Litigation 2024 Comparisons

England and Wales is a common law jurisdiction. The legislative system is comprised of three elements:

• Acts of Parliament (primary legislation);
• statutory instruments (secondary legislation); and
• residual common law.

Legislation will prevail over the common law if a conflict exists between them.

The courts are largely adversarial in nature, with parties submitting written evidence as well as oral evidence at trial, hearings, etc. To minimise court time and costs, judges will encourage matters to be dealt with on paper where possible.

The judiciary is comprised of highly experienced barristers and solicitors. Civil cases generally begin in the County Court or High Court, depending on the complexity and value of the claim.

The County Court hears claims under GBP100,000; any claim for a higher sum should be issued in the High Court.

The High Court is divided into three divisions:

• the King’s Bench Division deals with contract and tort, common law cases, high-value claims in the Commercial Court and building disputes in the Technology and Construction Court;
• the Chancery Division covers intellectual property, property, trust and probate, competition and the financial, business, insolvency and company lists; and
• the Family Division deals with matrimonial and child welfare cases.

Different tracks apply: the small claims track, the fast track, the intermediate track and the multi-track. Once a claim has been issued in the County Court or the High Court, the court will serve a Notice of Allocation that confirms which track that claim has been allocated and the steps that need to be taken.

Claims are generally allocated as follows:

• the small claims track for claims under GBP10,000;
• the fast track for claims between GBP10,000 and GBP25,000;
• the multi-track is generally used where the claim is above GBP25,000; and
• as of 1 October 2023, the intermediate track may be suitable for cases between GBP25,000 and GBP100,000.

The general rule is that litigation takes place in open court (the media and members of the public can attend). At judges’ discretion, courts can sit in private if the proceedings require confidentiality. Family court hearings usually take place in private to protect children or vulnerable individuals.

A party can apply to the court to have their case heard in private – for example, when it is in the public interest or when a party’s rights under the ECHR need to be protected. The party requesting a closed hearing must provide justification that the principles of open justice should be departed from.

Court judgments in open proceedings are made available to the public via a judicial database. Other documents on the court file are usually available upon application by a non-party, unless they are deemed private by the court following an application from either party to keep the material confidential.

Online portals for court filings are mandatory for new proceedings in many courts, including the Court of Appeal, the Central Office of the King’s Bench Division, and the Business and Property Courts. Transcripts of hearings can be obtained, usually for a fee, upon request.

Rights of audience are granted to litigants in person, to persons exercising rights granted by statute, and to those granted rights by authorised bodies such as the Law Society (solicitors), the Bar Council (barristers) or the Chartered Institute of Patent Attorneys (patent attorneys).

An exception applies for any person accompanying a litigant in person in the small claims track of the county courts, who is automatically granted rights of audience in such a setting.

Registered foreign lawyers cannot litigate in their own name, but may conduct litigation through a law firm under the firm’s name. They cannot appear in open court, but can appear in open chambers under the supervision of another lawyer with the appropriate entitlement to conduct the litigation.

Foreign lawyers permitted to work in any jurisdiction outside the EU should be registered with the Solicitors Regulation Authority (SRA) to be entitled to practise in England and Wales.

Litigation funding by a third party is permitted, but should not breach the rule against maintenance or champerty. If it does, the agreement will be void and unenforceable as a matter of public policy. The circumstances of the case may give rise to grounds justifying a costs order against the litigation funder, possibly for the entire costs of the litigation. Meanwhile, a funder’s returns from successful proceedings should be proportionate to the risk taken in funding the case.

A recent ruling by the Supreme Court in R (on the application of PACCAR Inc and others) (Appellants) v Competition Appeal Tribunal and others (Respondents) [2023] UKSC 28 held that litigation funding agreements were to be classed as damages-based agreements (DBAs) and would be rendered unenforceable if they failed to meet the formal requirements for DBAs.

The litigation funding sector is expected to undergo significant change as firms deal with the impact of the ruling.

Commercial claims such as breach of contract claims, fraud-related claims, IP claims and shareholder disputes attract third-party funding, as well as personal injury cases. Funders are interested in class actions relating to these and similar types of claims.

Third-party funding is available to both claimants and defendants, although claimants are generally more attractive to funders, since the risk:reward ratio is far more likely to be in the funder’s favour when backing their claim.

There is no minimum or maximum amount a third-party funder will fund; the quantum is at the funder’s discretion. In each case, their decision will be based on the claim's perceived strengths and weaknesses.

Funders may cover all costs incurred by a party in bringing its claim or mounting its defence, including lawyers’ fees, counsel fees, expert fees, court costs and tribunal fees.

DBAs are a form of contingency fee arrangement, in which a party only pays a sum to its lawyers if their case is successful and they are awarded damages.

Fees recoverable by lawyers are generally capped at 50% (exceptions apply for personal injury claims, where the cap is 25%, and for employment tribunal awards, where the cap is 35%).

