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POWELL2 qr-code-manual-questions-dispute-resolution-swsx.indd 1 05-Jan-21 10:26:18

DISPUTE RESOLUTION
DISPUTE RESOLUTION
THIRD EDITION
Amanda Powell
Third edition published 2023 by
The University of Law
2 Bunhill Row
London EC1Y 8HQ
© The University of Law 2023
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted,
in any form or by any means, without the prior written permission of the copyright holder, application for which
should be addressed to the publisher.
Contains public sector information licensed under the Open Government Licence v3.0
First edition published 2021
Second edition published 2022
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library.
ISBN 978 1 80502 043 1
 Preface

This book is part of a series of Study Manuals that have been specially designed
to support the reader to achieve the SQE1 Assessment Specification in relation to
Functioning Legal Knowledge. Each Study Manual aims to provide the reader with
a solid knowledge and understanding of fundamental legal principles and rules,
including how those principles and rules might be applied in practice.
This Study Manual covers the Solicitors Regulation Authority’s syllabus for the SQE1
assessment for Dispute Resolution in a concise and tightly focused manner. The
Manual provides a clear statement of relevant legal rules and a well-​defined road
map through examinable law and practice. The Manual aims to bring the law
and practice to life through the use of example scenarios based on realistic client-​
based problems and allows the reader to test their knowledge and understanding
through single best answer questions that have been modelled on the SRA’s sample
assessment questions.
For those readers who are students at the University of Law, the Study Manual is
used alongside other learning resources and the University’s assessment bank to
best prepare students not only for the SQE1 assessments, but also for a future life in
professional legal practice.
We hope that you find the Study Manual supportive of your preparation for SQE1 and
we wish you every success.
The legal principles and rules contained within this Manual are stated as at
1 April 2023.

Author acknowledgments
Amanda would like to thank Malcolm Roger and Kevin Browne for reviewing and
commenting on the content of chapters and sample questions: their input was
invaluable.
 Contents
Preface v
Table of Cases xvii
Table of Statutes xix

Chapter 1 Different Options for Dispute Resolution 1

SQE1 syllabus 1
Learning outcomes 1
1.1 Introduction 2
1.2 Alternative dispute resolution 2
1.2.1 The nature of ADR 2
1.2.2 Failure to engage with ADR 3
1.2.3 The independent third party 4
1.3 Mediation 4
1.3.1 Procedure 4
1.3.2 Advantages 5
1.3.3 Disadvantages 5
1.3.4 Enforcement 6
1.3.5 Summary 6
1.4 Arbitration 6
1.4.1 Legal authority 7
1.4.2 Procedure 7
1.4.3 Advantages 7
1.4.4 Disadvantages 8
1.4.5 Enforcement 8
1.4.6 Summary 8
1.5 Litigation 9
1.5.1 The Civil Procedure Rules 9
1.5.2 The civil courts 9
1.5.3 Terminology 9
1.5.4 Court personnel 10
1.6 An overview of a civil claim 10
1.6.1 Stage 1: pre-​commencement of proceedings 10
1.6.2 Stage 2: commencement of the claim 12
1.6.3 Stage 3: interim matters 12
1.6.4 Stage 4: trial 12
1.6.5 Stage 5: post-​trial 12
Summary 12
Sample questions 13
Contents

Chapter 2 Resolving a Dispute Through a Civil Claim 15

SQE1 syllabus 15
Learning outcomes 15
2.1 Introduction 16
2.2 Limitation 16
2.2.1 Effect of limitation 16
2.2.2 What are the limitation periods? 17
2.2.3 Can the limitation period be extended? 18
2.2.4 Summary of limitation 18
2.3 Parties to a claim 19
2.3.1 Who is the defendant? 19
2.3.2 Where is the defendant? 19
2.3.3 How should defendants be sued? 19
2.3.4 Is the defendant worth suing? 20
2.3.5 Types of claims 20
2.4 Case analysis 21
2.4.1 Causes of action 21
2.4.2 Case study of breach of contract 22
2.5 Pre-​action procedure 24
2.5.1 The Practice Direction and the pre-​action protocols 24
2.5.2 Principles 24
2.5.3 Practice Direction on Pre-​Action Conduct and Protocols 25
2.5.4 Consequences for failure to follow the terms 25
2.5.5 Summary 26
2.5.6 Pre-​Action Protocol for Debt Claims 27
2.5.7 Pre-​Action Protocol for Professional Negligence 27
2.5.8 Practice Direction – preliminary considerations for the
use of the Welsh language in civil proceedings 28
2.5.9 Summary 28
2.6 Foreign element and choice of forum 29
2.6.1 Which country’s laws apply? 29
2.6.2 Jurisdiction – where can proceedings be commenced? 29
2.6.3 Scotland and Northern Ireland 30
Summary of pre-​action steps 31
Sample questions 31
Chapter 3 Commencing Proceedings 35
SQE1 syllabus 35
Learning outcomes 36
3.1 Introduction 36
3.2 The civil courts 36
3.2.1 Which court? 36
3.2.2 The County Court 37
3.2.3 The High Court 37

viii
 Contents

3.3 Issuing proceedings 38

3.3.1 Completing the claim form 38
3.3.2 Adding, removing or substituting the parties 47
3.4 Service of the claim form 48
3.4.1 Methods of service 49
3.5 Where to serve? 50
3.6 When to serve? 50
3.7 Deemed service 51
3.7.1 Deemed service of the claim form 51
3.7.2 Deemed service of other documents 51
3.7.3 Service of the particulars of claim 52
3.8 Service out of the jurisdiction 53
Summary 53
Sample questions 54
Chapter 4 Responding to a Claim 57
SQE1 syllabus 57
Learning outcomes 57
4.1 Introduction 58
4.2 Admissions 59
4.2.1 Specified claims 59
4.2.2 Unspecified claims 59
4.3 Acknowledgment of service 59
4.4 The defence 60
4.4.1 Counterclaim 60
4.4.2 Extending the time limit 60
4.5 Default judgment 61
4.5.1 Procedure 61
4.5.2 Types of default judgment 61
4.5.3 Setting aside default judgments 62
4.5.4 The mandatory ground 62
4.5.5 The discretionary ground 62
4.5.6 Summary 63
4.6 Discontinuance 64
4.7 Pre-​action settlements 65
4.8 Settlements reached after the issue of proceedings 65
4.8.1 Consent orders 65
4.8.2 Tomlin orders 67
4.9 Disputing the court’s jurisdiction 68
Summary 69
Sample questions 69

ix
Contents

Chapter 5 Statements of Case 73

SQE1 syllabus 73
Learning outcomes 73
5.1 Introduction 74
5.1.1 Overview 74
5.1.2 Some general points 74
5.1.3 Ethical considerations 74
5.2 Claim form 74
5.3 Particulars of claim 75
5.3.1 Claim based on breach of contract 75
5.3.2 Claim based on negligence 77
5.4 Defence 79
5.4.1 Purpose of the defence 80
5.4.2 Contents of a defence 81
5.5 Additional claims 83
5.5.1 Counterclaim 83
5.5.2 Structure of a defence and counterclaim 83
5.5.3 Additional claims 84
5.6 Reply to defence 84
5.7 Defence to counterclaim 85
5.8 Amendments to statements of case 85
5.8.1 Before expiry of the limitation period 85
5.8.2 After expiry of the limitation period 85
5.9 Requests for further information 86
5.9.1 Procedure 86
Summary 87
Sample questions 88
Chapter 6 Interim Applications 91
SQE1 syllabus 91
Learning outcomes 91
6.1 Introduction 92
6.2 Purpose of interim applications 92
6.3 Procedure 92
6.3.1 Which court? 97
6.3.2 Content 97
6.3.3 Draft order 98
6.3.4 Service 98
6.3.5 Consent orders 98
6.3.6 Orders made without notice 98
6.3.7 Telephone hearings and video conferencing 100

x
 Contents

6.4 Interim costs 100

6.5 Summary judgment 111
6.5.1 No real prospect 111
6.5.2 Compelling reason 102
6.5.3 Procedure 102
6.5.4 Possible orders 103
6.5.5 Costs 103
6.5.6 Overview of summary judgment 104
6.6 Interim injunctions 104
6.6.1 Who can apply? 104
6.6.2 When to apply? 105
6.6.3 What is an injunction? 105
6.6.4 Guidelines used by the court 105
6.6.5 Cross-​undertaking 106
6.6.6 Procedure 106
6.7 Interim payments 107
6.7.1 Timing 107
6.7.2 Procedure 107
6.7.3 Grounds 108
6.7.4 Orders 108
6.7.5 Effect on trial 108
Summary 108
Sample questions 109
Chapter 7 Case Management 113
SQE1 syllabus 113
Learning outcomes 113
7.1 Introduction 114
7.2 The overriding objective 114
7.2.1 Vulnerable parties and witnesses 115
7.3 Allocation to a track 115
7.3.1 Provisional allocation 115
7.3.2 Directions questionnaire 115
7.3.3 Which track? 117
7.3.4 Small claims track 118
7.3.5 Fast track 118
7.3.6 Multi-​track 119
7.3.7 The case management conference (CMC) 120
7.3.8 Case summary 120
7.3.9 Directions on the multi-​track 122
7.4 Failure to comply with directions 123
7.5 Costs management 124
7.5.1 Costs budgets 124

xi
Contents

7.5.2 Failure to file a costs budget on time 125

7.5.3 Costs management order 125
7.5.4 Summary of case and costs management 126
7.6 Court sanctions 127
7.6.1 Striking out a statement of cases 127
7.6.2 Other sanctions 128
7.7 Relief from sanctions 128
Summary 129
Sample questions 128
Chapter 8 Disclosure and Inspection 133
SQE1 syllabus 133
Learning outcomes 133
8.1 Introduction 134
8.2 Disclosure of documents 134
8.2.1 Definition 134
8.3 Disclosure on each track 134
8.3.1 Small claims track 134
8.3.2 Fast track 134
8.3.3 Multi-​track 134
8.4 Standard disclosure 135
8.4.1 Control of documents 136
8.5 The duty to search 137
8.5.1 Scope of search 137
8.5.2 Limitations 137
8.5.3 Electronic documents 138
8.6 How disclosure is made 138
8.7 Withholding inspection of documents 143
8.7.1 Legal professional privilege 143
8.7.2 Waiving privilege 145
8.7.3 Without prejudice correspondence 146
8.8 The right of inspection 146
8.9 Summary of disclosure 146
8.10 Orders for disclosure 147
8.10.1 Specific disclosure 147
8.10.2 Disputing privilege 148
8.11 Pre-​action disclosure 148
8.12 Non-​party disclosure 149
Summary 149
Sample questions 150

xii
 Contents

Chapter 9 Evidence 153

SQE1 syllabus 153
Learning outcomes 153
9.1 Introduction 154
9.2 Burden and standard of proof 154
9.2.1 Legal burden of proof 154
9.2.2 Standard of proof 155
9.3 Witness statements 155
9.3.1 Form and content 155
9.3.2 Directions for exchange 156
9.3.3 Use at trial 158
9.4 Affidavits 158
9.5 Witness evidence 158
9.5.1 Relevance 159
9.5.2 Opinion 159
9.5.3 Hearsay evidence 160
9.6 Expert evidence 164
9.6.1 Admissibility 164
9.6.2 The expert’s duty 164
9.6.3 Single joint expert (SJE) 164
9.6.4 Separate instruction of experts 165
9.6.5 Procedure 165
9.6.6 Form of expert evidence 166
9.6.7 Overview of expert evidence 167
Summary 167
Sample questions 168
Chapter 10 Trials and Appeals 171
SQE1 syllabus 171
Learning outcomes 171
10.1 Introduction 172
10.2 Attendance of witnesses 172
10.2.1 Witness summons 172
10.3 Preparations for trial 173
10.3.1 Pre-​trial checklists (listing questionnaires) and reviews 173
10.3.2 Trial bundles 173
10.3.3 Case summary 174
10.4 The trial 174
10.4.1 Venue 175
10.4.2 Trial timetable 175
10.4.3 Hostile and unfavourable witnesses 177

xiii
Contents

10.5 Appeals 178

10.5.1 Permission to appeal: grounds 178
10.5.2 Permission to appeal: procedure 179
10.5.3 Timing 179
10.5.4 Destination of appeals 179
10.5.5 Grounds of appeal 180
10.5.6 Overview of appeals 181
Summary 181
Sample questions 182
Chapter 11 Costs 185
SQE1 syllabus 185
Learning outcomes 185
11.1 Introduction 186
11.2 The general rule 186
11.3 Costs management and budgeting 186
11.4 Procedure for determining costs 187
11.4.1 Fixed costs 187
11.4.2 Summary assessment 187
11.4.3 Detailed assessment 188
11.5 Inter-​partes costs: interim 188
11.6 Inter-​partes costs: final 188
11.6.1 Factors in assessing the amount of costs 188
11.6.2 The standard basis 189
11.6.3 Approach to determining costs on the standard basis 190
11.6.4 The indemnity basis 191
11.7 Non-​party costs 191
11.8 Security for costs 192
11.8.1 The order 192
11.8.2 The conditions 193
11.8.3 Justness 193
11.8.4 Procedure 193
11.9 Offers to settle and costs 194
11.10 Part 36 offers 194
11.10.1 Form and content 194
11.10.2 The effect of acceptance 195
11.10.3 The effect of non-​acceptance 196
11.10.4 Part 36 consequences at trial of a claimant’s offer 197
11.10.5 Part 36 consequences at trial of a defendant’s offer 199
Summary 201
Sample questions 201

xiv
 Contents

Chapter 12 Enforcement of Money Judgments 205

SQE1 syllabus 205
Learning outcomes 205
12.1 Introduction 206
12.2 Investigating the judgment debtor’s means 206
12.2.1 Order to obtain information 206
12.3 Methods of enforcement 207
12.4 Taking control of goods 207
12.4.1 Choice of court 208
12.4.2 Procedure 208
12.4.3 Advantages and disadvantages 209
12.5 Charging orders 209
12.5.1 Charging order on land 209
12.5.2 Procedure 210
12.5.3 Advantages and disadvantages 210
12.5.4 Charging order on securities 211
12.6 Third party debt orders 211
12.6.1 Procedure 211
12.6.2 Advantages and disadvantages 211
12.7 Attachment of earnings 211
12.7.1 Procedure 211
12.7.2 Advantages and disadvantages 211
12.8 Enforcement in another jurisdiction 213
12.8.1 Scotland and Northern Ireland 213
12.8.2 The Commonwealth 213
12.8.3 Other countries 213
12.8.4 Practical considerations 213
Summary 214
Sample questions 214

Index 217

xv
 Table of Cases

A A v Hoare [2008] UKHL 6 18

American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1 105
Andrew Mitchell MP v News Group Newspapers Ltd [2013] EWCA Civ 1537 125

D Denton v TH White Ltd [2014] EWCA Civ 906 128

G Gore v Naheed and Ahmed [2017] EWCA Civ 369 4

H Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 3

L Laporte v Commissioner of Police for the Metropolis [2015] EWHC 371 (QB) 3–​4

M May v Wavell, Claim No. A02CL398 190

 Table of Statutes

A Administration of Justice Act 1920 213

Arbitration Act 1996 7
s 66 8

C Civil Evidence Act 1968

s 11 154
Civil Evidence Act 1972
s 3(1) 164
s 3(2) 159
Civil Evidence Act 1995
s 1(1) 161
s 1(2) 160
s 2 161, 163
s 2(1)(a) 162
s 4 163
Civil Jurisdiction and Judgments Act 1982 30
Civil Procedure Rules 1998 3, 9, 13, 24, 26, 36, 52, 54, 56, 61, 78, 85, 108, 118, 127,
134, 136, 147, 158, 164, 178, 180, 187, 189
r 1.1 114, 154
r 1.2 114
r 1.3 114
r 1.4 114
r 3.4 127
r 3.9 126
r 3.9(1) 128
r 3.14 125
r 6.3 52
r 6.14 51
r 6.15 84
r 6.26 52
r 16.4(1) 75
r 16.5 80
r 24.2 101
r 31.6 135–​6
r 31.8 136
r 31.12 147
r 31.16 148
r 31.17 149
r 31.19 148
r 33.2(1)(b) 162
r 33.2(2) 162
r 44.4 186
Part 1 115, 139, 147
Part 2 139, 147
Part 3 114, 128, 139, 147
Table of Statutes

Part 6 48, 49, 53

Part 737
Part 1059
Part 1261
Part 1362
Part 1458
Part 1560
Part 1674
Part 1785
Part 18 86, 90
Part 1950
Part 2083–4
Part 22 47, 77
Part 23 92, 99, 101
Part 24 101, 102, 109
Part 25 104, 106, 107, 108, 109, 192
Part 26117
Part 29122
Part 31 134, 140
Part 32 155, 167, 168
Part 33 154, 161
Part 34172
Part 35 164, 166, 168
Part 36 9, 51, 194–204
Part 44 186, 190
Part 45 46, 103, 187
Part 46192
Part 52179
Part 71206
Part 72211
Part 73209
Part 74213
Part 83207
Part 89212
Commercial Debts (Interest) Act 1998 41, 76
Companies Act 2006
s 1139(1) 49–50
Consumer Credit Act 1974 208, 210
Consumer Protection Act 1987 17
County Courts Act 1984
s 69 77, 88

E European Union (Withdrawal) Act 2018 29

F Foreign Judgments (Reciprocal Enforcement) Act 1933 213

H Human Rights Act 1998 40, 46

xx
newgenprepdf

Table of Statutes

L Liability Act 1957 89

Limitation Act 1980 16, 81
s 2 17
s 5 17
s 14A 17

M Mental Capacity Act 2005 19

S Sale of Goods Act 1979 75, 83

s 14(2) 21
Senior Courts Act 1981
s 35A 77, 79
SRA Code of Conduct for Solicitors, RELs and RFLs
Paragraph 6.4(d) 146
SRA Principles
Principle 1 145
Principle 2 145
Principle 5 145
Principle 7 145
Supply of Goods and Services Act 1982 75
s 4(2) 23
s 13 23, 164

U Unfair Contract Terms Act 1977 29

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newgenprepdf

1 Different Options for Dispute

Resolution
1.1 Introduction 2
1.2 Alternative dispute resolution 2
1.3 Mediation 4
1.4 Arbitration 6
1.5 Litigation 9
1.6 An overview of a civil claim 10

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to the different options for dispute resolution as follows:
• mediation
• arbitration
• litigation
Note that for SQE1, candidates are not usually required to recall specific case names,
or cite statutory or regulatory authorities and these are provided for illustrative
purposes only.

Learning outcomes
The learning outcomes for this chapter are:
• To understand the characteristics of arbitration, mediation and litigation which
make them an appropriate mechanism to resolve a dispute.
• To appreciate how alternative dispute resolution differs from arbitration and
litigation.
• To explain the advantages and disadvantages of alternative dispute resolution.

1
Dispute Resolution

1.1 Introduction
Whilst the public perception of litigation as slow and expensive, with cases argued by
pompous barristers and presided over by elderly and out of touch judges may not have
changed, the reality certainly has. Indeed, civil litigation disputes are more likely to be ‘fought’
in the tranquil surroundings of lawyers’ offices or via virtual meetings than the courtroom,
as the popularity of alternative dispute resolution increases. Even if the case does proceed
through the courts, many claims are dealt with online –​a development which has accelerated
recently. To facilitate this, the courts’ system is in the throes of a £1 billion reform programme
aimed at reducing reliance on buildings, face to face hearings and paper to allow for and
promote the use of technology in resolving disputes.
There are several alternatives to court proceedings which may produce the remedy the
client wants and, as part of the government’s commitment to reducing the costs of litigation,
alternative dispute resolution is actively encouraged. Arbitration, mediation and negotiation
are now important aspects of civil litigation with most cases being settled well before the trial.
These alternative procedures should always be considered at the first interview with the client
and reviewed regularly thereafter.
This chapter will provide an overview of the civil litigation process and of some of the more
common types of alternative dispute resolution.

1.2 Alternative dispute resolution

Litigation is considered the last resort and sanctions may be imposed on those clients who
refuse to consider other options. Alternative dispute resolution (ADR) is a collective term
which refers to any means of settling disputes outside of the traditional litigation process.
Negotiation, in which the parties and the lawyers discuss possible solutions whether in formal
meetings or by correspondence, is a form of ADR which is used routinely throughout the
litigation process. In practice, the vast majority of claims are settled and negotiation is usually
a key element in achieving this outcome. Although there are a number of other different types
of ADR, most of these are outside the scope of this manual and this chapter will concentrate
on just two –​arbitration and mediation.

1.2.1 The nature of ADR

ADR, such as mediation, is a means of resolving disputes with the assistance of an
independent third party who may help the parties to reach their own solution but who cannot
impose a solution. It is voluntary and confidential or ‘without prejudice’. This means that if it
fails and court proceedings are taken, the court will not be made aware of the ADR until after
the judge has dealt with the issues of liability and the award of damages. The parties choose
the process and can withdraw at any time before a settlement is reached. If either party does
not like the proposed solution, they do not have to accept it.
Arbitration is also voluntary, but only in the sense that the parties either voluntarily entered
into an arbitration agreement or agreed to decide the matter in this way once a dispute
arose. If the former, the effect is that one party may force the other to arbitrate against their
will provided the original contractual agreement to arbitrate is valid.
In contrast, litigation is not voluntary (save that the claimant chooses to issue a claim in the
first place). Once the case is started, usually, neither party can withdraw without paying the
opponent’s costs. If the parties are unable to negotiate a settlement or otherwise resolve their
differences through ADR, the court will impose its own solution which may be enforced by the
party who obtains judgment.

2
 Different Options for Dispute Resolution

1.2.2 Failure to engage with ADR

When a dispute arises, a solicitor should discuss with the client the availability of ADR. If the
client is willing (or has already agreed) to participate in ADR, it should be used unless:
• it is obviously inappropriate, for example because an injunction is required;
• the other party is unlikely to co-​operate in the process; or
• the other party cannot be trusted to comply with an award.
Although actively promoted by the courts, there is no point in proceeding with ADR if it will
inevitably fail. Nevertheless, a party who decides not to engage in ADR must be made aware
that penalties may well be imposed for this failure, unless they can justify their stance to the
court. The litigation process is subject to rules, one of which specifically requires the parties to
consider the use of alternative dispute procedures, if appropriate. As a consequence, parties
who choose to litigate may well receive judicial encouragement (and sometimes a degree of
pressure) to attempt ADR although they cannot be ordered by a court to pursue this route.
Set out below is the wording of a direction which would commonly appear in a court order
detailing what the parties are required to do to progress the matter.

Alternative Dispute Resolution

At all stages the parties must consider settling this litigation by any means of Alternative
Dispute Resolution (including Mediation); any party not engaging in any such means
proposed by another must serve a witness statement giving reasons within 21 days of that
proposal; such witness statement must not be shown to the trial judge until questions of
costs arise.

The importance the court attaches to proposals for ADR is evidenced by the provisions of the
Civil Procedure Rules 1998 which dictate how a case is litigated; and a failure to respond to
a reasonable proposal to attempt settlement by ADR may have a significant impact on any
subsequent order for costs.

In the leading case of Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576,
the Court of Appeal held that the court may impose a costs sanction on a party if they
unreasonably refuse to take part in ADR. The court listed a number of factors which may
be taken into account when determining this question:
(a) the nature of the dispute;
(b) the merits of the case;
(c) the extent to which other settlement methods have been attempted;
(d) whether the costs of the ADR would be disproportionately high;
(e) whether any delay in setting up and attending the ADR would have been
prejudicial; and
(f) whether the ADR had a reasonable prospect of success.
The burden is on the other party to show that the refusal is unreasonable with the court
rejecting any presumption in favour of mediation.

The hard line the courts adopt was also apparent in the case of Laporte v Commissioner
of Police for the Metropolis [2015] EWHC 371 (QB), in which two protesters alleged they

3
Dispute Resolution

had been assaulted by the police and falsely imprisoned. The claim failed in every way,
thus confirming the Police Commissioner’s view that it was entirely without merit. Despite
this, the court penalised the defendant by ordering that the claimants only pay two thirds
of the defendant’s costs as the defendant had failed, without adequate justification, to
engage in ADR.
However, Gore v Naheed and Ahmed [2017] EWCA Civ 369 demonstrates that sanctions
will not always apply where the parties refuse to take part in ADR. The case involved a
dispute about a right of way for vehicle access. Although the court stressed that silence
in the face of an invitation to participate in ADR would, as a general rule, be regarded
as unreasonable, this was not automatic. In this particular instance, the judge did not
penalise the successful claimant for their failure to consider ADR because he concluded
that mediation had no reasonable prospect of success, would only add to costs and the
matter raised complex questions of law that made it unsuitable for mediation.
During the course of the court proceedings the parties complete what is known as a directions
questionnaire and, to ensure that clients are fully aware of the importance and implications of
ADR, solicitors are required to confirm they have explained to their client:
(a) the need to try to settle;
(b) the options available; and
(c) the possibility of costs sanctions if they refuse to attempt to settle.
The message is clear –​clients should always consider ADR and engage in the process unless
there are convincing reasons not to do so; and even then, they should be prepared to justify
their decision before a sceptical judge if necessary.

1.2.3 The independent third party

The independence of the third party is an essential feature of ADR, as is the fact that (with the
exception of arbitration) they cannot impose a solution. Because of this, the parties are more
likely to be open in their discussions and less likely to be aggressive towards each other. As a
consequence, the prospects of reaching a settlement are higher. A further advantage is that
the independent third party will not only be trained to act as a neutral, but they also should
have the appropriate industry or commercial knowledge required to understand the dispute.
This may allow them to come up with ideas the parties may not have thought of and which
solve the problem without either side losing face.

1.3 Mediation
Mediation is becoming increasingly popular as a form of ADR. At an early stage, the
availability of mediation as an option should be discussed with the client. If the client is open
to the suggestion, mediation should be proposed, usually by letter or email, to the opponent.

1.3.1 Procedure
In a typical mediation, the parties will agree an independent third person or body who will
act as a ‘go-​between’ known as a mediator. The mediator will be sent written statements from
both parties and, thereafter, will discuss the case with them on a ‘without prejudice’ basis.
Because any future judge in the proceedings will not be made aware of the discussions, the
parties should feel free to engage in frank exchanges with both the mediator and each other.
These conversations will also assist the mediator in identifying the real areas of disagreement
and the points that are most important to the respective parties, with the aim being to move
the parties towards constructive solutions to the problem.

4
 Different Options for Dispute Resolution

In many cases, the mediator and the parties will meet in the same building. This enables any
issues to be dealt with quickly because, if necessary, the parties can meet face to face to
resolve their differences. There are, however, other forms of mediation in which the dispute is
dealt with by correspondence, telephone conversations or online with the use of technology.

1.3.2 Advantages
Apart from the fact that an independent third party may find it easier to lead the parties to a
settlement, mediation has other attractions.

Cost and speed

Mediation can be significantly cheaper than both arbitration and litigation, primarily because
the process is quicker. A skilled neutral can often help the parties to resolve their dispute in a
relatively short period of time.
Nevertheless, clients should not be given the impression that mediation comes at ‘bargain
basement’ prices. The parties have to pay the third party for their services and, in addition,
lawyers will usually be instructed. However, if the mediation is successful, there will be a
significant reduction in the amount of time the lawyers would have spent in preparing and
presenting the case and this, in itself, will save costs.

Flexibility
Mediation is also very flexible, because the parties may choose the procedure to be followed.
There are no legal requirements and thus no need to comply with any statutes, rules of court
or even case law.

Privacy
Mediation takes place in private so that clients, customers and the public are unaware of
the circumstances or the outcome of the dispute. This may be important where the party’s
reputation is an issue or where there may be possible future claims from other litigants.

Preserving a business relationship

Mediation is also ideal for cases where the parties to the dispute will need to continue to
deal with each other. The fact they have chosen a non-​confrontational method of solving their
problem makes it much easier for them to continue their relationship, since the solution is
theirs and has not been imposed upon them.

Commercial reality
A third party unconnected with the dispute may be able to assist the parties to arrive at
realistic and workable terms of settlement. This could include arrangements that a court could
not order, such as discounts on future orders. In contrast, litigation with its final court judgment
will be decisive but the process carries inherent risk and uncertainty.

Ability to withdraw
If the client is unhappy with the progress, mediation allows them to withdraw at any time.

1.3.3 Disadvantages
There are occasions where mediation is simply not appropriate, such as where the client
needs a ruling on a point of law or if an injunction is required. Matters involving allegations of
fraud or other commercially disreputable conduct are also generally unsuitable for mediation.
However, although in most other cases the advantages of mediation will usually outweigh the
disadvantages, these must also be considered.

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Dispute Resolution

Disclosure
Because there are no formal procedures for disclosure of documents and evidence, there is
a risk the parties may resolve the dispute without knowing all the facts. This may lead to a
decision that is subsequently found to be unjust. However, many business clients take the view
that a quick decision, even if it is not completely accurate, is better than wasting time and
money on a protracted dispute in order to get a (potentially) more correct outcome.

Privacy
If the client requires public vindication –​perhaps to ensure that any damage to their
reputation is repaired –​privacy is a disadvantage as they will lose the opportunity to
demonstrate they were not at fault.

Ability to withdraw
As a general principle, no one can be forced to engage in mediation against their wishes.
Furthermore, even if the parties have started to resolve a dispute by mediation, they may
withdraw at any stage before a solution has been agreed despite objections from the other
party. It will then usually be necessary to resort to litigation.
As with privacy, the ability to withdraw is both an advantage and a disadvantage. A party who
decides to walk away from the mediation process will be pleased they can do so, whereas the
other party is likely to be unhappy at the time and money expended without a resolution.

1.3.4 Enforcement
Even if an agreement is reached, it is not automatically binding as the client cannot enforce
this like a court judgment. However, if the parties do agree to terms suggested as a result
of mediation, they have entered into a contract. If one of the parties does not carry out that
contract, they may be sued for the breach.

1.3.5 Summary
Set out below is a summary of the advantages and disadvantages of mediation over litigation
as well as two factors that could be viewed either way.

Table 1.1 Advantages and disadvantages of mediation over litigation

Advantage May be either Disadvantage

• involvement of an independent third party • privacy • limited disclosure

• cost • ability to withdraw •e nforcement is not
• speed automatic
• flexibility
• preserving business relationship
• commercial reality

1.4 Arbitration
Some cases proceed entirely separately from the civil justice system –​in a ‘parallel’ dispute
resolution process known as arbitration. It is a substitute for litigation and, once a party has
agreed to be subject to it, they cannot take advantage of the normal court processes.

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 Different Options for Dispute Resolution

Arbitration may arise in two ways:

(a) The parties may be contractually bound to use arbitration and many business contracts
contain a clause requiring the parties to submit to arbitration in the event of a dispute. It
is common in certain industries such as construction and shipping, for example.
Such a clause would be:

Any dispute arising out of or in connection with this contract, including any question
regarding its existence, validity or termination, shall be referred to and resolved by
arbitration under the XXX Rules.
The number of arbitrators shall be [one/​three].
The language of the arbitration will be English.
The governing law of the contract shall be the substantive law of England and Wales.

(b) In the absence of such a clause, the parties may agree to arbitration once a dispute has
arisen and may choose their own arbitrator with the relevant expertise.

1.4.1 Legal authority

Arbitration is largely governed by statute, namely the Arbitration Act 1996, although this only
applies if the agreement to arbitrate is in writing.

1.4.2 Procedure
The dispute is referred to an independent arbitrator. The person, professional or trade body
may be specified in the original contract; alternatively, the parties may choose their own
arbitrator with the relevant experience. An arbitration process will be adopted but this will be
less formal than the court procedure. Once the third party has reached their decision, this is
binding on both parties to the dispute.

1.4.3 Advantages
Many of the advantages of the parties agreeing to arbitration rather than litigation are similar
to those of mediation. The main ones are:
(a) arbitration is likely to be quicker than going to court and may be cheaper although there
will be costs implications in retaining the services of an arbitrator, who may be a highly
qualified and experienced expert in their field;
(b) the procedures are less formal;
(c) the decision is made by an impartial third party with expertise in the matter;
(d) arbitration takes place in private thus retaining confidentiality –​particularly important
if the parties wish to preserve a business relationship or to ensure that customers or
competitors are unaware of the dispute or the outcome;
(e) the solutions reached are often more practical than those a court has the power to
order; and
(f) the decision is binding on the parties.
The binding nature of the outcome is the most important distinction with mediation.

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Dispute Resolution

1.4.4 Disadvantages
The main disadvantages are:
(a) the dispute may not receive the depth of investigation it would receive in the courts
(depending upon the procedures adopted); and
(b) certain remedies such as injunctions are not available.
Furthermore, arbitration is unlikely to be a cheap alternative as the arbitration expert or panel
will need to be paid and parties often want to be represented by lawyers, particularly if the
amounts in dispute are significant.
One disadvantage mirrors an advantage: the decision is binding with very limited rights of
appeal.

1.4.5 Enforcement
Once a decision has been reached, the winning party to an arbitration can apply to the High
Court under s 66 of the Arbitration Act 1996 for permission to enforce the arbitration award as
if it were a court judgment.

1.4.6 Summary
Below is a summary of the advantages and disadvantages of arbitration over litigation as
well as three factors that could be viewed either way.

Table 1.2 Advantages and disadvantages of arbitration over litigation

Advantage May be either Disadvantage

• cost • privacy • limited disclosure

• speed • the decision of the • s ome remedies
• less formal arbitrator is binding are not available
• involvement of an expert to determine the issue •e  nforcement is
• preservation of business relationship available through
• commercial reality the courts

Examples
You are a solicitor acting for ULaws LLP. You have been asked to advise on the most
appropriate way forward for a number of clients.
(a) Maria booked a holiday to Costa Rica but her trip was cancelled and her travel
agent is only prepared to offer her a credit note for the cost of the flight. Maria wants
a refund. Because her holiday contract contains an arbitration clause requiring her to
submit to arbitration at ABTA (Association of British Travel Agents), she must refer her
dispute to this body.
(b) Natalie is an international sprinter. She has failed a drugs test and wants to contest
the findings. She agrees to submit to arbitration at the Court of Arbitration for Sport in
Switzerland after the dispute has arisen.
(c) Pembroke Windows Ltd (Pembroke) supply double glazing to a large company,
National Homes Plc (NHP), which specialises in building housing developments.
A dispute has arisen in relation to the installation of windows at one particular site.
Pembroke need the payment as they are experiencing cash flow problems but are

8
 Different Options for Dispute Resolution

anxious not to lose their customer as the contracts with NHP are vital to the success
of the company. Given the importance of maintaining its business relationship with
NHP, Pembroke are keen to reach an early settlement and agree to mediation. The
involvement of an independent third party enables the parties to reach an agreement
with which both are satisfied.
(d) Oliver owns a hotel near to a farm. Guests have been complaining about the smell
from the chickens that are housed in a barn in the field next to the hotel. ADR would
not be appropriate in this instance because Oliver needs an injunction to stop the legal
nuisance. Mediation might, however, assist once any injunction had been granted.

1.5 Litigation
If the parties either cannot or will not engage in ADR, they will be left with no alternative but
to proceed by way of litigation through the courts. Once they have done so, neither party
can withdraw without paying the opponent’s costs. If the parties are unable to negotiate a
settlement, the court will impose its own solution that may be enforced by the successful party.
Indeed, this is the main advantage of litigation as it breaks the deadlock between the parties,
albeit at a cost.
Most civil disputes are between individuals and/​or companies and they may arise in many
different contexts. The most common types are contractual disputes, perhaps involving the
sale of unsatisfactory goods, and negligence claims in relation to, for example, road traffic
accidents, injuries at work or inadequate professional advice.

1.5.1 The Civil Procedure Rules

Civil litigation is governed by the Civil Procedure Rules 1998 (CPR), which dictate the procedure
that must be adopted when pursuing a claim through the courts. These are regularly updated
and details of updates and amendments may be accessed at www.justice.gov.uk
• The CPR consist of 89 Parts each of which deal with one aspect of civil procedure.
• Additional information on how the rules work is set out in linked Practice Directions
bearing the same reference number. Thus, Part 36, which concerns offers to settle, is
supplemented by Practice Direction 36 (PD 36), which provides detail on, for example, the
formalities required for such offers.
The aim of the CPR is to provide a more ‘user-​friendly’ system of resolving such disputes. This
has become increasingly important due to the increase in litigants in person (those individuals
who represent themselves) who are unlikely to have the degree of legal knowledge of a
lawyer. To ensure that the process proceeds at a reasonable pace, with the consequent
reduction in cost, the courts have control over the conduct of the matter. This includes making
appropriate directions, setting strict timetables and ensuring the parties comply with them,
backed up by a system of sanctions that the court can impose.

1.5.2 The civil courts

In England and Wales, most civil disputes are dealt with either by the County Court or the
High Court. These are discussed in Chapter 3 when determining where to start proceedings.

1.5.3 Terminology
Proceedings may be brought by individuals, organisations or companies. In all cases, the
person or body who issues the claim is referred to as the claimant. The party against whom
proceedings are issued is called the defendant.
There may be more than one claimant or defendant.

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Dispute Resolution

1.5.4 Court personnel

To ensure the civil system operates effectively, the courts are supported by various personnel.

Judges
Much of the County Court and High Court work is dealt with by district judges, although for
matters proceeding in the Central Office in London they are referred to as masters. These
judges deal with the majority of interim applications (which are considered later in this
manual) and also have jurisdiction to hear trials where the amount involved does not exceed
£25,000. Trials for amounts in excess of this figure are heard by circuit judges in the County
Court and by High Court judges in the High Court.

Court manager
The court manager is the senior civil servant in charge of the court office, although they are
supported by a team of administrative staff. Formal documents that are sent to the court, such
as claim forms and defences, are addressed to the court manager.

Ushers
When the court is sitting, ushers are in attendance. Their role is to assist in the smooth running
of the courts including ensuring the lists of cases are dealt with efficiently.

Enforcement officers
Finally, bailiffs and High Court Enforcement Officers serve court documents and enforce court
orders and judgments, so that claimants receive their money.

1.6 An overview of a civil claim

Before moving on to consider the detail of how to start and progress a civil litigation claim, it
is important to have an understanding of the overall picture. The flowchart in Figure 1.1 shows
the structure of a case and how it proceeds from the pre-​action steps right through to a trial,
and the matters that may arise thereafter. For the purposes of this manual, these are referred
to as the five stages of litigation.

