Litigation is not uncommon and in recent years has increased for a number of reasons; one of which being that we are increasingly more aware of our legal rights and how to exercise them.
Worthing Rugby Football Club catch up with Robert Johnson, Partner & Head of Professional Negligence, at Healys LLP. Robert has almost 30 years’ experience working on commercial litigation cases and has acted for a wide range of clients across most industries
- How do I know if litigation is the right cause of action to take?
In the vast majority of cases, an individual (or entity) who has a claim (known as a Claimant) against another party (known as a Defendant) should only commence legal proceedings as a last resort. Invariably, it is better to seek to resolve the dispute by other means (often termed as Alternative Dispute Resolution). This can take a variety of forms, which include:
- Pre-Action Protocol: this is the process that the Court expects the parties to adopt with the intention of resolving the dispute between themselves and without the involvement of the Court or, if not possible, narrowing the issues in dispute before the matter gets to Court. This is achieved by the early exchange of information and documents and often then settlement negotiations.
- Mediation: This is a confidential process carried out on a “without prejudice” basis. Hence, nothing prepared for the purpose of the mediation or anything said during the mediation can be used by the other party in any subsequent proceedings that may take place if the mediation is not successful and a settlement is not achieved. It is a simple process whereby the parties (with or without legal representation) seek to settle their differences with the assistance of a mediator. The mediator is often (but does not have to be) legally qualified and his principal purpose is to facilitate a resolution. This is done by shuttling between the two parties who will be in separate rooms throughout most of the process.
- Expert determination: This is where parties appoint an individual who has the expertise to determine the dispute; often a barrister and sometimes a retired judge who receives the parties’ submissions and the relevant documents on paper and makes a determination without (generally) a hearing. While the expert’s determination can be for guidance only, invariably it is binding on the parties (at their request).
- Adjudication: This is a quick, informal and relatively inexpensive method of getting a high quality determination of the dispute by a specialist within 56 days from referral. In brief, a reasonably senior barrister is appointed by the parties to determine whatever it is that the parties want to be determined. For that purpose, the barrister is given submissions by each party and a bundle of contemporaneous documents agreed in advance by the parties. The determination of the barrister can be binding or merely informative.
If it is not possible to resolve the dispute without the involvement of the Court (and that can be the case for a variety of reasons) the Claimant will need to decide whether he is prepared to give up on his claim. If he is not (and all the above means have been exhausted) his only option is to issue legal proceedings.
Please note that there are some exceptions to only pursuing litigation as a last resort. These are cases when there is extreme urgency (such as when a competitor has obtained your confidential information and is about to deploy that information to your financial disadvantage). In those circumstances, it may be necessary to issue legal proceedings (almost) immediately.
- What do I need to be mindful of when litigating?
As an individual or business who has a claim against another, you will need to be advised by your lawyer (at the earliest stage) (1) what the prospects of your claim succeeding are; (2) what the value of your claim is; and (3) how much it is likely to cost to pursue your claim to a successful conclusion.
With this information, you are able to make an informed decision as to whether it is commercially sensible to pursue your claim and, if so, to what stage and with which firm. It is often the issue of costs that represents the greatest risk in pursuing the claim. This is not just your legal costs but also (potentially) the legal costs of your opponent. Although the award of costs in this jurisdiction is always in the discretion of the Court, it is usual for the Court to exercise that discretion in favour of the winning party. Thus, as the Claimant, if you succeed in your claim against your opponent, you can expect to recover the reasonable costs that you incurred with your lawyer from your opponent but the reverse is also true, i.e. if you are unsuccessful, you are likely to have to pay the reasonable costs of your opponent.
Therefore, the key risk for the Claimant is the possibility of not succeeding in the claim. In that event, you will not only have to pay your own legal costs but also a (significant) proportion of your opponent’s. Healys can significantly reduce and sometimes eliminate that risk.
This is by means of a combination of:
- Acting on a no win no fee agreement which means that you do not pay any of this firm’s fees unless/until you are successful in your claim. We are also prepared (in certain circumstances) only to charge you our fees once recoveries are received from the defendant. As will be appreciated, judgement is grand but of no practical significance unless it can be converted into monies.
- Obtaining after the event insurance by which you are insuring against the possibility of losing your claim. In that event, the insurer will pay the costs of the defendant. In addition, insurers can be persuaded to fund disbursement costs to include the Court fee and for experts (and which only become payable on a successful outcome).
In many circumstances, my team and I often share the risk with their clients to assist them in pursuing their claims. Having been practising in this field for over 20 years, I have had the opportunity to develop extensive expertise in such retainers. My team and I have also built up very strong relationships with barristers who are also prepared to share the risk in the same way and after the event insurers.
Always remember that litigation (1) is often expensive; (2) rarely can be guaranteed to be successful; and (3) will invariably be time-consuming.
- What are the common mistakes people make when thinking of litigation?
Some of the common mistakes made include the following:
- Never underestimate your opponent.
- Do not overly focus on your strengths but rather spend more time focussing on your weaknesses and your opponent’s strengths in relation to the respective legal positions.
- Hope for the best (i.e. an early settlement) but prepare for the worst (i.e. that the matter will proceed all the way to trial).
- Ensure (with your solicitor) that you have the means (primarily financial but also the stamina) to proceed all the way to trial.
It is essential for a Claimant to understand that once he commences legal proceedings, he or she loses (to a very large extent) the control of the dispute. Once legal proceedings are commenced, the Claimant is unable to conclude the proceedings but rather will have to go to trial unless (1) there is a settlement with the Defendant (but that depends (to a large extent) on the Defendant) or (2) continuing the proceedings (but in that event you will almost certainly have to pay the reasonable costs of the Defendant).
Robert Johnson and his team are extremely experienced in all forms of alternative dispute resolution. Robert has been resolving disputes for his clients by such means for over 30 years and as a consequence has built up extensive expertise in such matters.
If you feel that you may have a claim and would like to explore this further, please don’t hesitate to contact me directly on (direct dial) 020 7822 4106 (mobile) 07899 973306 or via email at: email@example.com