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If the person has put their threat in writing (in the form of a letter or another document), you should take it seriously. Keep the document for future reference – do not throw it away or lose it. Threats of legal action usually specify a deadline date for either a response or payment before the other party will begin court proceedings. It is advised that you respond in writing before the deadline, even if you deny the claims. This is your best opportunity to minimise damage and the best time to take legal advice. What you say in your first response may be held against you.
The other party may issue proceedings if they believe they have a legal basis for their claim, whether you respond or not. At this point, your potential liability to pay their legal costs begins to accrue. You should consider all allegations carefully and decide whether you wish to try for a settlement, ideally prior to the start of the proceedings. Again, there are special rules and considerations that apply to settlement offers and negotiations and an experienced litigation solicitor would add real value at this stage.
If you consider the claim unreasonable or unjust, but are not sure how to defend yourself, seek legal advice as early as possible. A solicitor can advise you on the merits of your case and devise a strategy for resolution. They can also give you an idea of the potential costs you may have to pay the other side if you lose.
First, a legal basis for your claim needs to be established. If you are unsure, a solicitor can advise whether or not you have a case. Next, the other party must be notified in writing that you are considering opening court proceedings. The notification should include a deadline by which they can settle outside of court, for example, by paying back outstanding debt or negotiating a suitable settlement. If they fail to respond or provide a settlement, and you believe that a judgment will be made in your favour in court (see our guide on how to enforce a judgment in your favour), you may proceed with your claim. Before issuing any claim you must ensure that you have followed the appropriate pre-action protocol http://www.justice.gov.uk/courts/procedure-rules/civil/protocol
To begin court proceedings, you must complete a claim form to be sent to an applicable court (usually your local county court) along with the details of your claim and the court fee. For cases of simple debt, you can start a claim online with Money Claim Online on the court services website. In more complex cases, it is advisable to use solicitors who can draft your claim for you and deliver it in court. A copy of your claim will be sent to the other party involved, who will be given the opportunity to respond.
If they choose to fight your claim, the court will assign the case to either:
- Small Claims – claims of a value less than £10,000;
- Fast-Track – claims of a value between £10,000-£25,000;
- Multi-Track – complex claims, or those of a value above £25,000.
As well as this, the court will make an ‘order for directions’ which sets out how the case should be conducted. It dictates when documents should be disclosed, the case timetable, and so forth so that each party can adequately prepare for the trial.
Finally, the claim is listed for trial before a judge who will decide its outcome.
Before starting a claim, you need to consider whether the potential defendant will be able to fulfil a judgment (if they have the means to pay the settlement). If they can’t, you could achieve moral and legal victory but be left with no financial recompense and a substantial legal bill.
Obtained court judgment is usually immediately effective, and the debtor must comply with its orders. Unless the judgment states that a payment should be paid ‘forthwith’, the debtor is given a reasonable period in which to pay.
If it becomes necessary to have the judgment enforced, there are several different methods that it can be used. You are required to ask the court to do this: it will not issue an enforcement automatically. You must choose what you believe is the most effective method of enforcement. Thus, further legal advice may be necessary.
Some examples of court enforcement include:
- Warrant of execution – a warrant gives High Court enforcement officers or county court bailiffs the power to confiscate goods from the defendant, usually from their home or business. However, there are regulations on the types of goods that can be taken, and anything sold at auction will achieve a fraction of its original value. You must also be very wary of the High Court enforcement officers costs.
- Attachment of earnings order – an order is sent to the debtor’s employer authorising the deduction of a certain amount from each of the debtor’s pay cheques. The money goes to a collection office before it is sent to the creditor.
- Third-party debt order – this is used when it is known that the debtor has the cash or other assets but refuses to pay. The issue of a third-party debt order prevents them from removing cash from their bank account or building society and authorises their bank, building society or other third party to pay the creditor money directly from the debtor’s account. This order can also be issued to anyone who is in debt to the debtor.
- Charging order – this ensures the Judgment is secured against one of the debtor’s assets, usually a house. If the debtor does not pay then it may be possible to get an order that their property be sold to repay the judgment debt.
