Volume 1: Issue 1

April 2016

STEP-BY-STEP GUIDE TO
COMMERCIAL LITIGATION
Table of contents
1. WHAT LIES AHEAD - AN INTRODUCTION........................................................................... 1
Stages in litigation..................................................................................................................... 1

2. BEFORE LITIGATION STARTS................................................................................................... 2

Alternative dispute resolution................................................................................................. 2
Costs.............................................................................................................................................. 2
Which court?............................................................................................................................... 3
Other considerations before starting litigation.................................................................. 3

3. PREPARING YOUR CASE.......................................................................................................... 4

Bringing and defending a claim.............................................................................................. 4
Costs.............................................................................................................................................. 4
Discovery...................................................................................................................................... 5
Experts.......................................................................................................................................... 5
Pre-trial conferences................................................................................................................. 5

4. TRIAL AND ENFORCEMENT.................................................................................................... 6

The trial......................................................................................................................................... 6
Judgment..................................................................................................................................... 6
Appeals......................................................................................................................................... 6
Enforcement................................................................................................................................ 6

5. MANAGING LITIGATION - Some practical considerations.............................................. 7

Get a head start.......................................................................................................................... 7
Seek early advice....................................................................................................................... 7
Consider alternatives................................................................................................................ 7
Take care with documents....................................................................................................... 7
Prepare for disclosure............................................................................................................... 7
Make time.................................................................................................................................... 7
Count the cost............................................................................................................................. 7
Review your approach regularly............................................................................................. 7

6. COMMON TERMS...................................................................................................................... 8

7. WHY CHOOSE SHEPSTONE & WYLIE?................................................................................ 9

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1. WHAT LIES AHEAD - AN INTRODUCTION
This guide provides an outline of the different stages in court proceedings in South Africa,
and sets out some of the options available to those involved in litigation. It focuses on
commercial disputes in the high court.

As the illustration opposite shows, litigation is a process. The guide aims to take the reader
through each stage, broadly in the order that it happens.
Achieving a successful outcome in litigation, however, requires a great deal more than
knowledge of the process. It usually depends on hard work, a strong team, careful preparation
and a willingness to review and flex the approach as a case proceeds.
There are a number of important steps and rules in civil proceedings that are not covered
by this guide. For example special rules apply to certain types of cases, such as family
proceedings and mortgage bond proceedings. There are also different rules in the lower
courts. Every case will differ.
This guide is based on the high court rules and of course, these rules may change from time
to time. Different divisions of the high court also have different practise rules. It should not
therefore be relied on by anyone contemplating bringing a claim, or who faces the prospect
of defending a claim - it serves only as a general guide.
Should you or your company become involved in a dispute, we recommend you seek
immediate legal advice.

STAGES IN LITIGATION

Investigation
Before
Alternative dispute resolution? litigation
starts
Pre-action steps (including letter of demand)

Summons and particulars of claim

Exchange
Plea (and any counterclaim) of
pleadings
Replication (and any defence to counterclaim)

Case management

Discovery of documents
Pre-trial
Request for trial particulars preparation
Witness statements

Expert reports and meeting of experts

Pre trial conference

Trial preparation
Trial
Trial and
Appeals, if any Enforcement

Enforcement

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 2. BEFORE LITIGATION STARTS

The courts take the view that litigation should be a last resort. This will involve, among other
things, the early exchange of information and documents.
You are expected to make serious attempts to resolve your dispute without recourse to the
courts. In all disputes, the courts expect you to behave reasonably to try to avoid litigation.
This will normally mean that the plaintiff should write a letter of demand to the defendant
setting out the basis of the claim and giving the defendant a reasonable time to respond to
the claim. The parties should if possible conduct genuine and reasonable negotiations with a
view to settling the claim.
The parties should also consider alternative dispute resolution (see below) and make every
effort to contain costs.
If a party is found not to have acted reasonably in attempting to settle the dispute before
proceedings are started, then the courts can take this into account at a later stage when
deciding which party should pay costs, and the level of those costs.

