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Frequently Asked Questions

Involved in a commercial dispute? Unsure how to resolve it or what happens next if you someone threatens to sue you? Read our practical FAQs.

What do I do if someone threatens to sue me as the result of a commercial dispute?

If the threat comes in written form (a letter or other document), take it seriously. Don’t throw it in the waste paper bin, or put it on one side to deal with later. It will generally contain a deadline by which you are required to respond (or pay up), failing which the other party will start court proceedings. You need to respond in writing within that deadline, even if you are denying the claim, because this is your best hope of minimising the damage.

If the other party considers that it has a legal basis for the claim, it may issue proceedings if you fail to respond, and may decide to do so despite your response. This is the point at which the legal costs start to increase. So it is worth considering the allegations carefully, and deciding whether you want to try for a settlement before things get to that stage.

If you think that the claim is unjust or unreasonable, but are uncertain about your ability to defend it, take professional advice. A solicitor will be able to advise you on the merits of the case, and suggest a strategy or strategies for resolving it.

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How do I set about suing someone?

First, you need to establish that you have a legal basis for your claim, consulting your solicitors if necessary. Next, you need to notify the other party, in writing, that you are considering commencing court proceedings, giving them an opportunity to put things right (for example, by paying an outstanding debt, or negotiating an acceptable settlement). If they fail to do so – and you believe they will be able to satisfy any judgment (see How will a judgment against me be enforced, or if I have a judgment in my favour, how do I enforce it?) – you may proceed with a claim.

To start court proceedings you need to complete a claim form and send it to the appropriate court (for example, your local county court), together with particulars of your claim and a court fee. In the case of simple debts, you can start the claim online via Money Claim Online, on the court service website. For more complicated claims, you would probably do better to use your solicitors, who will draft the claim for you and issue it at court. A copy will then be sent to the other party, who will have time to respond. If they intend to fight the claim, the court will allocate the case to one of three tracks:

  • small claims (claims with a value of less than £10,000);
  • fast track (claims with a value of £10,000 – £25,000); and
  • multi track (complicated claims/claims with a value in excess of £25,000).

The court will also make an ‘order for directions’, setting out how the case is to be conducted – for example, when documents are to be disclosed, what the timetable will be and so on – so that both parties can prepare for the trial. Finally the claim will be ‘listed’ for trial before a particular judge, who will decide the outcome.

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How will a judgment against me be enforced, or if I have a judgment in my favour, how do I enforce it?

You need to consider before you start a claim whether or not the potential defendant will be able to satisfy a judgment: otherwise you might end up with a moral and legal victory, but no financial recompense and a substantial bill for legal expenses. Once a judgment is obtained, it is effective immediately, and the debtor should comply with its terms. Unless it states that payment should be made ‘forthwith’, however, the debtor should be given a reasonable period of time in which to pay. If it is necessary to have the judgment enforced, it can be done in several different ways. The court will not do it, however, unless you ask for it. The way in which you are required to make the request is determined by the method of enforcement you choose, so you might need legal advice at this stage. You could, for example, ask for a warrant of execution, an attachment of earnings order, a third party debt order, or a charging order. A warrant of execution gives county court bailiffs or High Court enforcement officers the authority to take goods from the defendant’s home or business. But there are limits on the type of goods that can be seized, and goods sold at auction will only achieve a fraction of their value.

An attachment of earnings order can be sent to the debtor’s employer, authorising them to deduct an amount from the debtor’s pay cheque each pay day, and send it to a collection office, from which it will be sent on to the creditor. If the debtor has cash or other assets, but is refusing to pay, a third party debt order can be issued to stop them from removing money from their bank or building society account, and authorising the bank or building society to pay the creditor from the account. A third party debt order can also be sent to anyone who owes the debtor money. A charging order prevents the debtor from selling assets (such as property, land or investments), without paying what is owed under the judgement. Finally, if the amount owed is more than £750, the creditor can apply to make the debtor bankrupt.

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What will a solicitor do for me that I couldn't do for myself?

Use your solicitor’s experience in solving problems to provide you with a range of options, tailored to your commercial needs and expectations. If you find yourself mired in a commercial dispute, your solicitor will be able to analyse its legal basis, advise impartially on the strengths and weaknesses of your position, and set out the potential cost consequences of each of the available options. This is particularly useful where court proceedings may become necessary, because the courts have complex rules on the recovery of legal costs. Where a dispute is particularly acrimonious, the involvement of solicitors may also help by encouraging the parties to focus on the main issues, with a view to reaching an early resolution.

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The other side's solicitors are demanding information from us. Do we have to give it?