Conditional fee arrangements are also permitted, whereby lawyers are only paid their fees and expenses in the event of certain conditions being met (usually the client winning their case). The lawyers generally receive an uplift in the event of a successful outcome for the client, capped at 100% of their regular fee rates.

There are no time limits within which parties to a litigation should obtain third-party funding.

Pre-action protocols govern the conduct of parties ahead of a formal claim being issued, and are set out in the Civil Procedure Rules. Seventeen specific protocols apply to certain types of dispute, such as professional negligence cases; parties involved in any cases falling outside the scope of these specific protocols should instead follow the general protocols of the “Practice Direction on Pre-action Conduct and Protocols”.

Courts encourage claimants to write to defendants prior to issuing their claim, setting out the precise details, the basis on which it is made, a factual summary, and the amount claimed (along with the rationale behind reaching the claim figure). This is to encourage parties to find a resolution without court proceedings and consider alternative dispute resolution (ADR), such as mediation.

Various pre-action protocols provide time limits for a defendant's response, giving them a reasonable time, potentially up to three months, to confirm whether they accept the claim and provide details of any potential counterclaim.

Parties are expected to disclose relevant documents to support their claim or defence.

If the matter proceeds to court, failure to adhere to the guidelines may lead to sanctions, which include adverse cost orders against the offending party.

Limitation periods are governed by the Limitation Act 1980. The applicable period depends on the cause of action.

Claims relating to a breach of a simple contract must usually be brought within six years. However, it is important to check whether the contract in question provides for a contractual limitation period, as this period may be shorter than the statutory limitation of six years.

Similarly tortious claims (excluding personal injury and latent damages) must usually be brought within six years. Claims relating to a breach of an obligation under a deed must be brought within 12 years.

Limitation periods begin from the date of the breach of contract in contract claims, or from the date the damage was suffered in tortious claims.

Tortious claims involving “latent” damage are subject to a limitation period of either six years from the accrual of the cause of action, or three years from the date when the claimant knew, or ought to have known, the material facts relating to the loss suffered, subject to a longstop of 15 years from the date the cause of action accrued.

Claims in an English court governed by foreign law are subject to the limitation regime of the applicable foreign law in the case. English law will determine the day on which proceedings commenced for the purposes of determining whether a claim has been brought.

English courts have jurisdiction over any defendant who is present in the UK. In addition, individuals who are directors and have given a registered address in England may be served at that address, even when they are not physically present in England and regardless of whether the claim concerns the relevant company.

The courts can stay proceedings if the defendant can show that there is another more appropriate forum to hear the dispute. If a defendant is not resident in the UK, a claimant will have to make an application to serve the defendant outside the jurisdiction. There are “gateways” that set out the circumstances in which a court will allow a claimant to serve out of the jurisdiction. The claimant must satisfy the court that England is the appropriate forum for the claim.

Court proceedings are typically initiated by issuing a claim form; bankruptcy or insolvency proceedings are initiated by way of a court petition.

Claim forms must set out:

• the names and addresses of both parties;
• a statement of the nature of the claim;
• the remedy being sought; and
• the value claimed.

They may include the particulars of claim or these may be set out in a separate document., in which case the particulars of claim must be served 14 days after the service of the claim form, unless the claimant is granted an extension of time.

A party can amend the document without the court’s permission before it has been served; any amendments after service require either the court’s permission or the written consent of both parties. A fee is payable to submit a claim form, with the charge calculated in relation to the value of the claim.

Notification of proceedings against a defendant is performed by way of formally serving the claim form and particulars of claim on the defendant. Once the court has issued the claim form, the claimant must serve it and the particulars of claim on the defendant within four months. Particulars of claims should be served either with the claim form or 14 days after service of the claim form.

Service can be carried out by personal service, by first-class post, by fax, by email or by delivery to a specific address. A claim form is served as follows:

• personally on an individual by leaving it with that individual;
• on a company by leaving it with a person holding a senior position within the company; and
• on a partnership by leaving it with a partner or person who has control or management of the partnership business at its principal place of business.

Where instructed by claimants, solicitors may accept service on the claimant’s behalf.

Parties can be sued outside of the jurisdiction with the permission of the court. The claimant has six months from the date of issuing a claim form on parties outside the jurisdiction to action service.

In respect of claims issued within the jurisdiction, the defendant is required to file and serve an “acknowledgment of service” 14 days after service of the claim form.

If the defendant submits an “acknowledgment of service” within this timeframe, the “defence” falls due 28 days after service of the claim form, unless this period is extended by the parties’ agreement or a court order. Failure to file an acknowledgment of service or a defence can lead to a claimant applying to the court for default judgment against the defendant.

Default judgment may be obtained without a hearing by completing a standard form-request in cases where the recovery of money or goods is sought; non-money claims require an application to the court. Judgment can only be obtained after a hearing.