- Bankruptcy – if the amount owed by the debtor exceeds £5000, the creditor may apply to make the debtor bankrupt. If it is a company and the debt exceeds £750 then a winding up petition may be appropriate. However, great care should be taken to ensure there is no dispute or crossclaim.
Your solicitor’s legal background and experience can provide you with a range of options for your specific case. If you are threatened with legal action, a solicitor can analyse its legal basis, summarise the potential costs to you of each of your available options, and impartially advise you on the strengths and weaknesses of your case.
Using a solicitor is especially advised when court proceedings are involved, as courts enforce complex rules for recovering legal costs. In acrimonious disputes, solicitors help all parties to focus their attentions on the main issues in order to reach an early resolution.
In addition where your unrepresented your opponent is not at risk of paying your solicitors’ fees and therefore has no substantial penalty for fighting and losing.
If the other party’s solicitors are demanding information, am I required to give it?
Where court proceedings are involved, it is a general rule that you must disclose documents that are relevant to matters in dispute, even if they might harm your case. If the other party asks for documents, you should consider:
- Whether the information requested is relevant to the case; and,
- Whether it is proportionate to the case. For example, the cost of retrieving ten years’ worth of documents in a small-value claim is not justifiable.
- Whether it is somehow privileged and not open for inspection by the other side.
You do not have to show the other party any documents that were prepared for purposes of the litigation or for the receiving or giving of legal advice. These are considered ‘privileged’. However, you may not be able to prevent documents that you consider to be ‘commercially sensitive’ from being seen by the other party if they are relevant to the case.
The other party is entitled to request information about what you said in the process of initiating, or responding to, the claim. Usually this is for clarification purposes. If you do not comply with such a request, they may make a court application for an order that requires you to respond under Civil Procedure Rules, the cost of which order you are responsible for.
Litigation, or the process of legal action, is public. Your involvement in court proceedings could result in your personal and business affairs being made public. If you wish to take legal action, this is a risk you must consider. If this is a worry for you, you could consider alternative dispute resolution procedures, such as mediation. If you are in construction then you may be able to use adjudication.
If documents or information are requested by the other party during litigation that may harm your business, you can seek to prevent them from viewing it if their disclosure is disproportionate to the dispute. They may still apply to the court for permission to inspect it, however, if they can justify their request. Issues at the margins of disclosure and privilege can be legally complex and you should take the advice of an experienced litigation solicitor.
The defendant has 14 days maximum to respond to a claim and a total of 28 days to deliver it to court with a fully-reasoned defence to the claim. The court will generally send the claim form to the defendant, which is deemed to be served two business days after posting. You should carefully check the date the claim is deemed to be served, the date you must acknowledge the claim by and the date by which you must defend.
The court then sends a questionnaire to the parties, the results of which are used to assign the case to a ‘track’: small claims, fast-track, or multi-track. Which track is allocated depends on the value of the case. In general, small claims are usually for low-value, simpler cases not greater than £10,000; fast-track is usually for cases exceeding £10,000 but not exceeding £25,000; and multi-track is assigned to complex or high-value cases exceeding £25,000 where the trial will potentially last for more than one day.
The tracks also determine how quickly the case is heard in court. Small claims usually take three to six months to be heard; fast-track can take six to nine months; while multi-track claims may take significantly longer dependent on the complexity of the case.
These timeframes are a guide based on the average case. If further complex issues arise during proceedings, the process may take longer.
The court tries to ensure that dates and times are scheduled for trials and hearings that are convenient for both parties. It is not possible to change a court date after it is listed unless you apply to the court, who are not required to grant it, even if both parties are amenable. The court considers the request and takes into account both whether the request wastes court time, and the objective of Civil Procedure Rules, which state that the just handling of cases is a priority.
In cases where the defendant is an individual, it is automatically transferred to their home court upon their response to the claim. When the defendant is not an individual, the court uses its case management powers to decide where it is held.