If you are involved in court proceedings, as a general rule you must disclose any documents relevant to the matters in dispute, even if they may harm your case. If the other side asks for documents, the questions you need to consider are:

  • whether the information requested is relevant to the issues in the case, and
  • whether the request is proportionate to the claim.

It would be unreasonable, for example, to require 10 years’ worth of documents for a small value claim: the cost of retrieving them would not be justifiable. You do not have to let the other party see any documents prepared for the purposes of the litigation, or for the purpose of giving or receiving legal advice. These are ‘privileged’. However, you may not be able to prevent the other side from seeing documents that you consider to be ‘commercially sensitive’, if they are relevant. As well as requesting documents, the other side is entitled to ask for further information based on what you said in initiating (or responding to) the claim. This will usually be to clarify a point. If you fail to respond to this request, the other party may make an application to court, under the Civil Procedure Rules, for an order requiring you to respond, and you could be billed for the costs they incur in making this application.

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What do we do if we think they are asking for information which is commercially sensitive?

Litigation is a public process. So your involvement in court action may result in the publication of personal and business affairs. This is a risk you will have to live with. If it worries you, consider an alternative method of dispute resolution, such as mediation. You may seek to prevent your opponent from inspecting a document containing material which is potentially harmful to your business, if in the circumstances of the case it would be disproportionate to require you to divulge it. However, your opponent can apply to court to allow inspection of the document, giving reasons for the request.

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How long will it take for a commercial dispute case to come to court?

Once a court claim has been issued, the defendant has a maximum of 14 days from service of the claim to respond with a fully-reasoned defence, and deliver this to the court. Generally, the court will post the claim form to the defendant and it will be deemed served two days after posting. The court will then send the parties a questionnaire, which is used to allocate the case to one of three tracks. The small claims track is used for lower-value cases (under £10,000) of a simple nature; the fast track is used for reasonable cases of more moderate value (£10,000 – £25,000); and the multi-track is used for complex and high value cases (over £25,000), where the trial is likely to last more than one day.

Small claims should generally be heard within three to six months of the start of the court proceedings; fast track claims may take six to nine months; and claims on the multi-track can take considerably longer because of the complexity of the issues involved. However, these timescales are useful only as a guide for the average case; if more complex issues arise the whole process can take considerably longer.

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What happens if the court hearing comes at an inconvenient time? Can we get it changed?

The court will usually try to ensure that important hearings and trials are listed for a date and time convenient for the parties. Once a hearing has been listed, it is not possible to vary the date simply by agreeing with the opposing party. Any attempt to change the date or time must be by way of an application to the court – which is not bound to agree, even if the opposing party is amenable. However, the court will consider the request, taking into account the overriding objective of the Civil Procedure Rules – that cases should be handled justly – as well as the importance of not wasting court time.

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Where is the case likely to be held?

If the defendant is an individual, the case will automatically be transferred to their home court when they respond to the claim. If the defendant is not an individual, there is no automatic transfer provision and the court can decide where the case is held as part of its case management powers. When the court is allocating the case to a track, it will ask the parties if they would prefer the case to be heard at a particular court, consider their requests and decide on the most appropriate location. The court will also consider whether the matter is a specialist claim that should be dealt with by a specialist judge.

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How much work will i have to do beforehand?

Litigation can be very time-consuming, and complex cases can involve a lot of preparatory work. You will need to check what documents you have that could relate to the issues in the case, which will probably involve going through a lot of correspondence and emails, as well as identifying the contractual documents. You will also need to meet your solicitor to provide them with full details of the background to the dispute, and to discuss your objectives.

If you are bringing a claim it makes sense to invest the time early on, because as soon as a claim is issued the court will impose a timetable that must be complied with. If you are not properly prepared in advance, you may be called away from your business for considerable periods of time, and at very short notice. If you are defending a claim, time may be even more restricted so put some work in as soon as possible. This will allow your solicitor properly to evaluate the strength of your position, and could influence the strategies they suggest for resolving the situation.

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Will I have to appear as a witness?

Assuming that your case goes to trial, witness statements will have been taken and exchanged with the other party beforehand. If you have given a witness statement, it will usually stand as your ‘evidence in chief’. This means that you will not normally be able to expand on the content of your statement without the judge’s permission. You will be cross-examined on the content of this statement by the other party’s representative.

At court hearings other than trials (for example, a hearing for summary judgment), evidence is normally given by witness statement only. Even if you are reluctant to give evidence, one of the other parties could obtain a witness summons from the court, compelling you to do so. If you then fail to attend the trial to give evidence, committal proceedings (ie proceedings committing you to prison) could be taken against you.