1.6.1 Stage 1: pre-​commencement of proceedings

There are a number of steps to take before issuing proceedings and the starting point is
the client –​what are their objectives, both legal and commercial? Having established this,
evidence must be gathered to confirm the viability of the claim and the prospects of success.
Costs will be at the forefront of the client’s mind and should be addressed; and serious
consideration must be given to ADR.
Pre-​action protocols govern the steps the parties should take before commencing a court
case. The parties must establish what issues are in dispute, share information that is available
to them concerning these matters and endeavour to resolve the issues. Failure to follow a
protocol step or its spirit, without good reason, will usually incur a sanction such as a reduction
in the costs recovered by that party if litigation proves successful.
Immediately after collecting sufficient evidence to substantiate a realistic claim, the potential
claimant should send to the proposed defendant a letter detailing the claim; and the
defendant is expected to send a letter in response.
Only after these steps have been completed should litigation be started.

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 Different Options for Dispute Resolution

Figure 1.1 An overview of civil litigation

STAGE 1
Pre-commencement Preliminary considerations: see paragraph 2.1.

STAGE 2
Issue and serve claim form and particulars of claim.
Commencement
of the action

Defendant files defence.

Court allocates claim to a track.

Small claims track: Fast track: Multi-track:

up to £10,000. over £10,000 and over £25,000.
up to £25,000.

STAGE 3 Standard directions:

Standard Directions or case
Interim Disclosure of
directions. management
matters documents. conference where
Exchange of witness directions given.
statements and
experts’ reports.

STAGE 4
Final hearing. Trial within 30 weeks Trial.
Trial
Usually no costs. of directions.
Fixed trial costs;
summary assessment
of other costs.

STAGE 5
[Appeal.] Appeal. Appeal.
Post-trial
Enforcement. Enforcement. Detalied assessment
of costs.
Enforcement.

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Dispute Resolution

1.6.2 Stage 2: commencement of the claim

Proceedings are commenced by a claim form, which must be served on the defendant
together with full details of the claim, called particulars. If the defendant wishes to contest
the claim, they are required to file at the court and serve on the claimant a defence. At this
point, the court will allocate the matter to a track, with higher value cases being given greater
attention and resources.

1.6.3 Stage 3: interim matters

Once on a track, the court carefully manages a case to ensure the matter progresses towards
the trial date. Directions are given to the parties listing all the steps they must take to prepare
for trial and a strict timetable is imposed as to when each step must be taken. This will
include the parties disclosing any relevant documents that are in their possession and that
impact upon the case (whether they assist or not). Evidence the parties wish to rely on, such
as witness statements and experts’ reports, must then be exchanged; and costs will also be
scrutinised.
In addition, the parties may apply to the court for any specific orders that might be required,
perhaps to compel an opponent who has neglected to take a required step in accordance
with the timetable to do so.

1.6.4 Stage 4: trial

The judge will hear the evidence at the trial and make a decision as to the outcome, resolving
all issues of liability and quantum (damages). As to costs, the judge will decide if any party
should pay the other’s costs and, if so, how much.

1.6.5 Stage 5: post-​trial

A party who is unhappy with the judgment may decide to appeal all or part of the trial
judge’s decision.
If the damages and/​or costs are not paid as required, the party will have to apply to the court
to enforce the judgment. Most commonly, this involves instructing court officials to attend the
debtor’s premises and to take their belongings to be sold at public auction. The proceeds are
then paid to the appropriate party.
During this manual, each of these stages will be considered in more detail.

Summary
• Alternative dispute resolution is an important option for solving civil disputes and the
parties should engage if at all possible. Failure to do so may result in financial sanctions.
• Mediation is a type of ADR. A neutral third party is involved who discusses the dispute
and possible solutions with the parties with the aim of reaching a mutually agreed
solution. The outcome is a voluntary agreement which, if not met, must be enforced as a
breach of contract through the courts.
• Arbitration is an alternative to litigation. The dispute is decided by a single arbitrator or
a panel who are usually experts chosen from a particular field or professional body. The
decision is binding on the parties and enforceable in the courts.
• Negotiation, either face to face or by correspondence, is another important means of
achieving settlement and should be considered throughout the litigation process.

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 Different Options for Dispute Resolution

• There are five stages to litigation: pre-​commencement, issuing of proceedings, interim

matters, trial and appeal and/​or enforcement.
• The main civil courts are the County Court and the High Court. They deal with disputes
that arise between individuals and companies, such as breach of contract or negligence.
• The Civil Procedure Rules dictate the procedure that must be followed by the courts. They
are regularly updated and amended. The CPR are divided into Parts, most of which are
supplemented by a Practice Direction providing additional detail.

Sample questions

Question 1
A client purchases a software package to assist in the ordering and distribution of stock for
their manufacturing process. The system does not comply with the client’s requirements and
they instruct their solicitors to issue proceedings for breach of contract.
What is the best advice the solicitor can give their client concerning alternative dispute
resolution (ADR)?
A There is no need for the client to engage in ADR unless they choose to do so.
B The client may decide not to engage in ADR but should be prepared to justify this
decision to a judge.
C If the client fails to engage in ADR, the court will impose costs sanctions.
D The only options of ADR that are available to the client are mediation and arbitration.
E In ADR, a third party selected by the claimant will assist the parties to resolve their
disputes.

Answer
Option B is correct. Although the client may choose whether to engage in ADR, there are
consequences if they do not and so the advice in option A is incomplete. Option C is wrong
as the courts have discretion as to whether to impose sanctions; whilst D is wrong as there
are other forms of ADR available to the client, although this chapter has concentrated on
mediation and arbitration. Option E is wrong as the third party is independent and should
be agreed between the parties, rather than being selected by the claimant.

Question 2
A client runs a business providing educational software to colleges of further education
to improve their assessment processes. However, complaints have been received from
one college that the assessments are not being correctly recorded and the principal has
indicated that they will not be renewing the contract. It becomes apparent to the client
there may be errors in the system. The client has a number of other colleges that are
considering using the system.
Which of the following statements describes the client’s best option for resolving the
matter and why?
A Mediation because it is a cheaper and faster option than litigation.
B Mediation because it takes place in private and will ensure that other colleges do not
become aware of the dispute.

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Dispute Resolution

C Mediation because it is more likely that the parties will preserve their business
relationship.
D Arbitration because the decision is binding on both parties.
E Arbitration because an expert on information technology can determine the dispute.

Answer
Option B is correct as the client has a number of other colleges that are considering using
the system and it is unlikely they will do so if they become aware of the problems with the
software. Although speed and cost are advantages of mediation over litigation, they are
not the most important issues here, so option A is not the best answer. Option C is wrong
because the college are not looking to renew the contract, so maintaining the business
relationship is immaterial in this instance. The statement in D is correct but the binding
nature of any decision is both an advantage and a disadvantage. Option E is also not the
best answer for the reasons already stated, although it is an advantage of arbitration as a
means of resolving the dispute.

Question 3
A company is owed a significant amount of money by a partnership in relation to an
alleged failure to comply with a contract to supply goods. The partners are adamant they
do not owe the money, arguing that the company is in breach of contract of an implied
term as to quality. Negotiations to resolve the matter have failed, as has mediation, and the
company has not received the outstanding monies.
What advice should the solicitor give to the company before issuing proceedings?
A As it has not been possible to resolve the dispute, there is no alternative but to resort to
litigation and issue proceedings.
B Civil litigation is governed by the Civil Process Rules, which dictate the procedure that
must be adopted when pursuing a claim through the courts.
C The only advantage of litigation is that a final decision will be made by the judge but
the disadvantage is the increased cost.
D Once a judgment has been given, the parties must write to the High Court for
permission to enforce the judgment.
E Once a claim has entered the litigation process, it must follow all five stages up to and
beyond the trial.

Answer
Option A sets out the best advice as litigation is the only means of resolving the dispute
in the absence of agreement. Option B is wrong as the procedure is governed by the Civil
Procedure Rules and not the Civil Process Rules. Option C is not the best advice as there
are other advantages to litigation over ADR including the availability of full disclosure of
documents. Option D is wrong as the successful party does not have to write to the High Court
for permission to enforce the judgment –​this is the procedure required to enforce a decision
in arbitration. Option E is wrong as most claims are settled well before a trial.

14
newgenprepdf

2 Resolving a Dispute Through a

Civil Claim
2.1 Introduction 16
2.2 Limitation 16
2.3 Parties to a claim 19
2.4 Case analysis 21
2.5 Pre-​action procedure 24
2.6 Foreign element and choice of forum 29

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to resolving a dispute through a civil claim as follows:
• preliminary considerations: limitation, pre-​action protocols
• parties and causes of action
• calculating limitation periods for claims in contract and tort
• Practice Direction on Pre-​Action Conduct and Protocols
• principles and purpose of pre-​action protocols governing particular claims and
consequences of failure to follow their terms
• applicable law: mechanisms to determine which country’s laws apply to a
contractual or tortious claim issued in the courts of England and Wales
• jurisdiction: mechanisms to determine jurisdiction over an international contractual
or tortious claim.
Note that for SQE1, candidates are not usually required to recall specific case names,
or cite statutory or regulatory authorities. These are provided for illustrative purposes
only and the case analysis is included for the same reason.

Learning outcomes
The learning outcomes for this chapter are:
• To understand the preliminary matters that must be considered before litigation is
commenced.
• To be able to explain and apply the Practice Direction on Pre-​Action Conduct
and the pre-​action protocols.
• To understand the jurisdiction requirements for a civil claim.
When considering these issues, this manual concentrates on claims involving the
recovery of money as opposed to, for example, claims for the recovery of land or
judicial review.

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Dispute Resolution

2.1 Introduction
In Chapter 1, the five stages of a civil claim were outlined, the first of which is pre-​
commencement matters. Dealing effectively with these is key to a successful outcome. Indeed,
much of the work in civil litigation is carried out by solicitors before matters reach the court
and most cases never do. Those claims that are intrinsically weak or where the evidence is
lacking should be weeded out at this early stage to avoid the client losing even more money.
Efforts can then be concentrated on settling the matter without commencing proceedings –​a
course of action that is generally in the parties’ interests.
However, for reasons other than the merits of the case, it may not be possible to pursue a
claim to a successful conclusion. This may be because the client has left it too long to take
action or due to a lack of funding or even because the defendant is simply not worth suing.
Thus, before issuing proceedings, there are a number of factors to be considered:
(a) Can the claim be brought at all?
(b) Who are the parties?
(c) Does the defendant have the means to pay a judgment?
(d) What are the merits of the case?
(e) What steps must be taken before proceedings are issued?
This chapter focuses on the answers to these questions. However, a solicitor should always be
mindful of professional conduct issues and, before taking any action, consider whether they
can act for the client at all.

Example
A firm of solicitors already acts for a client in negotiating with publishers for the
publication of the client’s novel. The firm is now asked to act for a new client who alleges
that the novel is plagiarised and breaches their copyright. As this is a related matter,
there is a conflict of interest and the firm cannot represent the new client.

2.2 Limitation
Before issuing proceedings, the solicitor must ensure that the client is not precluded from
making a claim at all. The Limitation Act (LA) 1980 prescribes strict time limits with which the
claimant must comply. If these are missed, unless there are exceptional circumstances, that
is the end of the matter as the claim will be ‘statute barred’. The rationale behind imposing
these deadlines is to prevent a potential defendant remaining under constant threat of
litigation for events that happened many years before; and to recognise that the passage of
time results in evidence being lost and witness accounts becoming less reliable.
From the outset, a solicitor must ascertain when the limitation period began and when it
will expire. These dates should be diarised to remind the lawyer that time is marching on,
particularly if the expiration of the relevant period is drawing near. It is vital that proceedings
are issued before the limitation period expires, otherwise the solicitor is likely to face a claim
in negligence.

2.2.1 Effect of limitation

If a party has missed the limitation period, the defendant will have a technical defence to the
claim. This means that, if the court agrees the claim is statute barred, the claimant will not
succeed in the litigation.

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 Resolving a Dispute Through a Civil Claim

2.2.2 What are the limitation periods?

For claims founded on contract or tort, the time limits are set out in ss 2 and 5 of the LA
1980. The basic rule is that the claimant has six years from the date of the cause of action to
commence their proceedings and time runs from this point.
However, when calculating the date on which the limitation period expires, usually the day on
which the cause of action accrues is excluded from the calculation as is apparent from the
examples below.
• In contract, the cause of action accrues as soon as the breach of contract occurs. This will
be a question of fact to be determined by the court.
• In tort, the cause of action accrues when the tort is committed. In negligence, this will be
when damage occurs as a result of a breach of duty.
In contrast, the limitation period for personal injury matters is three years. This runs from the
date of the cause of action or the date of knowledge of the person injured, except for children
where the time limit does not start to run until their 18th birthday.
Furthermore, in a claim based on negligence where the damage is latent (hidden) at the date
when the cause of action accrued, s 14A of the LA 1980 provides that the limitation period
expires either:
• six years from the date of the cause of action; or
• three years from the date of knowledge of the damage, whichever is later; but
• no later than 15 years after the date of the negligent act or omission.

Examples
(a) Freshfruit Ltd supply a consignment of strawberries to Supermarket Plc on 10
September 2022. The strawberries are inspected immediately and found to be over-
ripe; consequently, they cannot be sold. The breach of contract occurs on the date of
delivery and Supermarket Plc has six years in which to issue proceedings, so until 10
September 2028.
(b) Hamish is aware that the tree in his garden is rotten and needs to be cut down. During
a storm on 5 January 2023, the tree is uprooted and smashes into his neighbour’s
conservatory causing extensive damage. The limitation period for the neighbour to
issue proceedings for the tort of negligence does not expire until 5 January 2029.
(c) Anne purchased a property from a building company on 17 October 2018. Four
years later, on 26 November 2022, the property begins to subside due to inadequate
foundations having been built. Because the damage is latent, Anne has until 26
November 2025 to commence proceedings.
These basic rules are summarised in Table 2.1.
Table 2.1 Limitation periods

Nature of action Starting point Length of period

Simple contract The date of breach of contract. 6 years

Tort other than: The date the damage occurs. 6 years

• personal injury
•a ctions under
the Consumer
Protection Act 1987
• latent damage

(continued )

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Dispute Resolution

Table 2.1 (continued )

Nature of action Starting point Length of period

Latent damage (in Later of:
the tort of negligence) (a) the date when the damage occurred; or (a) 6 years
(b) the date on which the claimant first had (b) 3 years
the knowledge required to bring an Overriding time
action. limit: 15 years from the
date of the negligence

2.2.2.1 Contractual limitation

In a contract case, it is very important to check whether a different limitation period is
specified in the contract. This is because any such provision is usually shorter than the
statutory limitation periods referred to above, and the claim should therefore be commenced
within the contractually specified period.

2.2.3 Can the limitation period be extended?

The general rule is that actions commenced outside the limitation period where the defendant
has raised the issue as a defence will not be allowed to proceed, although extensions may be
available in exceptional circumstances.

The case of A v Hoare [2008] UKHL 6 illustrates this, albeit in a different context. The
claimant issued proceedings against the defendant, Hoare, who had been convicted in
1989 for a serious sexual assault against her. In 2004, while still serving his sentence of
imprisonment, Hoare won £7 million on the national lottery. The appeal court granted the
claimant permission to pursue her claim for damages against the defendant despite
being well outside the limitation period.

2.2.4 Summary of limitation

To assist, set out below is an overview of the rules that apply to limitation.

Table 2.2 Limitation

What is limitation? The strict time limit imposed on a claimant that determines the last date
on which they can issue proceedings against a defendant in relation to a
cause of action.

What is the effect? A claimant may still commence their claim but the defendant will have a
complete defence.

General rule If the defendant establishes that the claim is statute barred, the court will
not allow actions commenced outside the limitation period to proceed.

Limitation periods These vary depending upon the type of claim. The statutory time limits
apply unless those stipulated in the contract are shorter.

Extending limitation The court has discretion to extend the deadline but will only do so in
exceptional circumstances.

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2.3 Parties to a claim

The claimant is the party who starts the case whilst the party against whom proceedings are
brought is the defendant. In all cases, it is vital to check the correct spelling and title of the
party concerned.

2.3.1 Who is the defendant?

All potential defendants should be identified at this early stage to avoid incurring costs later
on, for example, to amend court documents. Often this will be straightforward as usually there
will only be one potential defendant, but there are occasions when it is less so.
• If an employee commits a tort when acting in the course of their employment, both the
employee and the employer should be sued, as the latter is vicariously liable for the
former.
• A consumer may have a cause of action against both the retailer and the manufacturer of
a defective product.
There are special safeguards in place for children (a person under 18) and protected parties
(a person who is incapable of managing their own affairs because of a mental disorder as
defined by the Mental Capacity Act 2005). Because these individuals are considered in law to
be unable to make the decisions required of a party to court proceedings, they must have a
litigation friend to act on their behalf. For children, this will usually be a parent or guardian.
A litigation friend must be able to fairly and competently conduct proceedings on behalf of
the party and have no adverse interest.

Example
Sufia, aged 12 years, is injured in a road traffic collision caused by her father’s negligent
driving. In this instance, her father cannot be Sufia’s litigation friend because he would be
the defendant in her claim and, thus, has an adverse interest.
A further safeguard is provided to these parties by the requirement that any settlement
reached involving a child or a protected party will only be valid if approved by the court.

2.3.2 Where is the defendant?

Clearly, the defendant needs to be traceable and their whereabouts known in order to
communicate the claim and, if necessary, serve proceedings. An inquiry agent may be able to
assist if this is an issue.

2.3.3 How should defendants be sued?

Prospective defendants must be sued in their correct capacity and it is important to check this
as a person may have entered into a contract in one of a number of different ways. Equally, a
tort may have been committed or suffered by different legal entities.
The solicitor should confirm whether the defendant is:
• an individual;
• a sole trader;
• a partnership;
• a limited liability partnership (LLP); or
• a limited company.

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Example
You are contacted by a client, Chantelle White, who entered into a contract with Arjun
Bajwa to purchase a consignment of jumpers that she intended to sell at her shop. She
was unable to do so as the items were poorly made and she wants her money back.
Before taking the matter further, you must establish in what capacity Arjun acted.
(a) As an individual on his own behalf?
(b) As a representative of a partnership or LLP?
(c) As a director of a limited company?
The answer to these questions will determine the defendant against whom Chantelle will
bring proceedings. If Arjun is an individual, his correct name must be ascertained. If he is
a partner in a firm, the defendant would be (for example) Bajwa & Co (a firm), whereas
if he contracted on behalf of a LLP or company, the LLP or company itself would be the
defendant.

2.3.4 Is the defendant worth suing?

Suing a defendant who is on the verge of either bankruptcy or liquidation is a pointless
exercise as enforcement of any judgment obtained would be impossible. If the client has any
concerns about the prospective defendant’s ability to pay, further enquiries should be made.
These could include:
• a search at Companies House to ascertain information about the financial position of a
company;
• a bankruptcy search of an individual;
• instructing an inquiry agent (although the costs of this must be considered); and
• the use of various internet search engines to see if there is any relevant information there.
If the outcome of these investigations is that the defendant is struggling financially, although
making a claim is possible, it would not be viable.

2.3.5 Types of claims

When pursuing litigation, the claimant must be aware of the type of claim they are issuing as
this impacts upon how certain court documents are drafted and also the procedure.

2.3.5.1 Specified claims

A claim is specified if it is for a fixed amount of money; usually, it is a claim for a debt owed.
Because the amount is known already (perhaps from an invoice), the figure owed can be
calculated by mere mathematics. Examples would include the price of goods sold and
commission due under express contractual terms.

2.3.5.2 Unspecified claims

If the court will have to conduct an investigation to determine the amount of money payable,
the claim is an unspecified one even if the claimant puts forward some figures. Thus,
damages claims are usually unspecified.

Example
The claimant, Merlin Events Ltd (Merlin), instructs ULaws LLP to start proceedings against
an entertainer, Janice Star, for breach of contract. Janice refused to perform at a concert
in accordance with her agreement with Merlin resulting in the cancellation of the event,
and Merlin is claiming for loss of profits. This is an unspecified claim because the amount
of lost profits is not fixed and will require the court to decide on an appropriate figure.

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What if Merlin also claims the return of the fee paid to Janice (a specified sum)? In
circumstances where the claim is a mixture of specified and unspecified amounts, the
entire claim will be treated as unspecified.

2.4 Case analysis

A lawyer will not be acting in the best interests of their client if they encourage them to pursue
a case that is hopeless from the outset or with only limited prospects of success. Taking full
instructions at the first interview with the client will assist in this regard. The client will be
anxious that the solicitor appreciates their problem and will want to be assured that there is a
satisfactory solution, achievable at a reasonable cost. At the same time, the solicitor needs to
be able to extract relevant information from the client in order to give preliminary advice on
such issues as liability and quantum.

2.4.1 Causes of action

A cause of action is the legal basis of a claim, such as breach of contract or negligence. To
determine whether a client has a cause of action and the likelihood of success, it is essential
at the outset that a solicitor analyses all the available evidence, whether given orally by the
client and any witnesses or contained in documentation.
Table 2.3 contains examples of the most common types of causes of action that are likely to
arise in civil litigation.

Table 2.3 Causes of action

Types of dispute Legal definition Possible claims Purpose of

damages

Contract A party enters into Breach of express terms, for To put the
an agreement with example: claimant in the
another, one or •n  on-​payment of monies due position they
more of the terms (debt claim); or would have
are breached • failure to deliver a consignment been in had
and this causes on time. the contract
the other party to Breach of statutory implied terms been properly
suffer a loss. such as: performed.
• the goods supplied were not of
satisfactory quality, contrary to s
14(2) Sale of Goods Act 1979.

Tort (Negligence) A duty of care is Negligence including: To put the

owed by one party •a road traffic collision where a claimant in the
to another, the motorist breaches their duty of position they
duty is breached care to another road user by would have
and this causes failing to brake in time; or been in had the
the other party •m edical negligence where a negligent act not
to suffer loss doctor misdiagnoses a patient. occurred.
(financial and/​or Negligent mis-​statement such
otherwise). as where:
•a financial adviser gives
inadequate investment advice to
a client.

(continued )

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Table 2.3 (continued )

Types of dispute Legal definition Possible claims Purpose of

damages

Tort (Nuisance) Where use or Examples are: To put the

enjoyment of land •e  xcessive noise from a claimant in the
is unreasonably neighbour; position they
interfered with • tree roots causing damage to an would have
by another adjoining property; been in had the
landowner. •w  ater flooding from another’s nuisance not
property. occurred.

Misrepresentation An untrue or An example is: To put the

misleading •a car salesman who induces a claimant back to
statement of fact customer to purchase a vehicle the position they
by Party A that by falsely representing that it were in before
induces Party B has not been involved in any the contract was
to enter into a road traffic collisions when this entered into.
contract with Party is untrue.
A and that causes
loss to Party B.

2.4.2 Case study of breach of contract

Although it is important to identify the relevant cause of action, it is equally vital to understand
how this impacts upon the progression of the matter. The legal elements form the basis of the
statements of case (the documents that outline the parties’ positions) and the substantive law
provides the structure upon which the evidence will be draped. Take a claim for breach of
contract as an example.
(a) Existence of contract
First, it must be established that there was a contract although, in practice, this will rarely
be disputed.
(b) Terms relied on (express and/​or implied)
Next, the lawyer should establish the terms. If the dispute concerns what express terms
were agreed in a contract, a written agreement will assist. Where the contract was made
orally, the situation is more complex as often the only evidence available is from the
parties who made the contract and who are now locked in dispute. In addition, where
a contract is entered into in the course of business, there may be implied terms that are
imposed by statute. These apply to both written and oral contracts.
(c) Breach of those terms
Thereafter, the solicitor must consider how the client will prove there was a breach that
resulted in recoverable losses. What does the client say the opponent did (or failed to do)
that amounts to a breach of the contract? This is a question of fact, and the solicitor must
assess the evidence the client has to prove the claim.
(d) Consequences
Once a breach has been established, the factual consequences of that breach should be
identified.

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(e) Damage and loss

Finally, each item of loss claimed will have to be proved.
Analysing a case study demonstrates how this works in practice.

Example
ULaws LLP are consulted by Factory Goods (Midlands) Limited (FG) who wish to bring a
claim against Cool Systems Limited (CSL).
FG must first establish that a contract existed, although this is unlikely to be disputed. FG
provide a copy of a written contract in which CSL agreed, on 29 November [last year], to
supply and install at FG’s factory a new air conditioning system. In addition to the express
terms, such as the particular system required and the date of installation, the law provides
that certain terms are implied into the contract. In this instance, that the air conditioning
system would be of satisfactory quality and installed exercising reasonable care and skill
in accordance with s 4(2) and s 13 of the Supply of Goods and Services Act 1982.
FG’s case is that the system is not of satisfactory quality and, furthermore, it was installed
without reasonable care and skill being taken. In particular, the system:
• does not start automatically; and
• fails to achieve the required temperature settings.
Evidence would be required to prove the breach of contract. The client provides the
solicitor with a report from the head of FG’s factory maintenance team identifying faults
in the system and its installation and a daily record of when these arose. However, a
report from an expert confirming FG’s allegation would need to be obtained to provide
independent evidence for the court.
The next element of the claim to be established is that the client suffered consequences
as a result of the breach. The client explains that:
• portable air conditioning units had to be hired;
• the factory had to close in excessively hot weather causing a loss of profit; and
• the system needs upgrading or replacing.
The available evidence is written complaints by FG’s staff about extremes of temperatures
since installation and a daily record of factory temperatures kept by their employee
responsible for health and safety. In addition to taking a detailed proof of evidence from
the individuals concerned, the solicitor may commission a report from an independent
expert confirming these allegations.
Finally, proof of damage and loss must be obtained. The items that FG will be claiming are:
(1) The cost of upgrading the system supplied or replacement by a suitable system.
A report from an expert would be required to cover this.
(2) Loss of profit due to the time the factory had to close because of the excessively hot
working conditions. The client has records supplied by FG’s head of human resources
detailing the occasions when the factory was shut; whilst FG’s profit and loss accounts
and production records would assist in establishing this aspect of the damages.
However, it is likely that an independent accountant’s report would also be required.
Furthermore, the client is required to mitigate their loss, namely to show they have taken
reasonable steps to minimise the amount of loss suffered. FG can demonstrate this as
they hired portable air conditioning units, although these proved insufficient. Receipted
invoices would be useful in this regard.
Although an initial case analysis would be conducted, as the case develops, the solicitor
should continually review which issues remain in dispute and how these are to be proved.

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2.5 Pre-​action procedure

Before issuing court proceedings, the parties are required to comply with various pre-​action
rules, known as pre-​action protocols. These are annexed to the CPR and, over time, a number
have been developed, for example in relation to:
• debt claims
• personal injury
• construction and engineering
• professional negligence.
In addition, if no relevant protocol exists, there is a Practice Direction on Pre-​Action Conduct
and Protocols (PDPAC), which contains general guidance to be followed in such cases. Many
of the provisions mirror those of the protocols so that, effectively, all civil cases are dealt with
in a similar way.

2.5.1 The Practice Direction and the pre-​action protocols

The PDPAC and the protocols are important elements of civil litigation, and solicitors must
ensure they understand the content and are able to apply the provisions effectively.

Purpose
The objective of the PDPAC and the protocols is to initiate and increase pre-​action contact
between the parties. In particular, to encourage better and earlier exchange of information so
the parties are in a position where they may be able to settle cases fairly and early without
litigation, and to enable proceedings to run to the court’s timetable and efficiently if litigation
does become necessary.
These aims are consistent with the overriding objective of the CPR.

2.5.2 Principles
There are elements of the PDPAC and the protocols that are common to all.
(1) Litigation should be a last resort. The parties should consider whether negotiation or
some other form of alternative dispute resolution (ADR) might enable them to settle their
dispute without commencing proceedings.
(2) The parties should exchange sufficient information in order to:
(a) understand each other’s position;
(b) make decisions about how to proceed;
(c) try to settle the issues without proceedings;
(d) consider a form of ADR to assist with settlement;
(e) support the efficient management of those proceedings; and
(f) reduce the costs of resolving the dispute.
(3) The steps taken should usually include:
(a) the claimant writing to the defendant with concise details of the claim;
(b) the defendant responding within a reasonable time; and
(c) the parties disclosing key documents relevant to the issues in dispute.
(4) Only reasonable and proportionate steps should be taken by the parties to identify,
narrow and resolve the legal, factual and/​or expert issues.
(5) Where a dispute has not been resolved after the parties have followed the Practice
Direction, they should review their respective positions to see if proceedings can be

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avoided and at least seek to narrow the issues in dispute before the claimant issues
proceedings.
(6) If a dispute proceeds to litigation, the court will expect the parties to have complied with
the Practice Direction. A party may be sanctioned for failing to do so.
Early disclosure of the substance of the claim and supporting evidence, particularly relevant
documents, will assist the parties in making an informed decision on the merits of the case
at a preliminary stage. This, combined with the active encouragement of ADR, should lead to
a greater number of settlements without the need for court proceedings. The volume of pre-​
action work means that, even if proceedings prove unavoidable, the costs of the litigation
should be reduced. It is for these reasons that there are penalties for non-​compliance.
Although the purpose and principles of the PDPAC and the protocols are similar, in recognition
of the differences between types of claims, a variety of protocols are specifically tailored
to their individual requirements. Any claims that fall outside the protocols must proceed in
accordance with the PDPAC.

2.5.3 Practice Direction on Pre-​Action Conduct and Protocols

The PDPAC provides a safety net ensuring that no civil claim escapes the requirement to follow
the pre-​action procedures.

2.5.3.1 Steps
The Practice Direction is clear that, before commencing proceedings, the parties must
exchange information so they can understand the issues, consider ADR and attempt to settle
the dispute without litigation.
The importance of ADR is recognised specifically in paragraph 8 of the PDPAC, which instructs
the parties to give consideration to it. If proceedings occur, both the claimant and defendant
will normally be required by the court to provide evidence that they reflected upon alternative
means of resolving the dispute. The courts take the view that litigation should be a last resort,
and that claims should not be issued prematurely when a settlement is still actively being
explored. Parties are warned that if this provision is not followed then the court must have
regard to such conduct when determining costs.
The PDPAC expressly states that only reasonable and proportionate steps should be taken by
the parties to try and resolve the matter and costs incurred should also be proportionate. This
will include the claimant writing to the defendant with concise details of the claim, including
a summary of the facts, the sum due and how the amount is calculated. Thereafter, the
defendant must provide a response within a reasonable time –​14 days in a straightforward
claim and three months maximum in a complex case –​to include confirmation of whether
all or part of the claim is accepted, and if not the reasons why, together with details of any
counterclaim. Key documents relevant to the issues in dispute should also be disclosed.

2.5.4 Consequences for failure to follow the terms

A failure to comply with both the Practice Direction and the substance of any approved protocol
that applies to the dispute may lead to sanctions later on. Where non-​compliance has led to
proceedings that might otherwise not have been commenced, or has led to unnecessary costs
being incurred, the court may impose penalties. These can include an order:
(a) that the party at fault pays some or all of their opponent’s costs (perhaps on the penalty,
indemnity basis);
(b) depriving a claimant who is at fault of some or all of the interest they may subsequently
be awarded on any damages recovered; or
(c) requiring a defendant who is at fault to pay interest on any damages awarded to the
claimant at a rate of up to 10% per annum above the base rate.

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The CPR also include a provision that a person who knowingly makes a false statement in a
pre-​action protocol letter or other document prepared in anticipation of legal proceedings
may be subject to proceedings for contempt of court.

2.5.5 Summary
The Practice Direction requires the parties to complete a number of steps and the flowchart in
Figure 2.1 summarises the main provisions.

Figure 2.1 Practice Direction on Pre-​Action Conduct and Protocols

PRACTICE DIRECTION ON PRE-ACTION CONDUCT AND PROTOCOLS

Claimant sends letter before claim including:

• concise details of the claim
• a summary of the facts
• what C wants from D (if money, how this is calculated)
• key documents

Defendant sends a letter of response:

• within a reasonable time
• must confirm if the claim is accepted
• if not, explain the reasons
• indicate if there is a counterclaim
• include key documents

Claimant replies and the parties consider:

• negotiation
• ADR
• appointment of expert(s)

Stocktake: before issuing proceedings the parties should:

• review their positions
• consider whether proceedings can be avoided
• if not, narrow the issues in dispute

Sanctions for non-compliance:

• party at fault pays some or all of opponent’s costs (perhaps
on an indemnity basis)
• C is deprived of some or all of the interest on damages
• D is required to pay a higher rate of interest on damages

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2.5.6 Pre-​Action Protocol for Debt Claims

To assist in an understanding of the purpose and principles of the various pre-​action
protocols, two specific examples are examined in this chapter.
The vast majority of claims issued each year are for straightforward debt matters such
as unpaid invoices for goods sold and delivered or for services provided, for example,
construction works. The claim may also arise because money has been borrowed and not
repaid. Because the amounts involved are often relatively small, firms handling large numbers
of debt claims will often utilise specialist case management software to ensure the monies
can be recovered efficiently and economically.
Debt claims are covered by the Pre-​Action Protocol for Debt Claims (PPDC).
• This applies to any business including sole traders and public bodies (the creditor) that
brings a claim against a debtor who is either an individual or a sole trader (the debtor).
• It does not apply to business to business debts (unless the debtor is a sole trader).
Because the PPDC is specifically aimed at debt claims, the focus is slightly different. The
potential claimant must give full information on the debt owed, including an up-​to-​date
statement of account with details of interest and charges, and how the debt can be paid.
The standard Reply Form, Information Sheet and Financial Statement forms that are annexed
to the protocol should also be included. This is to encourage settlement, perhaps by way of
agreeing repayment plans.
Recognising that most debtors will be individuals, they are given a little longer to respond –​
30 days –​and court proceedings cannot be issued before this deadline. The creditor should
also allow extra time if necessary for the debtor to seek legal or debt advice or in order
to pay.

2.5.7 Pre-​Action Protocol for Professional Negligence

At the other end of the spectrum, the Pre-​Action Protocol for Professional Negligence applies
when a claimant wishes to make a claim against most types of professionals as a result of
alleged negligence.
As with all protocols, the primary aim is to set out a code of good practice, achieved by listing
the steps the parties should follow before commencing court proceedings. Although many are
the same as for the Practice Direction on Pre-​Action Conduct, there are some differences.
The first additional requirement is that a party is encouraged to notify the professional in
writing of any intended claim. This letter (the Preliminary Notice) contains information about
the claimant, a brief outline of the claimant’s grievance against the professional and, if
possible, a general indication of the financial value of the potential claim. The professional
should be instructed to inform their insurers immediately and to acknowledge the notice in
writing within 21 days of receipt.
Next, the claimant should write a Letter of Claim giving full details of the issues and attaching
key documents. The professional must acknowledge this in writing within 21 days of receipt.
Thereafter, they have three months to investigate and to respond.
The Letter of Response sets out whether the professional admits the allegations and if not why
not, with accompanying documents. Alternatively, or as well as the Letter of Response, a Letter
of Settlement may be sent if the professional intends to make proposals for settlement of all
or part of the claim.
If the Letter of Response denies the claim in its entirety and there is no Letter of Settlement, it
is open to the claimant to start court proceedings. In any other circumstance, the professional
and the claimant should instigate negotiations with the aim of resolving the claim within six
months of the date of the Letter of Acknowledgment. If matters cannot be resolved, there must
be a final Stocktake in which the parties review their positions, or at least narrow down the
issues, before court action is taken.

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As with all the protocols and the Practice Direction, the parties must consider ADR.
A summary of the steps is set out in the flowchart in Figure 2.2.

Figure 2.2 Pre-​Action Protocol for Professional Negligence

PRE-ACTION PROTOCOL FOR PROFESSIONAL NEGLIGENCE

Claimant gives Preliminary Notice

Claimant sends Letter of Claim

Defendant acknowledges

Defendant investigates claim

Defendant sends Letter of Response

and/or Letter of Settlement

Claim totally denied and no Claim admitted in whole or

settlement offered part and/or settlement offered

Stocktake
Negotiations ADR procedures

Claimant may start proceedings

2.5.8 Practice Direction – preliminary considerations for the use of the Welsh language
in civil proceedings
This Practice Direction applies to civil proceedings in or having a connection with Wales, and
its purpose is to ensure that the Welsh and English languages are treated equally. Measures
include that, provided the court is informed, hearings in Wales may be conducted entirely in
Welsh if all the parties and witnesses consent, and documents placed before the court may
also be in Welsh.

2.5.9 Summary
• Most civil actions are now governed by pre-​action protocols, for example, professional
negligence and debt claims. These dictate the stages that must be followed before
proceedings may be issued, with the aim of settling the matter without the necessity of
litigation.

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• If the type of case has no pre-​action protocol, such as debt claims between two
companies or claims for breach of contract, the parties must comply with the Practice
Direction on Pre-​Action Conduct and Protocols. The steps that must be taken are similar to
those outlined in the pre-​action protocols.

2.6 Foreign element and choice of forum

In the modern world with its global economy, business and trade are international. To ensure
that disputes which take place outside the confines of England and Wales may be litigated,
mechanisms are in place to determine both the applicable law and the jurisdiction of
international contractual and tortious claims.

2.6.1 Which country’s laws apply?

The starting point for a claim with international implications is to decide which country’s
laws apply. The United Kingdom’s exit from the European Union (EU) means that, for
proceedings issued in an English court after 1 January 2021, the old jurisdictional rules of the
EU are no longer valid. The effect is that each country will apply its own domestic rules to
cases where the UK is involved.

2.6.1.1 Choice of law

All contracts should have a clearly worded clause stating what law will govern the contract
to avoid uncertainty in the event of a dispute arising. Usually, the parties will be able to
nominate the governing law of their choice although there are some exceptions, for example,
the Unfair Contract Terms Act 1977 contains requirements that apply to the contract regardless
of any agreement to the contrary. If agreement has been reached in advance as to which
country’s laws apply to the claim, the case will usually proceed on that basis.

2.6.1.2 Other mechanisms

In situations where no governing law has been chosen, various default provisions come into
play. At this point, the parties no longer have a choice over the law that is applicable to their
dispute.
If the court that is determining the dispute is located outside England and Wales, the
procedure will vary significantly. Thus, there is a real possibility of becoming embroiled
in contentious litigation even before the proceedings have properly commenced because
establishing the applicable law would need to be decided as a preliminary matter. In such
situations, it is even more important to agree a governing law clause, if at all possible.