When allocating a track to the case, the court will ask each party which particular court they would prefer it to be heard. It then considers all requests and decides an appropriate location. If the matter is a specialist claim, the court also considers whether it should be heard by a specialist judge.
Litigation is time-consuming, especially in complex cases. Such cases require a lot of preparation. You will need to check for any documents you possess that relate to the issues in dispute, which will likely require you to go through a high volume of emails and correspondence. You will need to meet with a solicitor and provide them with all details necessary to the case, including what led to the dispute, and to assess your options and objectives.
If you are initiating a claim, it is advisable to prepare as early as you can. As soon as your claim is issued in court, a timetable will be imposed that all parties must comply with. If you are not prepared in advance, you could end up losing a great deal of time and money.
Time is even more restricted if you are defending a claim. You should invest time for preparations at the earliest opportunity. This gives your solicitor adequate time to evaluate your position and advise suitable strategies for your defence and the case’s resolution.
If your case goes to trial you will need to appear in court. Written witness statements must be taken and exchanged between both parties before the trial. Your witness statement will usually serve as your ‘evidence in chief’ – meaning that you are not normally allowed to expand on your statement at a later date unless the judge’s permission is given. The other party’s legal representative will cross-examine you on the basis of your statement. If your witnesses, including you, do not appear for cross examination then the evidence will carry little weight.
In court hearings that are not trials (for example in a hearing for a summary judgment), evidence is usually given only by witness statement. If you refuse to give a witness statement, the other party may obtain a witness summons from court ordering you to give evidence. If you do not comply with the witness summons and do not attend the trial or give evidence, committal proceedings (such as proceedings that commit you to prison) may be taken against you.
Your solicitor may be able to represent you depending on the type of hearing and the court. However, your solicitor may advise that you use a barrister for their experience in advocacy, especially in high-value or complex cases.
You can use a barrister in two ways: to represent you in court; or to provide you with specialist legal advice in the early stages, which is especially useful in high-value and complex cases where identifying the particular strengths and weaknesses of the case may enable the negotiation of an early settlement.
If you or your solicitor believe it will be useful to get a barrister’s opinion, your solicitor can find a relevant expert and brief them on the claims. You cannot usually brief a barrister yourself; a solicitor must do this on your behalf.
This depends on the reason for the hearing and the nature of the case. Most cases never reach the stage of being heard in court as they are usually settled before the trial. Cases can also be discontinued for a number of other reasons.
As a general rule: small claim court hearings usually last just a few hours and are relatively informal. Fast-track cases should not exceed one day. Multi-track is assigned to cases whose trial is set to last over a day. Complex multi-track cases can span months.
You must ask a court for permission to appeal its decision. Permission to appeal is only given when the court considers that the appellant’s prospect of success is high, or when there is another compelling reason for the appeal to be heard. An example of this is when further evidence is unearthed after the initial judgment, or there are serious allegations of a procedural irregularity.
With difficulty. Depending where the party you wish to make a claim against is based, gaining permission from the English or Welsh court may be necessary before your claim can even be issued. If you are required to get permission, you must apply to the English or Welsh court where the claim is to be issued, for the permission to serve it outside the court’s jurisdiction. The defendant is given more time – how long depends on the country in which the claim will be served – to respond to the claim than they would if they were based in England or Wales.
If you are faced with this situation, consult with a solicitor before taking any action. They might be able to advise a more commercial way to achieve your desired outcomes, including whether you could sue in the debtor’s country.
You may issue your claim in the same way as you would against a debtor based in England or Wales, on the condition that there are no proceedings concerning the same case already in process in another court. You must state this in your claim form.
In claims against a business, you may choose the court in which it is to be issued. As with a debtor in England, you must consider before commencing proceedings whether the debtor will be able to satisfy a judgment, especially if their assets are in Scotland; and if it is worth the time and money that you will expend in enforcing it.
You can register any judgment obtained against the debtor with the High Court and enforce it as you would a Scottish court judgment. However, Scottish law, enforcement and procedure is different from English, meaning that this process is time-consuming, expensive, and could involve practical difficulties.
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.