Dispute Resolution in England & Wales

Basic Principles

The United Kingdom consists of 4 different countries, namely England, Wales, Scotland and Northern Ireland.  The United Kingdom does not have a single unified legal system but rather consists of 3 different legal systems: England and Wales have one legal system, Scotland has one legal system and Northern Ireland has its own legal system.

Depending on which UK country you are doing business in then different laws and dispute resolution procedures may apply.

Therefore when entering into any contract with your customer or when doing business in the UK generally careful consideration should be given as to which law and jurisdiction as well as dispute resolution method is going to apply in the case of a dispute.

Court Proceedings

In England and Wales, the most common form of dispute resolution is by taking legal action through the courts.

England and Wales, as common law countries base their precedents upon a host of long standing case law.  However, the court procedural rules of commercial dispute resolution are codified by way of the Civil Procedure Rules 1998, generally referred to as the CPR and a number of Practice Directions which accompany the CPR in order for it to be correctly understood and interpreted.  As a result of the CPR the courts of England and Wales are in control of the court proceedings.

The highest court in England and Wales is the Supreme Court of the United Kingdom, which has jurisdiction over both civil and criminal matters. 

Litigation regarding civil business matters is first however carried out in the Queens Bench Division of the High Court, or in the County Courts, depending on the importance of the matter and the size of the matter in monetary terms. 

There are also alternative courts where proceedings may be commenced for specialist matters, such as the Commercial Court, Mercantile Court, Technology and Construction Court, and the Chancery Division.  The majority of commercial claims will however commence in either the relevant County Court, or within the Queens Bench Division of the High Court. 

The right of appeal within England and Wales is not automatic, and any appeal must first be determined to be upon acceptable grounds by a judge.  If an application for appeal is however accepted, the matter could eventually be heard by the highest Court, the Supreme Court, after being appealed through the Court of Appeal and any necessary lower courts.  In exceptional circumstances, a decision of the Supreme Court can be appealed to the European Courts of Justice. 

Conduct of court proceedings

Prior to the commencement of court proceedings the CPR sets out a number of steps which parties should take such as writing a letter before action to the potential defendant setting out in detail the nature of the claim and providing any relevant documents.  These steps are formalised by a variety of Pre-action Protocols depending on the nature of the dispute.  For example there are Pre-Action Protocols for personal injury matters, construction matters, negligence matters and so on.

The parties should follow the Pre-Action Protocol prior to commencing litigation at court as otherwise the defaulting party may face costs consequences should the court consider that their conduct prior to the commencement of the litigation at court was unreasonable.

Litigation is commenced by the claiming party filing a claim form at court.  Should the defendant wish to defend the claim then a defence is filed and the litigation process begins in earnest.  The court then takes control of the litigation by holding a case management conference.  The parties must consider the issues of length and cost of trial and are usually required  to give full disclosure of all the documents relevant to the issues in dispute (also known as discovery), and must request permission from the court if the party requires the use of an expert to give either oral or written evidence.

Alternative dispute resolution methods must also be considered. 

Once all the steps ordered at the case management conference have been complied with the trial in court takes place.  The court system allows both oral and written evidence to be heard at trial and accordingly trials can be long in length.

Interim measures

Pre-trial interim measures and orders are commonly used within English dispute resolution.  Measures can be obtained, for example, if it is necessary to protect one party from the possibility of not recovering a monetary order from the other side, or to have a claim set aside for lack of evidence or lack of a real issue to be tried. 

Costs

The issue of costs of any proceedings generally follows the principle of “costs follow the event” with the loser paying the winner its legal costs.  However, the CPR has created an intricate set of rules for situations which may effect the general principle that costs follow the event; any party commencing proceedings must therefore be wary of deviating from the CPR as to do so can result in large cost penalties and the inability to recover all costs that could have been possible at the end of the trial. 

Alternative Dispute Resolution Methods

Alternative dispute resolution (ADR) methods are continuously encouraged throughout the pre-trial period of court proceedings; if such a method could be used once trial has commenced, the court can stay proceedings in order for parties to carry out ADR if appropriate. 

Arbitration and mediation can be seen as the prominent ADR methods within England and Wales; however there are also other ADR methods, such as expert determination or expert appraisal. 

England has a number of prominent arbitration bodies which have become well respected throughout the commercial world.  As such, many parties who often have no connection with England and Wales choose to incorporate an English arbitration jurisdiction clause into their commercial contracts in order to resolve their disputes in a timely manner and with the judgement of well respected and knowledgeable arbitrator.  Arbitration is governed by the Arbitration Act 1996, which generally gives the relevant Arbitrator the same powers to settle the dispute as the Courts; however, the parties are free to agree the number of arbitrators, and the grounds upon which they will arbitrate the relevant dispute. 

The English courts are obliged to decline jurisdiction over any commercial contract which incorporates an arbitration clause, unless the clause can be shown to be null or void.  It is then for the arbitrator to decide whether a valid arbitration agreement exists, and upon what terms. 

Many commercial parties however often prefer to resolve their dispute through non-binding ADR, such as mediation.  The Centre for Effective Dispute Resolution (CEDR) and the ADR group are also now being used by international parties who have no connection with England or Wales due to their prominence and excellence within the field of international dispute resolution. 

In Summary

England and Wales’ historic legal system, its abundance of case law and world respected judges has led to prominence within all forms of dispute resolution.  Many foreign parties select England and Wales to hold sole jurisdiction over both litigation and ADR; demonstrating the attraction of international litigation and excellence within England and Wales.

Nigel Rowley is Head of Litigation and Dispute Resolution in the London Office of Mackrell Turner Garrett.

A brief look at his experience of acting in the last years includes:-

• Acting for a US hedge fund against a UK bank in  a claim for in excess of $10M claiming misrepresentation
• Acting for a UK based software company in a claim for £15M against a UK infringer claiming commercial infringement
• Acting for a US film producer in a claim against a UK media company claiming commercial infringement of rights
• Acting for a US high net worth individual in a claim against a UK architect designer claiming substantial over invoicing.
• Acting for a SA company in a £12M claim against a Canadian conglomerate – share dispute.
• Acting for a UK motor trader in a £1M+ claim against a UK individual – breach of guarantee.
• Acting for a UK company Director in defending a claim against an Iranian state owned business – alleged misallocation of payments
• Acting for a Middle Eastern Royal in defending a £20M+ claim made by a UK bank – alleged bank guarantee default.
• Acting for non –UK national in major extradition case
• Acting for non-UK nationals in international freezing injunction cases.

Nigel has considerable experience in defending FSA prosecutions, and HMRC Appeals.

Is an International Committee member for EMEA on Mackrell International, the independent network of 80+ law firms around the World.  As well as the Chairman of the Membership Committee for Mackrell International.

As a result of the firms membership of Mackrell International, very experienced in cross-border disputes, and multi-jurisdictional litigation.  Nigel can be contacted on +44 (0)207 240 0521 or by email at nigel.rowley@mackrell.com