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Do I need a barrister to represent me?

Depending on the court – and the type of hearing – your solicitor might be able to act as your representative. However, barristers are experienced advocates, and – particularly in complex or high-value claims – your solicitor might well advise you to use one. There are two ways in which you might want to use a barrister:

  • to provide specialist legal advice (an ‘opinion’) at an early stage – this can be particularly useful in complex, high-value cases, where knowledge of the strengths and weaknesses of your case might enable you to negotiate an early settlement; and
  • to represent you in court.

If a barrister’s opinion would be useful, your solicitor will know how to find the relevant expert, and will ‘brief’ (instruct) him or her. You will not be able to instruct a barrister yourself; a solicitor will do this on your behalf.

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How long will the court hearing take?

That will depend on the nature of the case and the purpose of the hearing. The majority of claims never reach a court hearing because they settle before trial, or are discontinued for some other reason. Trials of cases allocated to the small claims track should take no more than a few hours, as they are relatively informal. Trials of cases on the fast track should not last longer than a day. Claims on the multi-track could last from a little over a day to many months, depending on their complexity.

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How will a judgment against me be enforced, or if I have a judgment in my favour, how do I enforce it?

You need to consider before you start a claim whether or not the potential defendant will be able to satisfy a judgment: otherwise you might end up with a moral and legal victory, but no financial recompense and a substantial bill for legal expenses. Once a judgment is obtained, it is effective immediately, and the debtor should comply with its terms. Unless it states that payment should be made ‘forthwith’, however, the debtor should be given a reasonable period of time in which to pay. If it is necessary to have the judgment enforced, it can be done in several different ways. The court will not do it, however, unless you ask for it. The way in which you are required to make the request is determined by the method of enforcement you choose, so you might need legal advice at this stage. You could, for example, ask for a warrant of execution, an attachment of earnings order, a third party debt order, or a charging order. A warrant of execution gives county court bailiffs or High Court enforcement officers the authority to take goods from the defendant’s home or business. But there are limits on the type of goods that can be seized, and goods sold at auction will only achieve a fraction of their value.

An attachment of earnings order can be sent to the debtor’s employer, authorising them to deduct an amount from the debtor’s pay cheque each pay day, and send it to a collection office, from which it will be sent on to the creditor. If the debtor has cash or other assets, but is refusing to pay, a third party debt order can be issued to stop them from removing money from their bank or building society account, and authorising the bank or building society to pay the creditor from the account. A third party debt order can also be sent to anyone who owes the debtor money. A charging order prevents the debtor from selling assets (such as property, land or investments), without paying what is owed under the judgement. Finally, if the amount owed is more than £750, the creditor can apply to make the debtor bankrupt.

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Under what circumstances would it be worth appealing against a court judgement?

In almost all civil cases, you have to ask the court for permission to appeal against its decision. This will only be given if the court considers:

  • that the appellant has a real prospect of success; or
  • that there is some other compelling reason why the appeal should be heard. For example, further evidence might have come to light after the original judgment, or there might be allegations of a serious procedural or other irregularity.

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How do I proceed against an overseas debtor?

Slowly, and with some difficulty. Depending on where the party you wish to sue is based, permission of the English/Welsh court may be required before a claim can be issued at all. If permission is required, you would have to apply to the court (in England or Wales) where the claim is to be issued, for permission to serve it out of the court’s jurisdiction. The defendant will have to be given longer to respond than a defendant in England or Wales would get, the length of time depending on the country in which the claim is to be served.

If you find yourself in this position, consult your solicitor before you do anything. They may be able to suggest a more commercial way of achieving your objectives, possibly including advice as to whether you may be able to sue in the country in which the debtor is based.

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How do I proceed against a debtor based in Scotland?

You can issue a claim against a debtor based in Scotland in exactly the same way as against one based in England – with one proviso: there must be no existing proceedings concerning the same claim in another court. You must include a statement on the claim form to this effect.

If the claim is against a business, you can choose in which court to issue it. As with a debtor based in England, you need to consider carefully before you start the extent to which the debtor will be able to satisfy any judgement, and how much you will have to expend in time and money if you have to enforce it. This is particularly the case if the debtor’s assets are in Scotland.

If you obtain a judgment against the debtor, you will be able to register it in the High Court and enforce it as if it were a judgment from a Scottish court, but Scottish law, procedure and enforcement differ from English, so the business will be time-consuming and expensive, and may have practical difficulties.

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Contact Helix Law on 01273 761 990 or email: info@helix-law.com