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What is the dispute resolution process for commercial litigation cases?

Reasons to choose Wilson Browne

In Commercial Litigation cases, disputes can lead to escalating conflict which is why dispute resolution plays a key role.

Although some disputes can end up proceeding to court hearings, most Commercial Litigation cases settle without reaching trial. This is largely due to the encouragement for parties in disputes to consider forms of Alternative Dispute Resolution, or ADR (see below), throughout the process of a claim.

What is Commercial Litigation?

Litigation is the process whereby you pursue a claim through the Court following the Civil Procedure Rules and Practice Directions.

Claims will go through either a County Court, or for larger commercial cases, the High Court. The choice of court is largely based on the value of the claim being dealt with.

In bringing or defending a commercial claim, there are a number of procedural steps which the parties must mutually comply with leading up to the culmination of a trial should the parties not be able to settle the matter by agreement prior. At trial, a Judge will decide whether the Claimant does or does not have a claim and will accordingly rule in one party’s favour.

Commercial litigation can be costly. If a claim does proceed as far as a trial, this can run into many thousands of pounds. It can also be a timely process, with many cases taking years to resolve. The large caseload being dealt with by many Courts across the country can mean trial dates are listed months in advance, during which costs can be running up.

Therefore, it is a good idea to seek proper legal advice before issuing a claim to consider the potential costs involved and the prospects of succeeding in your claim.

Another important reason for considering your chances of being successful in your claim is because of the general position on costs being that the losing party pays the winning party’s reasonable costs. This can add to your potential cost liability as you may be liable for not only your own legal fees, but also the other party’s should you be unsuccessful.

There are a number of ways in which Commercial Litigation can be funded. For example, a Condition Fee Agreement (CFA) (also known as a no win no fee) is where you pay no fee, or a reduced fee if your case is unsuccessful.

Not all cases are suitable for a CFA, as these are based on the likely prospects of success, the amount of your claim and the means for the Defendant to pay. Initial assessments have to be carried out before a CFA can be entered into, so although the bulk of your costs may be deferred and only become payable at a later date, initial fees may be payable.

Another funding method is the possibility of your claim being covered by insurance policies. Check any insurance policies you have in place, whether this be business insurance or a car policy, to see whether you have legal expenses insurance which may cover your claim.

Despite there being multiple different funding possibilities, the norm is for Commercial Litigation to be funded on a private fee paying basis whereby you pay for the advice and work of your solicitor on regular interim periods.

What Must You Weigh Up Before Starting Litigation?

As well as the potential costs and time litigation can take, there are other things you should consider before starting litigation.

  • What are the issues? Identify the key documents relating to the dispute and make sure you have these. Establish a chronology of events adding as much detail as you can. This will assist with preparing your particulars of claim and will assist your solicitor in advising you the best they can, should you decide to instruct one. If further information is needed, work out where you will get this from and who you should contact. Make these enquiries before you issue a claim, as your claim may not have as much merit as you first thought.
  • Preserve all documents. If litigation is imminent then all parties have an obligation to preserve all relevant documentation whether they will be seeking to rely on it or not. This includes electronic documents, paper documents and photographs or recordings. Parties are encouraged to exchange information and documents early, so make sure you have all documentation ready in case the other party in your case requests it.
  • Does the Defendant have the ability to pay? Find out whether they have any assets which may be used to cover an award or whether this claim is likely to be covered by their insurance. If they don’t have the means to pay then there is a risk that you will incur all the costs of bringing a claim and then be unable to recover the cost because they can’t pay.
  • What are the time limits for your claim? Check the contractual or statutory time limits which apply to your claim, as the time periods can vary depending on the facts involved and the type of claim you are making. Consider this before you issue a claim as if you are outside of the time limit, your claim will be baseless, and you could incur costs unnecessarily. If you are intending to bring a claim and are not sure of the time limits, seek advice to make sure you avoid missing the deadline.
  • What are the costs versus benefits of litigation? Consider how much the claim is worth and whether the other side will be able to pay. Consider whether there is a commercial relationship at stake that you want to preserve. If so, consider alternative options to litigation to avoid risking your commercial relationship.
  • Are the reputational or regulatory risks? You may need to act fast to prevent further damage as a result of the dispute, or you may need to comply with certain regulatory conditions, depending on the nature of the dispute. Will adverse publicity be an issue?

What are Pre-Action Protocols?

Courts see litigation as a last resort and instead prefer matters to be dealt with between the parties, avoiding the need for formal hearings. There are therefore, a number of Pre-Action Protocols which apply to different types of litigation.

There are 13 different protocols, for example, Construction and Engineering Disputes, Debt Claims and Professional Negligence.

The expectation is that parties will follow the procedures required of the relevant Pre-Action Protocol to make serious attempts to resolve the claim before it reaches the courts. In all disputes, parties are expected to behave reasonably and to exchange information and documents early to avoid litigation where possible.

If the claim does go to a court hearing despite compliance with the relevant Pre-Action Protocol, if the Court finds that a party has not acted reasonably in the attempts to settle the dispute, then this may impact the court’s decision on which party should pay costs.