ALTERNATIVE DISPUTE RESOLUTION

Parties to a dispute are encouraged to consider whether some form of alternative dispute
resolution (or ADR) would be more suitable than litigation. Whilst the parties can choose
whatever form of ADR they consider to be appropriate, the more conventional options
include:
• Arbitration - a confidential form of dispute resolution pursuant to which one or more
arbitrators decide a case rather than a court appointed judge.
• Mediation - this is a facilitated negotiation assisted by an independent third party mediator
appointed by the parties.
• Early neutral evaluation by an independent third party, who advises on the merits of each
party’s position.
• Expert determination - in which an independent expert is appointed to resolve the matter
by producing a legally binding decision.
• Other forms of discussion and negotiation.
It might be that one or more of the above procedures are provided for in an agreement which
forms the basis of the dispute. If the agreement does provide for some sort of ADR then the
parties are bound, save in exceptional circumstances, to follow the procedure provided for.
Consideration should also be given to other ways of settling a dispute - for example, by
referring a complaint to an ombudsman.
Whilst it might be possible to settle the case before proceedings start, if this is not possible
you can still agree a settlement with the other parties at any time during the court
proceedings - even after the trial. However, most cases do settle before trial - usually on the
day the trial commences.

COSTS
Litigation is expensive and time consuming. You should therefore seek advice on how much
court proceedings might cost. Be aware that litigation is often unpredictable, so it can be
impossible to estimate costs accurately. Generally, lawyers charge for their work on an hourly
basis.
The general rule in litigation is that the losing party pays the winning party’s reasonable costs
- although it is rare that all the costs will be recovered. A losing party therefore usually has to

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pay not only his own costs but also those of his opponent. As a rule of thumb, the winning
party can recover up to 60% of the actual costs incurred.
It might be possible for you to enter into a conditional fee agreement (under which you would
pay no, or a reduced, fee if the case is unsuccessful, but generally a higher than normal fee if
the case is successful). You will not be able to claim the success amount from your opponent.
There are other ways in which litigation might be funded (in other words, not directly by the
plaintiff or defendant). It might be possible to find a third party funder, who would agree to
finance your legal costs, normally in return for a share in the proceeds if the case is
successful. These types of arrangement will be allowed by the courts if they have no
additional features that make them contrary to public policy. The third party funder could be
liable for the costs of the opposing party if the claim is unsuccessful.

WHICH COURT?
Large commercial cases are most likely to be brought in the high court. Claims with a value
of more than R400 000 can generally be issued in the high court. Claims below R400 000
must usually be issued in a magistrates court. There are many magistrates courts around the
country.

OTHER CONSIDERATIONS BEFORE STARTING LITIGATION

Preservation of documents
Once litigation is reasonably in contemplation, the parties are under obligation to preserve all
documents (papers and electronic, including recordings of telephone calls). Automatic
document destruction policies should be suspended.
Pre-action disclosure
In certain circumstances, it might be appropriate to apply to the court for copies of
documents from an intended defendant before proceedings have started.
Preservation of privilege
You do not have to provide legally privileged documents to other parties as part of the
disclosure process. Care should therefore be taken to ensure that harmful, non privileged
documents are not created. See section 3 for an explanation of privilege.
The defendant’s ability to pay
Does the defendant have any assets? If you are bringing a claim, it is important to find out if
the defendant has any assets or whether the claim is covered by insurance. Otherwise, there
is a danger that a successful claim is unenforceable (see enforcement).
Interim measures
If urgent assistance is needed from the courts, such as an order stopping something - for
example, is there a risk of the defendant moving its assets out of the jurisdiction to avoid
meeting a judgment in your favour? If this is a possibility, you will need to act urgently to
protect your position.
Limitation periods
Are there any ‘limitation periods’ you should be aware of? In short, a claim must be brought
within a certaln period of time - normally within three years of a dispute arising - although this
is a complex area of the law and the time periods can vary depending on the facts and the
type of claim.