2.6.2 Jurisdiction –​where can proceedings be commenced?

If a solicitor is instructed by a client who is based abroad, or is instructed to take proceedings
against a party based abroad, the question of jurisdiction must always be considered –​in
which country’s courts can proceedings be commenced? Because of Brexit, cases within the
EU are no longer treated differently and jurisdiction will now be determined in the same way
as for those which fall outside the EU rules. In England and Wales, this will mean considering
the 2005 Hague Convention (where it applies) and the common law. Although not ideal, the
current position does at least have the benefit of consistency.

2005 Hague Convention

The UK is now subject to the 2005 Hague Convention in its own right. The EU Member States
are also party to the Hague Convention, along with a few other countries. The Convention

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requires the court designated in an exclusive jurisdiction agreement (where a clause limits a
dispute to the courts of one jurisdiction) to hear the case and for any proceedings in another
contracting State to be dismissed. However, the impact of the Hague Convention is limited as
it only covers situations where an exclusive jurisdiction clause exists.

Common law
If the Hague Convention does not apply, the common law rules will come into play. In this
instance, jurisdiction may be established by serving the defendant within the jurisdiction,
thus in England and Wales. However, the court may still decline jurisdiction in certain
circumstances and, if the defendant is outside the jurisdiction, permission of the court must be
obtained.
Even if a claimant does not have any real connection with this country, they may issue
proceedings here and it is possible (albeit unlikely) that a claim could reach trial and be
enforced without the claimant ever setting foot in England or Wales.
• Service within England and Wales
The courts of England and Wales can hear any proceedings if the claim form was served
on the defendant while they were present in these countries (no matter how briefly). This
is because service of court papers itself establishes the English courts’ jurisdiction over the
defendant. The rationale behind this principle is that the mere presence of the defendant
indicates their acceptance of the nation’s jurisdiction.
The defendant could, however, object to the proceedings continuing in England and Wales on
the ground that the English courts are not the most appropriate for resolving the dispute.

Example
An Englishwoman is involved in an accident in New York caused by the negligence of a
local New York taxi driver. She is able to serve the defendant with a claim form while he
is in England on holiday. The defendant could object to the proceedings continuing in
England on the basis that New York State was a more convenient forum.
• Service outside England and Wales
If proceedings are issued and a defendant cannot be served with the documents in
England and Wales, the permission of the court must be obtained to serve them outside the
jurisdiction. This may be granted in the following circumstances.
(a) The contract was made or breached in England or Wales, is governed by English law, or
contains an agreement conferring jurisdiction on the English courts.
(b) In a tort claim, the act causing the damage was committed in England and Wales, or the
loss was sustained here.
Although the rules in relation to jurisdiction are complex, they give reassurance to those who
interact and trade internationally that the courts are willing and able to step in and provide a
remedy to wrongs committed anywhere in the world.

2.6.3 Scotland and Northern Ireland

A reference to ‘English law’ covers England and Wales but not Scotland or Northern Ireland,
which have their own legal systems. Although many of the laws made by the UK Parliament
at Westminster do apply or are very similar, this is not always the case. As above, whenever
possible, the parties should agree which law is applicable and the jurisdiction to avoid
incurring costs in establishing this and in enforcing any judgment.

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Summary of pre-​action steps

A significant amount of work is completed by the lawyer before proceedings reach the court, if
they ever do. Set out below is a summary of the most important pre-​action steps.
• The client’s objectives must be established and, before issuing proceedings, all potential
parties should be identified and located.
• The financial viability of the defendant should be checked to determine whether they
have the means to pay any judgment and costs, and what assets are available for
enforcement.
• There are strict time limits within which proceedings must be issued and these run from
the date of the cause of action. For most tort and contract claims, the limitation period is
six years.
• A case analysis should be completed to identify all potential causes of action and the
likely disputed issues for each element, to ensure evidence is collected and preserved
and to consider the realistic prospects of success.
• The parties are required to comply with the pre-​action protocols or the Practice Direction
on Pre-​Action Conduct and Protocols as relevant. These list the steps that must be taken
before issuing proceedings, with the aim of avoiding litigation by agreeing a settlement.
• Jurisdiction should be considered in cases where there is a foreign element. In particular,
the question of which country’s laws are applicable to the dispute and where proceedings
should be issued must be decided. If no prior agreement has been reached, different
mechanisms come into play depending upon whether the party is based inside the EU or
beyond.

Sample questions

Question 1
A man, who owns a florist business, entered into an oral contract on 16 January with a
company that grows and sells flowers. He submits that the contract contained an express
term the flowers would be delivered on 8 February with time being of the essence. The
reason for this provision was that the flowers were required for the lucrative Valentine’s Day
market on 14 February. The flowers failed to arrive until 17 February and most remained
unsold. The company disputes such a term was agreed and neither party has a written note
that time was of the essence.
Which of the following statements best describes the advice the solicitor should give to
the man concerning the commencement of proceedings?
A There is no hurry to issue proceedings as the limitation period does not expire for three
years from 16 January.
B The limitation period runs from the date of breach of the contract, this being the date of
delivery of the flowers on 17 February.
C When issuing proceedings, it does not matter whether the defendant is sued in their
company name or as individual directors.
D There is no need to look into the defendant’s finances until judgment has been
obtained.
E The prospects of the man succeeding in his claim are likely to be affected by his failure
to record in writing that a specified delivery date was agreed and that time was of the
essence.

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Answer
Option E is correct. To succeed in a breach of contract claim, the man must establish that a
contract existed, a term was breached and this caused his losses. The crucial issue will be
whether a delivery date was specified and whether time was of the essence in relation to
the delivery of the flowers. The lack of written evidence to support the man means that the
court will have to decide this based upon conflicting oral evidence.
Option A is wrong because, as this is a contract claim, the man has six years from the date
when the cause of action accrued to commence proceedings. Option B is also wrong as the
limitation period runs from the day of the breach of contract which, in this case, is 8 February
when delivery was not made in accordance with the terms of the contract; it does not run from
the date of the actual delivery on 17 February.
Option C is wrong because proceedings must be issued in the correct name of the
defendant and, in this instance, the company is a separate legal entity to the individual
directors. Option D is not the best advice to give a client as there is little point in winning a
claim only to discover that the defendant is insolvent or otherwise cannot pay the damages
and costs awarded.

Question 2
A company client seeks advice in relation to a contract for the sale of a carpet to a hotel.
The customer strongly disputes payment on the basis that the carpet supplied did not match
the sample provided. The client instructs their solicitor to issue proceedings against the
customer.
Which of the following best describes the approach that should be taken by the client?
A The client may issue proceedings against the customer immediately with confidence
that sanctions will not be imposed.
B As the only purpose of the pre-​action protocols is to assist the parties in settling cases
without litigation, the client need not comply as agreement is unlikely.
C Unless the limitation period is about to expire, the client should write to the customer
with concise details of the claim and disclose key documents.
D The client may choose whether to follow a pre-​action protocol or whether to rely upon
the Practice Direction for Pre-​Action Conduct.
E When trying to resolve matters, all possible steps should be taken by the client to effect
this but only proportionate costs need be incurred.

Answer
Option C is correct. According to the Practice Direction on Pre-​Action Conduct and Protocols,
these are the steps with which the claimant should usually comply before issuing a claim.
Option A is wrong as there are a number of sanctions that the court could impose if a party
fails to comply with the Practice Direction or a relevant pre-​action protocol. These include
penalties relating to costs and interest. Option B is wrong as assisting the parties in settling
cases without litigation is not the ‘only’ purpose of the protocols and the parties should comply
even if agreement seems unlikely.
Option D is wrong as the client cannot choose which route to take. The PDPAC only applies
if there is no specific protocol in relation to the particular dispute. Option E is also wrong
as the client is required to take ‘reasonable and proportionate steps’ to try and resolve the
matter, not ‘all’ steps, although it is correct that the costs incurred in doing so should be
proportionate.

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 Resolving a Dispute Through a Civil Claim

Question 3
A claimant enters into a contract with the defendant, who lives in Italy, for the purchase of
a specialist bicycle. As required by the agreement, the claimant pays in full for the bicycle
on 14 March and it is delivered to England on 27 March ready for a race scheduled to
take place in London. When the bicycle arrives at the claimant’s premises in England,
the claimant inspects it and finds that a faulty gear mechanism has been installed so the
bicycle is not suitable for racing. The claimant wishes to reject the goods and claim the
return of the monies paid. The claimant requests advice on issuing proceedings.
Which of the following statements best explains how the claimant should proceed?
A The claimant has complete choice as to jurisdiction and so should issue proceedings in
the English courts as this would be more convenient.
B The claimant should check the contract to see if there is a term agreeing which
country’s laws apply and whether the courts of England and Wales or Italy have
jurisdiction to hear the dispute.
C Because Italy is a Member State of the European Union, the claimant cannot rely upon
the Hague Convention to sue the defendant.
D In the absence of prior agreement, the claimant must wait until the defendant is
present in England and Wales to serve them with proceedings.
E In the absence of prior agreement, the dispute will be determined by English law as
the contract was breached in England and Wales and permission of the court will not
be required.

Answer
Option B is correct. This is because, although there are mechanisms in place to determine the
applicable law and the appropriate jurisdiction in cases with a foreign element, these only
apply if the parties have not reached agreement on these issues. Hence, the claimant should
check the contract before proceeding further.
Option A is wrong because there may be a jurisdiction clause in the contract and, even if not,
the claimant does not have complete choice due to the ‘default’ mechanisms which come into
effect in the absence of agreement. Option C is wrong as all Member States of the EU are
parties to the Hague Convention. However, this only applies if there is an exclusive jurisdiction
agreement and the facts do not provide information on this point.
Option D is wrong as although jurisdiction can be established by the defendant being served
in England and Wales, this is not the only option available to the claimant. If proceedings
are issued in England and Wales, the documents may be served outside the jurisdiction but
permission of the court must be obtained; hence, Option E is wrong.

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3 Commencing Proceedings

3.1 Introduction 36
3.2 The civil courts 36
3.3 Issuing proceedings 38
3.4 Service of the claim form 48
3.5 Where to serve? 50
3.6 When to serve? 50
3.7 Deemed service 51
3.8 Service out of the jurisdiction 53

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to:
Where to start proceedings:
• allocation of business between the High Court and the County Court
• jurisdiction of the specialist courts
Issuing and serving proceedings:
• issuing a claim form
• adding, removing or substituting parties
• service of a claim form within the jurisdiction
• procedure for service of a claim form outside the jurisdiction (with or without
the court’s permission) and mechanisms for effecting valid service in another
jurisdiction
• deemed dates of service and time limits for serving proceedings
• service by an alternative method
Note that for SQE1, candidates are not usually required to recall specific case names,
or cite statutory or regulatory authorities and these are provided for illustrative
purposes only. Furthermore, the sample claim form included in this chapter is to assist
in understanding the requirements as candidates are not required to draft these
forms for SQE1.

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Learning outcomes
The learning outcomes for this chapter are:
• To appreciate which court to use and why.
• To understand how to issue and serve a claim form both inside and outside the
jurisdiction.
• To comprehend and apply the procedure for changing the parties.
• To understand how service is effected and to be able to calculate this accurately.

3.1 Introduction
If the matter cannot be resolved, either due to the attitude of one or more of the parties or
simply because, despite their best efforts, there is insufficient common ground between them,
proceedings will have to be commenced to break the deadlock. Action must be taken before
the limitation period (see Chapter 2) expires to avoid the defendant having a complete
defence to the claim.
The starting point for any litigation is the court and, in this chapter, the different types and
work allocation will be considered. Having determined the most appropriate forum for the
particular case, how to issue and serve proceedings will be outlined including the practical
steps required to initiate such litigation.

3.2 The civil courts

In England and Wales, civil disputes are dealt with either by the County Court or the High
Court. It is important to ensure that cases are issued in the correct court to avoid the delay
and expense of a subsequent transfer; but also so that the claim proceeds in the court to
which the matter is best suited in terms of the specialism of the judge and the procedure.

3.2.1 Which court?

In some cases, the client will be able to select the court in which to start proceedings. However,
the most important element in determining venue is likely to be the amount in dispute.
• If the value of the claim is £100,000 or less, it must be started in the County Court.
• If the value of the case exceeds £100,000, it may be commenced in the High Court.
Note that different rules apply to proceedings that include a claim for damages in respect of
personal injuries; these cannot be started in the High Court unless the value of the claim is
£50,000 or more.
As a consequence, for claims in excess of £100,000 (or £50,000, as appropriate), the claimant
has a choice of which court to use. To assist lawyers in determining the appropriate venue,
further guidance is provided by the CPR. These indicate that, in addition to the value of the
claim, the High Court may also be used if there are other factors present, in particular:
• the claim is complex either in relation to the facts, the legal issues, the remedy or the
procedures; or
• the outcome is important to the public in general.

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Even if a claim is issued in the High Court, the judge may decide to transfer the matter to the
County Court at a later date.

Example
Northern Finance Ltd (Northern) instructs ULaws LLP to issue against Technology and Co
Ltd (TCL) for breach of contract in relation to the installation of a computer system. The
purpose of the software was to increase the speed and efficiency of Northern’s dealings
with customers. However, the system kept crashing and data was lost causing Northern to
suffer losses of £124,000. As the amount in dispute is more than £100,000, Northern can
issue their claim in the High Court and may decide to do so due to the technical nature of
the dispute and the likely complexity of the facts.

3.2.2 The County Court

The County Court generally deals with the more straightforward cases including claims for
money only where the value of the claim is £100,000 or less (unless damages are sought for
personal injuries). These may consist of:
• specified claims, namely those for a specific sum of money (debt claims); or
• unspecified claims for damages, where the amount in dispute will need to be quantified
by the court.
There is a single national County Court, served by named County Court hearing centres across
the country. There are also two County Court Business Centres, which issue most civil claims
and retain those that are undefended. Because details of what should be included in the
claim form are set out in Part 7 of the CPR, they are sometimes referred to as Part 7 claims.
Where and how to issue proceedings depends upon the type of claim.
• All money-​only claims made on paper, including both specified and unspecified claims,
must be sent to the County Court Money Claims Centre (CCMCC), which is based in
Salford. If a hearing is required, usually in contested cases, the matter will be transferred
to the County Court hearing centre local to the defendant.

Example
Northern Finance Ltd also require proceedings to be started against Harris Tools Ltd for
an unpaid invoice of £67,000. The value of the claim means that it must be started in the
County Court and, as a money-​only claim, it should be issued in the CCMCC.
• The County Court Business Centre at Northampton deals with online claims for specified
sums of money (debt claims) for amounts of up to £100,000. These are made via the
website Money Claim Online (MCOL), which allows individuals, businesses and solicitors
to issue proceedings, check the status of the claim, request judgment and enforce it over
the internet.
This court also provides a service for bulk users, such as utility providers and credit card
companies, that file large volumes of claims for money.
• For all other County Court claims, the claimant can usually issue proceedings in any
of the County Court hearing centres situated throughout England and Wales. In such
circumstances most claimants will choose to start proceedings in the court closest to their
home or business.

3.2.3 The High Court

The High Court is made up of three divisions.

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(a) The King’s Bench Division, which has a workload consisting primarily of actions in contract
and tort.
(b) The Chancery Division, which is used for disputes arising over land, trusts, contentious
inheritance matters, partnership claims and company law.
(c) The Family Division, where family disputes such as defended divorces and adoption are
resolved.
The Central Office of the High Court is located inside the Royal Courts of Justice in London,
but a party may also issue their action in a number of regional District Registries such as in
Birmingham and Leeds. Most claimants will choose to start proceedings in the court closest to
their home or business.

3.2.3.1 The Business and Property Courts

The Business and Property Courts is an umbrella term for a number of courts that decide
specialist business and other civil disputes, both national and international. Amongst
these are:
• the Commercial Court, which deals with complex cases arising out of business disputes
over contracts, insurance, banking and finance; and
• the Technology and Construction Court, which handles claims about buildings,
engineering and surveying.
Cases that are suitable for hearing in these courts would be outside the norm of most civil
disputes and, as a consequence, the (different) procedure is not covered in this chapter.

3.3 Issuing proceedings

Proceedings commence when the claimant or their solicitor send a claim form and other
relevant documents to the appropriate court to be ‘issued’; effectively, a file is opened.
The documents are:
• a claim form (form N1);
• particulars of claim (which may be drafted as part of the claim form or sent
separately); and
• documents that are required to be annexed by the CPR such as a copy of any contract.
Many claims are now dealt with online but, if not, sufficient copies for the defendant and any
other parties should be sent, together with a covering letter indicating whether the court or the
claimant is to serve proceedings and the court issue fee.
Once the claim form has been issued by the court, proceedings are formally started. Although
this rarely arises in practice, a claim is ‘brought’ for limitation purposes (and so time stops
running) when the claim form is received in the court office.

3.3.1 Completing the claim form

The claim form is the point of departure for the litigation and blank forms are accessible on
the Ministry of Justice website. It summarises the most important aspects of the claim, both
the substantive law that underpins the case and the facts in support. The content should be
sufficiently detailed so that the court and the other parties understand the claimant’s case
without being a full recitation of all the evidence in support. The key word is ‘summary’.
Figure 3.1 sets out the first two pages of a claim form and these have been completed
in relation to a debt claim. This is provided to assist in understanding the content and to
illustrate the points that are listed subsequently, and not for drafting purposes. The letters in
the headings below cross-​refer to the relevant part of the form.

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 Commencing Proceedings

Figure 3.1 Example of claim form in a County Court debt action

(continued )

39
Dispute Resolution

Figure 3.1 (continued )

40
 Commencing Proceedings

Figure 3.1 (continued )

(continued )

41
Dispute Resolution

Figure 3.1 (continued )

42
 Commencing Proceedings

Figure 3.1 (continued )

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Dispute Resolution

3.3.1.1 Heading (A)

In the top right hand corner of the claim form, details of the relevant court must be inserted.
This will be:
• the County Court Money Claims Centre for money-​only claims; or
• the appropriate County Court in other instances; or
• the relevant High Court division and local District Registry for High Court matters, for
example:
The High Court of Justice
King’s Bench Division
Birmingham District Registry
Details of the solicitors’ fee account must be added so the court fee may be paid.
The court will assign a claim number when the claim form is issued, which must be included
on all subsequent court documents and correspondence with the court. The date of issue will
also be inserted.

3.3.1.2 Details of the parties (B)

The parties’ names and status must be described accurately with the full address and
postcode. Failure to do so could result in the proceedings being struck out, particularly if the
mis-​spelling means the wrong defendant is sued. Further details on how the parties should be
described is set out below.

Table 3.1 Parties to proceedings

Party General rule Illustration

Individual Individuals must be described using their Mrs Rehana Waheed

full unabbreviated names and title.

Sole traders Individuals who engage in business are An example of a business name
referred to as sole traders. If they use is: Antony Tucker T/​A Marble Designs
a business name, this should also be Note: T/​A is an acceptable
included. abbreviation of ‘trading as’.

Partnerships A partnership is a formal arrangement by Justice & Co (a firm)

which two or more parties manage and
operate a business and share its profits.
They should sue and be sued in the
name of the firm rather than by naming
individual partners.

Companies For limited liability companies, the correct Arrow Engineering Ltd
registered name and address must be Note: check minor points such as
stated and this should be checked by whether the word used is ‘Ltd’ or
carrying out a company search. ‘Limited’.

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 Commencing Proceedings

What if a defendant is an individual who has died before proceedings are commenced?
In such circumstances, the claim should be made against the executors or administrators if
appointed; or ‘the personal representatives of [name] deceased’ if not.

3.3.1.3 Brief details of claim (C)

The claim form must contain a concise statement of the nature of the claim and specify the
remedy that the claimant is seeking. The sample claim form (Figure 3.1 above) is for a breach
of contract claim. However, the wording will change depending upon the relevant cause of
action, as demonstrated below.

Brief details of a claim relating to professional negligence:

By a written contract dated [date] the Defendant agreed to manage the Claimant’s
portfolio of investments. The Defendant was in breach of its obligations and negligent
in this management by failing to invest the Claimant’s investments in accordance with
his stated aim of conservative growth, choosing instead to invest in high-​risk investments,
causing the Claimant damage and loss. The claimant seeks damages estimated at
£500,000.

3.3.1.4 Statement of value (D)

Where the claim is for money, the estimated or actual value of the claim must be inserted.
(a) Specified claims
For specified (debt) claims: the precise figure should be calculated including the interest
that has accrued –​see Figure 3.1.
(b) Unspecified claims
For unspecified claims, such as an action for damages for breach of contract, in the High
Court the claimant need only put: ‘The Claimant expects to recover more than £100,000’.
This provides confirmation that the matter has been issued in the correct court. Where
damages are claimed for personal injury, the relevant figure is £50,000.
However, in the County Court, the claimant must state:
• whether they expect to recover:
∘​ not more than £10,000; or
∘​ more than £10,000 but not more than £25,000; or
∘​ more than £25,000; or
• they cannot say how much they expect to recover.
When calculating this figure, the following should be disregarded:
• possible awards of interest or costs;
• contributory negligence; and
• counterclaims.
Note that:
• In a claim for personal injuries, the claimant must also state whether the amount that the
claimant expects to recover as general damages for pain, suffering and loss of amenity is
more than £5,000.

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• If a claim is for both damages and a non-​monetary remedy such as an injunction to

prevent a private nuisance, a statement of value must be given in respect of the damages
claimed.
The reason for requesting this information is to assist the County Court in allocating the case
to an appropriate ‘track’. There are three different procedural routes that a claim may take
depending upon the value and these are discussed later in this manual.
In addition, the amount claimed impacts upon the size of the court fee.

3.3.1.5 Defendant’s name and address for service (E)

The defendant’s name and address for service should be described accurately in the box on
the bottom left hand side of the form; or alternatively, the solicitors’ details, provided either the
defendant or their legal representatives have confirmed in writing that the latter have been
instructed to accept service of the court proceedings on their client’s behalf.

3.3.1.6 Financial summary of the claim (F)

The last piece of information on the front of the form is a financial summary.
• The amount claimed must be stated. For specified claims, an exact figure should be
given, including the interest that has accrued to the date of issue of the proceedings. For
unspecified claims, an estimate of what the claimant genuinely expects to recover should
be stated.
• The court fee payable on issue is based upon the statement of value and the maximum
fee payable is £10,000 –​a hefty sum.
• The legal representative’s costs are fixed under Part 45 of the CPR for specified money
claims. For all other claims, the words ‘to be assessed’ should be inserted, as any costs
awarded will be assessed by the court at the conclusion of the proceedings.

3.3.1.7 Preferred County Court hearing centre (G)

If a claim is for money only, it must be issued in the County Court Money Claims Centre where
it will remain unless the claim is defended or a hearing is required. To assist the parties, the
claim will then be transferred to:
• the defendant’s home County Court; or to
• the claimant’s preferred hearing centre as stated on the claim form.
Thus, to avoid increased costs, the claimant should always include a named court that is most
convenient to them.

3.3.1.8 Witnesses (H)

In the next section, the claimant must state whether they or a witness who is to give evidence
on their behalf is vulnerable and, if so, how. Information must be provided on the support or
adjustments they wish the court and the judge to consider. See 7.2.1 for further information on
this aspect.

3.3.1.9 Human rights (l)

The claimant must indicate whether the claim includes any issues under the Human Rights Act
1998 (this would be rare).

3.3.1.10 Particulars of claim (J)

The details of the claim, known as the particulars of claim, must be set out either on the claim
form itself or in a separate document. If the claim is for a debt, there is usually sufficient space
on the form to outline the relevant details (see Figure 3.1). However, more complex cases will
be dealt with by way of a separate particulars of claim and the form should be amended
accordingly.

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3.3.1.11 Statement of truth (K)

CPR Part 22 requires that various documents, including the claim form, are verified by a
statement of truth, which must be in the witness’s own language, signed and dated. If the
particulars of claim are served separately, they must also be verified in this way. The wording
is as follows:
[I believe] [The claimant or as may be believes] that the facts stated in this [name of
the document] are true. [I understand] [The claimant or as may be understands] that
proceedings for contempt of court may be brought against anyone who makes, or
causes to be made, a false statement in a document verified by a statement of truth
without an honest belief in its truth.
As to who can sign the statement of truth, this may be either the party or their legal
representative. If the claimant is an individual, this will be straightforward. If not:
• any of the partners or a person having the control or management of the business may
sign for a partnership; and
• a person holding a senior position such as a director, secretary, chief executive or the
treasurer may sign on behalf of a company.
Where an individual signs on behalf of a party, the following should be added to the
statement of truth:
I am duly authorised by the [party] to sign this statement.
Where a legal representative signs a statement of truth, this will be taken as their statement that:
(a) the client has authorised them to do so;
(b) they have explained to the client that in signing the statement of truth the solicitor is
confirming the client’s belief that the facts stated in the document are true; and
(c) the client was warned of the possible consequences if it should subsequently transpire
that the client did not have an honest belief in the truth of those facts; specifically, the
client may be prosecuted for contempt of court.
A legal representative who signs a statement of truth must sign in their own name and not that
of their firm or employer, but should state the capacity in which they sign and add the name
of their firm where appropriate.
Failure to include a statement of truth means that the court may strike out the document and,
even if not, the claimant is precluded from relying upon its contents.

3.3.1.12 Address for service

An address for service within the jurisdiction must be given and this will usually be the
claimant’s own address or their solicitors’ address (thereby nominating those solicitors to
accept service of proceedings on the claimant’s behalf).

3.3.2 Adding, removing or substituting the parties

On occasion, it will be necessary for another party to be added to a claim or for one party to
be removed or replaced by another.

Example
Petra issues proceedings against Barry for negligence after he swerved across the road
and collided with her vehicle, causing significant damage. She subsequently discovers
that he acted to avoid a pedestrian who had stepped into the road without looking. Petra
may want to add the pedestrian to the proceedings as a second defendant.
The relevant provisions are contained within CPR 19 and are summarised below.

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Figure 3.2 Adding, substituting or removing a party

ADDING, SUBSTITUTING OR
REMOVING A PARTY

Who can make Is permission

Grounds?
an application? required?

An existing party or a Yes unless the Application made Application made

person who wants to claim form has within the outside the
become a party not been served limitation period limitation period

but It is desirable: A party may only be added or

• to add a new party to resolve substituted if the limitation
matters in dispute; or period was current when
No-one may be added • to remove a party; or proceedings were started
or substituted as a • to substitute a party where the
claimant unless their existing party’s interest or
consent in writing has liability has passed to them. and
been filed at court

• the original party was named by mistake; or

• the original party has died/is subject to a
bankruptcy order and their interest or liability
has passed to the new party; or
• the claim cannot properly be carried on
without the new party.

Although the law is clear, it is important to consider how this applies to the facts of each
particular case.

Example
During the course of the proceedings, Petra dies. An application is made to the court to
order that the personal representatives of Petra’s estate are substituted as the claimant
in her place in the litigation. The judge makes the order after being satisfied that Petra’s
interest has passed to the personal representatives and their consent in writing has been
filed at court.

3.4 Service of the claim form

Once a claim form has been issued, it must be served on the other parties within four months.
This means that it must be sent to or delivered to the defendant so they are aware of the
existence of the proceedings. The rules governing service of documents are set out in CPR Part 6.
A claim form can only be served on a firm of solicitors if the defendant has nominated them in
writing and this should not be presumed just because that firm has represented the defendant in
pre-​action negotiations. Once nominated, all court documents are served on the lawyers unless
(exceptionally) the document must be served personally on the party, such as an injunction.

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3.4.1 Methods of service

The following methods of service are permitted under CPR, r 6.3:
(a) personal service;
(b) first class post or document exchange;
(c) leaving the claim form at a specified place;
(d) fax or other means of electronic communication; or
(e) any other method authorised by the court.

3.4.1.1 Personal service

The arrangements for personal service will depend upon the status of the defendant.
• A claim form is served personally on an individual by simply handing it to them. If they
refuse to accept the document, it may be left with or near them.
• If the defendant is a partnership, the form may be left either with a partner or with a
person who has the control or management of the partnership at its principal place of
business.
• Personal service is effected on a company by leaving the documents with a person who
holds a senior position such as a director, treasurer, secretary or chief executive.

3.4.1.2 First class post or document exchange

Only first class post will satisfy the requirements of the CPR for service. Alternatively, where a
document exchange (DX) number is provided on the letter heading, this may be used unless
otherwise stated. DX is a system used by many solicitors and other professionals to transport
documents between their offices, arriving the next business day.

3.4.1.3 Leaving the form at a specified place

Here, the claim form is delivered by hand to the address specified by the CPR (see Table 3.2
below).

3.4.1.4 By fax or other electronic means

Service by fax is waning in popularity as email and similar electronic methods become the
normal means of communication. In both instances, the party to be served (or their solicitor)
must have expressly confirmed they are willing to accept service in this manner.
• An email address or fax number on the party’s headed paper is not enough to satisfy this
requirement.
• In contrast, the inclusion of a fax number on the solicitor’s letterhead is sufficient
indication they are willing to accept service by fax.
• The same does not apply for an email address, where the solicitor must specifically
confirm this method may be used for service.
A party or their nominated solicitors may include in a statement of case a fax number, email
address or electronic identification for the purpose of service of proceedings.

3.4.1.5 Service by an alternative method

In addition to the specific ways listed in Part 6 above, the court can authorise other methods
or places of service, such as sending a text message or leaving a voicemail on a particular
telephone number.
The court may also sanction service by a contractually agreed method, or on the agent of an
overseas principal. Furthermore, where the party to be served is a limited company, s 1139(1)

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of the Companies Act 2006 provides that documents may be left at or posted to the registered
office of the company.

Example
ULaws LLP are acting on behalf of Burton Carpets Ltd in a breach of contract claim. It has
proved impossible to serve the defendant with the court documents and so the solicitors
make an application to the court to serve by an alternative method. They obtain information
that the defendant regularly sees his partner at a different address to his own and apply
for permission to serve the documents by delivering them to his girlfriend’s property. The
application must be supported by evidence that the document is likely to be brought to the
attention of the defendant. In this instance, the solicitors rely upon a report from an enquiry
agent confirming the defendant stays at the property three nights each week.

3.5 Where to serve?

Where no solicitor is authorised to accept service and the defendant has not given an address
for service, the default position of the most common defendants is as set out in Table 3.2.

Table 3.2 Service at a specified place

Nature of defendant to be served Place of service

Individual Usual or last known residence.

Individual being sued in the name Usual or last known residence of the individual; or principal
of a business (sole trader) or last known place of business.

Individual being sued in the name Usual or last known residence of the individual; or principal
of a partnership or last known place of business of the partnership.

Limited liability partnership Principal office of the partnership; or any place of business
of the partnership within the jurisdiction that has a real
connection with the claim.

Company registered in England and Principal office of the company; or any place of business
Wales of the company within the jurisdiction that has a real
connection with the claim.

3.6 When to serve?

Once a claim form has been issued, the claimant has four calendar months in which to serve
it on the defendant.

Example
A claim form is issued on 20 January to be served on the defendant who is living in
Bristol. The claimant must complete the step required by the CPR, in relation to the
particular method of service chosen, before 12.00 midnight on 20 May.

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It would be unusual for the claimant to wait before serving the document because this
imposes an unnecessary deadline upon the solicitor. However, if the limitation period is
running out, the claimant may be forced to issue proceedings and, if difficulties arise in
relation to tracing the defendant, this four month window gives a little more breathing space.
Whether or not the time limit is met depends upon the method of service used; so the period
ends on the date:
• personal service was effected or delivery was made at the relevant place; or
• the letter was posted or left with the DX provider; or
• the transmission of the fax was completed or the email was sent.
Once this has been done, the claimant has completed the ‘step required’ for service of the
claim form.

3.7 Deemed service

The potential problem with any method of service, apart from personal service, is that
the claimant cannot know precisely when the defendant receives the claim form and this
information is essential in order to determine the next stage in the proceedings. To avoid
disputes about whether and when documents are served, the CPR adopt the concept of
deemed service. This means that a document will be taken to have arrived on a given day
regardless of whether it actually did. However, there are different rules for the claim form as
opposed to all other court documents.

3.7.1 Deemed service of the claim form

Rule 6.14 introduces a simple, indisputable presumption that the claim form is deemed to have
been served on the second business day after the step required has occurred. Establishing
this requires two pieces of information.
• A ‘business day’ is any day except Saturday, Sunday, a bank holiday, Good Friday or
Christmas Day.
• The ‘step required’ is, for example, putting the claim form in the post (see 3.4 above).
Thus, a claim form sent by post on Monday will usually be deemed served on Wednesday.

Example
(a) An individual defendant is personally served with a claim form on Friday. It is
deemed served on Tuesday, provided Monday and Tuesday are business days.
(b) A firm of solicitors authorised to accept service receives the claim form by an email
transmitted on Saturday. Sunday will not count. Assume Monday is a bank holiday
and so does not count either. Deemed service will be on Wednesday as this is the
second business day (Tuesday being the first) after the email was sent.
If this was the only rule, deemed service would be straightforward but there are different
provisions in place for all other documents. Thus, it is important to check what type of
document is being sent to determine when it is deemed served.

3.7.2 Deemed service of other documents

The rules that apply to all other documents (such as a defence or a Part 36 offer) are
somewhat complex and produce a variety of deemed dates of service according to the
method used. An important point to remember is that the particulars of claim, if served
separately, falls under these rules and not those that apply to claim forms.

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The requirements are set out in CPR, r 6.26 and can be divided into two simple categories –​
those with and without a cut off time of 4.30pm. They are summarised in Table 3.3.

Table 3.3 Deemed service of documents other than the claim form

Method of service Deemed date of service

Personal service • If served before 4.30pm on a business day,

Delivering the document to a permitted address on that day.
Fax • If not, on the next business day.
Email

First class post or DX • T he second day after it was posted provided

that day is a business day.
• If not, on the next business day.

A key difference is that service by first class post or DX is effected on the second day after
the document was posted, in contrast with the claim form where it is the second business day.
This is illogical, not just because it is inconsistent, but because this may fall on a Sunday when
there is no postal delivery service. In such cases, the practical effect is that service will ‘roll on’
to the next business day.

Examples
(a) A document is personally served at 3.30pm on a Monday. Provided this is a business
day, service is deemed to occur that day as it has taken place before 4.30pm.
(b) A defence is posted first class on a Tuesday. The day of deemed service is Thursday,
the second day after it was posted as it is a business day.
(c) The particulars of claim is served after the claim form. It is left in a numbered box
at the Document Exchange (DX) on Friday. The day of deemed service is the second
day after it is left, provided this is a business day. The second day will be Sunday
but, as this is not a business day, the day of deemed service is the next day,
Monday.
(d) A document is sent by fax on a Saturday and the transmission of that fax is completed
by 11.25am. Although this occurs before 4.30pm, Saturday is not a business day
and so does not count as the day of deemed service. The next business day will be
Monday and this is the date of deemed service.

3.7.3 Service of the particulars of claim

In many cases, such as debt actions, the particulars of claim will be included on the claim
form itself. However, for more complex cases, there is unlikely to be sufficient space to detail
the legal elements and the facts in support. In such instances, the particulars of claim may be
served separately:
• either at the same time as the claim form; or
• within 14 days after service of the claim form (but no later than four months after the date
of issue of the claim form).

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Example
ULaws LLP are instructed by a client to issue proceedings. They issue a claim form marked
‘particulars of claim to follow’ on 5 March. The four month deadline for serving the claim
form expires at 12 midnight on 5 July.
(a) The solicitors decide to serve the claim form on 10 April. As soon as they do this, the
(separate) clock starts ticking for service of the particulars of claim. This must be done
within 14 days so by 24 April.
(b) In an alternative scenario, having issued the claim form, ULaws LLP have difficulties
in tracing the defendant and are unable to serve the claim form until 27 June. In this
instance, the solicitors only have until 5 July to serve the particulars of claim, so less
than 14 days, because they are approaching the (long stop) deadline of four months.
Understanding the rules that apply to service is essential to a practising solicitor as missing
these important dates may lead to the proceedings being compromised or struck out, with a
consequential claim for negligence against the solicitor.

3.8 Service out of the jurisdiction

If a claim form is to be served outside the jurisdiction of England and Wales, the CPR allow
extra time for this to occur; instead of four months, the document must be served on the
other parties within six months of being issued. Furthermore, there are special procedures in
place which govern how service is effected. With regards to Scotland and Northern Ireland,
permission is not required to serve proceedings in these countries but there are special
provisions as to the methods of service of the claim form that are acceptable. These are
detailed in CPR Part 6.
In all other cases, including those involving EU Member States, the claimant must obtain
permission to serve proceedings out of the jurisdiction. However, there is an exception: the
Civil Procedure Rules have been amended to streamline the process so that where a contract
contains an English jurisdiction clause, no permission will be needed to serve the claim in
these circumstances.
The claim form must be accompanied by a notice setting out the grounds on which the
claimant is entitled to serve it outside the jurisdiction together with evidence that England
and Wales is the proper forum. Examples of the grounds that may be relied upon are that the
breach of contract occurred in England and Wales or the excessive cost or delay of the case
being heard in a foreign court. The application must be supported by evidence and is made
without notice.
If an order permitting service outside the jurisdiction is made, the time limit for responding to
the claim will be extended. Service is usually effected through the judicial authorities of the
State in question or the British Consul.

Summary
• The majority of cases are issued in the County Court and only claims in excess of £100,000
(or £50,000 for personal injury claims) may be commenced in the High Court.

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• Proceedings are commenced by way of a claim form, which provides a concise statement
of the nature of the claim and the remedy sought. It is reinforced by the particulars of claim,
which includes details of the cause of action and the facts in support. The particulars of
claim is usually included on the claim form itself for straightforward cases, for example a
debt action, but is drafted as a separate document for more complex matters.
• The claim form, particulars of claim and any required documents (such as a copy of the
contract) are sent to the appropriate court with the court fee to start proceedings. The
court will issue the claim by noting the issue date upon the claim form, sealing it and
allocating a claim number.
• Thereafter, the claim form will be served upon the defendant by the court, unless the
claimant has indicated otherwise, in which case they will arrange for service.
• There are several methods of service that may be used, for example, personal service, first
class post or email. How service is effected will depend upon the status of the defendant,
whether it be an individual, a sole trader, a partnership or a company. The CPR dictate
when the documents are deemed served regardless of when they are actually served and
the claim form is treated differently from all other documents in this regard.
• There are special rules in the CPR that detail how claims may be served outside the
jurisdiction.