Defendants against whom default judgments have been entered may apply to the court to set aside the judgment, on the basis that, for example, it was wrongly granted.

English courts permit representative and collective actions.

Group litigation orders collate claims where there is more than one claimant and the causes of action raise common or related issues of fact or law. Specific procedural rules apply to the management of such cases.

Representative actions are brought where more than one claimant has the same interest in a claim; one or more claimants is designated the representative, representing all other claimants with the same interest in the claim. The loss suffered by one claimant is often insufficient to make their individual claim economically viable, so a collective action delivers economies of scale.

Most collective actions are brought on an opt-in basis: every claimant has to issue proceedings, join proceedings or authorise another party to bring proceedings on their behalf. However, claims can also be brought on an opt-out basis, which allows one claimant to bring an action on behalf of a category of people without those individuals physically participating in the claim, or even having been contacted about the claim prior to it starting.

In Mastercard Incorporated and others v Walter Hugh Merricks CBE, the Supreme Court had its first opportunity to consider the collective actions regime established under the Consumer Rights Act 2015. This judgment lowered the bar for claimants, particularly consumers, and is likely to encourage mass consumer claims. Importantly, the court focused on policy considerations, and the ruling reinforces the original intention of the regime: to provide compensation to consumers for competition infringements where alternative methods of recovery and, in particular, individual proceedings are infeasible.

Separate procedures for bringing collective competition law claims before the Competition Appeal Tribunal include the Tribunal’s ability to order injunctive relief.

Although there is no strict requirement, the Solicitors Regulation Authority’s Code of Conduct maintains that clients should receive comprehensive information about the anticipated total cost of their case, both at the beginning of their engagement with lawyers and throughout the proceedings as circumstances develop.

Costs budgets from both parties will be requested from the court in cases that are subject to costs management. Cost budgeting provides clarity to all parties, including the court, on the losing party’s potential exposure to loss and ensure costs remain proportionate. In cases that are not subject to costs budgeting, the court retains the power to require parties to file costs estimates at any given point during proceedings.

Various interim applications are open to parties before trial or substantive hearings. Some deal with case management issues, such as an application for an extension of time. If a party believes it cannot comply with a court deadline, they must make an application for an extension explaining the reasons and justifying the extension.

Parties can also obtain remedies by way of interim applications. If a party is concerned that another party is going to dissipate or hide assets before the conclusion of proceedings, and therefore will not comply with an adverse cost order, they could apply for a freezing order. This prevents a party from disposing of or dealing with assets either in the UK or abroad (if they obtain a worldwide freezing order).

Parties can make interim applications for disclosure of documents prior to trial. In civil cases, these may be in the form of Norwich Pharmacal orders, which are often used in civil fraud cases and allow a party to obtain disclosure from third parties, such as a bank, to assist where funds have been diverted.

Early judgment can be obtained by default judgment or summary judgment. Default judgment can be obtained by a claimant where a defendant fails to respond to a claim that has been issued by filing an acknowledgment of service or a defence. Summary judgment can be obtained where the applicant can show that the respondent’s case has no real prospect of success, and that there is no other compelling reason why the case should be disposed of at trial.

A claimant may apply for default judgment against another party if the defendant does not respond to their claim. If a defendant does not file an acknowledgment or a defence, a claimant can apply for default judgment, which if granted will be entered without consideration of the merits of the claim.

A party may apply for summary judgment against another party. The court will grant summary judgment if the applicant shows that the other party has no real prospect of success at trial and that there is no other compelling reason why the case or issue should be disposed of at a trial. Where summary judgment is granted, proceedings are brought to an end without the need for a full trial. This usually occurs where a defendant has not filed a defence, or where a claim has no merit.

Where a defendant maintains that the English courts do not have jurisdiction to hear a claim, it can challenge jurisdiction in its formal acknowledgment of service of the claim form.

Dispositive motions may also be based on contentions that:

• the statement of case discloses no reasonable grounds for bringing or defending the claim;
• the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or
• there has been a failure to comply with a rule, practice direction or court order.

Obtaining default or summary judgment also serves to dispose of proceedings, except where costs orders continue to be sought by either party.

Interested parties may be joined to a claim without the permission of the court if the claim form has not yet been served, so long as a cause of action exists.

If the claim form has already been served, the joinder of new parties requires the court’s permission, which can be sought by way of an application by the existing parties or by a third party that also seeks to join the proceedings.

The court will grant permission if it views the joinder as being desirable to resolve all issues relating to the claim and there is an issue involving the new party and an existing party that is connected to the matters in dispute in the proceedings.

Conversely, the court may order the cessation of an individual as a party if it views their continuation as being undesirable.

A defendant can apply for security for costs once proceedings are commenced against them on certain grounds, such as if the claimant is resident outside the UK or the claimant is a company or other body and there is reason to believe that it will be unable to pay the defendant's costs if ordered to do so. This is designed to protect defendants against the risk that they win at trial and the claimant cannot pay their costs of defending the claim.