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 3. PREPARING YOUR CASE

BRINGING AND DEFENDING A CLAIM

A claim is started by a plaintiff issuing a summons issued by the registrar of the high court.
Particulars of claim, which set out the alleged facts on which the claim is based, must be
included. The summons and particulars of claim also set out what relief you are seeking from
the court - e.g. damages, an interdict or a declaration. The summons and particulars of claim
must then be served (that is, formally delivered to) by the sheriff of the high court on the
defendant within a year of the date of issue of the summons.
The defendant then has 10 days to file a notice to defend and 20 days to file a plea. This
deadline may be extended by agreement between the parties or on application to the court.
In practice, an extension is often requested and usually granted.
If you are served with summons, it is very important that you take urgent legal advice so
that you do not miss the deadlines. The courts require strict compliance with deadlines and
the court rules generally. If a defendant fails to file a notice to defend, or to file a plea within
the relevant time period, the plaintiff can normally obtain ‘judgement in default’, which is a
judgment in the plaintiff’s favour obtained without a hearing or further notice to the defendant.
It is open to a defendant to bring a counterclaim against the plaintiff, if he has grounds to
make his own claim against the plaintiff, or to bring in a third party as another defendant to
the proceedings (for example, if he says that another party is responsible for the plaintiff’s
loss). Counterclaims are sometimes brought purely for tactical reasons - to put pressure on
the plaintiff to settle.
In certain circumstances, the plaintiff must serve a replication, responding to points raised in
the plea.
After the filing of the plea, or replication, where required, pleadings are considered closed
and the plaintiff files a rule 37 questionnaire, which gives the court information about the
case, such as the number and identity of witnesses that they intend to call. The court then
appoints a case management judge (there is an approximate 12 month waiting period) who
holds a hearing called a “case management conference”, to decide the future conduct of
the case, including matters such as disclosure of documents, called “discovery”, exchange
of expert reports and when all issues have been attended to, the case management judge
will certify the matter trial ready whereafter the registrar will fix the trial date. The trial date is
usually within 30 months of the start of the litigation. More complex cases can take longer
- between three to five years - to reach a final judgment i.e. after all appeals have been
exhausted.
It may be possible to obtain a quicker judgment if you have grounds to ask the court for
‘summary judgment’ on either the whole of the claim or defence, or on a particular issue.
The court will give summary judgment, which means that the case does not need to go all
the way to a full trial, if it considers that there is not a real prospect of a party succeeding in
its defence.
The court also has power to ‘strike out’ a party’s claim/defence, either in whole or in part, if it
is satisfied that it discloses no reasonable grounds for bringing or defending the claim, it is an
abuse of the court process or a party has failed to comply with the rules or court order. This
process is called “exception proceedings” and can take up to a year to be finalised.

COSTS
The successful party is usually awarded costs of bringing the claim or defending it. The costs
are in accordance with a prescribed tariff. In practise, a litigant should be able to recover
around 60% of its actual spend, from the losing party.

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DISCOVERY
Each party must file and serve an affidavit with a list setting out a brief description of the
documents that exist and are relevant to the proceedings. Discovery is a very important part
of litigation. It gives each party the chance to test the opponent’s case at an early stage with
reference to the documentary evidence. A case will often turn on the documents that are
disclosed. Discovery can however be an expensive process.
Discovery means that each party must carry out a reasonable search for documents on which
it relies, documents which adversely affect its own or another party’s case and documents
which support another party’s case. It must then give disclosure of those documents, which
involves listing them and making them available for “inspection” and copying. Each party must
set out the extent of the search it has carried out and certify that, to the best of its knowledge,
it has complied with its duty to disclose all relevant documents. Generally, you cannot avoid
disclosing a document or information merely because it is confidential.
You are not entitled to inspect another party’s documents if they are privileged. You will need
to take specific advice on whether documents are privileged. In general terms, a document is
subject to ‘legal advice privilege’ if it is a communication between a lawyer and his client for
the purpose of giving or obtaining legal advice. Only communications between a lawyer and
the client are protected by this privilege. The privilege extends to advice on both what should
sensibly be done in the relevant legal context and party’s strict legal rights and obligations. A
document might also be subject to ‘privilege’ where it is prepared for purposes of settling the
dispute between the parties. Privilege may be waived, so careful consideration must be given
to this class of documents to avoid inadvertently waiving privilege.
Where a party believes that there are more documents relevant to the dispute, but not
disclosed such party may bring an application to court for an order to compel its discovery.

EXPERTS
For many cases, there will be specialist or technical issues on which the court will require the
assistance of independent experts, or a single expert. For example, in a medical negligence
case, the parties might instruct medical experts to opine on the question of whether or not a
doctor’s actions were negligent.
Experts are appointed by the parties.
The role of the expert is to provide an opinion to the party (or parties) instructing him. In so
doing, he owes his instructing party a duty to exercise reasonable skill and care. However,
when instructed to give or prepare evidence for court proceedings, the expert has a duty
to help the court on matters within his/her expertise, and this duty overrides any duty to the
instructing party.
There is an exchange of expert reports. The experts may be required to meet to seek
common ground where possible. The experts are then called to give oral evidence, and are
cross-examined, at trial. It is best to choose an expert witness who has some experience in
testifying in court.
An expert’s instructing party pay his fees. However, these will form part of the costs of the
action that a party may recover from the opposing party, provided that the court has
approved these costs by qualifying the witness as a necessary expert witness.