Sample questions

Question 1
A claimant wants to issue proceedings for a breach of contract claim arising from the
provision of goods that were not of satisfactory quality. This caused the claimant to suffer
losses of £43,000 being the price of the goods and £52,000 loss of profits. The defendant is
an individual who trades under a business name. The defendant has failed to respond to
any correspondence from the claimant. When the contract was negotiated, the defendant
instructed solicitors to act on their behalf.
Which statement describes the best way in which the claimant should issue
proceedings?
A In the High Court against the defendant in their individual and business names, with
the address for service being that of the defendant.
B In the High Court against the defendant in their business name only, with the address
for service being that of the solicitors.
C In the County Court against the defendant in their personal name only, with the
address for service being that of the defendant.
D In the County Court against the defendant in their business name only, with the address
for service being that of the solicitors.
E In the County Court against the defendant in their individual and business names, with
the address for service being that of the defendant.

Answer
Option E is correct. The claim must be issued in the County Court as the value of the losses
claimed is £95,000, so less than £100,000 which is required for High Court proceedings. Both
options A and B are wrong for this reason.

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The defendant should be sued in their full unabbreviated name together with their full trading
name. For this reason, options B, C and D are wrong. Options B and D are also wrong
because the defendant has not confirmed that their lawyers are instructed to accept service of
court proceedings on their behalf.

Question 2
A claim form is served by first class post on Friday 2 April. The particulars of claim is
delivered to a permitted address at 5pm on the following Thursday 8 April. The next day is
Good Friday and the Monday 12 April is also a bank holiday, being Easter Monday.
Which of the following statements gives the correct days of deemed service?
A The claim form is deemed served on Tuesday 6 April; the particulars of claim is
deemed served on Tuesday 13 April.
B The claim form is deemed served on Monday 5 April; the particulars of claim is
deemed served on Thursday 8 April.
C The claim form is deemed served on Tuesday 6 April; the particulars of claim is
deemed served on Friday 9 April.
D The claim form is deemed served on Tuesday 6 April; the particulars of claim is
deemed served on Monday 12 April.
E The claim form is deemed served on Monday 5 April; the particulars of claim is
deemed served on Tuesday 13 April.

Answer
Option A is correct. Under the rules, the claim form is deemed served on the second
business day after the step required (here sending by first class post) has occurred.
Monday 5 April is a business day, as is Tuesday 6 April so the claim form is deemed served
on the Tuesday. However, different rules apply to other documents.
The particulars of claim was delivered to the permitted address at 5pm. Even though
Thursday 8 April is a business day, it was delivered after the ‘cut-​off’ time of 4.30pm, so this
date is not the day of deemed service. Service will be effected on the next business day,
which is Tuesday 13 April because both Friday and Monday are bank holidays. The other
options are wrong because one or more of the dates given do not accurately describe the
dates of deemed service.

Question 3
A claimant commences a claim for breach of contract against a company (the defendant).
Two years later, the company is sold to another company (the purchasing company), which
takes over all the assets and liabilities. The claimant applies, within the limitation period, to
substitute the company as a defendant with the purchasing company so that the claim may
continue.
Which statement best describes the court’s powers in this situation?
A Because the purchasing company has taken over the company’s liabilities, the claimant
has the right to substitute the purchasing company as a new party.
B The purchasing company must file their consent in writing with the court before they
may be substituted as a defendant.
C The court can substitute the purchasing company as a defendant as it is desirable to
do so given that the company’s liabilities have passed to the purchasing company.

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D The court can substitute the purchasing company as a defendant because the claim
cannot properly be carried on without the new party.
E The court cannot substitute the purchasing company as a defendant.

Answer
Option C is the correct option as the application was made within the limitation period and
the statement correctly describes the legal test to substitute a party.
Option A is wrong because the claimant will require the court’s permission to substitute the
purchasing company as a new party given that the claim form has been served (two years
have passed). Option B is wrong as written consent is only required if the claimant is to be
added or substituted as a new party, and here it is the defendant.
Option D is wrong as this provision relates to applications made outside the limitation period,
which does not apply in this instance. Option E is wrong as the court does have the power to
substitute the purchasing company as a defendant.

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4 Responding to a Claim

4.1 Introduction 58
4.2 Admissions 59
4.3 Acknowledgment of service 59
4.4 The defence 60
4.5 Default judgment 61
4.6 Discontinuance 63
4.7 Pre-​action settlements 65
4.8 Settlements reached after the issue of proceedings 65
4.9 Disputing the court’s jurisdiction 68

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to responding to a claim as follows:
• admitting the claim
• acknowledging service and filing a defence and/​or counterclaim
• disputing the court’s jurisdiction
• entering and setting aside judgment in default
• discontinuance and settlement
• time limits for responding to a claim
Note that for SQE1, candidates are not usually required to recall specific case
names, or cite statutory or regulatory authorities. These are provided for illustrative
purposes only and the sample documents are included for the same reason.

Learning outcomes
The learning outcomes for this chapter are:
• To appreciate the different ways in which a defendant may respond to a
claim form.
• To understand when to apply for a judgment in default and how to set this aside
to allow the proceedings to continue.
• To evaluate ways in which the litigation may be brought to an early conclusion.
• To raise arguments in relation to jurisdiction.

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4.1 Introduction
Once proceedings are issued, the defendant is compelled to take action unless they are
prepared for the claimant to win outright. Quite when the defendant needs to respond
depends upon the approach taken by the claimant in drafting their claim. If the claim form
is marked ‘particulars of claim to follow’, the defendant must await service of these. This is
logical as it is the particulars of claim that set out the detail of the case and, without this
information, the defendant cannot properly draft their response.
Once the defendant has been served with both the claim form and the particulars of claim
(whether separately or together), the defendant must react in some way. To assist, at the
same time, the defendant will receive Form N9 –​the response pack –​which explains how the
defendant should respond and the time limits for doing so. There are three options open to
the defendant under the CPR, namely:
(a) to file an admission (Part 14);
(b) to file an acknowledgment of service (Part 10); or
(c) to file a defence (Part 15).
There is a fourth choice, which is to ignore the claim entirely, but this does not mean the
litigation goes away as the claimant will be able to apply for judgment in default. Figure 4.1
contains a summary of the defendant’s options and the effect of these.

Figure 4.1 Defendant’s response to proceedings

DEFENDANT’S RESPONSE

Claimant issues proceedings

If only Claim Form served (so marked ‘Particulars of

Claim to follow’) no action required by Defendant

When Particulars of Claim are served (either with the Claim Form or subsequently)
Defendant must ‘do something’ within 14 days of deemed service

File an Ignore
Admit claim in File a full proceedings
whole or part Acknowledgement Defence
of Service

Judgment
Defendant must file a
in default
Defence within 28 days
of the deemed service
of the Particulars of Claim

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4.2 Admissions
If a defendant is aware they owe the money, provided they have the means to pay, it is likely
to be in their interests to admit the claim as this will bring the matter to an early conclusion
and limit their liability for costs.
A defendant who wishes to admit either the whole or part of the claim should complete the
appropriate sections of the response pack. There are two types of admission forms –​one for
specified (debt) claims and the other for unspecified claims (where damages are sought) and
the defendant should ensure they select the correct form.

4.2.1 Specified claims

As to what happens next, the procedure will vary depending upon the parties’ responses.

4.2.1.1 Admission of entire claim

If a defendant admits the whole claim for a specified amount, they must provide details
of their income and expenditure and make an offer of payment, either in full or by way of
instalments. Upon receipt of the form, the claimant may then file a request for judgment. If the
claimant rejects the defendant’s payment terms, the judge will decide the appropriate rate of
payment, usually in the absence of a court hearing.

4.2.1.2 Admission of part of the claim

Alternatively, the defendant may admit only part of a claim for a specified amount. In this
instance, the claimant has 14 days in which to consider any offers made and to decide on
their next course of action as follows:
(a) to accept the part admission in full satisfaction of the claim and request that judgment be
entered by the court for that amount;
(b) to accept the part admission but not the defendant’s proposals for payment in which case
the court will decide on their suitability; or
(c) to reject the offer entirely and proceed with their claim as a defended action.
This decision is likely to be based, primarily, on the defendant’s ability to pay.

4.2.2 Unspecified claims

Where the defendant admits liability for a claim for an unspecified amount and offers a sum
of money, the court will serve a notice on the claimant asking whether or not they accept the
figure in satisfaction of the claim.
If the offer is accepted, the claimant may enter judgment for the amount offered and, if the
defendant has asked for time to pay, the procedure described above in 4.2.1.1 applies.
However, if either the claimant does not accept the offer or the defendant makes no offer, the
claimant will enter judgment for damages to be assessed at a disposal hearing.

4.3 Acknowledgment of service

In many cases, the defendant may be sure they want to defend the claim but are not yet in a
position to draft a full defence, perhaps because they are still gathering evidence. Filing the
acknowledgment of service form buys the defendant time to enable them to do this. The effect
is that, instead of having 14 days from service of the particulars of claim to file their defence,
they now have 28 days.

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Example
ULaws LLP are instructed by Harrison Curtains Ltd (Harrisons) to issue proceedings
against Marches Hotels Ltd (Marches). The contract was for the supply and fitting
of curtains for a hotel in Hereford. The first instalment was paid by Marches in
accordance with the contract, but the second instalment (due within seven days of
completion of the contract) has not been received. Harrisons issue proceedings for the
outstanding invoice.
Marches are served with a claim form and particulars of claim form on 2 November,
giving them 14 days in which to respond to the court. Because Marches dispute the claim,
they may either:
(a) file a full defence by 16 November; or
(b) file an acknowledgement of service on any day up to and including 16 November.
This will have the effect of extending the time for Marches to file their defence until
30 November.
If Marches meet either of these deadlines, they will be able to proceed with their defence
against Harrisons.

4.4 The defence

The third viable option for the defendant is to respond to the proceedings by filing a full
defence. As stated above, this may either be within the initial 14 day limit from service of the
particulars of claim or within 28 days if an acknowledgement of service is filed.
The response pack contains forms that the defendant can use and most litigants in person
(parties who are not represented by a lawyer) will take advantage of these. Alternatively, a
separate document may be prepared and this is the approach a solicitor would generally
take. The reason is that a well drafted defence would set out more factual detail than could
be included on the form.
Once the defence has been filed, a copy must be served on all other parties. The court will be
responsible for this unless the defendant’s solicitor has indicated otherwise.

4.4.1 Counterclaim
As part of the defendant’s response, they may wish to pursue their own claim against the
claimant and this is known as a counterclaim.

Example
Continuing with the claim by Harrisons, ULaws LLP are served with a copy of Marches’
defence by the court. Marches assert that the curtains are poorly made and do not hang
properly. In their defence, they dispute liability alleging that Harrisons are in breach of
the implied terms as the goods are not of satisfactory quality and were not fitted with
reasonable care and skill. Marches also attach a counterclaim for the repayment of the
first instalment.

4.4.2 Extending the time limit

On occasion, the defendant may not be able to meet the deadline for filing the defence
and so, with agreement from the other parties, this can be extended by a maximum of
28 days. The effect is that the defendant has a total of 56 days from the date of service of the
particulars of claim. Any further extension would need the court’s permission.

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4.5 Default judgment

Once proceedings have been served upon the defendant, it is common for them to take no
action at all. To ensure such defendants cannot evade liability for monies owed by simply
doing nothing, the CPR include a mechanism whereby the claimant can force the issue and
this is known as a judgment in default (of the defence) or a default judgment –​the terms are
interchangeable. This means that the claimant obtains a judgment without there being any
consideration of the facts involved. The process is a straightforward paper exercise.

4.5.1 Procedure
The claimant will make an application under CPR Part 12 and this will require them to
complete a request for default judgment. To succeed, they must satisfy the court that:
• the particulars of claim have been served upon the defendant; and
• the defendant has not filed an acknowledgement of service form or a defence within the
relevant time period.

Example
Wessex Insurance Plc (Wessex) issue proceedings against Alpha Motor Services Ltd
(Alpha) for non-​payment of an insurance premium of £37,000. The claim form and the
particulars of claim are issued and served on Wednesday 9 February 20XX. Alpha have
until close of business on Wednesday 23 February 20XX to take action.
(a) If Alpha ignores the claim, Wessex may apply for default judgment on Thursday
24 February.
(b) If Alpha file an acknowledgement of service by Wednesday 23 February, the time to
file a defence is extended until Wednesday 9 March 20XX, this being 28 days after
service of the particulars of claim. However, if this deadline is missed, Wessex may
request (and be granted) judgment in default.
There are limited circumstances where a claimant may not obtain a default judgment,
specifically if there is a pending application by the defendant for summary judgment or to
have the claimant’s statement of case struck out.

4.5.2 Types of default judgment

The application for a default judgment is dealt with in different ways depending upon whether
it is a debt claim or not.
When applying for judgment in default for a specified sum, the claimant must:
• indicate the date payment was due;
• calculate an up-​to-​date total for the interest claimed; and
• state a daily rate at which interest accrues.
This will enable the court to enter judgment for the correct figure on any given day. Once final
judgment has been entered, the payment will usually be required within 14 days.
However, if the claim is for an unspecified sum, the court will grant the claimant’s request for
default judgment but the case will need to come back before the court to decide the amount
of damages payable (a disposal hearing).

Examples
(a) Continuing with Wessex’s claim against Alpha, the insurance premium should have
been paid before 1 January and, under the contract, interest is also due on the sum

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of £37,000 at a rate of 10% per annum. This gives a daily rate of interest of £10.14
(£37,000 x 10% divided by 365).
Wessex may claim the interest from 1 January to 9 February 20XX (the date of issue
of proceedings), being 40 days. Multiplying this by the daily interest rate of £10.14
gives a total of £405.60.
In addition, Wessex will be entitled to an additional £10.14 for every day that passes
up until the date of judgment.
(b) In contrast, if Wessex had also claimed for loss of profits, default judgment would
have been entered on liability with damages to be decided (assessed) by the
court at a later date. This is because where a claim includes both specified and
unspecified amounts, the entire claim is treated as unspecified.

4.5.3 Setting aside default judgments

Having initially ignored the proceedings, if the claimant enters default judgment, the
defendant will have no choice but to face them. If the defendant accepts that the monies are
owed, it is best for them to pay the judgment, if at all possible, to avoid increased costs and
interest. If not, the way forward is for the defendant to apply for the judgment to be set aside.
There are two grounds under CPR Part 13 upon which the defendant may rely in their
application.

4.5.4 The mandatory ground

The court is obliged to set aside a default judgment if it was wrongly entered. This
would occur where judgment has been entered too early, before the time for filing an
acknowledgment of service or a defence (whichever is applicable) expired; or because the
claim has already been paid in full.

4.5.5 The discretionary ground

The court also has the power to set aside a default judgment in circumstances where the
defendant:
• has a real prospect of successfully defending the claim; or
• there is some other good reason why the defendant should be allowed to defend
the claim.
The first of these grounds is clearly linked to the merits of the defence and indeed, there
is little point in the defendant being allowed to re-​open proceedings in a case where their
prospects of success are limited.
With regard to the second ground, good reasons that may satisfy the test could be that the
defendant was ill or away on holiday so they could not respond within the time constraints.
Excuses such as pressure of work or the documents being misplaced would not be sufficient.
In addition, the court will also take account of the promptness of the defendant’s application
to set aside. It is therefore essential that the defendant issues their application as soon as they
become aware of the default judgment, to comply with the overriding objective of ensuring
that cases are dealt with expeditiously and fairly.

Example
Kanji Okinawan buys a dining room table and chairs from Quality Furniture Ltd (QFL).
There is a dispute about the quality of wood used in the construction of the furniture and
Kanji refuses to pay for it. While Kanji is away visiting family in Japan, QFL issue and

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serve proceedings for the price of the goods and then enter default judgment when no
acknowledgement of service or defence is filed. When Kanji returns, he is annoyed to find
that a judgment has been made against him and instructs ULaws LLP on his behalf.
Kanji has a good reason for asking the court to set aside the default judgment as he was
out of the country at the relevant time and so was unable to respond to the proceedings
through no fault of his own. In accordance with best practice, ULaws LLP write to QFL and
ask them to agree to the judgment being set aside. When the claimant refuses, they issue
an application to the court on Kanji’s behalf.
The application will need to be supported by evidence to show Kanji was in Japan and
that he acted promptly when becoming aware of the default judgment. The basis of
Kanji’s defence and any evidence in support should also be included to show that he has
a defence with a real prospect of success at trial. This is because whether to grant the
application is a matter of discretion for the court and the judge is more likely to set the
judgment aside and allow the proceedings to continue if the defence has real substance.

4.5.5.1 Procedure
The application is made by filing an application notice (form N244), which is usually supported
by a witness statement outlining the defendant’s submissions.

4.5.5.2 Orders
In determining the application, there are three possible orders the judge can make:
(a) the defendant succeeds and the judgment is set aside, allowing them to continue to
defend the action;
(b) the claimant wins and the judgment remains in place, so they may proceed to
enforcement; or
(c) a conditional order is made, namely, the judgment is set aside on condition the
defendant pays monies into court, for example, the amount of the claim. This is the least
likely outcome and is used in situations where the court is concerned the defence is being
pursued as a delaying tactic where the defendant does not have the money to pay.

4.5.5.3 Costs
Costs of interim applications such as this are dealt with in more detail in Chapter 6. Dealing
specifically with an application to set aside a default judgment, the costs order made at the
conclusion of the hearing will depend upon the outcome as follows:
• If the application is granted on a mandatory ground, the claimant will have been at fault
for entering judgment when they should not have done and, therefore, the claimant is
liable to pay the defendant’s costs.
• Where the defendant establishes the discretionary ground of a good reason for the
default, as neither side is at fault, costs are usually in the case.
• Where the defendant only establishes the discretionary ground of a defence with a real
prospect of success at trial, the defendant is at fault in failing (initially) to deal with the
proceedings. As a consequence, they normally have to pay the claimant’s costs.
• If the application fails, the defendant will pay the claimant’s costs of the application.

4.5.6 Summary
Figure 4.2 contains an overview of the process for applying for and setting aside default
judgments.

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Figure 4.2 Setting aside default judgments

D APPLIES TO SET ASIDE THE DEFAULT JUDGMENT

Mandatory Ground Discretionary Grounds

• Judgment entered too early
• Claim already paid in full
D has a real prospect of There is some other good
successfully defending or reason why the judgment
the claim should be set aside
Judgment must be
set aside
D must apply promptly

C pays D’s costs

Application Form + witness statement

Judgment may
be set aside

D’s application succeeds D’s application fails: D pays C’s costs

Good reason: Real prospect only:

costs in the case D pays C’s costs

4.6 Discontinuance
A claimant may decide not to pursue their claim, even though no settlement has been
reached. This may be for a variety of reasons but will usually be because, after further
consideration of the evidence, they conclude their prospects of succeeding at trial or of
recovering any money from the defendant are so slim that it would be better to cut their losses
and discontinue.
• Can a claimant discontinue all or part of a claim?
Yes, at any time during the proceedings.
• Is permission required?
Not usually, but permission must be obtained in certain circumstances such as if the court
has granted an interim injunction.
• What if there is more than one claimant?
A claimant may not discontinue unless every other party consents in writing or the court
gives permission.
• What if there is more than one defendant?

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 Responding to a Claim

The claimant may discontinue the claim against all or any of the defendants.
• What is the procedure?
The claimant must file and serve a notice of discontinuance on the parties to the
proceedings. If consent is required, a copy of this must be attached to the notice.
• What is the effect?
The proceedings are brought to an end against the defendant on the date the notice
of discontinuance is served upon them. The claimant will be liable for the costs of the
proceedings unless the court orders otherwise and it is vital that the solicitor explains this
to the client.
Because of the costs implications of discontinuance, a claimant should not issue
proceedings lightly and should consider carefully their prospects of success before
doing so.

4.7 Pre-​action settlements

Where a settlement is reached prior to the issue of proceedings, the prospective claimant will
not be entitled to recover their legal costs unless this has been agreed.
Once settlement terms have been agreed, they must be clearly and accurately recorded
in writing, so that the agreement can be enforced if one of the parties defaults. It may
be sufficient for the terms to be recorded in an exchange of correspondence, but more
complicated settlements should normally be recorded in a formal settlement agreement.

4.8 Settlements reached after the issue of proceedings

If a settlement is concluded after proceedings have started, it is preferable for this to be
recorded in a court order or judgment. This is so that enforcement proceedings may be
commenced to recover any monies due under the settlement (including costs) should the
agreement not be honoured.

4.8.1 Consent orders

Where none of the parties is a litigant in person, it will often be possible to avoid an
application to the court by drawing up a consent order or judgment for sealing by a court
officer. Although in theory the court retains the power not to approve the proposed order, in
practice, it will only be referred to a judge if it appears to be incorrect or unclear.
The formalities for a consent order are as follows:
(a) the order agreed by the parties must be drawn up in the terms agreed;
(b) it must be expressed as being ‘By Consent’; and
(c) signed by the legal representative acting for each of the parties to whom the order
relates.

Example
Returning to the case of Quality Furniture Ltd and Kanji Okinawan, the parties agree that
the latter will pay the sum of £12,000 for the dining room table and chairs and a consent
order is drawn up.

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Figure 4.3 Consent order

IN THE STAFFORD COUNTY COURT

WF-​20–​1234
BETWEEN
QUALITY FURNITURE LTD Claimant
and
MR KANJI OKINAWAN Defendant

CONSENT ORDER

Upon the parties agreeing to settle this matter

AND BY CONSENT

IT IS ORDERED THAT

1. The Defendant shall pay the Claimant the sum of £12,000 by 2.30 p.m. on 7 May 20XX.

2. Upon payment, the claim will be stayed.

3. No order as to costs.
We consent to the terms of We consent to the terms of
this order. this order.
Advocates & Co ULaws LLP
Advocates & Co ULaws LLP
-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​-​ -​--​ ​-​--​ ​--​ ​-​--​ -​ -​ -​ -​ -​ -​ -​ -​ -​ -​ -​ -​ -​ -​ -​ -​ -​ ​
Dated 19 April 20XX Dated 20 April 20XX

The effect of the Consent Order is that, provided Kanji pays £12,000 to QFL by the stated
deadline, the claim will come to an end. However, if the monies are not paid, interest will
start to run on the sum and the claimant can take enforcement action. The reference to
the claim being stayed means that the proceedings will be ‘paused’ until the agreement
is put into effect, allowing the claimant, Quality Furniture Ltd, to return to court should the
defendant fail to meet his commitments. It is also clear, from paragraph 3 of the Consent
Order, that each side has agreed to pay their own costs.
Only terms that are within the powers of the court to order may be agreed, for example
the payment of a sum of money. Furthermore, the terms of a consent order are open to
public inspection. Thus, if the parties want any terms to be confidential and/​or are beyond
the powers of a court to order, they should use a special form of consent order known as a
Tomlin order.

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4.8.2 Tomlin orders

A Tomlin order stays the claim on agreed terms that are set out either in a schedule to
the order or separately. The key to an effective Tomlin order is to appreciate that certain
terms must appear in the order itself, while others can be put in the schedule or a separate
document that is normally held by the parties’ solicitors.
The provisions that must appear in the order are summarised in Table 4.1.

Table 4.1 Terms contained within the Tomlin order

Order Explanation

‘By consent’ This term records the fact of there being agreement.

Stay of proceedings Confirms the proceedings are ‘paused’.

Liberty to apply This provision allows any party to apply to the court for the stay to be lifted
and the court can be asked to enforce the settlement if a party does not
perform its part of the agreement. The important effect is that new court
proceedings do not have to be commenced to enforce the terms.

Payment of costs or Where one party is to pay another’s costs and/​or the parties want the
detailed assessment amount of those costs to be assessed (checked and calculated) by the
of costs court, that direction must go in the order itself.

Signed by the A formal requirement signifying consent to the agreement.

parties’ solicitors

Terms that the parties wish to keep confidential or that the court does not have the power to
order must be set out in a schedule to the Tomlin order or in a separate document. Often this
will be for the payment of a sum of money so that other businesses or customers cannot see
how much the matter was settled for. Any other agreed terms should also be recorded, for
example that in future dealings one party is to give the other a discount.
An example of a Tomlin order is set out in Figure 4.4. The order is made ‘By Consent’, the
proceedings are stayed, there is liberty to apply and the defendant has agreed to pay
£40,000 of the claimant’s costs. The attached schedule records (at paragraph 1) the settlement
payment, the provision for interest on any late payment is contained in paragraph 2, whilst
paragraph 3 records the parties’ agreement to enter into a particular contract as part of the
settlement.

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Figure 4.4 Example of a Tomlin order

IN THE HIGH COURT OF JUSTICE

KING’S BENCH DIVISION 20XX L 164

MANCHESTER DISTRICT REGISTRY

BETWEEN
LA BOULE PLC Claimant
and
CHRISTALINE LIMITED Defendant
ORDER BY CONSENT
UPON the parties having agreed terms of settlement
BY CONSENT IT IS ORDERED THAT:
1. All further proceedings in this action shall be stayed upon the terms set out in the attached schedule,
except for the purpose of carrying such terms into effect.
2. Each party shall have liberty to apply to the court if the other party does not give effect to the terms set
out in the schedule.
3. The Defendant do pay the Claimant within 28 days the sum of £40,000 in respect of the
Claimant’s costs.
Dated: ....................................
We consent to the making of an order in the above terms.
...............................................
Swallows & Co., Solicitors for the Claimant
...............................................
Singleton Trumper & Co., Solicitors for the Defendant

SCHEDULE
1. The Defendant shall pay or cause to be paid to the Claimant the sum of £500,000 within 28 days of the
Order in full and final satisfaction of all claims and counterclaims arising in this action.
2. In the event of late payment, the Defendant will pay interest on the sum of £500,000 or any part
remaining due at a daily rate equal to 10% above the Bank of England base rate as at 1 January 20XX.
3. The Claimant and the Defendant will on the making of the Order enter into a distribution agreement on
terms agreed between the parties and held by the Claimant’s solicitors as part of the compromise of
this action.

4.9 Disputing the court’s jurisdiction

If a defendant wishes to dispute the jurisdiction of the court, this must be stated on the
acknowledgement of service. The defendant then has 14 days after filing the acknowledgment
of service form to make a challenge, failing which they will be treated as having submitted
to the jurisdiction. The application to the court to dispute the court’s jurisdiction must be
supported by evidence as to why England and Wales is not the proper forum for the case.
• If the court grants the application and finds that the claim should not have been
brought in England and Wales, service of the claim form will usually be set aside. As a
consequence the proceedings come to an end.

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 Responding to a Claim

• If the court refuses the defendant’s application, the original acknowledgement of service
ceases to have effect and the defendant must file a further acknowledgement within
14 days. The proceedings will then continue in the usual way.

Summary
• Having received court proceedings, a defendant must respond within 14 days of service
of the particulars of claim by filing an admission, an acknowledgment of service or a
defence (and perhaps also a counterclaim).
• Filing an acknowledgment of service gives the defendant an extra 14 days in which to file
their defence, granting them a total of 28 days from the date of service of the particulars
of claim.
• A defendant may admit the whole or part of the claim and either pay the sum or
request time to do so. If the claimant does not accept the part admitted in full and
final settlement, the case will continue as a defended claim. If the defendant admits
an unspecified claim, the amount of damages payable must be determined at a court
hearing before the matter may be concluded.
• If a full defence is filed with the court, the litigation will proceed as a contested matter.
• If a defendant does not file an acknowledgement of service or a defence within the
required time limits, the claimant may enter judgment in default. On a specified claim, this
will be for a final sum of money and the matter will proceed immediately to enforcement.
If the claim is for an unspecified amount of money, the judgment is for damages to be
assessed by the court at a disposal hearing.
• Default judgments may be set aside either on mandatory grounds; or on discretionary
grounds provided the defendant applies promptly.
• A claimant may discontinue the proceedings, usually without needing the permission of
the court, but they will be responsible for the costs of doing so.
• A settlement reached before proceedings are issued may be recorded either by letter or
in a formal agreement. Once proceedings have commenced, the terms of a settlement
must be recorded in a formal court order or, if the parties require confidentiality or the
imposition of terms beyond the powers of the court, in a Tomlin order.
• The defendant may dispute the court’s jurisdiction to hear the claim and the issue will then
be determined by the court.

Sample questions

Question 1
A claimant issues proceedings against a travel company for failing to repay the monies
that he paid for his holiday, which was cancelled due to civil disorder in the country he
was intending to visit. The claim form and the particulars of claim are deemed served on
Tuesday 11 May.

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Which of the following answers correctly describes the time limits imposed by the CPR?
A The company must file a full defence within 14 days and in any event by Tuesday
25 May.
B If the company files an acknowledgment of service within 14 days, they have until
Tuesday 8 June to file a full defence.
C If the company files an acknowledgement of service on Thursday 13 May, they have
until Thursday 27 May to file a full defence.
D If the company files an acknowledgment of service on Friday 14 May, the claimant may
apply for default judgment 14 days thereafter.
E If the company fails to respond to the proceedings, the first date on which the claimant
could apply for default judgment is Tuesday 25 May.

Answer
Option B is the correct answer. The company has 14 days, so until Tuesday 25 May, to file
either an acknowledgment of service or a full defence –​hence, option A is wrong. If an
acknowledgement of service is filed within 14 days, the deadline to file the defence is
extended to 28 days from service of the particulars of claim, so until Tuesday 8 June (option
B). The effect is not to ‘add’ 14 days to the date when the acknowledgment of service was
filed and this is why option C is wrong. For the same reason, option D is wrong.
The claimant may apply for default judgment after 14 days if the defendant fails to respond at
all. However, as the company has until close of business on Tuesday 25 May to do so, the first
date on which an application for judgment in default could be made is Wednesday 26 May –​
explaining why option E is wrong.

Question 2
A woman is the managing director of a company. She becomes aware that default
judgment has been entered, correctly, for an outstanding invoice. The employee in the
accounts department who is responsible has been extremely busy and confesses that he
forgot to deal with the invoice. However, he explains to the woman that the reason for
the non-​payment was because there was a dispute about the quality of the consignment
delivered under the contract.
Which of the following best describes the course of action which the woman
should take?
A The woman should write to the court on behalf of the company requesting more time to
investigate and ask that judgment be set aside in the meantime.
B The company should apply to the court requesting that the judgment be set aside
under the mandatory ground.
C The company should apply to the court requesting that the judgment be set aside
on the discretionary ground that the defendant has a real prospect of successfully
defending the claim.
D The company should apply to the court and rely upon the discretionary ground that
there is some other good reason why the judgment be set aside.
E The woman should advise her fellow directors that if the company succeeds in the
application, the claimant will be ordered to pay their costs.

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Answer
Option C is correct as the facts state there is a dispute about the quality of the consignment
and so the company may succeed in their defence. Option A is not the best approach
because a formal application must be made to the court to set the judgment aside and a
letter will not suffice. Option B is wrong as the mandatory ground is irrelevant here –​the
company have not paid the invoice in full and default judgment was entered correctly, so not
too early. Option D is not an appropriate way forward –​pressure of work is not a sufficient
‘good reason’ to satisfy the court. Option E is wrong as the company may well be ordered to
pay the costs of the application even if they succeed. This is because the company is at fault
in failing to deal with the claim form in the first place.

Question 3
A claimant has issued proceedings against a defendant and the trial date is approaching.
The parties enter into negotiations and agree that the defendant will pay half of the
outstanding invoice that is in dispute, and the claimant will supply additional materials at
no extra cost. The claimant does not want other customers to be aware of this arrangement.
Both parties are represented by solicitors.
Now the parties have agreed a resolution to their dispute, what answer describes the
best way forward?
A The claimant will agree to discontinue their claim.
B The parties will record their agreement in an exchange of correspondence.
C The parties will need to attend a court hearing to confirm their agreement.
D The parties should sign a formal consent order to be sealed by the court.
E The parties should sign a Tomlin order.

Answer
Option E is correct. Option A does not apply in these circumstances. A notice of
discontinuance would be served by the claimant where, for example, they conclude that they
are unlikely to succeed at trial and so decide to cut their losses and bring the litigation to a
halt. Option B is wrong because proceedings have been issued and, thus, recording the terms
of the settlement in correspondence would not be sufficient. Option C is wrong as there is no
need for a court hearing to confirm the agreement –​it may be ratified in the absence of the
parties.
Although the agreement could be confirmed in either a consent order (option D) or a Tomlin
order (option E), the latter is the best way forward as the claimant does not want other
customers to be aware that they have supplied the defendant with additional materials at no
extra cost. If a Tomlin order is used, this term could be kept confidential by placing it in the
schedule to the agreement or in a separate document.

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newgenprepdf

5 Statements of Case

5.1 Introduction 74
5.2 Claim form 74
5.3 Particulars of claim 75
5.4 Defence 79
5.5 Additional claims 83
5.6 Reply to defence 84
5.7 Defence to counterclaim 85
5.8 Amendments to statements of case 85
5.9 Requests for further information 86

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to statements of case as follows:
• purpose, structure and content of a claim form, particulars of claim, or defence
relating to a claim in contract or tort
• purpose, structure and content of a reply, additional claim and defence to
additional claim
• requests for further information about statements of case
• amendments
Note that for SQE1, candidates are not usually required to recall specific case
names, or cite statutory or regulatory authorities. These are provided for illustrative
purposes only and the sample statements of case are included for the same reason.

Learning outcomes
The learning outcomes for this chapter are:
• To appreciate how statements of case define the issues in dispute.
• To understand what must be included in different particulars of claim and the
principles involved in drafting a defence.
• To understand the role of the reply and defence to counterclaim and when these
would apply.
• To know when and how to make a request for further information.
• To understand and apply the procedure for amending a statement of case.

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5.1 Introduction
5.1.1 Overview
Statements of case are the formal documents in which the parties concisely set out their
respective cases. They are served between the parties and filed at court. The statements of
case are central to the litigation as they ensure that each party knows their opponent’s case
at an early stage, providing them with the opportunity to assess how strong it is, to determine
what evidence is needed to counter it and to consider whether to make an offer to settle and
on what terms. At trial, the court will only decide those issues that are raised in the statements
of case and so they must be drafted carefully and reviewed continually as the matter
develops.
Statements of case are invariably the first documents that are served between the parties and
are served in sequence.
• The claim form and particulars of claim start the process.
• If the case is contested, a defence will be filed by the defendant.
Usually, these will be the only statements of case in civil proceedings. However, on occasion,
they will not be sufficient and the CPR provide for additional documents that may also prove
useful.
• If deemed necessary by the claimant, they will respond with a reply.
• The defendant may also file a counterclaim; if so, the claimant will need to serve a
defence to the counterclaim.
• If any party requires additional details of another party’s case, they may file a request
and a response to the request for further information must be served.

5.1.2 Some general points

Part 16 of the CPR sets out the requirements and the formalities of statements of case.
However, precedents are another useful starting point when drafting these documents,
although they must always be tailored to the particular matter that is the subject of the
litigation. When drafting, it is important to remember that, although the documents themselves
are formal, the style adopted should be clear using plain English where possible. Where a
solicitor prepares a party’s statements of case, it should be signed in the name of the firm.

5.1.3 Ethical considerations

A solicitor must not mislead the court so should only include assertions in the statements
of case that are properly arguable. For example, a solicitor should not include a client’s
allegation that the opponent has acted fraudulently unless there is some evidential basis
for this.
What if a client has filed a statement of case and subsequently tells their solicitor before the
litigation ends that it contains a material error, the effect of which is to mislead the court? In
those circumstances, the solicitor should advise the client to amend the statement of case and,
if the client refuses to do so, should cease to act. In order to keep client confidentiality, the
solicitor should not inform the court or any other party of the reasons why they are no longer
representing their client.

5.2 Claim form

In Chapter 3, the content and structure of a claim form were discussed in detail and an
example provided of a claim form for a specified sum (a debt) incorporating the particulars

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 Statements of Case

of claim. However, in most instances where lawyers are involved, the facts are likely to be
too complex to fit into the limited space available on a claim form; consequently, a separate
particulars of claim will be required.

5.3 Particulars of claim

The contents and purpose of the particulars of claim are governed by r 16.4(1) of the CPR.
Specifically, the document must include:
(a) A concise statement of the facts on which the claimant relies. This means that it must
outline all the facts giving rise to the dispute, to demonstrate the required elements of the
cause of action on which the claim is based.
(b) If the claimant is seeking interest, a statement to that effect and the details.
However, the precise contents of the particulars of claim will depend upon the relevant cause
of action, for example, whether the claim is for breach of contract or negligence.

5.3.1 Claim based on breach of contract

Where the claimant alleges breach of contract, the particulars of claim should deal with the
essential material facts that will establish the cause of action.
(a) The status of the parties: this is the starting point and, apart from providing background
information, these details are required in certain situations. For example, the parties
should confirm the defendant’s business when relying on sale during the course of that
business to establish terms implied by the Sale of Goods Act 1979 or the Supply of Goods
and Services Act 1982.
Next, the claimant will set out the chronological events explaining what has occurred.
This may include pre-​contractual matters if they assist in establishing the claim, such as
the request for a sample or relevant pre-​contract statements. Thereafter, the particulars
of claim will move into the substance of the matter. However, whilst it may appear that
the claimant is simply ‘telling their story’, behind this are the legal elements that underpin
their case.
(b) Existence of contract: this must be established (although rarely disputed in practice) and
will consist of the date, type (written or oral), parties, subject matter and consideration.
Where a claim is based upon a written contract, by paragraph 7.3 of PD 16, a copy of
the contractual documents must be attached to or served with the particulars of claim. If
the claim is based on an oral agreement, the contractual words used, by whom, to whom,
and when and where they were spoken should be specified by virtue of paragraph 7.4
of PD 16.
(c) Terms: details of any express terms are included and these will usually be found in the
contract itself. Likewise, any implied terms relied upon should be stated specifically.

Examples
In a dispute over a service agreement between a company and an individual, the
relevant express term could be referred to in this way:
• By clause 5.1 of the Service Agreement, the Defendant agreed not to take up
employment with a rival company within 6 months of termination of the Service
Agreement.
In a dispute over the printing and binding of a biography of a famous entertainer, implied
terms are pleaded as follows:

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• The Contract contained implied terms that the Defendant would carry out the services
of printing and binding of the Books with reasonable care and skill and would
produce Books of satisfactory quality.
At this point, the particulars of claim may appear to revert back to a mere description of the
facts, perhaps the date that the goods were delivered or the payment of the first instalment.
However, in addition to telling the chronological story, this paragraph sets out what parts of
the contract have been performed. This is important in limiting the areas of dispute the court
will need to consider.
(d) Breach alleged and particularised: this section contains details of which terms were
breached and specifically how. Examples would be a failure to pay for the goods, late
delivery or the poor quality of the items supplied. Initially, the breach is alleged generally.