A claimant will have to pay money into court or provide a bond or guarantee if the defendant is granted an order for security for costs. The claim may be stayed if security is not provided.

Following the court’s determination of an interim application, it will make a summary assessment of the parties’ costs by reference to schedules known as statements of costs, which are filed and exchanged by the parties before the hearing.

In some cases, courts may order that the costs should be determined by way of detailed assessment: although the paying party has been ordered to pay the receiving party’s costs, the exact amount is to be quantified later, usually at the conclusion of the proceedings. In such instances, the court might order the paying party to pay a reasonable sum of costs on account.

The court will issue an order relating to those costs, typically payable within 14 days of the order.

Since 1 October 2023, fixed recoverable costs have been extended to cover most civil cases valued up to GBP100,000. This new regime applies to cases issued on or after 1 October 2023. Fixed reasonable costs set out the amount of legal costs that the receiving party can claim from the paying party. The amount of costs that can be recovered is fixed, determined by reference to the Civil Procedure Rules (CPR) Part 45 and Practice Direction 45.

Applications on paper are generally dealt with more speedily than those that require a court hearing.

Courts will ask parties for an estimate of how much time will be needed in court for applications requiring a hearing. They often publish waiting time estimates based on the length of time sought by parties for their requested hearings.

Urgent applications are dealt with on an expedited basis, subject to the applicant certifying that the hearing is urgently required and providing compelling proof that this is the case.

In litigation, parties are required to make documents that support or undermine their respective cases available to each other. This disclosure process is governed by CPR Part 31. The word “document” means anything in which information of any description is recorded: paper documents, audio recordings, phone recordings, emails and instant messages all fall within this definition.

When giving disclosure, a party is required to make a reasonable search with reference to the number of documents, the nature and complexity of the proceedings, the ease and expense of retrieval of any particular document and the significance of any document that is likely to be located during the search. A party is only expected to disclose documents that are, or have been, in their control.

For this purpose, a party is only in “control” of a document if it is or was in their physical possession or if they have or had a right to possession of it or a right to inspect or take copies of it.

Courts can order disclosure by third parties in cases where the documents sought are likely to support either party’s case, and where disclosure is necessary to dispose fairly of the claim or to save costs.

Parties to proceedings can apply for third-party disclosure orders against a third party under CPR Rule 31.17. The court will only order non-party disclosure where the documents sought are likely either to support the case of the applicant or to adversely affect the case of another party to the proceedings, and disclosure is necessary to dispose fairly of the claim or to save costs.

Third-party disclosure can also be obtained by application to the court for a witness summons for a third party to produce documents.

Norwich Pharmacal orders require a third party to provide documents or information to the applicant, usually to assist in identifying the proper defendant for their claim or to obtain information to plead their claim properly. The court will only grant a Norwich Pharmacal order where it is necessary in the interests of justice.

Parties must comply with certain disclosure duties, including preserving relevant documents in their control and conducting reasonable searches. A party must also disclose documents that adversely affect their or another party’s case or support another party’s case. The document must be relevant to an issue in the proceedings.

A party is not expected to disclose any documents that may be privileged, and may risk waiving privilege in the event that they do so. Parties’ lawyers are bound by the same disclosure rules.

Disclosure may also be sought before proceedings have commenced by way of court application, which is called “pre-action” disclosure.

This is not applicable in the UK.

Two types of privilege are recognised under English law: legal advice privilege and litigation privilege.

Legal advice privilege protects communications between a lawyer and their client that are made for the sole or dominant purpose of giving or receiving legal advice.

Litigation privilege protects communications between lawyers or their clients and third parties for the purpose of obtaining information in connection with existing or reasonably contemplated litigation. The communications must also be for the sole and dominant purpose of conducting that litigation. The litigation must be adversarial rather than investigative.

For public policy reasons, there are some exceptions to claiming legal professional privilege. The “iniquity” exception, for example, prevents parties from claiming privilege over documents brought into existence for the purpose of furthering a crime or fraud.

If either type of privilege applies, parties are permitted to refuse to produce documents to which the privilege applies to any third party, including the courts, subject to the court finding that an exception applies.

Under CPR Rule 31.19(1), a person may apply, without notice, for an order permitting them to withhold disclosure of a document on the ground that disclosure would damage the public interest. This aims to prevent the disclosure of material that would harm the nation or the administration of justice. Its application is therefore very rare.

Injunctions obtained during or in advance of proceedings are categorised as interim relief, while injunctions obtained at trial are termed final relief. These require a party to perform a specified act (a mandatory injunction) or refrain from a particular act (a prohibitive injunction).