PRE􀀄TRIAL CONFERENCES
A pre-trial conference is a meeting between the parties’ legal teams aimed at summarising
the ambit of the dispute, recording admission and formally considering settlement
possibilities. As in discovery, this is a very important part of the litigation process. Cases can
be won or lost at the pre-trial conference.

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 4. TRIAL AND ENFORCEMENT

THE TRIAL
The length of the trial will depend on matters such as the complexity of the case and the
number of witnesses giving evidence.
There is one judge, who listens to all the evidence. It is for the parties to present the
evidence. The judge does not investigate the case, but listens to the evidence that is put up
and may ask questions.
The case is usually presented orally at trial by an advocate (also referred to as “counsel”)
(although some attorneys have the right to present cases in the high court). In larger and
more complex cases, one or more advocates are likely to be instructed at the beginning of a
case, and will be fully involved in drafting the pleadings and preparation of the case for trial.
The plaintiffs advocate usually starts by presenting the plaintiffs case. The defendant’s
advocate then presents the defendant’s case. This is called ‘opening submissions’.
There is no jury. The general rules are that, at trial, witnesses of fact give oral evidence and
are cross-examined. Expert witnesses are also cross-examined. The parties then summarise
their cases (called ‘closing submissions’).

JUDGMENT
Following the trial, the judge usually takes a period of time to write his judgment. It is then
typically delivered (known as being ‘handed down’) in court, sometimes read out by the
judge and, more often, copies are made available to the parties by the judge’s registrar. Once
handed down, the judgment is public. Only in very exceptional circumstances do parts of or
even whole judgments remain confidential (at the request of the parties and where the court
agrees to this).

APPEALS
An unsuccessful party (‘the appellant’) can appeal from the high court (one judge) to a full
bench of the high court (three judges) or from the high court to the supreme court of appeal,
subject to permission from the trial judge. The court only grants leave to appeal if it considers
that the appeal has a real prospect of success or there is some other compelling reason for
the appeal to be heard.
It is possible to appeal in relation to findings of both law and fact. However, the appeal courts
are generally reluctant to overturn a trial judge’s findings of fact, particularly where these
depend on the judge’s view of the credibility of the witnesses.
The appellant must file an “application for leave to appeal” (a request for permission to appeal
made to the appeal court) within 21 days of the date of decision appealed against.

ENFORCEMENT
If a plaintiff wins, he will get judgment in his favour. If the defendant does not pay, the plaintiff
can take steps to enforce the judgment, also called execution of the judgment. The main
enforcement means that:
• The high court can give a sheriff authority to seize and sell the debtor’s (defendant’s)
property by way of issuing a warrant of execution.
• Third party debt orders, which redirect to the creditor (i.e. the plaintiff) funds owed to
the debtor by a third party - for example, funds in the debtor’s (defendant’s) bank account
by issuing a garnishee order.

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• Insolvency proceedings - i.e. steps taken to put a non-paying defendant company into
liquidation, or bankruptcy in the case of individuals. A creditor will be paid a dividend in
the event of sufficient assets being found to cover costs.

5. MANAGING LITIGATION - SOME PRACTICAL CONSIDERATIONS

Success in litigation doesn’t just require a strong case. It involves hard work, commitment,
careful preparation and well-conceived strategy and sufficient funds to see it through to
the end.

Get a head start

lf possible spend some time and effort investigating a claim before issuing proceedings. This
should include locating relevant documents, allowing your attorney(s) to speak to relevant
witnesses, take a statement from each witness and establishing whether or not your opponent
has sufficient assets to pay a successful claim and/or costs. That way, you will be better
prepared for litigation, have fewer surprises when proceedings start, and gain a clearer idea of
your chances of success.
Seek early advice
There might be limitation periods that are about to run out; urgent court applications that
should be made such as an application to freeze your opponent’s assets; or court deadlines
looming. Any delay may affect the urgency of the relief you may be entitled to.
Consider the alternatives
Consider whether there are other options available for resolving your dispute - the courts
will expect you to do so and you might be able to do a good deal that avoids the time and
expense of litigation.
Take care with documents
Take advice on matters such as privilege and disclosure at an early stage - it is important, for
example, not to create documents that could damage your case, or to destroy documents
that should be disclosed.
Prepare for disclosure
Remember that disclosure is a very important part of litigation. You are obliged to disclose all
relevant (non privileged) documents, even if they are unhelpful, confidential or embarrassing.
On the other hand, you might receive documents from your opponent that really assist your
case.
Make time
Be prepared for the amount of time involved in litigation. A lot of management time might be
involved in preparing a case - particularly if employees are required to give evidence. In our
experience the more involvement in a case a client has, the better his prospects of success.
Count the cost
Bear in mind that litigation can be very expensive, particularly in large and complex cases that
last a number of years. It is, generally speaking, impossible to give any accurate estimation
of costs. From time to time, we will be able to give you a “ball park figure” which is subject to
change.
Review your approach regularly
Litigation can be a very complex process, requiring a careful and regular review of your
chosen litigation strategy and tactics.

