Commercial litigation deals with disputes over all kinds of commercial arrangements. Depending on the nature of the case, it may be heard in the defendant’s home court. Alternatively, the court system itself may decide where the case will be heard. If the claim is a large one, it may be heard in the high court, typically in the Chancery Division or the Queen’s Bench Division.
In the UK, the legal system takes the view that litigation should be used as a method of last resort. This means that when possible a dispute is solved by other means, such as by mediation or arbitration. When alternative methods are unsuccessful or not feasible, litigation may be the last remaining option.
The Commercial Court, Queen’s Bench, and Chancery Division
Depending on the nature of a commercial case it is typically heard in one of several different courts. Smaller claims are heard in a County Court. Large claims are typically heard in the High Court, either in the Queen’s Bench Division or the Chancery Division.
Within the Queen’s Bench Division, the commercial court hears claims relating transactions of trade and commerce. This can include business contracts and documents, the import or export of goods, insurance, banking and financial services, the purchase and sale of commodities, and the operation of markets and exchanges.
The Chancery Division deals with disputes that relate to business, companies, property, trusts competition, patents, intellectual property, and insolvency. Within the Chancery Division are four specialist courts: the Companies Court, the Bankruptcy Court, the Patents Court, and the Intellectual Property Enterprise Court.
Another specialist division is The Financial List, which covers large claims relating to loans, project financing, banking transactions, capital or currency controls, debt securities, private equity deals, and similar matters.
Preparing a Case
Before starting the preparation for a case, the parties involved must perform preliminary investigation and negotiation to determine the facts of the case, and to decide if an alternative dispute resolution method is possible. There are also pre-action protocols to follow, including an exchange of letters, as well as specific protocols that may apply depending on the nature of the case.
In preparing the case, there are defined procedures that must be followed. For the claimant, the first action to complete is to file a claim form, which includes the facts of the case and other information that must be supplied to set the process in motion. The defendant then has a defined period of time in which to respond to the claim; they can choose to defend the claim, or make their own counterclaim. The next step is that the court holds a hearing to decide how the case will be conducted, and to set a trial date.
Case preparation involves gathering evidence, locating witnesses, preparing arguments, and other tasks that ensure a solicitor or barrister is prepared to argue their case in court, and defend against claims made by the opposing counsel.
Trial and Verdict
Prior to the trial, both parties provide the court with a skeleton argument, which is an outline of the case they plan to present at trial. During the trial, a judge listens to all of the evidence presented. Typically the claimant presents their evidence first, followed by the defendant.
Once all of the evidence has been presented, and witnesses have been questioned, the judge takes time to consider the facts of the case and write their judgement. They then return to the court to hand down their verdict. Once the verdict has been handed down it is made public, unless there are exceptional circumstances that require the judgement to remain private. Sometimes, an additional hearing may take place where the opposing parties present arguments as to appropriate remedies based on the judgement.
After the Verdict
A judge’s decision is legally binding, but not necessarily enforced by the courts. If a claimant wins judgement in their favour and the defendant does not pay, the claimant has several options; for instance they can obtain a third party debt order, which redirects funds from the defendant to the claimant.
If either party is dissatisfied with the verdict, they have the right of appeal, and must do so within 21 days of the verdict in question. If the case was heard in the County Court they must appeal to the High Court. If it was heard in the High Court, they must appeal to the Court of Appeal. In order for an appeal to be heard, the court must consider that the appeal has a reasonable chance of success. Courts are typically reluctant to overturn a judge’s findings relating to the facts of the case. Often this means the appellant must have sufficient grounds for an appeal to be made on the basis of law, rather than fact.