Examples
• The Defendant breached clause 5.1 of the Service Agreement.
• In breach of the implied terms, the Defendant did not carry out the services of printing
and binding the Books with reasonable care and skill and did not produce Books of
satisfactory quality.
Next, under a heading of Particulars of Breach, the details of exactly what the claimant
alleges the defendant did wrong must be itemised. This could be quite straightforward
such as:
• The Defendant took up employment with Media Giants Ltd, a rival company of the
Claimant, in June 20XX, only 3 weeks after the termination of the Service Agreement.
Alternatively, a more complex list of how the defendant fell short of the express or implied
terms may be required, for example:
• The binding agent used when printing and binding the Books was only 45% of full
strength or was applied at too high a temperature.
• The laminate covering the Books was wrinkled and in some places detached from the
hard cover.
(e) Factual consequences: this is a continuation of the chronological events where the
claimant explains what happened as a result of what the defendant did wrong (the
breach). It may be that the poor quality goods supplied to a retailer could not be sold on
to consumers or that repair work had to be carried out.
(f) Damage and loss alleged and particularised: the loss must be alleged generally, for
example:
• By reason of the Defendant’s breaches of the Contract, the Claimant has suffered
damage and loss.
The losses should then be itemised so it is clear to the defendant exactly what is being
claimed from them and how this is calculated.
(g) Interest: where the remedy sought by the claimant is either damages or the repayment
of a debt, the court may award interest on the sum outstanding, but only if claimed. In
breach of contract cases, there are three alternative ways of claiming interest as follows:
• The contract itself may specify a rate of interest payable on any outstanding sum.
• If there is no provision in the contract for interest, interest may be claimed under
the Late Payment of Commercial Debts (Interest) Act 1998, which gives a statutory

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 Statements of Case

right to interest on commercial debts that are paid late. As the Act is only concerned
with commercial debts, it does not apply to unspecified (damages) claims or to a
specified amount (a debt) owed by a consumer. The relevant rate of interest is 8%
per annum above the Bank of England’s base rate on the date the debt became due
for payment. The claimant is also entitled to a small, prescribed amount of statutory
compensation for the inconvenience of having to recover the debt.
• In all other cases, the court has a discretion to award interest either under s 35A of
the Senior Courts Act 1981 (SCA 1981) in respect of High Court cases, or under s 69 of
the County Courts Act 1984 (CCA 1984) for County Court cases.
For specified claims, the interest must be precisely calculated as a lump sum for
the amount that has accrued from breach of contract up to the date of issue of the
proceedings, plus a daily rate so it is easy to provide an updated total. Set out below is a
calculation of interest in a specified claim to illustrate this in practice.

Example
ULaws LLP act for Guy Tibbs, a local builder who is in dispute with one of his customers,
Jemma Little. He entered into a written contract to convert her basement into a games
room in May [this year]. He finished the work on 12 September but, despite reminders,
Jemma has not paid him the contract price of £13,000. The written contract between
Guy and Jemma provides that interest is payable on late payment at the rate of 20% per
annum from and including the day of completion of the works. Guy issues a claim form on
31 October.
He is entitled to interest on £13,000 for 50 days (namely 19 days in September and
31 days in October). For each day, he is entitled to interest of £7.12 (that is £13,000 x
20% ÷ 365 rounded down). Thus, on the claim form, Guy should claim £356.00 by way of
interest.
Thereafter, £7.12 would be added to the outstanding balance for each day that passes
up until judgment is awarded.
(h) Summary of relief: traditionally, although not a requirement of the CPR, the remedies
claimed are summarised towards the end of the particulars of claim.
(i) Statement of truth: the claim form or particulars of claim must contain a signed statement
of truth that its contents are believed to be true (Part 22) as set out in Chapter 3.
An example of a particulars of claim for a claim arising out of a dispute over a contract is
provided as Figure 5.1 to give an insight into how the document would look in practice. This
relates to a High Court matter.

5.3.2 Claim based on negligence

Particulars of claim relating to an action in the tort of negligence will be approached in
a similar way, although the content will differ to reflect the legal elements of duty of care,
breach of that duty, causation and loss.
The court has a general discretion (which is usually exercised) to award interest on damages
in any negligence claim in accordance with s 35A SCA 1981 in respect of High Court claims,
and s 69 CCA 1984 for County Court matters. In practice, interest is normally awarded from
when the loss was sustained.

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Figure 5.1 Example of particulars of claim in a High Court case

IN THE HIGH COURT OF JUSTICE

KING’S BENCH DIVISION 20XX No 876

READING DISTRICT REGISTRY

BETWEEN
INDUSTRIAL MANUFACTURING LIMITED Claimant
and
HEATECHS LIMITED Defendant
PARTICULARS OF CLAIM
1. At all material times the Claimant was a manufacturer of small industrial machinery parts and the
Defendant carried on business as a manufacturer and supplier of central heating boilers and systems.
2. By a written contract made on 23 April 20XX between the Claimant and Defendant, the Defendant
agreed to sell to the Claimant a central heating gas boiler and integrated water pump described in
clause 1 as a Heatechs Powerheat Unit Model 312K (‘the Unit’) for the sum of £70,000. A copy of the
contract is attached.
3. The Claimant bought the Unit from the Defendant who sold it in the course of its business. It was an
implied term of the contract that the Unit should be of satisfactory quality.
4. Further, during a telephone conversation at about 11.30 am on 18 April 20XX, the Claimant by its
contracts manager, Ian Jones, expressly or by implication made known to the Defendant (represented
by their sales manager, Polly Rees) the particular purpose for which it required the Unit, namely for the
purpose of installation in the Claimant’s factory at 15 Normandale Lane, Reading ‘as part of a heating
system required to be in continuous use for 7 days per week’. It was an express and/​or implied term of
the contract that the Unit to be delivered by the Defendant should be reasonably fit for that particular
purpose.
5. In purported performance of the contract the Defendant delivered the Unit on 25 June 20XX when the
Claimant paid the Defendant the agreed sum of £70,000. The Unit was installed by the Claimant into its
factory heating system on or about 6 July 20XX.
6. In breach of the express and/​or implied terms the Unit delivered by the Defendant was not of satisfactory
quality and was not reasonably fit for its particular purpose.

PARTICULARS OF BREACH
The impeller retaining nut on the integrated water pump was insufficiently secure because the thread was
0.4cm wide whereas the maximum that it should have been was 0.2cm wide.
7. As a consequence of the breaches of terms the integrated water pump failed to operate and the boiler
in the Unit became or had become drained of water on 6 August 20XX and overheated as a result. When
the pump effectively re-​engaged, cold water flowed into the boiler causing it to explode and rupture on
6 August 20XX and the pipe connections to distort. As a result the boiler house had to be pumped out
and repaired and a new boiler installed. During this time the Claimant lost 9 days of production.
8. By reason of the above the Claimant has suffered loss and damage.

(continued )

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 Statements of Case

Figure 5.1 (continued )

PARTICULARS OF LOSS AND DAMAGE

8.1 Cost of new boiler £72,500
8.2 Cost of installation of new boiler £4,700
8.3 Cost of pumping out boiler house and repairing damaged premises £17,625
8.4 Consequential losses as the result of production losses (estimated) £25,000
9. In respect of damages awarded the Claimant is entitled to interest pursuant to s 35A of the Senior
Courts Act 1981 at such rates and for such period as the Court thinks just.

AND THE CLAIMANT CLAIMS:

(1) Damages pursuant to paragraph 8 above;
(2) Interest pursuant to paragraph 9 above.

Dated 10 December 20XX.

ULaws LLP
ULAWS LLP

STATEMENT OF TRUTH
I believe that the facts stated in these Particulars of Claim are true. I am duly authorised by the Claimant
to sign this statement. I understand that proceedings for contempt of court may be brought against anyone
who makes, or causes to be made, a false statement in a document verified by a statement of truth without
an honest belief in its truth.

Signed: D. Smith
DAVID SMITH
Director of Claimant company
This statement of truth was signed on [date].

The Claimant’s Solicitors are ULaws LLP of 133 Great Hampton Street, Birmingham B18 6AQ where they will
accept service of proceedings on behalf of the Claimant.

To the Defendant
To the Court Manager.

5.4 Defence
The defendant only has a limited amount of time in which to file a defence with the court and,
where solicitors are instructed, they will usually draft this as a separate document rather than
completing the standard form.

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5.4.1 Purpose of the defence

The defence sets out the defendant’s answer to the claim with the aim being to highlight what
issues are in dispute. Rule 16.5 assists in the approach that should be adopted when drafting
this document. The defence must state, for each allegation, whether it is:
a) denied;
b) not admitted; or
c) admitted.
Where a defendant denies an allegation, they must state:
• their reasons for doing so; and
• their own version of events if different from that given by the claimant.

Example
Returning to the case study (above), to satisfy this requirement, the Defence includes a
statement as follows:
• Paragraph 3 of the Particulars of Claim is denied. The Defendant has been working
with Media Giants Ltd on a consultancy basis only and is not, nor ever has been,
employed by them in breach of the Service Agreement or at all.
A non-​admission is made where the defendant has no knowledge of the particular matter
alleged.
The effect of the three different responses is summarised in Table 5.1.

Table 5.1 Defence: effect of defendant’s responses to the claimant’s allegations

Response? Does the claimant need to prove the allegation?

Admit No

Non-​admission Yes

Denial Yes

Considering these issues in the context of a scenario will assist in understanding how this
would apply in practice.

Example
Hamza is driving to work one day when he is involved in a road traffic accident with
Marnie. A few months later, he is served with a claim form and particulars of claim
alleging negligence.
In his defence, Hamza admits that he has a duty of care to other road users (this is
an established duty) and further admits the date of the car accident, that a collision
took place and the location where this occurred. As a consequence, the claimant is not
required to prove these facts.

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 Statements of Case

However, Hamza denies he was at fault, alleging that he had the right of way and that
Marnie drove across his path. The effect of this response is that the claimant must provide
evidence to prove Hamza was in breach of his duty of care.
With regard to the damage or loss alleged to have been sustained by the claimant,
Hamza makes a non-​admission because he does not know how much Marnie’s car cost to
repair. This will force the claimant to prove her losses.
The purpose of the defence is to narrow down the issues between the parties so that only the
matters in dispute are tested in court. In the example above, the central issue to determine
is who was at fault in causing the collision. If the court rules in the claimant’s favour, Hamza
is likely to admit the amount of the damages once Marnie produces evidence to prove them,
such as a car repair bill.
It is vital not to miss an allegation because the effect is that it is deemed to be accepted.
Accordingly, best practice dictates that a systematic approach is adopted to ensure every
allegation in the particulars of claim is dealt with and nothing is admitted through omission.
This will mirror, as far as possible, the sequence of events in the particulars of claim, with the
defence usually answering each paragraph in turn. If more than one allegation is included in
the paragraph, these should be dealt with on a point by point basis.

5.4.2 Contents of a defence

When drafting the defence, the defendant must comply with the formalities required by the
CPR and must include:
• the name of the court;
• the claim number (the unique reference number that is allocated by the court on issue of
proceedings);
• the parties;
• the title (DEFENCE);
• the date and signature of solicitors in the name of the firm;
• the statement of truth; and
• details of who is to be served and where.
If the defendant alleges that the relevant limitation period for the claim has expired, the
details of this must be given in the defence, for example, when it began and expired, and
whether it ran under the terms of a contract or under the Limitation Act 1980. The burden of
proof is then normally transferred to the claimant to show the claim is not time-​barred.
There are some instances where the burden of proof falls upon the defendant, specifically in
relation to:
(a) contributory negligence; and
(b) a failure by the claimant to mitigate its loss.
Where these matters are alleged, they should be made and detailed in the defence.
Figure 5.2 illustrates how a defence is drafted in the breach of contract claim between
Industrial Manufacturing Limited and Heatechs Limited. This defence also illustrates the
methodical approach that should be adopted in answering the allegations raised.

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Figure 5.2 Example of a defence in a High Court case

IN THE HIGH COURT OF JUSTICE

KING’S BENCH DIVISION 20XX No 876

READING DISTRICT REGISTRY

BETWEEN
INDUSTRIAL MANUFACTURING LIMITED Claimant
and
HEATECHS LIMITED Defendant
DEFENCE
1. The Defendant admits paragraphs 1 to 4 of the Particulars of Claim.
2. The delivery of the Unit referred to in paragraph 5 of the Particulars of Claim was wholly in accordance
with the terms of the contract and constituted full and complete performance by the Defendant. Payment
of the agreed sum of £70,000 by the Claimant is admitted. No admission is made as to the installation
of the Unit by the Claimant as the Defendant has no knowledge of that matter.
3. The Defendant denies it was in breach of contract as alleged in paragraph 6 of the Particulars of Claim,
or at all. The Defendant asserts that the Unit supplied was of satisfactory quality and fit for its purpose.
In particular, the impeller retaining nut on the water pump was sufficiently secure by means of a 0.4cm
thread.
4. The Defendant makes no admission as to the matters stated in paragraph 7 as the Defendant has no
knowledge of these matters.
5. As to paragraph 8 it is not admitted that the Claimant has suffered the alleged or any loss and damage
as the Defendant has no knowledge of these matters.
6. If, which is not admitted, the Claimant suffered the loss and damage alleged in paragraph 8, it is denied
that this occurred as a result of the alleged or any breach of term by the Defendant. Any such loss or
damage was caused by the Claimant’s installation and/​or subsequent use of the Unit.
7. If, which is not admitted, the Claimant suffered the loss and damage alleged in paragraph 8, the Claimant
failed to mitigate that loss and damage. In particular, it was unreasonable to stop production for 9 days.
8. In all the circumstances it is denied that the Claimant is entitled to the relief claimed or any relief.

Dated 8 January 20XX.

Haughton & Co
HAUGHTON & CO

STATEMENT OF TRUTH
I believe that the facts stated in this Defence are true. I am duly authorised by the Defendant to sign this
statement. I understand that proceedings for contempt of court may be brought against anyone who makes,
or causes to be made, a false statement in a document verified by a statement of truth without an honest
belief in its truth.
Signed: Darren Bennett
DARREN BENNETT, Managing Director of the Defendant company
This statement of truth was signed on [date].
The Defendant’s Solicitors are Haughton & Co, 19 High Pavement, Reading RD61 4UZ, where they will
accept service of proceedings on behalf of the Defendant.
To the Court Manager and the Claimant.

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 Statements of Case

5.5 Additional claims

In many cases, the only statements of case will be the particulars of claim and the defence.
However, a defendant may wish to make their own claim against a claimant, or to bring
another party into the proceedings. These additional claims are governed by rules set out in
CPR Part 20.

5.5.1 Counterclaim
A counterclaim arises where the defendant is alleging they have their own cause of action
against the claimant. Effectively, they could have taken action against the claimant first and
issued proceedings.

Example
Kendal Plumbers Ltd (KPL) supply and install high quality bathrooms. Edwin Gallagher,
who owns a hotel in the Lake District, purchases new bathroom suites for two of the
bedrooms. However, on installation, it becomes apparent that there are a number of
flaws in the ceramic appearance. Edwin refuses to pay the second instalment as required
under the contract and, as a consequence, KPL issues proceedings for the monies due.
In response, Edwin files a defence stating that he is not liable to pay for the bathroom
suites because they are defective. In the meantime, the toilets have leaked causing
extensive flood damage to the floor below. Edwin wants to claim for losses incurred as
a result of the damage to his hotel and does so by way of a counterclaim. This will form
part of the same document as the defence.
This may also be referred to as a ‘set off’. Edwin’s defence is that he should not
have to pay the balance due for the bathroom suites because, if he can establish his
counterclaim, it will set off the amount claimed and KPL will have to pay him damages.
In summary, a counterclaim will be relevant if the defendant has actually suffered loss that
is attributable to the claimant. If the defendant simply has a good reason for not paying the
monies owed, but has not incurred any loss, they should only file a defence.

5.5.2 Structure of a defence and counterclaim

A defence and counterclaim is essentially what the title suggests: a defence and a (new)
claim, set out in a single document. The title to the action remains the same but the heading
will now be ‘DEFENCE AND COUNTERCLAIM’. The document is then sub-​divided into two
sections, with the defence outlined at the beginning and the counterclaim following on
immediately thereafter.
In terms of the content, the best approach to drafting a counterclaim is to treat it as a stand-​
alone claim, for example, for breach of the Sale of Goods Act 1979 on the basis the goods
were not of satisfactory quality. However, rather than repeat aspects that have already been
included in the statements of case, such as details of the contract and the incorporation of the
implied terms, the counterclaim will refer back to the defence. The first paragraph will simply
state that the relevant paragraphs are repeated. The effect of this is that, for example, the
existence and terms of the contract are accepted and the defendant’s allegation of breach is
also confirmed. The rest of the counterclaim will then set out the allegations of loss resulting
from the claimants’ breach.
In summary:
• A counterclaim is treated as if it were a claim and should be filed with the defence.
• It will form one document, with the counterclaim following on from the defence.
• Permission is not required from the court unless the defence has already been filed.

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5.5.3 Additional claims

Part 20 also applies to additional claims made by a defendant for a contribution or indemnity
or some other remedy against any person whether or not they are already a party. These are
referred to as additional claims.
A common scenario is where the defendant wishes to pass the blame, either in whole or in
part, onto a third party. The defendant may be seeking a full indemnity from the third party, or
a contribution towards any damages they have to pay the claimant.

5.5.3.1 Indemnity
A claim for an indemnity may arise where there is a contractual relationship between the
defendant and the third party, in which the latter is obliged by the terms of a contract to
indemnify the defendant if they are found liable for the claim. This may also arise by way
of statute.

Example
Continuing with the scenario above, KPL claim an indemnity against Alpha Bathrooms Ltd
(Alpha), the company that manufactured the bathroom suites, alleging that there was an
inherent defect in the goods. If KPL lose the claim against Edwin, the liability for any sums
the defendant is ordered to pay may be passed on to Alpha.

5.5.3.2 Contribution
A claim for a contribution can be made where there are joint wrong-​doers and the defendant
argues that the third party is partly responsible for the harm the claimant has suffered.

Example
Toya claims damages from Lisa as a result of a road traffic collision. Lisa alleges
that another driver, Jaspar, was partly to blame for the accident. She will claim
a contribution from Jaspar towards any damages that she is ordered to pay to
the claimant.

5.5.3.3 Other additional claims

The defendant may also make other additional claims without the court’s permission provided
this is done either before or at the same time as they file the defence.

Example
Farzani is suing Leycester Motors Ltd (LML) because the new car that she purchased
from the company has patches of rust underneath the vehicle. LML bring in Fenland
Storage Limited as an additional party as they have evidence that the company
stored the car outside before delivering it, instead of in a warehouse as they were
contracted to do.

5.6 Reply to defence

A claimant may wish to file a reply to the defence but is under no obligation to do so. Replies
tend to be used if the claimant wants to respond to matters that have been raised in the
defence but which are not covered in the particulars of claim.

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 Statements of Case

5.7 Defence to counterclaim

If the claimant decides to dispute the counterclaim, they must file a defence to the
counterclaim within 14 days (unless an extension of up to 28 days has been agreed with
the defendant). If they fail to do so, the defendant may enter judgment in default on the
counterclaim using the procedure outlined in Chapter 4.

5.8 Amendments to statements of case

In a perfect world, no one would ever have to amend their statements of case. However,
sometimes mistakes are made and, on other occasions, fresh information comes to light after
the statement of case has been served. CPR Part 17 lists the ways in which these can be
amended.

5.8.1 Before expiry of the limitation period

The procedure for amending documents prior to the expiry of the limitation period is set out in
Table 5.2.

Table 5.2 Amending statements of case (within limitation period)

After filing but before service After filing and service

Amendments may be made any time. Only with:

(a) the written consent of all of the parties; or
(b) the permission of the court.

When applying for permission, the applicant should file a copy of the statement of case with
the proposed amendments together with an application notice. The court will then decide
whether or not to exercise its discretion to grant the application, taking into account the
overriding objective of dealing with the case justly and at proportionate cost. In particular,
the court will need to strike a balance between injustice to the applicant if the amendment
is refused, and injustice to the opposing party and other litigants in general, if it is
permitted.

5.8.2 After expiry of the limitation period

Where the limitation period has ended, the court may allow an amendment only in the
following three circumstances:
a) to add or substitute a new claim, if this arises out of the same or substantially the same
facts as an existing claim;
b) to correct a (genuine) mistake as to the name of a party;
c) to alter the capacity in which a party claims.

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5.9 Requests for further information

There will be occasions where the statement of case is somewhat confusing or fails to set out
the case precisely enough. At this point, CPR Part 18 comes into play. The rule provides that,
at any time, either the court or the parties may request further information and, if successful, a
party will be ordered to:
(a) clarify any matter that is in dispute; or
(b) give additional information in relation to any such matter.

5.9.1 Procedure
The procedure for making or responding to Part 18 requests is as follows:
• If either party requires further information, they must (first) serve a written request on the
other party, allowing a reasonable time for the response.
• A request should be concise and strictly confined to matters that are reasonably
necessary and proportionate to enable the applicant to prepare their own case or to
understand the case they have to answer.

Example
KPL receive Edwin Gallagher’s defence and counterclaim to their claim. Edwin has
not specified what the flaws are that he alleges can be seen in the ceramic bathroom
suites. Furthermore, in his counterclaim, he merely states that he is claiming for flood
damage to his hotel but without itemising what this entails. As a consequence, KPL
contact Edwin asking him to provide sufficient particulars of both the alleged breach and
the damages.
• Requests must be made as far as possible in a single comprehensive document and not
piecemeal. If brief, this may be by letter; if not, the request should be made in a separate
document, which must be sent to the other party.
• Any request must be headed with the name of the court, the title and number of the
claim and identify that it is a Part 18 request. The requests should be set out in separate
numbered paragraphs, and state the date for a response.
Figure 5.3 provides an example of a request for further information under Part 18.
Once the request has been received, the other party must deal with the issues raised.
• The response must be in writing, dated and signed by the party or their solicitor. It should
set out the same information as the request and then give details of the response.
• The response must be:
∘ served on all the parties;
∘ filed with the court; and
∘ verified by a statement of truth.
• If a request for further information is not responded to, or cannot be complied with,
an application may be made to court under Part 18. The court will grant an order if it
is satisfied that the request is confined to matters that are reasonably necessary and
proportionate to enable the applicant to prepare their case or to understand the case
against them.

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 Statements of Case

Figure 5.3 Request for further information

IN THE CARLISLE COUNTY COURT

BETWEEN
KENDAL PLUMBERS LTD Claimant
and
EDWIN GALLAGHER Defendant

CLAIMANT’S PART 18 REQUEST FOR FURTHER INFORMATION

This Request is made on 10 April 20XX and the Claimant expects a response to it no later than 24 April 20XX.
1. Under paragraph 4 of the Particulars of Claim, please provide a detailed description of the appearance
of the ceramic finish on the bathroom suites and an explanation of why this is alleged to be unsatisfactory.
2. Under the same paragraph, please provide full details of how the flooding occurred and how it is
alleged this was due to the quality of the bathroom suites.
3. Under paragraph 6 of the Particulars of Claim, please provide a detailed description and financial
breakdown of all work which it is proposed be undertaken and each and every item of cost it is proposed
to incur in respect of:
(a) the repairs to the hotel; and
(b) the refitting of the rooms affected by the flooding.

ULaws LLP
ULAWS LLP

15-​16 Park Row, Leeds LS1 5HD

Solicitors for the Claimant
To the Defendant

Summary
• Statements of case are the formal documents that are served by the parties on each
other. Their purpose is to define for the court the issues that are in dispute and, as a
consequence, to limit the matters that must be proved by the respective parties.
• The term ‘statements of case’ encompasses claim forms, particulars of claim, defences,
counterclaims, replies and responses to requests for further information, but not evidential
documents such as witness statements or expert reports.
• The document that begins legal proceedings is the claim form. This may either stand
alone or (for more complex matters) be accompanied by separate particulars of claim.
The particulars of claim contain a concise statement of the legal and factual basis of
the claim, together with details of the alleged breach and the remedies sought, and the
interest claimed.

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• The defence outlines the defendant’s answer to the claim and each allegation in the
particulars of claim must be answered, otherwise it is deemed to be admitted. Allegations
that are admitted need not be proved by the claimant, but those that are either denied or
not admitted must be.
• In most instances, the statements of case will consist of the claim form, particulars of
claim and the defence only. However, if the defendant wishes to raise a claim of their
own, a counterclaim must be served. The claimant must respond with a defence to
the counterclaim if they are to avoid judgment being entered in default. A reply to the
defence itself may be filed by the claimant but this is optional.
• If either party requires clarification of or more information on any matter in dispute, a
request for further information can be made, to which the other party must respond.
• All statements of case must be verified by a statement of truth.
• Statements of case may be amended but only with the agreement of the other party or
the permission of the court after service has been effected.

Sample questions

Question 1
A company (the claimant) owns an office building on a business park. When making a
delivery of office supplies to the claimant, the defendant loses control of his van and
crashes into the reception causing extensive damage. The cost of rebuilding has been
assessed as £32,500. The defendant is refusing to accept liability and so the claimant
issues proceedings in the County Court.
Which of the following statements best describes how the claimant should make a claim
for interest?
A The claimant should claim interest pursuant to any relevant term in the contract
between it and the defendant.
B The claimant need not claim interest as this will be automatically added to the claim if
successful.
C The claimant should set out the basis of its entitlement to interest, but need not
calculate the amount owing.
D The claimant must precisely calculate the amount of interest which has accrued up to
the date of proceedings.
E The claimant must precisely calculate the amount of interest which has accrued up
to the date of proceedings as well as the daily rate of interest which will continue to
accrue.

Answer
Option C is correct. The court may award interest, but only if it is claimed –​as a result,
option B is wrong.
As the claim is for damages, and is therefore unspecified in nature, all the claimant
is required to do is to set out the basis of its entitlement to interest. In this case, that
entitlement comes from s 69 of the County Courts Act 1984. Although there may be a
contract between the claimant and the defendant, most likely that contract will be limited to
the supply of goods by the defendant to the claimant. Any term for interest in that contract

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will presumably only exist for the benefit of the defendant should the claimant be late in
paying any invoices for the supply of those goods. Option A therefore is unlikely to represent
the best option on the facts.
It is only when the claim is specified in nature (a claim for monies owing in debt) that the
claimant must precisely calculate both the amount of interest which has accrued and the daily
rate of interest that will continue to accrue. For this reason, options D and E are both wrong.

Question 2
The defendant is served with proceedings for damage caused to the claimant’s reception
building when his van collided into it. He denies liability and files and serves a defence
alleging that the reason he lost control of the van was because there were shards of glass
on the driveway approaching the reception, which caused a puncture to the front tyre. The
defendant alleges that he was a visitor within the meaning of the Occupiers’ Liability Act
1957 and that the claimant failed in its statutory duty to safeguard him from danger and a
foreseeable risk of damage to his property. He also makes a claim for the cost of repair to
his van. This is disputed by the claimant.
Which of the following statements correctly describes how the defendant should
approach drafting his statements of case?
A When drafting his defence, the defendant need only admit facts that he accepts and
deny those which he disputes.
B The defendant should adopt a structured approach to drafting his defence, but any
facts missed are deemed to have been denied.
C The defendant should include a counterclaim with his defence if he wishes to claim for
the repair of his van.
D When drafting a counterclaim, the defendant should include all the relevant facts even
if these have already been set out in the defence.
E The counterclaim need not be verified by a statement of truth as it is part of the
defence.

Answer
Option C is correct. Option A is wrong because there is a third option –​that of a non-​
admission and this applies to those facts of which the defendant has no knowledge. Option
B is wrong as any facts missed are deemed to be admitted. Option D is also wrong as
there is no need to include facts that have already been set out in the defence and the first
paragraph will simply state that the relevant paragraphs are repeated. Option E is wrong
because all statements of case must be verified by a statement of truth.

Question 3
The claimant has issued proceedings against the defendant, who files and serves a
defence and counterclaim in response. However, the claimant is unable to respond
effectively because the contents are lacking in clarity.
Which of the following statements provides the best advice as to the action the
claimant should take first?
A The claimant should write to the defendant to request further information on the
defence and counterclaim.
B The claimant should make an application to the court to request further information in
relation to the defence and counterclaim.

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C The claimant should apply for permission from the court as they cannot make an
application for further information on the defence and counterclaim without this.
D The claimant does not need to respond to the counterclaim as they are deemed to
deny it.
E The claimant should file a reply to the defence and a defence to the counterclaim
based on the information that has been provided by the defendant.

Answer
Option A is correct. Under CPR Part 18, the client may request further information from their
opponent to clarify any matter that is in dispute or to obtain additional information in relation
to any such matter. Before applying to the court, the claimant should write to the defendant to
request this –​hence, option B is wrong. Option C is wrong as the claimant does not need the
permission of the court to request further information on statements of case.
Option D is wrong as the facts state that the claimant disputes the counterclaim and if they
do not file and serve a defence, the defendant can enter judgment in default for this aspect.
Option E is not the best advice because responding to the defence and counterclaim where
the issues are unclear would be contrary to the overriding objective as the statements of case
would almost certainly need amending at a later stage.

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6 Interim Applications

6.1 Introduction 92
6.2 Purpose of interim applications 92
6.3 Procedure 92
6.4 Interim costs 100
6.5 Summary judgment 101
6.6 Interim injunctions 104
6.7 Interim payments 107

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to interim applications as follows:
• procedure for making an application
• purpose, procedure and evidence required for particular applications:
∘ summary judgment
∘ interim injunctions
∘ interim payments
Note that for SQE1, candidates are not usually required to recall specific case
names, or cite statutory or regulatory authorities. These are provided for illustrative
purposes only and the sample notice of application is included for the same reason.

Learning outcomes
The learning outcomes for this chapter are:
• To understand how to make an interim application.
• To understand and apply the procedure for summary judgment.
• To know when and how to apply for an interim payment.
• To appreciate when it is appropriate to apply for an interim injunction.

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6.1 Introduction
If the parties are unable to resolve their differences by negotiation, they will have little
alternative but to issue proceedings. However, cases do not always proceed seamlessly to
trial and, in many cases, one or other of the parties will need to bring a particular matter
before the court along the way. Applications that are made after litigation starts but before
the trial are known as interim applications and they are many and varied. However, in this
chapter, only a sample will be covered.

6.2 Purpose of interim applications

There are many reasons why a party may consider it necessary to apply to the court but,
in most instances, the aim is to ensure that the case proceeds as quickly and efficiently as
possible in accordance with the overriding objective. Table 6.1 contains illustrations of interim
applications.

Table 6.1 Types of interim applications

Purpose of interim Examples

application

To ensure • permission to serve a claim form out of the jurisdiction

compliance with • challenging the court’s jurisdiction
procedural matters • permission to amend a statement of case or to make an additional claim

To request more • to serve a claim form or a defence

time • to serve the list of documents –​see Chapter 8

To assist in • requiring a reply to a Part 18 request for further information

preparation for trial • seeking disclosure of documents

To consider • applying for a sanction against the opponent for failing to meet a deadline
penalties •a pplying for relief from a sanction imposed by the court, such as the
imposition of a penalty costs order or the striking out of a claim

Part 23 of the CPR sets out the general rules governing applications to the court, but these are
subject to (additional) express provisions that apply to specific types of applications.

6.3 Procedure
Before applying to the court, the parties should seek to resolve matters between themselves
so as to comply with the overriding objective and to avoid the imposition of costs penalties.
This will usually be achieved by the exchange of correspondence, whether by letter or email,
and only if that fails should an application be made.
Under Part 23, the party who is applying (the applicant) must complete an application notice
and Form N244 should be used. The party against whom the order is sought is known as the
respondent.

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Figure 6.1 sets out an example of a completed notice of application for an interim order
(Form N244).

Figure 6.1 Completed notice of application for an interim order

(continued )

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Figure 6.1 (continued )

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Figure 6.1 (continued )

(continued )

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Figure 6.1 (continued )

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Figure 6.1 (continued )

6.3.1 Which court?

The application must be made to the court where the claim started or (if relevant) to where it
has been transferred.

6.3.2 Content
An application notice must state what order is being sought and why. Although there is no
specific requirement to provide evidence, as a matter of practical reality, it will be necessary
to set out the facts the party is relying on in support of, or for opposing, the application.

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If the issues raised are straightforward, the applicant will complete the box to be found on
the second page of Form N244. However, if there is insufficient space on the form, a witness
statement may be filed at the same time. Furthermore, the party may also rely on the contents
of a statement of case, such as the particulars of claim. The application must be verified by a
statement of truth.
6.3.2.1 Evidence in support
The witness statement should be made by the person best able to address the relevant
points from personal knowledge. If the application is a more technical one, such as for the
amendment of a statement of case, this is likely to be the solicitor; whereas in other situations,
it may be the client. The statement should:
(a) include the factual information and the evidence in support of the application; and
(b) anticipate the opponent’s case, where appropriate.
Sufficient detail must be provided to persuade the court to make the order, as there will be
no oral evidence from witnesses at the hearing. Although the solicitor will make submissions,
the judge will decide the issue primarily on the basis of the written evidence. Hence, it is
important that the witness statement covers all the required points including, if necessary,
attaching relevant documents as exhibits.
6.3.3 Draft order
Practice Direction 23A states that, except in the most simple of applications, the applicant
should attach a draft of the order sought to assist the judge.
6.3.4 Service
The application notice must be served on the opponent at least three clear days before the
court hearing to allow the other party to respond and to object to the application should they
wish to do so. Clear days means that the date of service and of the hearing are excluded, as
well as weekends and bank holidays.

Example
ULaws LLP are acting on behalf of a company that is engaged in litigation against a
defendant. They issue an interim application on behalf of their client. A hearing is listed for
Thursday 10 November. Counting back from this date, the three clear days are Wednesday
9, Tuesday 8 and Monday 7 November; so the latest day on which the documents can
arrive with the opponent is Friday 4 November (as the weekend is excluded). Given that
such documents are deemed served on the second day after being sent by first class post
provided this is a business day, ULaws LLP must post the application notice and the witness
statement in support no later than Wednesday 2 November.
6.3.5 Consent orders
If the parties have reached agreement on the order they require, they can apply to the court
for an order to be made by consent without the need for attendance at the hearing. The
parties must ensure they provide the court with any material it needs to be satisfied that it is
appropriate to make the order, and usually a letter will suffice. The main advantage of this is
the saving of costs for all concerned.
6.3.6 Orders made without notice
The general rule is that applications must be made on notice to the other party. This ensures that
the opponent is aware of the application so they may file evidence in response and arrange for
attendance at the hearing. However, there are exceptions to this rule, usually where:
• there is exceptional urgency; or
• the overriding objective of the CPR would be best achieved by making an order without
notice.

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The most common examples are where the applicant is applying to freeze their opponent’s
financial assets or to search their premises. Clearly, in these instances, giving warning of the
intended action would defeat the purpose of the application as it would allow time for assets
to be moved or destroyed. These type of applications are considered later in this chapter.
Where an application is made without notice to the respondent, the evidence must explain
why notice was not given. In addition, the applicant has a duty of full and frank disclosure,
which means they cannot take advantage of the respondent’s absence at the hearing and
must draw the court’s attention to evidence and arguments they reasonably anticipate the
respondent would wish to make.
If an order is made on an application without notice, the following copy documents must be
served on the respondent, as soon as it is practicable to do so:
(a) the court order;
(b) the application notice; and
(c) any supporting evidence.
The respondent may then apply to set aside or vary the order within seven days of service of
the order upon them. Figure 6.2 provides a summary of the procedure under CPR Part 23.

Figure 6.2 Overview of interim applications

INTERIM APPLICATIONS

Witness Statement
Form N244 + + Draft order
stating why the order is sought and
evidence of the facts relied on in support.

Service

Applications made Applications made

on notice without notice

At least 3 clear days • As soon as practicable after the

before the hearing. order is issued.
• The respondent may apply to set
aside or vary the order within 7
days of it being granted.

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6.3.7 Telephone hearings and video conferencing

Many courts now have the facilities to conduct hearings by telephone or video conferencing. This
is actively encouraged and, under PD 23A, the general rule is that interim applications with a time
estimate of one hour or less will be conducted by telephone if at all possible. However, there are
exceptions such as the hearing of an application made without notice to the other party.

6.4 Interim costs

Any interim application will involve the parties in expense, for example, in collecting evidence,
preparing the notice of application and supporting witness statement, and attending the
hearing. A court fee is also payable.
At the end of any interim application, the judge will decide the issue of costs –​often referred
to as ‘pay as you go’ litigation. The general costs rule applies with the loser paying the
winner’s costs. Thus, if the application is granted, it is normal to order the respondent to
pay the applicant’s costs. However, the type of costs order will depend upon the nature of
the application and interim costs orders usually reflect, to a large extent, the conduct of the
parties. For example, a party who wants permission to amend their statement of case starts
from a weak position as the document should perhaps have been properly drafted in the first
place; hence, they may have to pay the costs of the application even if they win.
There are several possible costs orders, but the most common are included in Table 6.2.

Table 6.2 Interim costs orders

Term Effect When would this apply?

[Named The party named in the order is entitled When there is a clear ‘winner’ such as
party’s] to their costs of the interim application where the claimant succeeds in their
costs whatever other costs orders are made in application for summary judgment. The
the proceedings. These costs are normally unsuccessful party would be ordered to
summarily (instantly) assessed and pay the costs.
ordered to be paid within 14 days.
An example would be an order for
‘claimant’s costs’. This would mean that the
defendant must pay the claimant’s costs.

Costs in the In an order for costs in the case, no party This could apply if the court makes a
case is named and, at this stage, neither party conditional order, for example, that
can recover their costs. It only becomes the defendant may continue to defend
apparent who is to pay the costs of the the proceedings but only if they file a
interim application at the conclusion of full defence within 14 days. If they fail
the proceedings. The ultimate loser of the to do so, only then would the claimant
litigation will also be liable for these costs. receive the costs of the interim
application.

No order as Each party is to bear their own costs of the This order is often made when the
to costs interim application whatever costs orders outcome of the interim application is
are made at the end of the proceedings. effectively a draw with neither party
being perceived to be at fault. An
example may be where evidence later
comes to light that requires additional
witness statements to be filed.

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Having covered interim applications in general by reference to Part 23, the remainder of this
chapter will consider specific examples.