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 6. COMMON TERMS

A
ADR: Alternative dispute resolution - a description of the different possible methods used to
resolve disputes other than through the normal court process, e.g. meditation.
Arbitration: A confidential form of dispute resolution pursuant to which one or more
arbitrators decide a case rather than a court-appointed judge, and which uses different
procedural rules from those adopted by the courts.
C
Case management conference (or CMC): A court hearing to decide the future conduct of a
case, including certain procedural matters such as the exchange of evidence.
Counterclaim: A claim brought by a defendant, against the plaintiff, in response to the claim
brought by the plaintiff.
Cross-examination: The questioning of a witness at trial by the opponent’s advocate (see
also: evidence in chief).
D
Damages: Money awarded by the court to the plaintiff, payable by the defendant, by way of
compensation.
Discovery: The process pursuant to which the parties to litigation identify to the other parties,
normally by the provision of a list, those documents which they are obligated to disclosure
(see also: inspection).
E
Execution: A method of enforcing a court judgment by way of the sheriff of the high court
attaching property and selling it at auction.
Evidence in chief: The evidence given by a witness for the party who called him to be a
witness.
Expert witness: An individual, appointed by a party (or the parties jointly), to provide
technical or specialist assistance to the parties and the court.
Inspection: The process of allowing the other parties to inspect disclosed documents (or the
provision of copies of disclosed documents to the other parties).
Interdict: An order of court prohibiting somebody from doing something.
J
Judgment in default: A court judgment in a plaintiff’s favour which can be obtained by a
plaintiff if a defendant fails to respond to a claim.
L
Limitation period: Also known as Prescription. The period of time within which a claim must
be started. For commercial claims, this is normally six years from the date on which the cause
of action arises.
M
Mediation: Another form of ADR - a facilitated negotiation assisted by an independent third
party mediator appointed by the parties.
P
Particulars of claim: The document in which a plaintiff sets out the details of his claim against
the defendant.
Plea: The document in which a defendant sets out the grounds on which he is defending a
claim.

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Privilege: The right of a party to refuse to give inspection of a document on the basis that the
document is confidential and is either a communication between a lawyer and his client for
the purpose of giving or obtaining legal advice, or is a communication between a lawyer and
his client, or between either of them and a third party, created for the dominant purpose of
giving or receiving legal advice in connection with litigation.
R
Rule 37 questionnaire: A form filed by the plaintiff before a case management conference,
giving the court information about the case.
Return of service: A form filed by the sheriff confirming delivery of a document commencing
proceedings.
S
Statement of case: Document in which a party sets out its case e.g. particulars of claim and
defence.
Strike out: A strike out order is an order of the court that identified written material which
cannot be relied on by a party.
Summary judgment: The court will give summary judgment, if it considers that there is not a
real prospect of a party succeeding in its claim or defence and there is no other compelling
reason why the case or issue should be disposed of at trial. As a result, the case will not go
all the way to a full trial.
Summons: The document which a plaintiff uses to start a claim.
T
Third party debt order: Also known as Garnishee Order. Third party debt orders redirected
to a creditor in respect of funds owed to a debtor by a third party - for example, funds in the
debtor’s bank account.
W
Witness statements: Written statements containing the evidence of the parties’ witnesses.
Without prejudice: Negotiations between parties to a dispute with a view to settling the
dispute are usually conducted on a ‘without prejudice’ basis, which means that, save in
certain circumstances, the content of the negotiations cannot be revealed to the court.

7. WHY CHOOSE SHEPSTONE & WYLIE?

Our award winning litigation practice has a market leading reputation and is highly
respected by clients and peers alike.
We handle all types of litigation and arbitration, including aviation and shipping,
construction and engineering, energy, financial and banking disputes, fraud and asset
tracing, information technology, insolvency, intellectual property, professional indemnity,
property disputes, regulatory investigations, shipping and trust litigation.
Shepstone & Wylie have acted in many of RSA’s top litigation matters in recent years.

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www.wylie.co.za