An injunction is granted at the court’s discretion where it appears that it is just and convenient to do so. The court must exercise its discretion in accordance with the guidelines. In following the guidelines, the court will consider:

• whether there is a serious issue to be tried;
• whether damages would be the adequate remedy;
• the respective inconvenience or loss to each party; and
• whether there are any other special factors.

In making its determination, the court may also consider whether the claimant has come to court with “clean hands” (ie, determining whether they have embarked on any illegality that is linked to the relief sought) and whether there has been any delay in issuing the application for injunctive relief.

Examples of injunctive relief include the issuing of a freezing order or a search order, in which a party’s property is searched for the purpose of preserving evidence. Other injunctions include anti-suit injunctions and proprietary injunctions.

Urgent injunctive relief can be obtained swiftly via the English courts, within 24 hours. The application must explain the urgency of the matter to the judge’s satisfaction.

Injunctive relief can be obtained on an ex parte basis and the court will only hear from the party requesting the relief. The applicant must show a strong enough case to justify the court proceeding without hearing the other side's case.

Ex parte hearings are often required to ensure the other party is not “tipped off” and are common in freezing order applications so that the defendant does not get notice of the claim and start dissipating assets prior to an order being made.

Applicants must meet certain strict criteria under an ex parte application, such as providing full and frank disclosure to the court. Failure to do so may result in adverse costs orders or the order granted being set aside.

Following an ex parte application, the court will usually list a hearing on notice to allow the other party to address the court.

Applicants can be held liable for damages suffered by the respondent if the respondent later successfully discharges the injunction.

Courts may require applicants for injunctive relief to provide a cross-undertaking in damages, and to pay money into the court to ensure that the applicant proves it has sufficient resources to make good on its undertaking in damages.

Worldwide freezing orders can be granted in cases where the court believes the respondent has insufficient assets within the jurisdiction to meet the value of the applicant’s claim.

Such order is a draconian remedy, and therefore the court will expect the applicant to give undertakings. For example, the applicant will be required to give an undertaking not to seek to enforce it outside England and Wales without the court's permission and a cross-undertaking in damages, where the applicant undertakes to pay any damages incurred by the respondent if it is ultimately determined by a court that they are not entitled to a worldwide freezing order.

Injunctive relief can be obtained against third parties. For instance, a party may be entitled to serve a freezing order on any third party holding assets belonging to the respondent that are the subject of the freezing order (such as a bank holding assets belonging to the respondent).

Although a third party cannot be bound by the terms of the freezing order, a third party with knowledge of an injunction must not deliberately aid and abet a breach of the injunction by the respondent. Doing so may lead to the court finding that the third party is in contempt of court.

A respondent who fails to comply with the terms of an injunction is deemed to be in contempt of court, which can result in sanctions being imposed by the court, including fines, sequestration of assets and custodial sentences.

Trials are conducted via oral argument and are adversarial in nature. Ahead of trial, skeleton arguments outlining the parties’ cases are provided to the court. Witness evidence (and expert evidence) is also provided to the court ahead of trial. At trial, witnesses and expert witnesses may be cross-examined.

Opening statements by the parties’ legal representatives present their respective cases, with claimants’ advocates typically presenting first.

At the conclusion of a trial, closing statements are made by both parties’ legal teams. The judge will then consider the case and issue a final judgment following deliberations.

A party who issues an application can decide whether they want it to be heard or dealt with on paper.

The application must also state how long the applicant thinks the hearing will last and the level of judge required. If a hearing is necessary, it may be held in person, remotely, or partially remotely. Practice Direction 23A 6.3 provides that hearings with a time estimate of two hours or less may be conducted remotely, “depending on the particular court”.

The CPR require courts to actively manage cases by setting out timetables and issuing procedural directions. Case management conferences (CMCs) to deal with directions take place as early as possible during proceedings, in which the court sets a timetable for directions leading up to trial. CMCs usually take place after the close of pleadings and before disclosure. However, there may be several CMCs during the course of a case where the court needs to set further directions. In proceedings where the costs management regime applies, the court may issue directions accordingly.

In more complex cases, pre-trial review hearings may be ordered. The parties will be required to complete pre-trail checklists that enable the court to decide whether any further directions are needed in the case before trial.

Parties may apply for a jury trial in a civil case where there is a claim of false imprisonment, malicious prosecution or fraud. However, civil cases are rarely tried by juries.

Evidence is deemed admissible unless there is a compelling reason for its exclusion. For example, any information that is covered by legal advice privilege or litigation privilege does not need to be put into evidence. Evidence obtained illegally or improperly may be admissible at the discretion of the courts.

Evidence deemed to fall under without prejudice privilege is not admissible at trial. Without prejudice privilege applies to communications between the parties that are made with a genuine attempt to settle a dispute. This ensures that parties are able to speak freely as if no proceedings are in play for the purposes of reaching a settlement.