6.5 Summary judgment

Once a claim has been served, the defendant may:
(a) do nothing –​in which case the claimant will apply for default judgment;
(b) admit the claim, allowing the claim to be enforced; or
(c) file a full defence so the case proceeds to trial.
However, there is a fourth option. Sometimes the defendant will simply file a weak defence,
either because their case has no substance or as a delaying tactic to buy more time. This
may be because they are looking for additional evidence, or simply that they do not have
the available financial assets to pay the claim. If the defence received is poor, the claimant
would almost certainly succeed at trial but this would cost them additional time and money.
To enable a claimant to bring the matter to an early conclusion, Part 24 of the CPR provides a
solution. This is known as summary judgment.
Although such applications are normally brought by the claimant, the defendant may also
apply for summary judgment. This may occur if, for example, a litigant in person has filed a
weak particulars of claim or one which has no legal basis.
Rule 24.2 states that the court may give summary judgment on the whole of the claim or a
particular issue if:
(a) it considers that:
(i) the claimant has no real prospect of succeeding on the claim; or
(ii) the defendant has no real prospect of successfully defending the claim; and
(b) there is no other compelling reason why the case should be disposed of at trial.
There are some cases which are clearly not suitable for summary judgment, for example,
where there are complex issues that need proper investigation at trial or difficult questions
of law. However, Part 24 is a useful mechanism that should be considered by the parties
wherever appropriate, particularly as it is consistent with the overriding objective of the CPR to
deal with matter justly and at proportionate cost.

Example
Classic Motoring Ltd (Classic) provide self-​build kits for go-​karts and other leisure cars
including all technical drawings and full build instructions. Joe purchased five kits for his
caravan park to provide entertainment for the guests. However, having built the go-​karts,
they constantly break down so they prove to be entirely unsuitable for their purpose.
Joe issues proceedings against Classic for £24,000. Classic files a defence, which simply
states: ‘The self-​build kits supplied were perfectly good and the claimant does not know
how to construct them properly’.
This is clearly insufficient and, although the claimant would certainly succeed at trial
were this to be the only defence submitted, Joe does not want to waste time and money
allowing the case to proceed this far. He can apply for summary judgment under Part 24.

6.5.1 No real prospect

In determining whether the claimant has a real prospect of succeeding in their claim or the
defendant of defending theirs, the court will consider the evidence and this will vary from
case to case. With the increase in litigants in person, there is a risk that claims are pursued

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or defended with limited understanding of the legal merits of a particular issue or the
requirements of evidence. In these situations, the responsibility will fall upon the court to weed
out the somewhat hopeless cases.

6.5.2 Compelling reason

In addition to the prospect of success being determined, the judge must also be satisfied that
there are compelling reasons to allow the matter to proceed to trial. Although this covers a
range of situations, the most common reasons would be:
• The need to allow more time for the matter to be investigated, perhaps due to difficulties
in contacting an important witness.
• The claim or defence is of a highly complicated and/​or technical nature so it can only be
properly understood with all the evidence that would be available at a full trial.
• The need to hear from witnesses, particularly if one of the central issues (such as the
terms of a contract) is disputed oral evidence.
It is important to bear in mind that the hearing is not the trial. The submissions should be
based upon the criteria of Part 24 so the respondent should concentrate on establishing a
compelling reason to allow the proceedings to continue and not attempt to argue their case
in its entirety. Obtaining an order for summary judgment is not a given and indeed, the easier
option may be for the judge to allow the proceedings to continue.

Example
Continuing with the scenario above, Joe files and serves his application for summary
judgment against Classic. The defendant responds with a witness statement from their
technical director setting out their submissions as to why they consider their kits to be
satisfactory and why Joe is at fault. This is to persuade the court that Classic has a
defence with a real prospect of success.
However, if summary judgment is to be granted, the judge must also be satisfied that
there is no other compelling reason why the matter should be disposed of at trial. Having
listened to the evidence, the judge finds against Joe on the basis that Classic’s defence
does have merit. Furthermore, the matter is too technical to be determined at a summary
judgment hearing and would benefit from additional evidence –​specifically, from an
independent expert.
In summary:
• a claimant applicant has to prove both that the defendant has no real prospect of
successfully defending the claim and that there is no other compelling reason why the
matter should proceed to trial; but
• a defendant respondent need only succeed in preventing the claimant from proving one
aspect to ensure the dismissal of the application for summary judgment.

6.5.3 Procedure
An application for summary judgment can be made by either party at any time. The only
occasion where the court’s permission is required is where the claimant wishes to apply
before the defendant has filed an acknowledgement of service or a defence. However, given
the requirement to convince the judge that the defendant has no real prospect of defending
the claim, a claimant will invariably wait until after the defence has been filed.
The procedure is as follows:
• The applicant applies with Form N244 and (usually) a witness statement in support.
• The respondent must:

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∘ be given at least 14 days’ notice of the hearing date; and

∘ file and serve any written evidence at least seven days before the hearing.
• If the applicant wishes to rely on further evidence, this must be filed and served at least
three days before the hearing.
Figure 6.1 referred to earlier in this chapter is an example of a completed notice of
application in which the claimant is applying for summary judgment.

6.5.4 Possible orders

The judge has a number of possible orders at their disposal.
(a) Judgment on the claim: this means that the claimant has succeeded in their application
for summary judgment and the matter will proceed to enforcement.
(b) The striking out or dismissal of the claim: here, the defendant has succeeded in their
application to dispose of the claimant’s claim and the case comes to an end.
(c) The application is dismissed: the applicant has failed to bring the case to an early
conclusion and it will now proceed towards trial.
(d) A conditional order: the application has not been granted, but equally the respondent has
not succeeded in having it dismissed –​neither side has won.
A conditional order will be made where the court concludes it is possible, but not probable,
that the claim or defence may succeed. The party will be allowed to continue with the
litigation provided they pay a sum of money into court or take a specified step in relation
to their claim. This ensures that the party is genuine in their desire and ability to pursue the
matter and, in the case of the defendant, they are not merely delaying payment.

Example
In Joe’s claim against Classic, the judge makes a conditional order. She allows Classic to
pursue their defence provided they file and serve a full defence within 14 days of the hearing
and pay the sum of £24,000 (the value of the claim) into court within 28 days. If Classic fails
to do so, their defence will be struck out and Joe will be able to enforce his claim.
Where the court dismisses the application or makes an order that does not completely
dispose of the claim, case management directions are usually given as to the future conduct
of the case.

6.5.5 Costs
The costs order awarded will depend upon the type of claim and the outcome of the
application.
• Where a claimant succeeds in obtaining summary judgment for a specified sum, the court
may award fixed costs under Part 45. However, it is open to the claimant to request a higher
figure as their costs usually exceed these, and to ask for summary assessment of the costs.
• If a claimant is awarded summary judgment in an unspecified claim, the usual rule
applies so that the winner (the claimant) is granted their costs. These will be summarily
assessed and a further hearing will be listed to assess the damages payable by the
defendant (a disposal hearing).
• If the defendant secures summary judgment so the entire claim is struck out, the court will
normally order that the claimant pays the defendant’s costs of the whole claim –​again,
subject to summary assessment.
• If the application is dismissed, the proceedings will continue and the unsuccessful party
will pay the successful party’s costs of the summary judgment hearing.
• If a conditional order is made, the usual order will be for costs in the case.

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Applying for summary judgment is a useful means of bringing the matter to an early
conclusion or, at the very least, putting pressure on the opponent to confront the claim.

6.5.6 Overview of summary judgment

Figure 6.3 Summary judgment

SUMMARY JUDGMENT

GROUNDS

Claimant has no real Defendant has no real There is no other compelling

prospect of succeeding or prospect of successfully and reason why the case should
on the claim defending the claim be disposed of at trial

• To allow time for further investigation

• Points of law and/or evidence • Complex or technical evidence is required (expert)
• Disputed issue requires oral evidence

PROCEDURE

• Applicant files and serves Form N244 + witness statement

at least 14 days before the hearing
• Respondent files and serves own evidence at least
7 days before the hearing
• Applicant may file and serve further evidence at least
3 days before the hearing.

ORDERS

Claimant’s application granted Defendant’s application Application dismissed Conditional order

• D pays C’s costs granted • Loser pays winner’s • Costs in the case
• Judgment entered and • C pays D’s costs costs • Case proceeds if
proceedings end • Claim dismissed and • Proceedings continue condition satisfied
subject to enforcement proceedings end

6.6 Interim injunctions

Under Part 25 of the CPR, the court has wide powers to grant various interim remedies,
including interim injunctions.

6.6.1 Who can apply?

Either party may apply for (and be granted) an interim injunction in support of their cause of
action.

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6.6.2 When to apply?

A party may seek an injunction at any time after proceedings have been commenced and, in
exceptional cases, even beforehand. However, the court must be satisfied that the matter is
urgent or it is otherwise desirable in the interests of justice.
If granted before trial, these orders are known as interim injunctions. They remain in force until
the matter comes to trial (or until further order), at which point the court will decide whether or
not to make a final injunction.

6.6.3 What is an injunction?

Injunctions may be distinguished from other court orders because breach is punishable as a
contempt of court. They are a discretionary remedy and may only be granted when damages
are not an adequate remedy for the applicant.
There are different types of injunctions but the primary aim is to maintain the status quo –​the
current position –​until the trial. Generally, they will be used to prevent the defendant from
taking certain steps, such as soliciting customers of the claimant, but they can also order a
party to take action, for example to stop committing a nuisance.

6.6.4 Guidelines used by the court

When the court hears an application for an interim injunction, it does not know all the facts
and so, to assist in making the correct decision, judges refer to certain guidelines.

These are set out in the case of American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL
1 and are sometimes referred to by reference to this authority.
When deciding whether to grant an interim injunction, the court will determine whether:
(a) there is a serious question to be tried;
(b) damages are an adequate remedy for either side;
(c) the balance of convenience lies in favour of granting or refusing the injunction; and
(d) whether there are any special factors.
The effect of these is best demonstrated by considering an illustration.

Example
Taste of the Caribbean Ltd (TCL) have commenced proceedings against Ocean Foods Ltd
(Ocean) alleging that they have infringed their copyright by selling jars of sauce with an
almost identical image on the label to their own brand.

Outcome 1
TCL obtains an interim injunction to stop Ocean selling the sauce having satisfied the
court that its claim for breach of copyright is a serious issue to be tried and that damages
are not an adequate remedy. The injunction will remain in place until the matter is
determined at trial. The aim of the injunction is to prevent TCL suffering further loss of
profits in the meantime.

Outcome 2
At the hearing for the interim injunction, Ocean provides evidence that they will go out
of business if the injunction is granted. In contrast, if TCL’s application for an injunction is
refused, although they will suffer financial losses, both parties will continue to trade. The
judge declines to grant an injunction to TCL.

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6.6.5 Cross-​undertaking
If an interim injunction is granted, the applicant must undertake to the court to pay any
damages that the respondent (or any other party affected by the order) sustains by reason of
the injunction, if it subsequently transpires that the injunction ought not to have been granted.
This is often called the applicant’s ‘cross-​undertaking’.

Example
Continuing with the scenario (above) as described in Outcome 1, when the action comes
to trial, Ocean proves they were not infringing TCL’s copyright. As a consequence, Ocean
can claim damages for their loss of profits arising from their inability to sell their sauce
during the period between the injunction and the trial.

6.6.6 Procedure
As with other types of applications, the party who seeks the order must apply by way of an
application notice with evidence in support –​usually, a witness statement.

6.6.6.1 Orders obtained with notice

Interim injunctions are usually obtained on notice, so the defendant has prior warning of the
hearing. They last until the trial of the claimant’s action unless they are set aside earlier by the
court, perhaps because of a change of circumstances.

6.6.6.2 Orders obtained without notice

However, under Part 25, the court may grant an interim remedy on an application made
without notice if there are good reasons for doing so. This could be due to insufficient time or,
more commonly, that giving notice would enable the defendant to harm the claimant in some
way, such as destroying evidence that would support the claimant’s case. Secrecy is needed
because if the defendant learns of the claimant’s plans they may try to cause irreparable
harm to the claimant before an injunction can be secured.
An injunction without notice takes one of two forms.
(a) The court may fix a date for a further hearing with all parties present, in which case it
lasts until the date specified for that hearing. If the defendant successfully argues that the
injunction should not be granted, it will be set aside.
(b) Alternatively, rather than fixing a hearing date, an injunction without notice may simply tell
the defendant that they may, if they wish, apply on notice for the order to be varied or set
aside. In the meantime, the injunction remains in force until trial or further order.
Examples of injunctions that can be made without notice include:

Freezing injunctions
These restrain a party from removing their assets from the jurisdiction (England and Wales). If
notice was given of such an application, the respondent could simply transfer their assets prior
to the hearing. The court must be satisfied that the applicant has a good arguable claim and
there is a real risk the respondent will dispose of their assets so as to defeat the enforcement
of an eventual judgment.

Search orders
A search order compels the respondent to allow their premises to be searched by the
applicant, where the applicant believes that the respondent has documents or property
belonging to them. Again, if notice was given to the respondent in advance, it would be a

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simple matter for them to hide the items somewhere else. The court must be satisfied that the
applicant appears to have a strong case, they will suffer serious harm if the order is not made
and the respondent has incriminating materials in their possession which cannot be obtained
by other means.

Example
Junaid Mahmood was employed by Southcity Engineering Ltd (SEL) in a senior
management post, but was dismissed. SEL becomes aware that Junaid is about to set
up a business in competition. Furthermore, they have discovered that he removed his
work laptop containing confidential information in relation to a new, innovatory product
belonging to SEL so he could compete with their business. They have obtained evidence
suggesting that Junaid will conceal or destroy the laptop if he becomes aware they are
taking court proceedings against him. SEL obtains a search order allowing them access to
Junaid’s premises to enable them to search for the laptop. This could be combined with
an interim injunction restraining Junaid from making use of the confidential information.
Because freezing injunctions and search orders can be quite draconian in their impact upon
the respondent, such applications are normally made to a High Court judge and must be
supported by evidence in the form of an affidavit. This is a document that is similar in content
to a witness statement but it is sworn or affirmed by the person making it.

6.7 Interim payments

One particular type of interim remedy also covered by Part 25 is an interim payment. This is
an advance payment on account of any damages, debt or other sum (excluding costs) that a
defendant may be held liable to pay. The interim payment procedure enables a claimant who
has a strong case on liability to avoid the financial hardship and/​or inconvenience that might
otherwise be suffered because of any delay during the period between the start of the claim
and its final determination.
Before making an application to the court, the claimant should try to negotiate with the
defendant or the defendant’s insurance company to obtain a voluntary interim payment. Only
if one is not forthcoming, should an application be made.

6.7.1 Timing
A claimant may not seek an interim payment until after the time for acknowledging service
has expired, although they can make more than one application during the proceedings.

6.7.2 Procedure
An application notice for an interim payment must be served at least 14 days before the
hearing date. Evidence must be provided and should set out:
• the amount requested and what it will be used for;
• the amount of the sum of money that is likely to be awarded at final judgment; and
• the reasons for believing that the grounds required by the CPR are satisfied.
Any documents in support of the application should be exhibited to the witness statement. If
the respondent wishes to rely on evidence to counter the application, this must be served at
least seven days before the hearing. The applicant may then respond with further evidence
provided it is served at least three days before the hearing.

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6.7.3 Grounds
Part 25 of the CPR contains the grounds that must be satisfied before the court will make an
interim payment. These are:
(a) the defendant has admitted liability; or
(b) the claimant has obtained a judgment against the defendant for damages to be
assessed or for a sum of money; or
(c) the court is satisfied that, if the case went to trial, the claimant would obtain judgment for
a substantial amount of money (other than costs).
Usually, an order for an interim payment will only be made if there is likely to be a delay in the
assessment of damages, perhaps because the situation is ongoing or particularly complex.
As to ground (c), the burden on the applicant is high. They must prove, on the balance of
probabilities, that they will succeed and it is not enough that the court considers it likely they
will do so. This is a common sense approach because, once the money has been paid out, it
may not be possible to obtain its return.

6.7.4 Orders
Having established their entitlement to an interim payment, the court has discretion in relation
to two questions:
(a) Should an order for an interim payment be made?
If the issues are complicated or difficult questions of law arise, the court may decide not
to order an interim payment at all.
(b) If yes, what should the amount be?
If the applicant succeeds, the court cannot order a sum of more than a reasonable
proportion of the likely amount of the final judgment and must take into account
contributory negligence and any counterclaim. In other words, the court will try and
calculate what figure is indisputably due to the claimant and then determine what the
defendant is able to pay.
The court may order an interim payment in one sum or in instalments.

6.7.5 Effect on trial

The trial judge will not be told about any interim payment order or voluntary payment until
after they have determined all issues of liability and quantum, unless the defendant consents.
As the purpose of keeping any payment secret is to avoid the trial judge’s decision being
influenced in any way, it is difficult to see when a defendant would give their consent.

Summary
• Interim applications are those made between the issue of proceedings and the trial.
Their purpose is to obtain directions from the court to push the matter forwards, to obtain
clarification of any issues or to seek a particular remedy.
• Part 23 contains the general rules for interim applications, which may be made either with
or without notice, and which may be disposed of in the absence of a hearing. However,
the parties should attempt to reach agreement before submitting an application.
• Either party may apply using Form N244 –​the Notice of Application. This is supported by
evidence, usually in the form of a witness statement, and should be accompanied by a
draft order.

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• Summary judgment may be applied for by either party under Part 24. It is available
where the court concludes that there is no real prospect of either the claimant or the
defendant succeeding on the claim or in their defence, and there is no other compelling
reason why the case should proceed to trial. The advantage of winning an application
for summary judgment is that the matter is brought to an early conclusion without the
additional cost in time and expense of proceeding further.
• Applications for interim remedies are governed by Part 25, including for interim payments
and injunctions.
• Interim injunctions may be granted at any time up to the trial and are reserved for urgent
matters or those where the court is satisfied that it would be in the interests of justice.
Although such injunctions may be made on notice, doing so would often defeat the
purpose as it would allow the defendant to dispose of evidence or to transfer financial
assets out of the jurisdiction. Freezing injunctions and search orders may be applied for
without notice in these circumstances.
• Interim payments are orders for payments on account of a debt owed or damages sought
that the court is expected to order the defendant to pay. Before such an order is made,
liability must have been admitted or determined, or the court is satisfied the claimant will
win at trial and obtain a substantial amount in damages.

Sample questions

Question 1
The defendant has a contract with a hotel to landscape their gardens ready for the official
opening on 14 May. They order 2,000 plants and shrubs (the Order) from the claimant
for £18,500. However, the Order does not arrive until 20 May (after the event) and so the
defendant refuses to pay the invoice. The claimant issues proceedings in the County Court
for the monies due and the defendant responds with a defence stating: ‘We dispute the
payment. The Order arrived too late so we could not fulfil our contract with the hotel. The
terms of the contract were agreed orally at a meeting where our sales director made it
clear to the claimant’s facilities manager that the plants and shrubs had to be delivered by
7 May to allow time for planting and that time was of the essence.’ The claimant applies to
the court for an order for summary judgment.
Which of the following answers best describes the likely outcome of the claimant’s
application for summary judgment?
A The claimant will succeed in its application because the defendant’s defence does not
provide sufficient detail for the court to determine the matter.
B The claimant may fail in their application because the need to hear oral evidence from
witnesses to determine whether time was of the essence is a compelling reason as to
why the matter should proceed to trial.
C The claimant will fail in their application but only because the information provided
in the defence is sufficient to demonstrate that the defendant has a real prospect of
successfully defending the claim.
D The claimant may fail in their application because the matter is too complex and
technical to be dealt with at a summary judgment hearing and this is a compelling
reason why the matter should proceed to trial.
E The court is likely to make a conditional order as it is possible but not probable that the
defence will succeed.

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Answer
Option B is correct as a central issue is whether the contract contained an express term
that time was of the essence and the judge will need to hear oral evidence from the sales
director and the facilities manager who were at the meeting where the terms were agreed to
determine this issue. This is a compelling reason why the matter should proceed to trial.
Option A is wrong because there is no guarantee the claimant ‘will’ succeed in their
application. Option C is wrong as there are two grounds upon which the court could refuse
to grant summary judgment. In addition to deciding that the defendant has a real prospect
of defending the claim, the court could also refuse the claimant’s application on the basis of
compelling reasons (as above).
Option D is wrong because the matter is neither complex nor technical in nature. Option E is
not the best answer because of the reasons above, but also the defendant’s defence has a
greater than ‘possible’ chance of success on the limited evidence available.

Question 2
The company is a pharmaceutical corporation and they have just developed a vaccine for a
coronavirus that is sweeping the globe. One of their research scientists is offered significant
financial incentives to work for a competitor in producing their own vaccine. The scientist
leaves the company and begins work immediately for the competitor. The company is
concerned that the scientist will use the confidential information and knowledge they have
acquired and this will have a huge impact upon the company’s future profits. They have
information that the scientist downloaded material onto a mobile device and also that they
may be moving to the United States to work in a laboratory there.
Which of the following best describes the action that the company could take to protect
their position?
A The company should issue proceedings against the scientist claiming damages for
breach of contract and wait for the trial to determine these.
B The company should apply for an interim injunction to prevent the scientist from using
the confidential information that they have obtained.
C The company should apply for a search order and a freezing injunction against the
scientist.
D The company should apply for an interim injunction to prevent the scientist from using
the confidential information that they have obtained together with a search order.
E The company should apply for an interim injunction to prevent the scientist from using
the confidential information that they have obtained, a search order and a freezing
injunction.

Answer
Option E is correct. The company should apply for an interim injunction to prevent the
scientist from using the confidential information they have obtained, a search order to
compel the scientist to allow their premises to be searched for the mobile device and a
freezing injunction to prevent them from moving their assets to the United States. As all
three interim remedies are possible on the facts, options B, C and D are not the best ones.
Whilst option A is a correct course of action, waiting for the trial would mean the damage
was done –​the competitor would have developed and sold the vaccine and the company
would have lost the profits from doing so themselves.

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Question 3
A woman issues proceedings against a company for breach of contract relating to the
building of a new house. The company respond with a full defence and a counterclaim
for the second instalment, which they allege is owed by the woman for the building works
carried out to date. The issues in dispute are complex and highly contested so the litigation
is likely to take some considerable time to resolve. The woman has just lost her employment
and is in financial difficulties. Her solicitor advises her to apply for an interim payment.
Is the woman likely to succeed in her application for an interim payment?
A Yes, because the woman can apply for an interim payment as soon as she serves the
particulars of claim.
B Yes, because when deciding whether to grant the application for an interim payment,
the court may take into account the woman’s financial hardship.
C No, because liability has not been determined and the court must have established
liability before an interim payment can be awarded.
D No, because the litigation is complex and highly contested, so the court cannot be
satisfied the woman would obtain judgment at trial.
E No, because the company have served a counterclaim and this precludes the woman
from being granted an interim payment.

Answer
Option D is the correct answer. The woman would not be granted an interim payment as the
court is unlikely to be satisfied that, if the claim went to trial, she would obtain a judgment.
Given that the case is complex and highly contested, there is real uncertainty as to which of
the parties would succeed in the litigation.
Option A is wrong as the woman cannot apply for an interim payment after serving the
particulars of claim; she must wait until after the time for acknowledging service has expired.
Option B is wrong because the woman’s financial hardship is not a ground on which the court
may grant the application.
Option C is wrong because (as stated above) the court may grant an application for an
interim payment before liability has been determined provided the court is satisfied that the
woman would obtain a judgment for a substantial amount of money against the company
should the matter proceed to trial. Option E is wrong because the mere presence of a
counterclaim does not preclude the court from granting an interim payment.

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7 Case Management

7.1 Introduction 114

7.2 The overriding objective 114
7.3 Allocation to a track 115
7.4 Failure to comply with directions 123
7.5 Costs management 124
7.6 Court sanctions 127
7.7 Relief from sanctions 128

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to case management as follows:
• the overriding objective
• track allocation
• case management directions for cases proceeding on the fast or multi-​tracks
• non-​compliance with orders, sanctions and relief
• costs and case management conferences
Note that for SQE1, candidates are not usually required to recall specific case names,
or cite statutory or regulatory authorities and these are provided for illustrative
purposes only.

Learning outcomes
The learning outcomes for this chapter are:
• To appreciate the overall approach taken by the courts in resolving disputes.
• To understand what influences the allocation of a case to a particular track.
• To evaluate what directions are appropriate and why, and the different sanctions
the court may impose on a party who defaults.
• To recognise the role of a case management conference on the multi-​track and
how the court deals with the issue of costs.

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7.1 Introduction
One of the key elements of the CPR is the notion of case management. The aim is to promote
justice but in a way that makes the best use of the court’s resources, to ensure cases are
pushed through efficiently and effectively. Part 3 is a vital tool in achieving this as it provides
the court with wide-​ranging powers including to make, vary or revoke orders, to strike out a
party’s statement of case and to impose penalties on a party who falls short in some way. The
role of the court is not a passive one and judges are expected to be robust and interventionist
in their approach to ensure compliance with rules, practice directions and orders.

7.2 The overriding objective

In exercising their powers to manage cases, the courts must comply with the overriding
objective of the CPR and this is to be found in Part 1.
(1) The overriding objective is set out in r 1.1 of the CPR and the aim is to enable the court to
deal with cases justly and at proportionate cost.
(2) The rule then lists the six objectives the court should seek to achieve when dealing
with cases:
(a) ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways that are proportionate to:
—​ the amount of money involved
—​ the importance of the case
—​ the complexity of the issues and
—​ the financial position of each party;
(d) ensuring that the case is dealt with expeditiously and fairly;
(e) allotting to it an appropriate share of the court’s resources, whilst taking into account
the need to allot resources to other cases; and
(f) enforcing compliance with rules, practice directions and orders.
The importance of these aims both to the court and to the parties and their legal advisers is
emphasised by later provisions:
• CPR, r 1.2 –​the court must give effect to the overriding objective when making procedural
decisions; and
• CPR, r 1.3 –​the parties are required to help the court to further the overriding objective.
It is essential to note that r 1.3 imposes a positive duty upon the parties and the court will
expect a high level of co-​operation and realism from those involved in the litigation process.
To give practical effect to the overriding objective:
• CPR, r 1.4 –​the court must actively manage cases.
This means that the courts may tailor their approach to individual cases, adopting a more flexible
approach to meet the object of cost-​proportionate litigation. The court’s active role includes:
(a) encouraging the parties to co-​operate with each other in the conduct of the proceedings;
(b) identifying the issues at an early stage;
(c) deciding promptly which issues need to be fully investigated and dealt with at a trial;
(d) deciding the order in which issues are to be resolved;
(e) encouraging the parties to use alternative dispute resolution procedures if appropriate;

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(f) helping the parties to settle the case;

(g) fixing timetables or otherwise controlling the progress of the case;
(h) considering whether the likely benefits of taking a particular step justify the cost of taking it;
(i) dealing with as many aspects of the case as it can on the same occasion;
(j) dealing with the case without the parties needing to attend at court;
(k) making use of technology; and
(l) giving directions to ensure that the trial of a case proceeds quickly and efficiently.
The scope of these provisions is extensive. The aim is to ensure tailored directions so that
cases progress quickly and efficiently to their conclusion, whilst keeping costs under control.

7.2.1 Vulnerable parties and witnesses

The overriding objective of enabling the court to deal with a case justly includes ensuring
that the parties are on an equal footing and can participate fully in proceedings, and that
parties and witnesses can give their best evidence. It is now specifically recognised that the
vulnerability of a party or witness may impede these goals. The CPR list various examples of
factors which may make a person vulnerable and these include communication or language
difficulties (including literacy) and a physical disability or impairment, or a health condition.
Having identified those who are vulnerable, the court may order appropriate provisions such
as allowing a party or witness to give evidence remotely by video conference or questioning
them through an intermediary, for example, a translator.

7.3 Allocation to a track

One important way in which cases are dealt with proportionately is by the allocation
procedure. Cases are allocated to different tracks or ‘routes’ to ensure that the most difficult
and highest value claims receive greater resources and attention than simpler matters.
Different rules apply with the small claims track requiring the least formality to recognise
the low value of the claims and the fact they are often conducted by litigants in person. The
fast track is the standard route along which most cases proceed, whereas the multi-​track
incorporates greater flexibility to reflect the variety and complexity of these cases.

7.3.1 Provisional allocation

Initially the decision as to track allocation is made by a court officer, but this is only confirmed
after the involvement of the parties.
• When a defence is filed, the court will provisionally decide which track appears the most
appropriate for the claim.
• The court will then serve on the parties a notice of proposed allocation, requiring them to
file and serve a completed directions questionnaire by a specified date.
The directions questionnaire is a key document in the progress of a case and will be used by
the court to confirm the track and to determine directions for case management. In claims that
have been provisionally allocated to the multi-​track, the following documents should also be
prepared:
(a) a case summary
(b) a disclosure report
(c) a costs budget and budget discussion report.
These documents will be considered later in the chapter. In addition, a draft order for
directions should accompany the return of the questionnaire.

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7.3.2 Directions questionnaire

Because of the importance of the directions questionnaire, the parties must consult with one
another and co-​operate in completing it, including attempting to agree case management
directions. However, if this proves impossible, perhaps because one of the parties is
intransigent, this should not delay the others in filing their completed questionnaires.
The directions questionnaire (Form N181) is divided into 10 parts, lettered A to J as follows:

Table 7.1 Contents of the directions questionnaire

Part Content

A: Settlement The solicitor must confirm that they have explained to their client the need to try to
settle, the options available and the possible costs sanctions if the client refuses
to engage.
The parties are asked whether they want a one month stay (suspension of the
proceedings) to attempt to settle the matter at this stage.
• If they all agree, the court will stay (pause) the proceedings for one month.
• If not, the party who objects must provide reasons why they consider it inappropriate.
•A  lternatively, the court may of its own initiative, whether or not any party has
requested it, order a stay of any length for this purpose.

B: Court Reasons why the case needs to be heard at a particular court should be stated.

C: Pre-​action The parties must state whether they have complied with any relevant pre-​action
protocols protocol and, if not, explain their reasons.

D: Case This includes:

management
• whether any applications have been made to the court;
information
•a  ny objections to the provisional allocation of the case and reasons for requesting
a different track; and
• the scope and extent of disclosure of documents including proposals for how to
deal with electronic documents.

E: Experts The parties should indicate whether the case is suitable for a single joint expert and,
if not, provide details of the expert evidence they wish to rely on at trial including
the cost.

F: Witnesses The parties must name or provide the number of the witnesses of fact they intend to
call at trial and identify the points the witnesses will address.

G: Trial A realistic estimate of how long the trial will last must be given.

H: Costs If a party is legally represented and the case is likely to be allocated to the multi-​
track, a costs budget must be filed.

I: Other Any other information that might assist the judge in managing the claim should be
information stated, including applications that the party intends to make.

J: Directions The parties should attempt to agree directions and a draft order must accompany
the questionnaire.
• For the fast track this will usually be standard directions.
• F or multi-​track claims, directions should be based on the specimen directions,
which are listed on the Ministry of Justice website.

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7.3.2.1 Failure to file the directions questionnaire

Consequences will follow if a party fails to file the directions questionnaire:
• If the claim is for money in the County Court, the court will serve a notice on the defaulting
party requiring compliance within seven days. Failure to do so results in the party’s
statement of case being automatically struck out.
• In all other cases, the court will make such order as it considers appropriate. This may
include an order for directions, to strike out a statement of case or to list the matter for a
case management conference.

7.3.3 Which track?

In deciding which track to allocate a case, the most important factor will be the financial value
of the claim. However, Part 26 sets out other factors to which the court must have regard,
including the remedy sought, the complexity of the facts and the law, the number of parties
involved, the value of any counterclaim, the amount of oral evidence and the circumstances of
the parties.

Figure 7.1 Overview of track allocation

ALLOCATION TO TRACK

SMALL CLAIMS
FAST TRACK MULTI-TRACK
TRACK

Claims valued
Claims for Claims for more
between £10,000.01
£10,000 or less than £25,000
and £25,000 inclusive

Other factors taken into account:

• remedy sought
Amounts disregarded:
• complexity of facts, law and evidence
• interest
• number of parties
• costs
• value of any counterclaim
• contributory negligence
• amount of oral evidence
• any sum not in dispute
• importance to non-parties
• views and circumstances of parties

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Example
Alison purchases a kitchen from Bespoke Kitchens Ltd (BKL) –​a company that designs and
fits high quality kitchens. Alison is dissatisfied with the work and refuses to pay the invoice
of £18,000. BKL issue proceedings against Alison, which she defends on the basis that the
goods supplied were not of satisfactory quality and the fitting was not carried out with
reasonable care and skill. She also counterclaims for the sum of £9,500, this being the
cost of repairing the kitchen to an acceptable standard.
The case will be allocated to the fast track because the amount of the claim falls between
£10,000 and £25,000. The court will not generally aggregate a claim and a counterclaim,
and the largest of them will usually determine the financial value, so here this is £18,000.
There are no other factors that suggest the case should be allocated to the multi-​track
as the remedy sought is monetary, the facts and law are not complex (a straightforward
breach of contract claim) and there are only two parties involved.

7.3.4 Small claims track

This track is intended to provide a proportionate procedure to deal with straightforward
claims.

7.3.4.1 Value
‘Small claims’ are those with a financial value of £10,000 or less, although note that the rules
for personal injury claims are slightly different. In road traffic cases occurring after 31 May
2021, the value of the damages claimed for the pain, suffering and loss of amenity aspect
must not exceed £5,000.

7.3.4.2 Type
The type of cases the small claims track would deal with are consumer disputes, disputes
about ownership of goods and those between a landlord and tenant (but not for possession).
Also, lower value personal injury cases.

7.3.4.3 Procedure
The requirements for the preparation of the case and the conduct of the hearing are designed
to enable litigants in person to represent themselves. As a consequence, certain parts of
the CPR do not apply to the small claims track, for example, disclosure and inspection and
provisions relating to evidence and experts. Directions will be issued by the court but these
will be quite simple in content to reflect the reality that solicitors are not usually involved and
costs cannot generally be recovered from the losing party.
Typical directions would include:
• each party delivering to the others copies of all documents on which they intend to rely;
• a requirement for them to bring original documents to the hearing; and
• the parties not being allowed to rely on an expert’s report without express permission
from the court.
The hearing itself is informal and, if all parties agree, a court can make a decision based on
the statements of case and documents submitted rather than by hearing oral evidence.

7.3.5 Fast track

For the ‘middle range’ of cases, the fast track is the appropriate way forward.

7.3.5.1 Value
To follow the fast track, the claim must fall on or between the relevant financial value bands of
£10,000.01 and £25,000. However, the court will also take into account the likely length of the

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trial before making a final decision on allocation. Only those cases where the trial is expected
to last no longer than one day are generally suitable for the fast track.

7.3.5.2 Procedure
When a case is allocated to the fast track, the court will give directions on how the matter is to
proceed to trial and, usually, the court will simply issue standard directions. A typical timetable
for preparation of a case allocated to this track is:

Disclosure 4 weeks

Exchange of witness statements 10 weeks

Exchange of experts’ reports 14 weeks

Court sends pre-​trial checklists 20 weeks

Parties file pre-​trial checklists 22 weeks

Hearing (trial) 30 weeks

These periods run from the date of allocation. The time between each step is intended to be
sufficient to allow the parties to prepare their case, whilst being short enough to discourage
tactical litigation such as making technical applications. The court will also fix the date and
place of the trial.
Although the parties may agree different directions, these must be approved by the court.
They may also agree in writing to vary the timetable but not the trial date nor the date for
returning the pre-​trial checklists.

7.3.5.3 Differences with the multi-​track

There are certain key differences with the approach taken for multi-​track cases.
(a) Directions are standard, so not tailored to the individual case.
(b) Expert evidence is more limited. The court will usually order a single joint expert, unless
there is a good reason to appoint separate experts, and will rely upon their written report
at trial rather than allowing the expert to give oral evidence.
(c) The trial is expected to last no longer than a day.
(d) The power to award costs is more limited and the judge will generally assess these
summarily (instantly) at the end of the trial.

7.3.6 Multi-​track
The third option available for the allocation of a case is the multi-​track.

7.3.6.1 Value
Cases that have a value of more than £25,000 will usually be allocated to this track. The multi-​
track therefore includes an enormously wide range of cases, from the fairly straightforward to
the most complex and weighty matters involving claims for millions of pounds and multi-​party
claims.

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7.3.6.2 Procedure
Case management on the multi-​track has to reflect this wide diversity of claims. In simpler
matters, the standard directions as used on the fast track may be perfectly adequate. Here,
the court will usually:
• give directions for the management of the case; and
• set a timetable for the steps to be taken up to trial.
However, in more complex claims, the court will need to adopt a flexible approach. This
recognises that the time required for the parties to complete each step may be considerably
longer than on the fast track. In such instances, the court will:
• fix a case management conference to ensure that appropriate directions relating to the
management of the case are given.

7.3.7 The case management conference (CMC)

Because multi-​track cases are more complex, a discussion may prove helpful in deciding
what actions are necessary to progress the matter to trial and how long these will take. To
enable the judge to do this effectively, the ‘live’ issues between the parties must be evaluated
because these will impact upon decisions about what directions are appropriate.
Where this more hands on approach is required, the CMC will:
(a) review the steps the parties have already taken to prepare the case;
(b) check their compliance with any directions the court has made (for example, following an
application for summary judgment that has been dismissed); and
(c) consider and give directions about future steps to ensure the claim proceeds in
accordance with the overriding objective.
An initial CMC may be listed as soon as a claim is allocated to the multi-​track. Often one CMC
will prove more than adequate to deal with any issues that arise during the proceedings but,
if necessary, the court may order further CMCs to review the progress the parties have made.
If the trial is approaching, such a hearing may also be referred to as a pre-​trial review but the
purpose and substance are similar.

7.3.7.1 Attendance at the case management conference

If a party has a legal representative, an individual who is familiar with the case must attend
the CMC. This will usually be someone who is personally involved in the conduct of the
case and who has both the authority and information available to deal with any matter
that may reasonably be expected to arise. This could include the fixing of the timetable, the
identification of issues and matters of evidence.
Where the inadequacy of the person attending leads to the adjournment of the hearing, the
court may order that the other party’s costs incurred in preparing for and attending the hearing
are paid by either the solicitor personally or their firm (known as a wasted costs order).

