Litigation can be extremely expensive so it is critical to start it on good, cost effective, advice.
Controlling the costs and making litigation pay is all about understanding how it works. These are the key elements:
- Before going to court it is important to send a carefully worded letter to the other side setting out the claim in detail, how much is owed and why and giving them a chance to respond.
- If you get a letter before action, it is important not to ignore it. Parties that fail to try and settle their disputes before going to court will get penalised by the court in costs.
Given the fact that costs can, in all but the biggest claims, be a very significant issue, that is important to avoid.
- So what is the big issue with costs? When you look through the rest of the following, you will see that there is a lot of work involved in bringing a case to court.
Naturally, you would assume that the loser would have to pay the winner's costs. In theory, that's how it works too, but in practice, there are some important nuances.
The costs that the court normally awards to the winner are the assessed costs. Irrespective of what costs are incurred, the court always seems to believe that only about 60% of those
costs really needed to be incurred. That means the winner can end up out of pocket to the tune of 40% of their costs. There are ways to avoid this though.
- Settlement offers, made at the right time and in the right way, will lead to a change in the position on costs. Where the other party fails to accept an offer that they then
fail to beat at court, they will normally end up paying around 90% of the other side's costs.
- Having tried setting out the claim in a letter and making a settlement offer, the parties are also expected to consider how else to settle their differences.
We offer services in relation to negotiation and mediation and in most cases these are well worth a try before going to court.
- If all else fails, the claim must then be issued at court. To do that, a claim form and the all important particulars of claim must be submitted along with the court
issue fee. The particulars of claim are critical as they have to set out clearly what is owed and why. There is a fine line here between arguments and evidence. The latter comes later.
- Once the claim is issued, the other side has two weeks to respond but can extend that to a further two weeks by sending a simple acknowledgment of service
stating that they are going to defend the claim.
- Once the defence is received, the dispute is clearly defined and the evidence required to prove the case can be seen. The court will then ask the parties what directions they
want in terms of how the claim will proceed. Having said this, the procedure is largely standardised.
- This is also the stage where, in the case of claims worth over £25,000, the court will consider the costs budgets put forward by each party. Following any amendments
directed by the court, these will then be approved and will, to some extent limit the costs that can be incurred unless something unforeseen happens.
- If directions and, where appropriate, cost budgets, are agreed, the court will usually give notice that those directions must be followed. Otherwise a hearing will be held for the directions to be decided.
- The first direction is normally for the exchange of documentary evidence. It is worth noting that you can be forced to hand over documents that are detrimental to your case.
- After documents are exchanged, the witnesses are expected to produce written statements and these must then be exchanged. Normally, they will have to attend court
but will not be allowed to expand much, if at all, on their written witness statements except in answering questions from the other side. Those questions are unlikely to be helpful
to a witness and it is therefore critical that their written statements contain all of their important evidence. On the other hand, busy judges don't like unnecessarily long statements.
The statements have to be carefully honed to the point.
- In some cases, there are technical issues that the judge is unable to decide without expert evidence. If the parties have permission, they will instruct experts (or, very often
these days, a single joint expert) to write a report to the court to help the judge with such issues.
- Before going to court for the trial, there will sometimes be a further hearing to decide how, exactly, the trial should be organised.
- A few days before the trial, the advocates will be expected to produce 'skeleton arguments'. These are the bare bones of what will be argued in court and is a great first
chance to get the judge to see the case your way.
- At the trial, the claimant's advocate is normally asked to 'open' the case to set out what is to be decided by the court. Next, the court will hear from witnesses for the
claimant. Their witness statements will be read by the judge and they will be cross-examined by the advocate for the defendant.
- Next comes the case for the defendant. Following cross-examination of their witnesses, the defendant's advocate will be allowed to make closing arguments before the
claimant's advocate has the last word.
- In more straightforward cases, the judge will give judgment immediately. If the case is more complicated, judgment might be 'reserved' and given on a later date.
- Once judgment is given, the court will be asked to decide costs recovery and the efforts that the parties made to settle their differences will be put forward.
- Unfortunately, in many cases, judgment doesn't completely resolve the issue. Even where judgment is accepted and there is no appeal, enforcing the judgment can be far from easy.
Bailiffs can be employed to take goods, but most people's only asset of any significant value is their car and that might actually belong to a leasing company.
A third party debt order can be
sought to get an employer to pay directly, but the amount recovered each month by this route is usually relatively low and a change of jobs means a new order will have to be sought.
Alternatively, a charge can be given over a person's home. This can be relatively secure so long as the property is not already mortgaged to the hilt but payment will only be obtained
once the property is sold and that can be some time.
The description above may put many off, but given the costs involved, that is for the best. For those that do think litigation is worthwhile, we can help
to make the process cost effective. Give us a call and let's chat it through. We never charge anything unless and until you have been given a quote for the charges to be incurred
and have decided that the costs are worth it for you.