Evidence deemed as self-incriminatory is privileged and therefore inadmissible in civil trials. A defendant may wish to rely on privilege against self-incrimination in cases where they are concerned about putting forward a positive case in civil proceedings and they have not been charged with an offence. This is also not absolute – exceptions exist.

While expert testimony is permitted at trial, the permission of the court is required. In an application to rely on expert testimony, the party must provide an estimate of the costs of the proposed expert evidence and identify the field in which expert evidence is required and the issues it will address.

Courts may themselves decide to introduce expert testimony to assist with a case.

Expert witnesses are usually cross-examined at trial, and both sides’ expert witnesses often produce a joint report stating the areas on which they agree and the areas on which they disagree.

Please see 1.3 Court Filings and Proceedings.

Judges may intervene at any time during oral hearings, to seek clarification of certain points or to ask further questions of either parties’ legal representatives or witnesses and expert witnesses.

A judge may give an ex tempore judgment at the immediate conclusion of a trial or, if the case is complex and requires further consideration, may require longer before issuing a final judgment to the parties either in writing or orally in court.

The timeframes for proceedings from commencement of claim through to trial vary according to complexity and case management requirements.

To set deadlines leading up to trial, CMCs are scheduled early on in proceedings, and the period between each deadline will vary in each case. Parties must seek to agree directions prior to the CMC based on their knowledge of the proceedings and the work to be done.

The estimated length of the trial will depend on the complexity of the case, the number of witnesses giving evidence and whether there is expert evidence.

Court approval is not usually required to settle a case, and most litigation and arbitral proceedings are settled by a contractual agreement between the parties in dispute. Courts encourage settlement at every stage in proceedings.

In limited, particularly sensitive cases (eg, involving a child or vulnerable individual), the court’s approval may be required to effect a settlement between parties.

In relation to claims about the estate of a deceased person, property subject to a trust or the meaning of a document, the court may appoint someone to represent an unborn person, a missing person, or those in a class who have the same interest in the claim. In these circumstances, the court’s approval is required to settle a claim.

Where parties require the terms of the settlement of a lawsuit to be directly enforceable as an order of the court, the settlement will be recorded in a court order. If parties require the terms of the settlement to remain confidential, they need to draw up a Tomlin Order, in which the terms of the settlement are recorded outside the main body of the consent order in a confidential schedule unavailable to the public. However, the fact that the parties have reached a settlement will still be a matter of public record, unless the parties apply for a court order to keep the consent order confidential.

Breach of contract-based settlement agreements can result in the injured party bringing a new action seeking damages for breach of contract. Where settlement has been reached by way of a Tomlin Order, the settlement agreement itself is enforceable by way of court order, circumventing the need to bring a new action.

To set aside a settlement agreement, a party must bring a new action to obtain a declaration of the invalidity of the settlement agreement from the courts, or to seek an order for the setting aside of the settlement agreement. However, no new action is needed where the settlement agreement is by way of a Tomlin Order.

The most common form of redress sought by claimants is monetary damages. Courts can also order other forms of redress, in the form of equitable, restitutionary and statutory remedies, all of which are available at the full trial stage, along with monetary redress.

By contrast, damages are awarded for injuries or damage suffered by a party, rather than to ameliorate the effects of unjust enrichment.

Damages are intended as a form of compensation, calculated by determining the financial sum that would restore the claimant to the position they would have been in had the contract not been breached (breach of contract cases), or had the wrongful acts not been committed (tort-based cases).

Claimants are required to prove that:

• the defendant’s actions caused the loss;
• the loss is not too remote; and
• they have taken reasonable steps to mitigate the loss.

In trust or restitutionary cases, damages can be awarded to disgorge the defendant of benefits obtained.

In rare cases, damages may go further. Punitive damages or exemplary damages are awarded in addition to compensatory damages where the court considers it is necessary to punish the defendant and, incidentally, to deter other individuals from a similar conduct. They are rarely available, and even then only in cases involving deliberate torts, but not breach of contract. In tort cases, the claimant must establish that the defendant engaged in an intentional tort and/or wilful misconduct.

Courts may award pre-judgment interest at a rate the court considers appropriate. If the Late Payments of Commercial Debts (Interest) Act 1998 applies, the court’s discretion may be removed, and the implied term in business contracts may be used as the yardstick instead. This prescribed rate of interest is 8%, plus a fixed sum and reasonable costs of recovering the debt.

In the High Court, interest is charged at a rate of 8% from the date of judgment; in the County Court, the same interest rate generally also applies from the date of judgment.

Mechanisms for enforcing a domestic judgment include obtaining a charging order over a judgment debtor’s assets, preventing the sale of assets without the debt to the judgment creditor being repaid.

A creditor can also obtain a writ or warrant of control over a debtor’s goods in order to sell the goods to satisfy the debt owed. A party can also seek a writ of sequestration, allowing enforcement officers to take control of a contemnor’s property until they have remedied the contempt. A judgment creditor may also apply for a receiver to be appointed over the debtor and its assets.