One example of this is the cost consequences that are associated with accepting or not accepting an offer of settlement made by way of a Part 36 Offer.

What does Alternative Dispute Resolution involve?

Alternative Dispute Resolution (ADR) provides parties with a confidential opportunity to settle their dispute outside of court. ADR is encouraged by all pre-action protocols and should be seriously considered in every case.

Parties can choose from many methods of (ADR) depending on the circumstances and what will work best for them and their dispute. Options include:

  • Mediation;
  • Arbitration;
  • Expert Determination; and
  • Early Neutral Evaluation


This involved an independent third party who assists both sides in negotiating and coming to an agreement to resolve their dispute.

The parties will begin by each summarising their case to the mediator. The parties will then break away to separate rooms, and the mediator will travel between each party, seeking to identify issues where an agreement may be reached.

Although a mediator cannot impose a settlement on the parties, the intention is that agreement will be reached on issues at hand until a settlement is reached between the parties by the end of the process.


Both parties put their case to an independent third party who will listen to both sides, look at the evidence provided by the parties and decide what the outcome will be.

The outcome decided by the arbitrator is binding between the parties, and the matter cannot be taken to court once the decision is reached.

Arbitration offers a confidential and more flexible option than proceeding to court but still offers a binding resolution between the parties. This is often therefore seen as an attractive ADR option as it saves a lot of time and cost associated with Court hearings.

Expert Determination

An expert is agreed and appointed by the parties to consider the issues as well as any technical and/or legal issues. The expert will come to a binding decision which is enforceable between the parties.

This can offer a quicker resolution however, is much less flexible, with limited opportunity for parties to negotiate and come to a settlement each are happy with.

Early Neutral Evaluation

The parties agree and appoint a neutral third party who will give their opinion on the merits of the case as a whole or on particular aspects. The third party will usually be a lawyer or an expert in the particular field at hand.

The evaluator will provide a viewpoint of the issues, giving their opinion on the merits of the case and guidance as to the likely outcome should the matter proceed to be heard in court.

This can offer the parties a basis on which to negotiate and come to a settlement without the need for the court’s involvement.

What happens if you bring a claim?

To start the claim process, a Claim Form must be issued at the relevant court office supported by Particulars of Claim. Together these will set out the basis of your claim, specifying the facts you rely on in brining your claim together with the resolution you are seeking.

You can choose to issue your Claim Form and Particulars of Claim at the same time, or you can first issue your Claim Form and then your Particulars of Claim up to 14 days later.

The person whom your claim is against (The Defendant) then has 14 days from receipt of your Particulars of Claim (whether this be served at the same time as your Claim Form or later) to file a Defence. This will outline point by point whether or not they agree with your statements and if not, their version of events.

Alternatively, the Defendant could choose to file an Acknowledgement of Service within 14 days of service of the Claim Form and Particulars. This will give the Defendant a further 14 days to file their Defence with the Court.

The Defendant could also choose to bring a counter-claim of their own if they have the grounds to do so. They may choose to do this where they believe the Claimant owes them something too.

The Claimant will need to respond to a Counter-Claim issued by the Defendant with their own Defence in order to avoid being deemed to have made an admission. The Claimant may also choose to respond to the points included in the Defence.

There are various deadlines involved in the full claim process and it is key that these are not missed. There can be consequences if deadlines are missed.

For example, if the Defendant does not file their Defence within 14 days of service of the Claim Form and Particulars of Claim, the Claimant may apply to the Court for a default judgement against the Defendant. An award may therefore be made against a Defendant without any opportunity to respond to or refute the claim.

Following the issue of the Claim Form, Particulars of Claim, Defence and Counter-Claim, the parties will file a Directions Questionnaire at the Court, giving further information about the case so that the court can decide which court and track the claim should be allocated to and how the claim should be managed.

How should you manage the dispute resolution process?

Litigation is a serious step to take. If you are going to take it, make sure you are properly prepared. Look carefully at the basis of your claim before issuing a claim, and make sure you include everything.

Be prepared to set aside plenty of time to focus on your claim because the full process is not quick. Be prepared for disclosure because you are likely to have to disclose all relevant documents regardless of whether they are confidential or sensitive.

Consider the costs involved. Weigh up whether you are willing to risk the possibility of not being able to get this back. Litigation is unpredictable and just because you are the one bringing the claim, doesn’t mean you will be successful.

Consider the alternatives. Is there a cheaper way of reaching the resolution you are seeking? If so, this may be both quicker, cheaper, more flexible and more confidential.

Seek expert advice early in the process. If you are unsure about anything, seek advice and make sure everything is done correctly. In the long run, this could save you time and money.

To find out more about commercial litigation and dispute resolution, please call 0800 088 6004, or fill in our online contact form and we will be in touch as soon as possible.

Jamie Boswell


Jamie Boswell


Jamie is a Paralegal in the Commercial Litigation team at our Kettering office.