7.3.8 Case summary

Once the parties have served their statements of case, it will become clearer what the issues
are. The purpose of the case summary is to describe what matters are still in dispute and
which are agreed –​effectively, it is an updated case analysis. In most multi-​track cases, a
case summary will be prepared for the CMC to assist the judge in determining how the case
should proceed to trial.
The case summary should set out a brief chronology of the claim, state the factual issues that
are agreed and those that are not, and the evidence needed to decide them. The claimant
is responsible for preparing the document but, if possible, it should be agreed with the
other parties.

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Example
ULaws LLP are advising Bromsgrove Transport Services (BTS) in relation to their claim for
negligence against Kwame Nkrumah, trading as Hopwood Vehicles (Kwame). Kwame
leased a lorry from BTS for the purposes of transporting gravel to a customer. However,
he collided with a tree and caused extensive damage to the vehicle. ULaws LLP draft the
case summary. This is set out as a court document with the relevant heading, but then
includes the following:

Chronology

Claim form 6 May 20XX

Particulars of claim 6 May 20XX

Acknowledgment of service 14 May 20XX

Defence 21 May 20XX

Directions questionnaire 8 June 20XX

Agreed Issues of Fact [this is not an entire list]

1. On 3 January 20XX, the Defendant agreed with the Claimant to hire a DAF c450
lorry (‘the Lorry’) with Steel Tipper Body for a period of five days commencing on
5 January 20XX.
2. The Defendant was driving the Lorry on 8 January 20XX when he collided with a tree
on the B4294 at Feckenham Cross, Worcestershire.
3. Substantial damage was caused to the Lorry, which is a write off. The quantum of the
damage has been agreed at £58,000 subject to liability.

Issues in Dispute [this is not an entire list]

1. Were the brakes of the lorry defective?
2. Was the Defendant driving negligently by going too fast and/​or without due care and
attention along the B4294?
3. Did the Defendant cause the damage to the Claimant’s Lorry?

Evidence Required to Deal with the Disputed Issues [this is not an entire list]
The Claimant
Peter Johnson, the managing director of the Claimant will give evidence on all issues
relating to liability.
The Claimant wishes to rely upon Alexandra McDowell, an accident reconstruction
expert, as to the cause of the collision.

The Defendant
The Defendant will give evidence as to his driving and the accident.
The Defendant wishes to rely upon Sundar Pichai, an accident reconstruction expert,
as to the cause of the collision.
The case summary would then be signed and dated.

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7.3.9 Directions on the multi-​track

In all cases, an order for directions will be made, with the aim being to provide a ‘road map’
to take the proceedings all the way to trial in an efficient and cost-​effective way. For the more
straightforward cases, standard directions may be sufficient. If not, in line with Part 29, the
court’s general approach will be to list directions covering the following issues:

Figure 7.2 Content of directions for the multi-​track

Is further
information
required to clarify Disclosure of
a party’s case? documents and
inspection
Costs of
CMC

Simultaneous
Directions exchange of
Consider
on the factual evidence
ADR
multi-track (witnesses)

Timetable
to trial Expert evidence
Review CMC?

Simultaneous
Single joint expert exchange of separate
(unless a good expert evidence (on
reason not to) liability and quantum?)

Many of these mirror the standard directions issued on the fast track but usually the provisions
are more detailed. To assist in drafting case management directions, the parties can refer to
a ‘menu’ of directions, which may be found online on the Ministry of Justice website. These
include the standard directions but also a number of model directions, which may be adapted
as appropriate to the circumstances of the particular case.
Unlike the more rigid approach adopted on the fast track, there is some flexibility as to the
timing of the steps and the parties may agree in writing to vary the timetable. However, they
are precluded from changing any of the following without making an application to the court:
(a) any case management conference;
(b) a pre-​trial review;
(c) the return of a pre-​trial checklist; or
(d) the trial or the trial period.
To ensure the flow of communication with the court at all times, it is usual for the parties to be
directed to inform the court immediately if the claim is settled and to file a draft consent order

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giving effect to their agreement. This is in accordance with the overriding objective, and in
particular the principles of saving expense and allotting to a case only an appropriate share
of the court’s resources.
Finally, the issue of costs of the CMC will be determined and, normally, an order will be made
for costs in the case (see Chapter 6).

Example
Bronwyn Williams has issued proceedings against Grand Finance Plc (GFP) for negligent
mis-​statement in relation to her pension investments. The case involves the provision of
specialist financial advice and a complex analysis of the alleged losses of £2.4 million.
The claim is provisionally allocated to the multi-​track and the parties file and serve their
directions questionnaires.
The parties enter into discussions and agree appropriate directions. These are submitted
to the court for approval, as required, at least seven days before the CMC. The judge
considers the case and agrees with the proposals. As a consequence, the CMC is vacated
and the court issues directions for the future conduct of the matter. The order confirms that
the case will remain in the multi-​track and in addition:
• The parties are instructed to consider settling the matter by any means of alternative
dispute resolution.
• An order is made for standard disclosure and inspection of documents with further
specific directions listed in relation to the disclosure and inspection of electronic
documents.
• Statements of witnesses upon whom the party intends to rely must be served on the
other party by a set date and this will include Bronwyn’s own statement.
• Bronwyn is given permission to rely on evidence from her expert, Sadiq Javid, on
whether the investments were appropriate to her needs (liability) and what value the
pension should have been if invested correctly (quantum). GFP is given permission to
rely on their own named expert in relation to these matters. The court also orders that
the experts exchange reports, answer any written questions raised, further discuss any
issues that remain in dispute and give oral evidence.
• The case is listed for a (review) CMC.
• The trial is listed between 25 April and 22 May with a time estimate of six days.
Had Bronwen and GFP been unable to reach agreement, to ensure the progression of the
case, directions would have been imposed by the judge at the CMC.

7.4 Failure to comply with directions

If a party fails to keep precisely to the directions timetable, this will not generally be an issue
provided the parties co-​operate and are able to meet certain key dates, such as the CMC and
the trial. However, to ensure the case proceeds without delay, if a step is missed:
• any other party may apply for an order enforcing compliance and/​or for a sanction to be
imposed.
Furthermore, to comply with the overriding objective:
• the trial date is sacrosanct and the court will not allow failure to comply with directions to
lead to the postponement of the trial, unless the circumstances are exceptional.

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7.5 Costs management

Costs management is another way in which the court seeks to control the litigation. It enables
the court to manage both the steps to be taken and the costs to be incurred by the parties in
multi-​track cases, so as to further the overriding objective. Generally, only claims of £10 million
or more are excluded from the process. The aim is to ensure that future costs are reasonable
and do not become disproportionate by determining what actions should be taken in the
proceedings and at what expense.

7.5.1 Costs budgets

Costs are managed by the parties being required to provide a costs budget in the prescribed
form (Precedent H).
• What is included?
The costs budget consists of:
∘ a detailed breakdown of the costs and disbursements already incurred (pre-​action,
issue of proceedings and statements of case) –​‘incurred costs’; and
∘ an estimate of future costs and the assumptions on which those are based for the
future phases of the proceedings, namely, case management, disclosure, evidence,
pre-​trial review, trial preparation and trial stages, along with any ADR or settlement
discussions and contingencies. These are known as ‘budgeted costs’.
A budget must be dated and verified by a statement of truth signed by a senior legal
representative of the party.
• What must the parties do next?
Costs budgets must be filed:
∘ with the directions questionnaire for claims of less than £50,000; and
∘ no later than 21 days before the first CMC for all other claims.
Having done so, the parties must complete a budget discussion report (Precedent R) no
later than seven days before the first CMC. This itemises the figures for phases that are
agreed and those that are not, with a brief summary of the grounds of dispute.
• What is the judge’s role?
The judge will review those costs which are disputed by systematically cross-​referring
between the parties’ proposed directions and their budgets to ensure the suggested costs
are reasonable and proportionate to the case in hand. The budget will then be revised as
necessary. The court normally conducts a costs and case management conference at the
same time but they may be held separately in complex cases.
• What if a party wants to change a costs budget?
Once a costs budget has been agreed or approved by the court, it is extremely difficult to
amend or update it. Consequently, it should be drafted with great care as inadequacies
and mistakes will not be rectified. Only if the other party agrees –​which is unlikely –​or
the court can be persuaded that there have been significant developments, for example
the need for an additional expert’s report that could not have been anticipated, may it
be revised. However, this is a rare event. In such circumstances, the parties must file a
budget variation summary sheet (Precedent T). The rigidity of the process is one reason
why litigation has become so front-​loaded. It is much easier to draft a costs budget that
accurately reflects the likely costs if much of the work has already been completed.
• What if a party acts oppressively?
If one party considers that another is acting oppressively in seeking to cause the
applicant to spend money disproportionately on costs, an application can be made to
the court, which will grant such relief as may be appropriate. This is to ensure that parties

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with ‘deep pockets’ do not take advantage of their financial position to discourage their
opponent from continuing with the litigation.

Example
Mason Care Homes Plc (Mason) are suing Health Procurement Ltd (HPL) for breach of
contract. They are claiming £3.2 million for the defendant’s failure to source appropriate
medical supplies and equipment. After the costs budgets have been filed and agreed,
Mason become aware of a further 1,000 documents, which had been incorrectly stored
for reasons unconnected to them. The disclosure of these documents has a knock-​on effect
on the experts’ reports, which will need to be updated.
Mason ask HPL to agree to an upward revision of their agreed costs for the disclosure
and evidence phases but this is refused; so Mason apply to the court for an order to vary
their budget setting out the changes made, the reasons for these and the defendant’s
objections. The application is granted as the court is satisfied that the assumptions upon
which the disclosure and evidence phases of Mason’s costs budget were agreed have
been significantly departed from through no fault of the claimant.

7.5.2 Failure to file a costs budget on time

If a party files their costs budget late or not at all, there are significant consequences for that
party and (potentially) their lawyers. Rule 3.14 provides that, unless the court orders otherwise,
the party will be treated as having filed a costs budget consisting only of the court fees. Thus,
unless the court gives relief from this automatic sanction, that party will not be able to recover
any of its future legal costs, apart from court fees, from another party.

In the case of Andrew Mitchell MP v News Group Newspapers Ltd [2013] EWCA Civ 1537,
the claimant sued The Sun newspaper in relation to their coverage of an incident that
took place outside Downing Street. Although of interest to the wider public because it
involved a government minister, the case was significant to the legal profession as it was
the first time r 3.14 was used in such a high profile case. Mr Mitchell’s lawyers were six
days late in filing their costs budget without any adequate excuse and so were treated as
having filed a budget consisting of court fees only. Although the solicitors agreed to
continue to act, the effect was that they conducted expensive and strongly contested
litigation with no prospect of being paid for their work after the date of the sanction.
The subsequent rejection of the solicitors’ appeal against the sanction led to a shift in the
way dispute resolution matters were conducted as meeting deadlines became of paramount
importance.

7.5.3 Costs management order

As a further means of ensuring costs are kept in check, the court is now highly likely to make
a costs management order. Such an order is imposed unless the judge is satisfied that the
litigation can be conducted justly and at proportionate cost.
In the order the court will:
a) record the extent to which any incurred or budgeted costs are agreed between the
parties; and
b) in respect of the budgeted costs that are not agreed, record the court’s approval after
making appropriate revisions.

7.5.3.1 Effect of a costs management order

The court will thereafter control the parties’ budgets in respect of recoverable costs. If at trial
one party is ordered to pay another party’s costs to be assessed by the court on the standard
(usual) basis, the court will not depart from the receiving party’s last approved or agreed

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budget unless satisfied there is a good reason for doing so. The consequence is that the
parties are tied to their costs budget figures even if the litigation proves far more expensive
than anticipated.

7.5.3.2 Effect if no costs management order

If there is no costs management order, there is more flexibility when dealing with costs. Where
there is a difference of 20% or more between the costs claimed by the receiving party and the
costs as set out in the budget, the receiving party must provide a statement of the reasons for
the difference. It is then a matter for the court to decide whether the additional amounts can
be recovered.

7.5.4 Summary of case and costs management

Set out below is an overview of the provisions relating to costs management.

Table 7.2 Costs management

Costs management

(a) What is a costs budget? A statement of costs already incurred and those anticipated for the
future conduct of the litigation.

(b) When must a costs budget Either:

be filed?
• with the directions questionnaire (claims under £50,000); or
• no later than 21 days before the CMC.

(c) W
 hat if a party files a costs They will be treated as having filed a budget consisting of court
budget late or not at all? fees only.

(d) What can be done? A party may apply for relief from this sanction under r 3.9 (see
later in this chapter).

(e) How are the costs decided? •A budget discussion report must be filed by both parties
highlighting costs agreed and disagreed no later than seven
days before the CMC.
• The parties should then seek to agree those costs.
• If not, the court will review costs.

(f) What if the party’s If the judge is not satisfied that the litigation can be conducted
budgeted costs are justly and at proportionate cost, a costs management order will be
considered to be too high? made.

(g) W
 hat if the party wants to The party will have to persuade the court there have been
revise their costs budget? significant unanticipated developments since the budget was filed.

(h) What happens at the end •A

 party awarded its costs on the standard basis will recover
of the case? its last approved or agreed budgeted costs unless the court is
satisfied there is a good reason for departing from them.
•C
 osts awarded on the indemnity basis and incurred costs are
assessed by the court in the usual way.

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Finally, Figure 7.3 provides an overview of both case and costs management in the multi-​track,
including the key role played by the CMC.

Figure 7.3 Case and costs management

CASE MANAGEMENT CONFERENCE

PURPOSE WHO
To identify the ‘live’ issues WHEN A person who is familiar
between the parties and to After allocation. with the case and has the
set a timetable to trial. authority to take decisions.

COURT’S ROLE
• To review the steps taken to date including compliance
with previous orders or directions.
• To determine the directions needed to progress the
case in accordance with the overriding objective.
• To deal with costs management.

Budget
Directions Case Disclosure Costs
Discussion Draft
Questionnaire Summary Report Budget
Report order

DOCUMENTS FOR THE CMC

DIRECTIONS ORDER COSTS MANAGEMENT ORDER

7.6 Court sanctions

There is little point in having directions if a party can simply ignore them and so, to ensure
compliance with the overriding objective, the CPR provide the court with a range of sanctions.

7.6.1 Striking out a statement of case

CPR, r 3.4 gives the court the ultimate sanction of striking out a party’s case so their claim or
defence comes to an immediate halt. The two most common scenarios where the court may
exercise this power are:
• the statement of case discloses no reasonable grounds for bringing or defending the
claim; and
• there has been a failure to comply with a rule, practice direction or court order.

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These would include a particulars of claim that does not set out any facts indicating what the
claim or the defence is about –​for example, ‘money owed £5,000’. Also, those statements of
case that contain a coherent set of facts but where those facts, even if true, do not disclose
any legally recognisable claim or defence so they are ‘doomed to failure’.

Example
Water Utilities Plc issue proceedings against Akhil for the recovery of a debt. A defence
is filed that simply consists of a bare denial that the money is due. When considering the
case, the judge may, as part of their case management powers under Part 3, make an
order that the defence is struck out. Water Utilities Plc will be able to obtain judgment
simply by filing a request for judgment (with interest and costs).

7.6.2 Other sanctions

In addition to striking out, the court has other sanctions at its disposal including:
• Costs: a common sanction is to require the party in default to pay the other party’s
additional costs on an indemnity (penalty) basis.
• Interest: orders could be made increasing or reducing –​depending upon which party is
at fault –​the interest payable on any damages.
• The unless order: if a party has not taken a step in the proceedings in accordance with a
court order, an application may be made to the court for an ‘unless’ order.

Example
Continuing with the case of Water Utilities Plc against Akhil (above), rather than striking
out the defence immediately, the judge is far more likely to order that unless the
defendant files a full defence setting out his reasons for denying the debt is due, within
seven days of service of the order, the defence will be struck out. If Akhil files the defence
as ordered, he will be allowed to continue to defend the proceedings; if not, Water
Utilities Plc may obtain judgment simply by filing a request for judgment (with interest and
costs).

7.7 Relief from sanctions

If the court imposes a sanction, this will take effect unless the party applies to obtain relief,
in other words, to overturn the penalty. Unless the sanction is the payment of costs, in which
case the party in default will have to appeal against the order, r 3.9(1) will apply. In deciding
whether to grant relief, the court will consider all the circumstances of the case, so as to
enable it to deal justly with the application, including the need:
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders.
To seek a reprieve from a penalty imposed, the party must apply promptly and support their
application with evidence addressing the factors outlined below.

In Denton v TH White Ltd [2014] EWCA Civ 906, the appeal court ruled that, when
considering a party’s failure to comply with any rule, practice direction or court order, the
court should adopt a structured approach as follows:
(a) The first stage is to identify and assess the seriousness or significance of the relevant
failure. If a breach was not serious or significant, relief is usually granted.
(b) The second stage is to consider why the failure or default occurred.

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(c) The third stage is to evaluate all the circumstances of the case so as to enable the
court to deal justly with the application. Factors would include whether the trial date
could still be met and the effect the failure to comply and the granting of relief would
have on each party.
In recent times, judges have taken a robust approach to such applications and the party will
face an uphill task to convince the court to grant relief. However, the judges have also warned
that a party could be penalised if they seek, unreasonably, to take advantage of a mistake by
an opponent where the failure concerned a minor or technical breach that had no effect on
the litigation.

Summary
• The court is required to further the overriding objective by actively managing cases.
• To assist with this process, defended cases are provisionally allocated to one of three
tracks. The small claims track is the most informal and is designed for claims with a value
of up to £10,000, the fast track is the standard route for cases of over £10,000 and up to
£25,000, whilst the multi-​track is reserved for the higher value and more complex cases
over £25,000.
• Thereafter, all the parties must complete a directions questionnaire so the judge has the
relevant information to confirm or change the track, as appropriate.
• The court will give directions at the track allocation stage. These vary depending upon the
track but will cover issues such as disclosure, witnesses of fact, expert evidence and the
steps required to take the matter to trial.
• In the multi-​track, a case management conference will usually be held at which the court
will also consider the question of costs. The parties are required to file costs budgets
and a budget discussion report. The court may take control of costs by imposing a costs
management order.
• The court has a number of sanctions at its disposal to enforce compliance with the
overriding objective. These include the power to strike out statements of case, to impose
penalty costs orders and to make unless orders.
• A party may apply for relief from a sanction imposed but this may not be granted.

Sample questions

Question 1
The claimant issues proceedings against the defendant for breach of contract arising from
the installation of a heating system in their plant nursery. The claimant claims that, due
to inherent defects within the system, the heating failed to come on at the appropriate
temperature on the night of 23 November. As a consequence, the claimant’s entire stock
of valuable roses died causing losses of £43,000 and damage to their reputation in the
industry. This is disputed by the defendant who submits that the fault lay with the claimant
in its operation of the system. Both parties have instructed experts. The claimant is a multi-​
national company whereas the defendant is an individual.

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Which of the following best describes the approach the court would take when seeking
to comply with the overriding objective?
A The aim of the court is to deal with the case justly and at reasonable cost. As a
consequence, the court directs that a single joint expert be appointed to deal with
liability.
B The court must manage cases as best as possible and the parties are required to
assist the court in furthering the overriding objective.
C The court will concentrate entirely on the merits of the case and will have no
regard for the difference in status and financial position of the claimant and the
defendant.
D The court will take account of the fact this is a complex breach of contract claim
requiring expert evidence and the level of damages sought is £43,000.
E The court will allocate all the resources the claimant requires to resolve the matter
because of the importance of the matter to the claimant.

Answer
Option D is correct because when deciding the appropriate approach to the matter, the
court will consider the amount of money involved and should also take account of the
complexity of the issues.
Option A is wrong because the overriding objective requires the court to deal with cases
justly and at ‘proportionate’ cost –​not ‘reasonable’ cost. Also, it would be more usual for
the parties to instruct separate experts in a case of this value. Option B is wrong because
the court must manage cases ‘actively’ rather than ‘as best as possible’ although the
second part of the statement is correct.
Option C is wrong as one of the objectives that the court should seek to achieve when
dealing with cases is to ensure the parties are on an equal footing with the financial
position of each party being a factor. Option E is wrong as the court will allocate ‘an
appropriate share of the court’s resources’ to the case and not all the resources the
claimant requires. It is, however, correct that the court will take account of the importance of
the case to the parties.

Question 2
The claimant has issued proceedings in the County Court for £24,500 against the defendant.
The particulars of claim state that: ‘The claim is for building work provided by the defendant
which was sub-​standard’. The court provisionally allocates the claim to a track. The
defendant completes the directions questionnaire as required and files it at court, but the
claimant fails to file their questionnaire.
Which of the following statements best describes how the matter will proceed?
A The court will provisionally allocate the claim to the multi-​track.
B The defendant could apply to strike out the claim on the basis that it discloses no
realistic grounds for bringing the claim.
C The court could grant an order that unless the claimant files full particulars of claim
setting out their reasons for claiming the damages within seven days of service of the
order, the claim will be struck out.

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D The court will serve a notice on the claimant requiring them to file the directions
questionnaire within seven days failing which the claimant’s statement of case may be
struck out.
E If either party fails to comply with any future directions issued by the court, the court will
automatically impose a sanction to ensure the trial is not postponed.

Answer
Between the options provided, Option C provides the best answer as to how the case should
proceed. Option A is wrong as the amount in dispute is less than £25,000 and so the case
will be allocated to the fast track. Option B is wrong because a claim will be struck out if
it has no reasonable (not realistic) prospect of success. Option D is wrong because, in the
circumstances described –​a claim for money in the County Court –​the claimant’s statement
of case will be automatically struck out if the claimant does not file its directions questionnaire
within seven days.
Option E is not an appropriate way forward (and therefore a wrong answer) because the
court will not automatically impose a sanction. If a party fails to keep to the directions
timetable, the parties should co-​operate to ensure they meet certain key dates, such as the
case management conference and the trial. However, if a step is missed, the other party may
apply for an order enforcing compliance and/​or for a sanction to be imposed.

Question 3
A claimant issues proceedings against the defendant, a structural engineering company,
for the sum of £340,000 in relation to the negligent construction of a road bridge. The case
is allocated to the multi-​track and a case management conference is listed. The client
telephones for an update and asks for an email to be sent advising them on the litigation
process at this stage of the proceedings.
Which one of the following statements correctly describes what might happen at a case
management conference?
A The purpose of the case management conference is to review the steps the parties
have taken to prepare the case, check their compliance with any directions the court
has made and give directions for the future conduct of the case.
B At the case management conference, if agreement cannot be reached between the
parties, a costs management order will be imposed in every case to ensure that future
costs are kept under control.
C In the multi-​track, directions will be tailored to the circumstances of the particular case
and will often include a direction that a single joint expert be appointed.
D The parties must file a costs budget and failure to do so on time will result in the
automatic sanction that the defaulting party’s future recoverable costs are limited to
50% of their actual costs (unless relief is obtained from the sanction).
E If either party has already been sanctioned in their conduct of the litigation, they must
apply for relief from that sanction, but that application can only be heard after the case
management conference, as the conference can only address directions for the future
conduct of the case.

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Answer
Option A correctly summarises what might happen at a case management conference.
Option B is wrong, as a costs management order will not be imposed in every case. However,
such an order will usually be made unless the judge is satisfied that the litigation can be
conducted justly and at proportionate cost.
Option C is wrong in that, on the multi-​track, it is more common for a judge to grant
permission that each party can instruct their own expert. Option D is also wrong. If either
party fails to file its costs budget on time, the automatic sanction applied is that the defaulting
party’s future recoverable costs will be limited to any court fees that have been paid (unless
relief is obtained from that sanction).
Option E is wrong. If either party has already been sanctioned, an application for relief
from that sanction will usually be heard at the case management conference, provided the
application has been made properly and in good time, and there is time to deal with the
application during the conference hearing itself.

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8 Disclosure and Inspection

8.1 Introduction 134

8.2 Disclosure of documents 134
8.3 Disclosure on each track 134
8.4 Standard disclosure 135
8.5 The duty to search 137
8.6 How disclosure is made 138
8.7 Withholding inspection of documents 143
8.8 The right of inspection 146
8.9 Summary of disclosure 146
8.10 Orders for disclosure 147
8.11 Pre-​action disclosure 148
8.12 Non-​party disclosure 149

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to disclosure and inspection as follows:
• standard disclosure
• orders for disclosure
• specific disclosure
• pre-​action and non-​party disclosure
• electronic disclosure
• privilege and without prejudice communications
• waiver of privilege
In this chapter, disclosure is often referenced by r 31.6 and may be referred to as
such in the SQE assessment. Otherwise, references to cases, statutory and regulatory
authorities are provided for illustrative purposes only, and the sample list of
documents is included for the same reason.

Learning outcomes
The learning outcomes for this chapter are:
• To understand the role and scope of disclosure and inspection.
• To be able to apply the definition of legal professional privilege.
• To understand what applications can be made for disclosure.
• To appreciate the effect of marking correspondence ‘without prejudice’.

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8.1 Introduction
Once the parties have filed and served their statements of case, the court will issue directions
for the future conduct of the proceedings. The first of these is usually a requirement for the
disclosure and inspection of documents.
The main purpose of this step is to enable the parties to evaluate the strengths and
weaknesses of their case in advance of the trial. This will assist them in making an informed
decision about whether to pursue the matter or whether to seek an early settlement. The
parties are required to reveal to each other any documents that have a bearing on the case,
even if they are unhelpful to the party giving disclosure and which they would rather keep
hidden.
Disclosure is usually achieved by completing a list of documents. The parties may then inspect,
that is read, some of the other party’s documents. This is to ensure they are not taken by
surprise at the trial and that the court has all the relevant information to ensure justice is done.
Disclosure is governed by Part 31 of the CPR, which applies to all claims except those
allocated to the small claims track.

8.2 Disclosure of documents

Disclosure is defined in Part 31 as follows:
• a party discloses a document by stating that it exists or has existed.
This is done by preparing and serving a list of documents on all the other parties, the format
of which is considered later in the chapter.

8.2.1 Definition
Documents are defined as anything in which information of any description is recorded.
Consequently, it includes written documents, audiotapes, videotapes and photographs
although this is not an exhaustive list. Electronic documents, such as emails, word-​processed
documents and databases are also subject to disclosure.
The definition under the CPR is extensive, but the crucial words are ‘information … is recorded’.
This is what determines whether or not the document forms part of disclosure. It is irrelevant
whether it is admissible or whether a party wishes to rely upon the actual document itself
at trial.

8.3 Disclosure on each track

Different provisions apply to disclosure depending upon the track to which the claim has been
allocated.

8.3.1 Small claims track

The usual direction is that each party shall, at least 14 days before the date of the final
hearing, file and serve on every other party copies of all documents (including any expert’s
report) on which they intend to rely at that hearing.

8.3.2 Fast track

On the fast track, an order for standard disclosure will invariably be made.

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8.3.3 Multi-​track
Although standard disclosure is usually ordered, the court may tailor the order to the
requirements of the particular case, taking account of the importance of the issues and the
complexity of the matter. This necessitates a more involved procedure as set out in Table 8.1.

Table 8.1 Overview of disclosure on the multi-​track

Disclosure on the multi-​track

How do the parties notify the court of By compiling a disclosure report.

their requirements for disclosure?

When must this be filed and served? Not less than 14 days before the first case management
conference (CMC).

What happens next? Not less than 7 days before the first CMC the parties must
discuss and seek to agree a proposal for disclosure that
meets the overriding objective. Any agreed proposal must
be filed at court.

What orders for disclosure can the An order for standard disclosure or any other order that the
court make? court considers appropriate.

Examples? An order:
• dispensing with disclosure;
• for specific disclosure;
• disclosure on an issue by issue basis.

In recognition of the variety of cases that are dealt with on the multi-​track, the parties have the
benefit of a menu of options for disclosure from which they can select the most appropriate
for their particular matter. These may be accessed on the Ministry of Justice website. Judges
can make orders that cover the entire spectrum from dispensing with disclosure entirely to
what Lord Jackson referred to as the ‘keys to the warehouse approach’ –​although both of
these will be very rare in practice. More commonly, the court will order something in between
such as the provision of disclosure in stages or on an issue by issue basis –​perhaps that
disclosure is only required on the issue of liability but not causation. A more complex example
is an order that a party should disclose any documents it is reasonable to suppose may
contain information which enables that party to advance its own case or to damage that of
another party’s case, or which leads to an enquiry that has either of these consequences.
However, it should be borne in mind that, to deal with concerns about the potentially
huge task of disclosure a party may face, the court is required actively to consider limiting
disclosure to deal with the case justly.

8.4 Standard disclosure

Standard disclosure is defined in CPR, r 31.6 and requires a party to disclose:
(a) the documents on which they rely; and

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(b) the documents which:

(i) adversely affect their own case;
(ii) adversely affect another party’s case; or
(iii) support another party’s case.
In practice, documents falling within this definition are often called ‘Rule 31.6 documents’.
Although there appear to be four possibilities, they mirror each other so that effectively the
requirement is to disclose any documents that help or hinder the party. Most clients will
be happy to provide their solicitors with favourable documents, namely those containing
information on which they intend to rely. However, they may be less forthcoming with
documents that adversely affect their own case or support their opponent’s. Litigants often
find it difficult to accept that they are required to provide their opponent with the means to
defeat them. However, not only is this a requirement of the CPR, but it is a mutual obligation
so they should receive similar disclosure from the other party.
The references to ‘the case’ are those issues that are in dispute and the parties should
concentrate their efforts in searching for documents that impact on these. There is no need to
search for and disclose documents that record only information relating to agreed matters.

Example
ULaws LLP act for Country Fare Limited (Country Fare), which runs a large farm shop in
Worcestershire. On 16 June 20XX, Country Fare entered into a contract with Rural Dairies
Ltd (RDL) for the provision of fresh milk to their business. However, a dispute has arisen
between the parties and Country Fare is refusing to pay the outstanding invoice. RDL has
now issued proceedings against Country Fare for the monies due.
There is no dispute that a contract existed between the parties and that delivery was
made, so they do not need to search for documents relating to these aspects. However,
the issues of liability and quantum are contested as Country Fare are alleging that the
milk had gone sour and they had to source alternative supplies at short notice to sell in
their shop. Country Fare defend the claim and make a counterclaim on this basis.
There must be full disclosure of any documents that record information relevant to the
alleged breach of contract and the loss. This would include documents on which Country
Fare would rely, for example, any written contract providing for the quality of the milk,
an email from the store manager (Jagdev Singh) to the owner of the business (Elisabeth
Jenkins) explaining the milk was sour and the invoice for the alternative supplies obtained
from Green Farms Ltd.
However, Country Fare would also be required to disclose an email from the store
manager to a junior employee (Naomi McMahon) in which he asks why the milk was left
outside for two hours on one of the hottest days of the summer. This records information
relevant to the issue of liability and must be disclosed, despite it adversely affecting
Country Fare’s own case and supporting RDL.

8.4.1 Control of documents

The duty to disclose is limited to documents in the party’s control (CPR, r 31.8). This means
documents that:
(a) either are or were in their physical possession;
(b) they have a right to possess; or
(c) they have a right to inspect.

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Example
Continuing with the case study, Country Fare’s disclosure obligations would include any
documents they possess such as the contract and any correspondence received from RDL.
It would also include the originals of any letters sent to the opponent (used to possess).
Documents covered by a party’s right to possess would include those held by third
parties. Examples would be the statements of case that are retained on Country Fare’s
solicitors’ file (information is recorded on these –​it is irrelevant what use of the document
will be made at trial) and documents relating to the claim for loss of profits that their
accountants may have.
With regard to the right to inspect, although not relevant in this case study, a person has
the right to inspect their medical records, for example.

8.5 The duty to search

All parties to the proceedings are subject to a duty to search for documents.

8.5.1 Scope of search

A party is required to make a reasonable and proportionate search for all documents that:
(a) adversely affect their own case;
(b) adversely affect another party’s case; or
(c) support another party’s case.
Documents on which the party intends to rely are not listed but, presumably, the party would
look for these anyway as it is in their interests to do so.
What is reasonable depends upon:
• the number of documents involved;
• the nature and complexity of the proceedings;
• the ease and expense of retrieval of any particular document; and
• the significance of the document.
Thus, if a document is peripheral to the main issues and would be expensive to locate, it
would not be reasonable for the party to be ordered to search for it. In contrast, if the claim is
of a high value, the search required is likely to be more extensive than for a low value one.

8.5.2 Limitations
The duty to search is not exhaustive and a party may limit the extent of their search in
several ways:
• by not searching for documents that came into existence before a particular date; or
• by specifying a particular place or places they search; or
• by limiting the categories of documents.
Any such limitation would need to be justified.

Example
Gillian has issued proceedings against her former solicitors, Throp & Co, for negligence.
Throp & Co limit their search in the following ways:
• By time: they do not search for documents that pre-​date 10 May [two years
previously] as this was the date when they were first instructed by Gillian.

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• By location: they limit their search to the main office and the branch office that dealt
with Gillian’s case.
• By category: Throp & Co only search for documents that relate to the subject matter
of the client’s current negligence claim.
• By type of electronic storage devices: they search for documents on their office
computers but not mobile devices.
• By keywords: the solicitors search the electronic devices using Gillian’s full name.
These limitations will be acceptable if the court is satisfied they would not affect a proper
investigation into the merits of the case. Arguments concerning the extent of the disclosure
provided may arise after lists of documents have been sent, in the context of an application
by the dissatisfied party for further disclosure. However, it is sensible and more cost
effective to avoid them by proposing (and hopefully agreeing) any limitations earlier in the
proceedings, either when drafting the disclosure report or attending a directions hearing. This
would also be in accordance with the overriding objective.

Example
Continuing with Gillian’s claim against Throp & Co, she is unhappy with the limits on
disclosure her opponent has imposed. In particular, she is aware that it is common
practice for solicitors at the firm to work from home and so the location may need to be
widened to take account of this. In addition, more information would be required as to
what mobile devices are used in the firm and why these are excluded.
Note that if the search is limited in any way, this must be specifically stated in the list of
documents (see below).

8.5.3 Electronic documents

Electronic documents include those which are readily accessible from computer systems and
other electronic devices and media, but also those stored on servers and back-​up systems
even if they have been deleted. There are special rules that apply because the sheer volume
of such documents is such that disclosure could become a mammoth task.
The CPR require the parties to manage electronic documents to minimise the cost incurred
in disclosure and to use technology to ensure that the search is undertaken efficiently and
effectively. To keep the work involved to a sensible level, the parties must discuss and (if
possible) agree such matters as the categories of electronic documents to be disclosed, how
data will be exchanged, the format for inspection and any limitations, for example, what
keywords will be used. This must be done before directions are given for the conduct of the
case and the parties may, if they wish, use an electronic disclosure questionnaire for this
purpose.
At the case management conference, the parties will discuss disclosure and the court will then
either give written directions on how electronic disclosure will proceed or order a separate
hearing to deal with this aspect.

8.6 How disclosure is made

Once the party has gathered together the documents, they are disclosed by way of a list and
this is achieved by the completion of Form N265. The contents of the list of documents are as
follows.

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(a) Formalities: the court, the claim number and the parties are set out in the top right hand
corner.
(b) Disclosure statement: the party must sign to confirm the extent of the search made to
locate any documents. They must also certify that they understand their duty of disclosure
and that, to the best of their knowledge, the duty has been carried out.
A legal representative cannot sign the disclosure statement on behalf of their client.
Where the party is a partnership, LLP, company or corporation, an individual in that
organisation who was responsible for overseeing the disclosure process should sign. The
name, address and the office or position that the signatory holds in the disclosing party
or the basis upon which they have made the statement on behalf of the party must be
included.
A party may decide not to permit inspection of a category or class of documents because
they consider it would be disproportionate to the issues in the case. If so, they must
explain their reasons on the disclosure statement, for example, the difficulty or expense
such a search would have entailed or the documents’ marginal relevance.
The duty of disclosure is regarded so seriously that proceedings for contempt of court may
be brought against anyone who makes a false disclosure statement without an honest
belief in its truth. It is also a continuing duty so that if, after signing the statement and at
any time before the proceedings are concluded, the party becomes aware of additional
documents, they must prepare and serve a supplemental list of documents. Having done
so, if they wish to rely upon the ‘new’ document at trial and the opponent does not agree,
they will have to obtain the court’s permission.
(c) The list: this is on the final page and consists of three parts.
‘Part 1’ –​In the first part of the list are documents that are within the party’s control and
which they do not object to the other party inspecting. These are usually numbered and
listed in date order with a concise description, for example, email from A to B dated 10
May 20XX or contract dated 15 October 20XX between X and Y.
‘Part 2’ –​In the second section are those documents which are in the party’s control but
where there is an objection to inspection, usually because they are privileged (discussed
later in this chapter).
‘Part 3’ –​The final, third part sets out the documents that are not privileged from
inspection but are no longer in the party’s control. The list must state what happened to
the documents, for example, that they were lost or destroyed in a fire. The most common
scenario where this arises is in relation to correspondence –​a copy of a letter retained by
solicitors on their file would be disclosed in Part 1, and Part 3 might state: ‘The original
of the letter from the claimant’s solicitors to the defendant dated 12 October 20XX which
was last in the claimant’s control on the day it was posted.’
The importance of disclosure is underlined by the fact that a party who fails to disclose a
document may not rely on it at trial unless the court permits and, if such a document is harmful
to their claim or defence, their case could even be struck out.
Set out below is the defendant’s completed list of documents for the claim by Rural Dairies
Ltd against Country Fare Limited. This is provided to illustrate how the list would be drafted in
practice, although the actual wording may vary.

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Figure 8.1 Example of a completed list of documents

List of documents: In the

Worcester County Court
standard disclosure
Notes
• The rules relating to standard disclosure are contained Claim No. WR 20 2869
in Part 31 of the Civil Procedure Rules. Claimant Rural Dairies Ltd
• Documents to be included under standard disclosure
(including ref) (ref 485001/AP/C)
are contained in Rule 31.6 Defendant Country Fare Limited
(including ref) (ref UL/CF/47)
• A document has or will have been in your control if you
have or have had possession, or a right of possession, Date 15 November 20XX
of it or a right to inspect or take copies of it.
Click here to clear all fields
Disclosure Statement Click here to print form

I, the above named

Claimant Defendant
Party (if party making disclosure is a company, firm or other organisation identify here who the person making the
disclosure statement is and why he is the appropriate person to make it)

state that I have carried out a reasonable and proportionate search to locate all the documents which I am

required to disclose under the order made by the court on (date of order)
18 October 20XX
I did not search for documents:-

pre-dating 1 June 20XX

located elsewhere than

The Defendant's offices at Country Fare Farm Shop, Manor Road, Worcester WR11 5TB

in categories other than

for electronic documents

I carried out a search for electronic documents contained on or created by the following:
(list what was searched and extent of search)

On the Defendant's databases and email accounts.