The enforcement of a judgment from a foreign country is possible, although the procedure varies enormously depending on where it was made.

Enforcement under the Hague Convention of Court Agreements requires a two-step process of registration, after which enforcement must be followed. The Convention currently covers EU countries, Mexico, Singapore, Denmark and Montenegro.

Foreign judgments from most other countries must be enforced as a debt, requiring the judgment creditor to bring a new action in the English courts.

Appeals and other mechanisms of review in the court system are as follows:

• a decision of a district judge can be appealed to a circuit judge;
• a decision of a circuit judge or recorder sitting in the county court can be appealed to a High Court judge sitting in the High Court;
• a decision of a master or district judge sitting in the High Court may be appealed to a High Court judge sitting in the High Court;
• a decision of a High Court judge sitting in the High Court may be appealed to the Court of Appeal; and
• a decision of the Court of Appeal may be appealed to the Supreme Court – such appeals are typically granted only for applications that, in the Justices’ opinion, raise an arguable point of law of general importance.

In first instance, an applicant seeking to appeal a judgment must first seek permission to appeal from the court that delivered the relevant judgment. The court will need to be of the opinion that the appeal will have a real prospect of success in order to grant permission to appeal to the applicant. If permission is refused, the applicant can also seek permission to appeal from the higher court in which the appeal would be heard.

An application for permission to appeal must be made in writing by way of an application notice, filed within a timeframe directed by the lower court or, where no timeframe is given, within 21 days of the decision of the lower court. The application notice must include the grounds of appeal.

The respondent then has 14 days in which to serve any statement in opposition. Although the default position is that an application for permission to appeal should be considered on paper without a hearing, a judge has the discretion to order that an oral hearing takes place to consider the application.

Appeals will be granted where the decision of the lower court was wrong or unjust due to a serious procedural error or other irregularity, and involve an error of law or fact, or an error in exercise of the court’s discretion.

The appeal court will typically not consider new evidence that was not presented in front of the lower court, unless it can be shown that the evidence could not have been obtained with reasonable diligence for display in those proceedings, or that the evidence would likely have an important influence on the outcome of the case. If the appellant wishes to present new evidence, they must make an application to adduce fresh evidence.

Generally, appeals are confined to a review of the decision of the lower court, unless the court believes that holding a rehearing would be in the interests of justice, or if the procedural rules permit such a rehearing.

When granting an appeal, a court may order that the permission to appeal is conditional on certain requirements being fulfilled, such as the payment of security for costs by the appellant or the payment of the judgment debt into the court.

The appellate court has the power to affirm, set aside or vary an order or judgment made by the lower court. It also has the power to refer any claim or issue for determination by the lower court, to order a new trial or hearing, or to make orders relating to the payment of costs and interest.

Usually, the successful party in a litigation case will be awarded their costs in relation to the proceedings, which may include court fees, solicitors’ charges and counsels’ fees. The indemnity principle means that parties cannot recover more than they are liable to pay to their solicitor.

Where the court orders a party to pay the costs of litigation, the amount of which is to be subject to a detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so. Appeals of costs orders are discouraged.

Regarding interim applications, where the court orders a party to pay costs to another party (other than fixed costs), it may either make a summary assessment of the costs or order a detailed assessment of the costs.

Since 1 October 2023, the court will determine costs with reference to the fixed recoverable costs regime for cases in the fast track and intermediate track.

For cases in the multi-track, the court will consider the costs incurred by reference to:

• the parties’ costs budgets;
• the guideline hourly rates;
• the conduct of the parties; and
• the complexity of the litigation.

In circumstances where a party makes a settlement offer that is not accepted by the other party, after which the offeree obtains a better result at trial, higher awards of costs are also likely to be made to reflect the unsuccessful party’s refusal to settle.

The default interest rate on judgment debts, including in respect of costs, is currently 8% pa.

The default date on which interest begins to accrue is the date on which the costs order is granted, although judges have discretion to set the start date earlier if they believe compensation is due for the period between the recipient incurring their costs and receiving payment.

The most popular ADR methods include mediation, arbitration, expert determination and early neutral evaluation.

• Mediation involves the appointment of a neutral third party to help achieve a settlement, although the parties are under no obligation to reach a settlement.
• Arbitration involves resolving disputes fairly by an impartial tribunal, pursuant to an agreement between the parties.
• Expert determination takes place when a valuation is required or an expert’s opinion is needed on a technical point; parties agree to a binding contractual agreement to abide by the expert’s determination.
• Early neutral evaluation involves a neutral third party – often a senior lawyer or judge – hearing submissions from both parties and providing an opinion on which side is likely to prevail at trial; the process is non-binding.

Pre-action protocol requires the parties to consider negotiation or ADR before commencing court proceedings; litigation should be a last resort. If ADR is not suitable, parties will be expected to justify the need for litigation to the court.

If a party refuses unreasonably to participate in ADR, the court can stay the proceedings and order both sides to participate, or alternatively can impose adverse costs sanctions on the refusing party.

Compulsory ADR has been deemed lawful by the Civil Justice Council, although no steps have yet been taken to make it compulsory. The court has imposed indemnity cost orders against parties who have unreasonably refused to engage in ADR, requiring the paying party to pay approximately 70–80% of the counterparty’s legal costs and disbursements.

In Garritt-Critchley v Ronnan [2014] EWHC 1774 (Ch), HHJ Waksman QC granted the claimants’ application for indemnity costs based principally upon the defendants’ failure to engage in mediation.

Several organisations exist to promote ADR, including the London Court of International Arbitration and the Chartered Institute of Arbitrators, which offer a full complement of ADR methods to resolve disputes, as well as training for mediators and others working in the field.

The Arbitration Act 1996 applies where the seat of arbitration is in England and Wales or Northern Ireland. However, if the arbitration agreement is governed by foreign law, foreign law will apply in respect of a non-mandatory provision.

The Arbitration Act 1996 is based upon three principles:

• disputes should be resolved fairly in arbitration by an impartial tribunal without unnecessary delay or expense;
• parties should be free to agree how their disputes are resolved; and
• domestic courts should not intervene unless necessary and authorised by the Arbitration Act.

Some elements of arbitration law are also found in English common law.

In the UK, one can enforce an arbitration award by summary procedure under Section 66 of the Arbitration Act, with the court’s permission. This can be enforced in the same manner as a judgment or order of the court, or it can be “converted” into a court judgment.

Once permission to enforce is granted, all methods available to the court to enforce a judgment can be used to enforce an arbitration award, including inunction, damages and specific performance.

Criminal matters cannot be arbitrated.

Arbitral decisions can be challenged on the following bases:

• serious irregularity affecting the tribunal, proceedings or award;
• an appeal on a point of law; or
• a challenge of the tribunal’s substantive jurisdiction.

Challenges to arbitral decisions must be made within 28 days of the date of the award or within 28 days of being notified of the outcome of any arbitral appeal, review or an additional award, otherwise the right to challenge will be lost by the challenging party.

Domestic arbitral awards can be enforced by summary procedure or by bringing an action relating to failure to comply with the award determined.

The enforcement of awards can be affected in the same way as a judgment, or an award can be converted into a court judgment. In both cases, the party must apply to the court for permission by submitting an application providing copies of the arbitral agreement and award and witness statements. If permission is granted, the same methods used to enforce court judgments apply to the enforcement of the award.

Foreign arbitral awards that are subject to the New York Convention (the convention governing the recognition and enforcement of foreign arbitral awards) require application to the English court, providing copies of the arbitral agreement and the award.

The application will be decided on paper or following an oral hearing. If enforcement is granted, the court will issue an order for the other party to apply to set aside the order. If the other side does not have the order set aside, enforcement occurs in the same way as for an English judgment.

Foreign arbitral awards not subject to the New York Convention must be enforced using a similar procedure of recognition and enforcement, although there is a higher chance that the English court has greater scope to refuse to enforce the award.

In November 2021, the Civil Justice Council (CJC) published an Interim Report considering recommending substantial changes to the regime of pre-action protocols (PAPs).

The CPR encourage parties to engage with PAPs before commencing civil proceedings in the English courts; failure to do so may lead to costs consequences if the dispute proceeds to court. However, compliance with PAPs is not mandatory.

The CJC’s key recommendations are:

• to make compliance with PAPs mandatory, with an exception for urgent cases;
• to formalise PAPs by including reference to their role within the Overriding Objective in CPR Part 1;
• to formalise the status of PAPs by replacing the current Practice Direction “Pre-Action Conduct” with a new “General PAP” as a Practice Direction to CPR Part 1; and
• to extend the current obligations in the “default” general PAP protocol – this would mean that prior to commencing proceedings it would be mandatory for parties to engage in some form of dispute resolution process and to prepare a “stocktake” report summarising the parties' issues in dispute.

The objective of the suggested reforms is to increase the level of pre-action exchange and engagement between parties in order to limit the issues in dispute and reduce litigation costs.

The CJC also recognises that a “one size fits all” approach is not practicable. Arguably, in commercial cases, the changes may be counterproductive to reducing costs and narrowing the issue, as these proposals would be likely to result in a very significant proportion of the case preparation being conducted at the pre-action stage.

In terms of implementation, the CJC’s role is limited to policy review and recommendations, and it will be a matter for the Civil Procedure Rules Committee to decide whether and how the recommendations are implemented.

As set out in the report by Lady Justice Asplin, “more work is necessary in order to determine the types of claim and situations in which compulsory (A)DR would be appropriate and most effective for all concerned, both in the present system and in relation to online justice”.