N265 Standard disclosure (10.05) HMCS

(continued )

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Figure 8.1 (continued )

I did not search for the following:-

documents created before

1 June 20XX

documents contained on or created by the Claimant Defendant

PCs portable data storage media

databases servers
back-up tapes off-site storage
mobile phones laptops
notebooks handheld devices
PDA devices

documents contained on or created by the Claimant Defendant

mail files document files

calendar files web-based applications
spreadsheet files graphic and presentation files

documents other than by reference to the following keyword(s)/concepts

(delete if your search was not confined to specific keywords or concepts)

Rural Dairies Ltd

Rural Dairies Ltd

I certify that I understand the duty of disclosure and to the best of my knowledge I have carried out that duty.
I further certify that the list of documents set out in or attached to this form, is a complete list of all documents
which are or have been in my control and which I am obliged under the order to disclose.

I understand that I must inform the court and the other parties immediately if any further document required to
be disclosed by Rule 31.6 comes into my control at any time before the conclusion of the case.

I have not permitted inspection of documents within the category or class of documents (as set out below)
required to be disclosed under Rule 31(6)(b)or (c) on the grounds that to do so would be disproportionate to
the issues in the case.

Signed Date

(Defendant)

(continued )

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Figure 8.1 (continued )

List and number I have control of the documents numbered and listed here. I do not object to you
here, in a convenient inspecting them/producing copies.
order, the documents
(or bundles of 1. Statements of case and other court documents - various dates
documents if of the
same nature, e.g. 2. Correspondence between the Claimant's solicitors and the Defendant's solicitors - various dates
invoices) in your 3. Contract between Rural Dairies Ltd and Country Fare Limited dated 16 June 20XX
control, which you do 4. Email from Jagdev Singh to Elisabeth Jenkins dated 27 June 20XX
not object to being 5. Email from Jagdev Singh to Naomi McMahon dated 27 June 20XX
inspected. Give a
short description 6. Invoice from Green Farms Ltd dated 28 June 20XX
of each document 7. Copy letter from Elisabeth Jenkins to the Claimant dated 29 June 20XX
or bundle so that it
can be identified,
and say if it is kept
elsewhere i.e. with a
bank or solicitor

List and number I have control of the documents numbered and listed here, but I object to you
here, as above, inspecting them:
the documents in
your control which
you object to being
(1) Correspondence, attendance notes and similar documentation, instructions to counsel and
inspected. counsel's advice recording communications between the Defendant's solicitors and the Defendant,
(Rule 31.19) and the Defendant's solicitors and Counsel.

(2) Correspondence between the Defendant's solicitors and witnesses, both expert and factual,
including proofs, statements, reports, drafts and similar documentation.

Say what your I object to you inspecting these documents because:

objections are
As to the documents referred to at (1) above, these were created for the sole or dominant purpose
of giving or receiving legal advice and so are covered by legal professional advice privilege.

As to the documents referred to at (2) above, these were created when this litigation was
reasonably contemplated or after this litigation was commenced for the sole or dominant purpose
of obtaining or collecting evidence to be used in this litigation and so are covered by legal
professional litigation privilege.

List and number I have had the documents numbered and listed below, but they are no longer in my control.
here, the documents
you once had in your The original of the copy letter referred to in Part 1. This was last in the Defendant's control on the
control, but which day the original was posted or otherwise sent.
you no longer have.
For each document
listed, say when
it was last in your
control and where it
is now.

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8.7 Withholding inspection of documents

There are some instances where a party can legitimately withhold documents and this
is usually because they come within the definition of legal professional privilege. Such
documents must still be disclosed in the list but there are two key differences:
(a) the other parties cannot inspect them; and
(b) they are described generically.
This is in direct contrast with Part 1 documents, which must be described precisely so the other
party can identify what they are.

Example
Continuing with the case study of the sour milk, each non-​privileged document would be
described clearly in Part 1 of the list, for example:
• Contract between Rural Dairies Ltd and Country Fare Limited dated 16 June 20XX.
However, privileged documents would be combined together in Part 2 in a broad
description such as:
• Correspondence, attendance notes, instructions to counsel and counsel’s advice
created for the sole or dominant purpose of giving or receiving legal professional
advice and so covered by legal advice privilege.
• Correspondence between the claimant’s solicitors and witnesses, both expert and
factual, including proofs, statements, reports, drafts and similar documentation
created when this litigation was reasonably contemplated or commenced for the sole
or dominant purpose of obtaining evidence and so covered by legal professional
litigation privilege.
The effect is that particular documents are disclosed but otherwise concealed under an
umbrella description, thus preventing identification of their maker, any recipient and the
contents. However, only those documents that satisfy the legal tests for legal professional
privilege qualify for this special treatment.

8.7.1 Legal professional privilege

The advantage to a party of a document being privileged is that, whilst it is disclosable, it
cannot be inspected. The most common type of privilege used is legal professional privilege,
consisting of advice privilege and litigation privilege. To qualify, the document must satisfy
the legal requirements and a party cannot claim privilege simply because the document is
adverse to their case or is confidential.

8.7.1.1 Legal advice privilege

Legal advice privilege is essential as it would be difficult for lawyers to advise their clients
effectively and honestly without it. Because the purpose is to allow free access to the legal
profession, solicitors, licensed conveyancers, legal executives, in-​house lawyers, barristers and
foreign lawyers are all protected; but the privilege does not extend to legal advice given by a
non-​lawyer such as an accountant. Furthermore, advice privilege only applies where the sole
or dominant purpose of the communication is to seek or to give legal advice. If the document
has a dual purpose, the dominant one must be established. If the court finds this was, for
example, to obtain commercial advice from the lawyer, the document is not privileged. Thus,
clients need to be careful when communicating with their solicitors.
It is important not to confuse documents that are to be used at a trial with the disclosure
process. For example, an attendance note that records advice given at a meeting between the
client and their lawyer would not be referred to at trial, but is disclosable. This is because the

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note contains information on which the client would rely or which might adversely affect their
case, perhaps concerning a discussion about the strengths and weaknesses of the evidence.

8.7.1.2 Litigation privilege

Litigation privilege is more complex as there are three distinct aspects that must be satisfied.
The document must be a communication:
(a) passing between the client or lawyer and a third party;
(b) which came into existence when litigation was contemplated or ongoing; and
(c) which was produced with a view to the litigation, either for the sole or dominant purpose
of giving or receiving legal advice in regard to it, or for obtaining evidence to be used in
the litigation.
Examples would include a report from an expert obtained by a solicitor in order to advise
their client on existing or contemplated proceedings, or witness statements obtained by a
legal executive for the purpose of using as evidence.

8.7.1.3 Overview of legal professional privilege

Table 8.2 Legal professional privilege

Type of Definition Examples

privilege

Advice Communications between a client • L etters or emails seeking or giving advice

and their lawyer prepared for between solicitor and client.
the sole or dominant purpose of •A  ttendance notes of a meeting between
giving or receiving legal advice. solicitor and client.
• Instructions to counsel and counsel’s advice.

Litigation Who? • L etter to a witness, proofs of evidence and

Communications passing between witness statements.
the client or the lawyer and a • Instructions to an expert and their report.
third party…
Timing?
•… provided they came into •A fter the client makes an appointment with
existence after litigation was their lawyer to discuss proceedings.
contemplated or commenced… • After proceedings are issued.
Purpose?
• …and were made for the sole or •A  n expert’s report to advise on whether a
dominant purpose of obtaining contract was breached.
advice or for using as evidence •A  n accountant’s report on the losses suffered.
in the litigation. • T he statement of a witness who saw the
accident.

In most instances, it will be clear that a document is privileged but issues may arise.

Example
Eastleigh Forge Ltd (EFL) is a company that manufactures steel components for the motor
industry. One of their employees, Marek, suffers extensive burns in an accident that occurs
when he is working at a machine on the factory floor. He brings proceedings against EFL

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for his injuries and loss of earnings claiming that the machine had a fault. This is denied
by EFL who claim that Marek failed to use the guard provided for the machine.
Zhen works next to Marek and he now provides a written statement to EFL’s solicitors
stating that the guard on the machine they were both working at was in place but that the
machine had a fault with its temperature controls. This is disclosable because it falls within
standard disclosure –​it is a document that records information which supports another
party’s case (Marek’s) and also adversely affects EFL’s case. EFL would want to ‘hide’ the
statement but they can only do so if it is privileged from inspection. The statement is a
communication passing between their solicitors and a third party (Zhen) which came into
existence after litigation had commenced. Furthermore, it was obtained for the sole or
dominant purpose of obtaining evidence on who was to blame for the accident and thus
is covered by litigation privilege. As a consequence, the statement will go into Part 2 of
the list of documents.
EFL carry out a search of their files for any relevant documents and forward a copy
of a report, which they obtained immediately after the incident, to their solicitors. EFL
commissioned the report from a health and safety expert to establish the cause of the
accident. If the only purpose was to ensure that appropriate safety measures were taken
to prevent a repetition of the accident, the report is not privileged from inspection and
must go in Part 1 of the list. But what if it was obtained for the additional purpose of
asking EFL’s solicitors to advise on litigation that EFL thought Marek might bring?
Where more than one purpose applies, the document is only privileged from inspection
where the dominant (or main) purpose for which the document was brought into existence
was for use in pending or contemplated litigation. Thus, if EFL obtained the report mainly
to prevent a repetition of the accident, it will not be privileged from inspection. However,
if the reason for the report was primarily to enable its solicitors to advise on the litigation
they believed Marek would bring, it will be.

8.7.2 Waiving privilege

Privilege is the right of the client and not their lawyer. The client may give up, or waive, that
privilege. Waiver will often occur during litigation because it is the only way to advance the
proceedings. For example, while a party’s solicitors are drafting statements of case and
witness statements, they are privileged from inspection; but once these are served on the
other side, the privilege is waived. Here it is intentional but sometimes waiver of privilege
occurs by mistake.

Example
A barrister is instructed to advise a claimant on the evidence in a claim. In error, the
barrister’s chambers send the letter with the enclosed advice to the solicitors acting for
the defendant. The solicitor reads the letter and immediately appreciates that, although
it concerns their client’s case, it was meant for the claimant’s solicitors. What should
they do?

Option 1 –​read the advice

Applying the SRA Code, principle 7 would suggest continuing to read the letter and the
enclosure as it is in the defendant’s best interests to know what advice the claimant is
receiving about the evidence in the case.

Option 2 –​do not read the advice

Principles 1, 2 and 5 suggest otherwise as reading the advice would not uphold the
proper administration of justice, nor uphold public trust and confidence in the solicitors’
profession and would lack integrity.

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Action required
The solicitor should return the advice to the barristers’ chambers pointing out the error
and confirming they have not read it. However, they should not inform their client –​the
defendant. SRA Code 6.4(d) provides that the general duty to make a client aware of
all relevant information does not apply if that information is contained in a privileged
document that has been mistakenly disclosed.

8.7.3 Without prejudice correspondence

Without prejudice correspondence will record information as part of a party’s genuine
attempt to settle a case. The correspondence will probably therefore satisfy the definition
of standard disclosure as it is likely to set out the strengths of a party’s case and may also
contain concessions that are adverse to their case and support the opponent. Remember that
it is irrelevant to standard disclosure that the recipient of a document has already seen it.
The point of marking correspondence without prejudice is so the trial judge is unaware of the
content whereas, in contrast, the disclosure process is just between the parties.
Accordingly, like any other correspondence between the parties that meets the test for
standard disclosure, those documents marked without prejudice should be disclosed and no
privilege from inspection claimed.

8.8 The right of inspection

Having received the opponent’s list, the party is entitled to inspect documents contained
in Part 1. They cannot inspect documents in Part 2 because they are covered by legal
professional privilege and those in Part 3 are no longer in the party’s control. The request to
inspect must be made in writing and granted within seven days, although a longer period is
often agreed between the parties. Rather than going to inspect the documents personally,
a party may ask for copies of the documents if they agree to pay reasonable copying costs.
Large numbers of copies of electronic documents are often provided on an external hard
drive, otherwise USB memory keys or DVDs are commonly used.

8.9 Summary of disclosure

To assist in understanding disclosure, Figure 8.2 sets out an overview.

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Figure 8.2 Overview of the disclosure process

DISCLOSURE

Does the document fall within standard disclosure?

Documents which: No
• the party relies upon
• adversely affect their own or another party’s case
• support another’s case

Yes No need to disclose

Does the party have control of the document?

Those which the party either has or used to have: No
• physical possession
• the right to possession
• the right to inspect

Yes

Is the document privileged?

Advice privilege Litigation privilege

• Between lawyer and client • Between lawyer or client and a third party
• Sole or dominant purpose of • Litigation must be contemplated or commenced
obtaining legal advice • For sole or dominant purpose of litigation (obtaining advice or evidence)

Yes No

Effect? Effect?
• Described generically in Part 2 of the list • Described specifically in Parts 1 and 3 of the list
• Other party may not inspect unless privilege waived • Other party may inspect

8.10 Orders for disclosure

To ensure that disclosure is complied with properly, the CPR provide mechanisms to assist
a party who is dissatisfied with their opponent’s efforts. However, before applying to the
court, the party should write to the other side first as this may lead to a quicker and cheaper
resolution of the issue. If this fails, an application notice (Form N244) must be filed at court
accompanied by a witness statement, and served on the opponent.

8.10.1 Specific disclosure

Once the list of documents has been served, the contents should be scrutinised carefully. If the
disclosure appears inadequate, an application may be made for specific disclosure under
CPR, r 31.12. This could request an order that the party:

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• carry out a more extensive search; and

• disclose any further documents located as a result of that search; or
• disclose specific documents that the party would have expected to see.
The application will require a witness statement in support. This should explain why the
applicant believes the document exists, perhaps because the party has seen it previously,
and justify the application. It may be that the document is vital to establish an issue such as
liability or the information contained will enable the party to pursue a line of enquiry into the
disputed facts.

Example
Continuing with the case of Eastleigh Forge Ltd, the parties serve their list of documents.
Marek’s lawyers are unhappy with the disclosure provided by EFL and issue an
application to the court on the grounds that EFL have failed to conduct a reasonable
search or to disclose key documents adverse to their case.
The witness statement in support is completed by Marek’s solicitor, Kieron. He submits
that EFL should have gone back further in time, as there was a similar accident five
years previously, and the search should have included the managing director’s personal
computer and mobile phone because he often works from home. The solicitor also
requests a number of specific documents including copies of records relating to the
inspection of the machine in question.
In deciding whether or not to make the order for specific disclosure, the court takes into
account all the circumstances of the case and, in particular, the overriding objective. The
court concludes that EFL has failed adequately to comply with its disclosure obligations
and so the application is granted. EFL are required to provide the specific disclosure
requested.

8.10.2 Disputing privilege

The disclosure provisions could (in theory) be abused by parties who wish to hide documents
that are unhelpful to their case. To overcome this, an application can be made to the court
under CPR, r 31.19 to challenge a claim for privilege. The court may require the party claiming
privilege to produce the document, invite any person (whether or not a party) to make
representations and will determine whether it has been correctly categorised. If not, the court
will order that the document be revealed to the opponent.
However, the effectiveness of this option is limited by the broad nature of the claim for
privilege and the general description in Part 2 of the list of documents, which makes it difficult
for a party to evaluate whether privilege is being correctly claimed or not.

8.11 Pre-​action disclosure

The pre-​action protocols require the parties to prospective litigation to share information.
However, there is no general obligation on a party to show their opponent the contents of
documents or to disclose those which are adverse to their own position. Although a request
can be made to the other party in this regard, the only way to compel such disclosure is by
way of court order. Therefore, prior to a claim form being issued, the parties may to a large
extent select those documents they wish to show and keep all the others hidden.
To overcome this, a party may issue an application for pre-​action disclosure under CPR,
r 31.16. This procedure is normally used where a party is unsure as to the strength of their
case, so they can then make an informed decision as to whether to issue proceedings against
the intended defendant.

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The application must be supported by a witness statement and the court must be
satisfied that:
• both the applicant and the respondent are likely to be a party to subsequent
proceedings;
• the documents sought would come within standard disclosure; and
• disclosure is desirable to dispose fairly of the anticipated proceedings, assist the dispute
being resolved without proceedings or save costs.

8.12 Non-​party disclosure

Where proceedings have commenced, a party can apply for disclosure against a non-​party
(r 31.17) if this would help to resolve an issue in the case. The most common use of this
procedure is where a party indicates in their list of documents that they no longer have a
document in their possession, but that X does. The other party may then write to X asking for a
copy of the document. If X refuses to supply that copy voluntarily, an application may be made
for non-​party disclosure against X.
The application must be supported by evidence and disclosure will only be ordered if:
(a) the documents in question are likely to support the applicant’s case or adversely affect
the case of another party; and
(b) disclosure is necessary to dispose fairly of the case or to save costs.
The order must specify the documents to be disclosed; and require the non-​party to identify
which documents are no longer in their control and which are privileged.

Example
Returning to the case of Eastleigh Forge Ltd, Marek’s solicitor requests copies of
documents concerning any maintenance carried out on the machine that is the subject
of the litigation. EFL respond by stating that the machine is serviced each year by a
specialist company, Jenner Engineering Ltd (JEL) but they only have the last three reports.
Marek wants the service report covering the previous accident, which occurred five years
ago, and so his solicitor writes to JEL requesting this. When no response is received, an
application is made for non-​party disclosure. The court grants the application as it is
satisfied that the service report from JEL is likely to support Marek’s case and is necessary
to dispose of the case fairly. This is because the information would demonstrate whether
there was a history of poor health and safety at EFL’s factory.

Summary
• Disclosure is an important step in the litigation process and full disclosure is required to
ensure justice.
• Standard disclosure is the usual order on the fast track. This requires the parties to
disclose all documents that record information upon which they intend to rely, which are
adverse to either party’s case or which support the opponent’s case. A more tailored
approach may be taken to disclosure on the multi-​track.
• Disclosure is usually effected by serving a list of documents (Form N265). This contains a
disclosure statement setting out the extent of the search carried out and confirmation that
the party understands and has complied with their duty of disclosure.

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• The duty of disclosure is ongoing and continues throughout the proceedings. Proceedings
for contempt of court may be brought against anyone who makes a false disclosure
statement without an honest belief in its truth.
• Some documents may be withheld from inspection although they must still be disclosed.
This is usually because the document satisfies the requirements for legal professional
advice or litigation privilege. If a party suspects that privilege has been claimed
inappropriately, an application may be made to the court to challenge this.
• Documents may be inspected within seven days of disclosure, either personally or by
requesting copies.
• A party who is dissatisfied with the disclosure provided by the opponent may apply to the
court for an order for specific disclosure.
• Disclosure may be ordered prior to proceedings being issued or against a non-​party, if
appropriate.

Sample questions

Question 1
A solicitor is conducting proceedings on behalf of a client. The court makes an order for
directions and the solicitor writes to the client outlining their standard disclosure obligations.
Which of the following statements should the solicitor make to the client?
A The court order requires you to carry out an exhaustive search for documents sparing
no expense.
B Once you have listed all of the documents that is the end of your disclosure obligations.
C If you have lost any documents then that is unfortunate, but there is no need to give me
details of these.
D In due course, I will produce a draft list of documents for your approval. You will need
to consider this carefully because you will sign the disclosure statement confirming that
you understand your duty to give disclosure and have complied with it. If that statement
is wrong, you could be imprisoned for contempt of court.
E Once the list has been served, that is it and your opponent cannot obtain disclosure of
any documents that have been missed.

Answer
Option D is correct. Option A is wrong because the CPR require a reasonable and
proportionate search (not an exhaustive one). Option B is wrong as disclosure is a
continuing obligation throughout the proceedings. Documents that have been lost or
destroyed must still be disclosed (in Part 3 of the list) so option C is wrong. Option E is
wrong because a party who is dissatisfied with their opponent’s disclosure does have
options available to them, for example, applying for an order for specific disclosure or to
dispute privilege claimed.

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Question 2
A couple issue proceedings for £15,000 against a company for breach of a written contract
in relation to the provision of a buffet at their wedding. The couple allege that several of
the guests were unhappy that no vegetarian options were provided and additional food
had to be purchased for them on the day. The couple send an email to the company
making these complaints about the buffet. The company respond by pointing to a checklist
that the couple were asked to complete in which the vegetarian option was not ticked. The
company deny the food supplied was not in accordance with the terms of the contract.
There is no dispute that full payment was made by the couple to the company. During the
course of the negotiations, a ‘without prejudice’ letter is sent from the couple’s solicitors to
the company offering to accept £10,000 in settlement.
Which of the following best describes the documents that the couple would need to
disclose if the court orders standard disclosure?
A The contract, the proof of payment, the email of complaint, the checklist and the without
prejudice letter.
B The contract, the email of complaint, the checklist and the without prejudice letter.
C The contract, the email of complaint and the checklist.
D The contract, the email of complaint and the without prejudice letter.
E The checklist and the without prejudice letter.

Answer
Option B is correct as the only document that does not need to be disclosed is the proof of
payment (and A is wrong for this reason). This is because there is no dispute that full payment
was made and so the document does not record any information relevant to the disputed
issues between the parties.
Option C is not the best answer –​the without prejudice letter should also be disclosed as it
falls within standard disclosure. The letter most probably records information upon which the
couple will rely as part of their claim, and the fact that the couple will now accept £10,000 is
adverse to their claim for £15,000. The effect of a document being marked in this way is that
it cannot be shown to the judge at trial but disclosure takes effect between the parties and, in
any event, both have seen the letter.
Option D is wrong because the checklist must also be disclosed as it adversely affects the
couple’s case and so comes within the definition of standard disclosure. Option E is not the
best answer as the couple will want to rely upon the contract as to the disputed issue of
the provision of the food as well as the email recording the detail of their complaint that is
disputed by the company.

Question 3
A company manufactures scooters. On testing the finished product, it becomes apparent
there is a problem with the brakes. The manufacturing company obtains a report from
their quality control department to check the reason, which concludes that the cause may
either have been a temporary glitch in the software or a fault with the brakes themselves.
The manufacturing company instructs solicitors and issues proceedings against one of its
parts suppliers (which supplied the brakes) for breach of contract and to claim damages
including loss of profits. The proceedings are defended and the court directs that standard
disclosure is given.

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Which of the following approaches should the manufacturing company’s solicitors take
when completing the list of documents?
A Any confidential document must be disclosed but may be included in Part 2 of the list.
B Attendance notes of meetings between the manufacturing company and their solicitors
need not be disclosed as they will not be relied on at trial.
C Instructions to counsel and counsel’s opinion may be disclosed in Part 2 of the list as
they fall within the definition of advice privilege.
D All witness statements obtained must be disclosed in Part 1 of the list of documents.
E The report from the quality control department is subject to litigation privilege and
should be disclosed in Part 2 of the list.

Answer
Option C is correct. Option A is wrong because documents may only be disclosed in Part 2 if
they satisfy the test of legal professional privilege –​confidentiality is irrelevant to answering
this particular question. Option B is also wrong as attendance notes of meetings between the
client and their solicitor would fall within the definition of standard disclosure and so must be
disclosed. However, they are protected by legal advice privilege and would be described
generically in Part 2.
Witness statements, whether helpful or not to the manufacturing company, would be subject
to litigation privilege and disclosed in Part 2 of the list –​hence, option D is wrong. If the
party decides to rely upon any of the witnesses, privilege is waived at the next stage in the
proceedings when the parties exchange the witness statements of those witnesses that they
intend to rely on at trial.
Option E is wrong because the report does not satisfy the requirements of litigation privilege.
It was commissioned before litigation was contemplated and the purpose was to establish the
cause of the fault with the brakes, and not with a view to litigation for the sole or dominant
purpose of obtaining advice or evidence.

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9 Evidence

9.1 Introduction 154

9.2 Burden and standard of proof 154
9.3 Witness statements 155
9.4 Affidavits 158
9.5 Witness evidence 158
9.6 Expert evidence 162

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to evidence as follows:
• relevance, hearsay and admissibility
• the burden and standard of proof
• expert evidence
∘ opinion evidence
∘ duties of experts
∘ single joint experts
∘ discussion between experts
• witness evidence
∘ witness statements
∘ affidavits
Note that for SQE1, candidates are not usually required to recall specific case
names, or cite statutory or regulatory authorities. These are provided for illustrative
purposes only and the sample documents are included for the same reason.

Learning outcomes
The learning outcomes for this chapter are:
• To understand how the courts control evidence.
• To appreciate the role and content of witness statements and affidavits.
• To recognise what evidence is admissible, how hearsay evidence is defined and
the approach the courts take to this.
• To understand how opinion evidence is dealt with and the role of expert
evidence.

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9.1 Introduction
Having outlined their respective cases in the statements of case, the parties will concentrate
on proving or disproving the issues raised by putting forward their evidence in support. The
rules governing how this is achieved and specifically what evidence may be used in civil
proceedings are to be found in Parts 32, 33 and 35 of the CPR.
In particular, the court may control the evidence by giving directions as to:
• the issues on which it requires evidence, whether liability, causation or quantum;
• the nature of the evidence it requires to decide those issues, for example, an expert’s
report;
• the number of witnesses of fact a party may call at trial; and
• the way in which the evidence is to be placed before the court, whether orally or by
relying upon written statements.
When exercising its powers, the court will bear in mind the overriding objective in CPR, r 1.1 to
decide matters justly and at proportionate expense. This will involve the court being actively
involved throughout the proceedings, up to and including the trial. Even at this late stage, the
judge could, for example, decide that an issue which had been raised is no longer important
and order that any evidence relating to it should be excluded.

9.2 Burden and standard of proof

A trial judge is likely to have to evaluate many different types of evidence, such as oral
evidence from witnesses of fact (sometimes referred to as lay witnesses), experts’ written
reports and the parties’ own documents. In determining the outcome of a case, judges must
bear in mind the burden and standard of proof, both of which must be considered.

9.2.1 Legal burden of proof

The burden of proof refers to the party’s duty to produce sufficient evidence to establish their
allegation or argument.

9.2.1.1 General rule

The legal burden of proof lies with the claimant and each fact must be proved unless it is
admitted by the opponent. For example, a claimant alleging breach of contract must prove
that a contract existed between the parties, the defendant broke the relevant express and/​or
implied terms of the contract, and the claimant suffered loss as a result.

9.2.1.2 Exception
The exception to this is where the defendant in civil proceedings has been convicted of a
relevant criminal offence. Under s 11 of the Civil Evidence Act 1968, the burden of proof is
reversed –​unsurprising given the higher standard of proof required to obtain a conviction in
the criminal courts. Thus, if a defendant wishes to argue they should not have been convicted
they must prove this, meaning that the legal burden has shifted on this point.

Example
Jakob and Barney are the claimant and defendant (respectively) in civil proceedings
having been involved in a road traffic collision. Barney’s vehicle hit the back of Jakob’s
car while it was stationary, waiting to enter a busy roundabout. Before the proceedings
started, Barney was convicted of careless driving in the local magistrates’ court in relation
to the accident. Jakob gives details of the conviction in the particulars of claim, stating

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that it relates to the issue of the defendant’s negligent driving. Barney argues that he was
wrongly convicted but, if he is to succeed in his defence, he will have to prove this to the
satisfaction of the court.

9.2.1.3 The defendant

There are a few occasions where the burden of proof falls on the defendant, for example,
contributory negligence, where the defendant must prove that the claimant’s failure to take
care contributed to the damage suffered.

Example
Continuing with the scenario (above), Barney alleges that Jakob was not wearing a seat
belt at the time of the accident and this was partly responsible for his injuries. Barney
must prove this fact if he is to succeed in reducing the damages payable.

9.2.2 Standard of proof

In civil cases, the claimant is required to prove a fact on the balance of probabilities. This
requires the judge to be persuaded that the claimant’s version of events is more likely to
be true than the defendant’s. In simple terms, there must be a certainty of greater than 50
per cent.

9.3 Witness statements

The general rule is that any fact upon which a party intends to rely must be proved at trial
by oral evidence. However, this rule is modified in practice as much of the evidence in a civil
litigation case is actually dealt with in writing.
Under Part 32, if a party wishes to call a witness, they must serve a witness statement on the
other parties setting out all the facts which that witness would be allowed to give orally at
trial. Inadmissible or irrelevant material should not, therefore, be included. If the statement is
not served for any reason, the witness will only be allowed to speak at trial with the court’s
permission and this would be a rare occurrence.

Witness summaries
Sometimes it will be very difficult to obtain a witness statement, perhaps because the person
is uncontactable abroad, or to persuade a witness to give a statement (for example, it will
be against their current employer and they fear being dismissed). In these circumstances, the
party can apply to the court without notice for an order to serve a written witness summary.
This will contain:
• the witness’s name and address;
• the evidence the witness can provide, if it is known; or if not
• the matters on which the witness would be questioned at trial, namely, the relevant
disputed issues.
Witness summaries are less satisfactory to the party than a statement but they may be useful
where the alternative is no evidence at all.

9.3.1 Form and content

Rules relating to the form of witness statements are set out in the Practice Direction attached
to CPR 32, and they list the formalities required for the statement to be valid. It is important
that these are complied with as a failure to do so may result in the court refusing to admit the
witness statement as evidence.

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(a) The statement should be headed with the title of the proceedings and details such as the
name of the witness, the number of the statement and the date in the top right hand corner.
(b) In the opening paragraph should be the witness’s address, their occupation or
description, whether the statement is made as part of their employment or business and,
if so, the name of the business and whether they are a party to the proceedings.
(c) The paragraphs must be numbered with all numbers, including dates, being expressed
as figures and not words, thus, ‘five people’ should read ‘5 people’. The format for dates
would be, for example, 16 January 2022 and not 16.01.2022.
(d) The statement should normally follow the chronological sequence of the events.
(e) The function of the witness statement is to set out in writing the evidence that the
individual wants to provide on behalf of the party that called them. Historically, such
evidence was given orally at the trial but now, to save time, the witness statement usually
replaces this.
(f) Consequently, it should be written in the first person and expressed in the witness’s own
words as far as possible.
(g) The witness must also indicate which of the statements are made from their own
knowledge and which are based on information and belief, naming the source if
appropriate. Also, the process by which the witness statement was prepared must be
included, for example, face to face or over the telephone with a party’s solicitor.
(h) Any documents that are attached are formally exhibited, for example, ‘AP1’.
(i) Under PD 32 para 20.2, it must be verified by a statement of truth in the format:
‘I believe that the facts stated in this witness statement are true. I understand that
proceedings for contempt of court may be brought against anyone who makes, or causes
to be made, a false statement in a document verified by a statement of truth without an
honest belief in its truth’.
Unlike statements of case, a witness statement cannot be signed by a legal
representative.
There are special provisions that apply where the statement cannot be given in English. In
such cases, the statement should be drafted in the witness’s own language with the date and
the details of the translation being included in the statement.
Although the content of witness statements will vary significantly, the style and layout will not
and Figure 9.1 provides an illustration.

Example
In this matter, the claimant (Scandinavian Self-​Build Limited) issued proceedings against
the defendant, Platinum Developments Limited, for payment due under a contract to
supply three self-​build ‘Lillehammer’ house kits. The defendant’s defence is that the
kits were defective because the claimant’s specification for construction of the house
foundations did not comply with Building Regulations requirements.
The statement on the opposite page details the evidence that the managing director of
the claimant company intends to give on behalf of Scandinavian Self-​Build Limited.

9.3.2 Directions for exchange

Once the case has been allocated to a track, the court will give directions as to when and
how witness statements are to be exchanged and this is usually completed simultaneously. The
reason is to prevent one party having an advantage over the other by seeing their opponent’s
witness statement first. In most cases, the statements will be exchanged a few weeks after
disclosure and inspection of the documents, although the interval will vary depending upon

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Figure 9.1 Example of a witness statement

On behalf of the Claimant

J Waggett
1st
Exhibit: JW1
Dated: 31/​10/​20XX

IN THE HIGH COURT OF JUSTICE CLAIM NUMBER HQ 001234

KING’S BENCH DIVISION
BETWEEN
SCANDINAVIAN SELF-​BUILD LIMITED Claimant
and
PLATINUM DEVELOPMENTS LIMITED Defendant

WITNESS STATEMENT OF JAMES WAGGETT

I, James Waggett, company director of 2 The Firs, Christlethorpe, Guildshire GU17 6WL will say as follows:
1. I am the Managing Director of the Claimant and I am authorised by the Claimant to make this witness
statement.
2. The facts and matters set out in this statement are within my own knowledge unless otherwise stated, and
I believe them to be true. Where I refer to information supplied by others, the source of the information is
identified; facts and matters derived from other sources are true to the best of my knowledge and belief.
I have made this witness statement following a face to face meeting with the Claimant’s in-​house solicitor,
Yasmin Ansari.
3. On 23 April 20XX, the Claimant received a telephone call from Mr Bold on behalf of the Defendant about
the Lillehammer kit. The Claimant’s sales manager, Mrs Halls, took the call.
4. I have spoken to Mrs Halls, who is a very senior sales operative who has worked for the Claimant for
almost 10 years. Mrs Halls informs me that Mr Bold explained that the Defendant was a developer, and
that, if it made a good profit on these 3 kits when they were built, it would be looking to acquire more. She
quoted him a price of £180,000 for the 3 kits which he accepted. She then explained in accordance with
company policy that this was an all-​inclusive price to include the kit, technical drawings, specifications for
Building Regulations approval and full build instructions.
5. I refer to Mrs Halls’ note of the conversation marked JW1. It can be seen that at no point did Mrs Halls
say that the Lillehammer houses when built would comply with Building Regulations. This is in line with
company policy, as, although we are confident that if our kits are built precisely to our specifications the
finished houses will comply with Building Regulations, we clearly have no control over whether a customer
is able to follow the specification or not…
[The witness continues with the narrative].
…
16. The Claimant’s specification for the foundations are considerably more stringent than the Building
Regulations requirements. I understand from the District Surveyor’s Department that the Defendant’s
foundations complied with neither this specification nor Building Regulations.
I believe that the facts stated in this witness statement are true. I understand that proceedings for contempt
of court may be brought against anyone who makes, or causes to be made, a false statement in a
document verified by a statement of truth without an honest belief in its truth.
Signed: J Waggett
Dated: 31/​10/​XX

(continued )

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Figure 9.1 (continued )

Exhibit JW1 [Separate document]

23/​4/​XX-​ 10.18 am
Adrian Bold, MD Platinum Developments Ltd
Wants 3 Lillehammer kits for small development behind Waitway.
Quoted him £180,000 10% deposit. Balance due 2 months (to allow for building of houses and building regs
approval)
Confirmed price includes plans and Building Regs Approval.
He is happy to deal on these terms.

I verify that this is the document marked JW1 exhibited to my witness statement dated 31 October 20XX.
Signed: J Waggett

the complexity of the matter. This allows the witness an opportunity to review their evidence
after having taken into account any documents that have been inspected.

9.3.3 Use at trial

Having served a witness statement on the other side, the witness will usually be called to give
oral evidence at trial. Before the hearing, the judge will have read all the witness statements
that were exchanged. These form part of the trial bundle (see Chapter 10). The witness will go
into the witness box, take the oath or affirm, be shown a copy of their statement and confirm
the contents are true. It is then assumed that the witness has said, from the witness box,
everything in their statement and so this stands as their evidence-​(or examination-​)in-​chief.
Unless the court gives permission for additional examination-​in-​chief (see below), they will then
be subject to questioning by the other side’s advocate –​known as cross-​examination.
It is essential that the statement is comprehensive because a witness cannot add to it at the
trial unless the court gives permission, and this will be the exception rather than the rule. Such
an event will only occur if the judge is satisfied there is a good reason why the evidence was
not dealt with in the statement itself –​perhaps because it needs to be amplified or a new
relevant matter arose after the statement was served.

9.4 Affidavits
Affidavits are sworn statements of evidence and they differ from witness statements as the
maker has to swear or affirm before a solicitor (not their own), or other authorised person,
that the contents of the affidavit are true. Prior to the CPR, affidavits were the usual means of
submitting evidence but they have been replaced in this role by witness statements. There are
now only a few occasions where it is necessary to use an affidavit, including applications for a
freezing injunction or a search order.

9.5 Witness evidence

When drafting witness statements, or indeed affidavits, it is important to be aware of the rules
of evidence and how these apply to civil proceedings.

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9.5.1 Relevance
The starting point is that any evidence included must be relevant. On a practical level, there
is little point in the witness setting out vast amounts of irrelevant material as this will not assist
in deciding the case and will simply prolong the trial unnecessarily. Furthermore, its inclusion
would fall foul of the rules of evidence, which state that:
• irrelevant material is not admissible.
Relevance is judged by reference to the issues the court is called upon to decide.

9.5.1.1 When is evidence relevant?

Evidence from a witness of fact is admissible when it addresses relevant facts, namely those
which are in dispute and which have to be proved by the party calling the witness. These
should be apparent from comparing the particulars of claim with the defence –​the facts not
admitted and denied are in dispute.

Example
Dawn issues proceedings for negligence against her solicitor, Razwana, arguing that
Razwana did not represent her properly in her employment claim against a former
employer. In her defence, Razwana admits that, as a lawyer, she owes a duty of care
to Dawn as her client and so no evidence is required on this issue. However, she
denies being in breach of the duty. She submits that Dawn did not provide her with full
instructions of what happened during the incident leading up to her dismissal from her
employment. Razwana calls Erin, a paralegal who sat in on the meeting, as a witness on
her behalf. Erin may give evidence on what was said at the discussion as this is relevant
to the disputed question of liability (namely who is at fault).

9.5.2 Opinion
9.5.2.1 General rule
The general rule is that opinion evidence is not admissible because the function of a witness
is to give evidence of relevant facts from which the court can draw its own conclusions.
However, there are some situations where it is difficult for a witness to separate fact and
opinion.

9.5.2.2 Facts personally perceived

Under s 3(2) of the Civil Evidence Act 1972, a witness may give a statement of opinion if made
as a way of conveying relevant facts personally perceived by them. If this test is satisfied, the
evidence is admissible.
Strictly speaking, rather than stating their opinion, the witness should list the facts that they
saw which led them to reach their conclusion. However, if they fail to do so, even though
the accuracy of the witness’s assessment of the speed or the level of intoxication might be
challenged, the evidence would usually be admissible.
What the witness cannot do is to draw any conclusion from their evidence as this is the role
of the court. So, for example, the witness to the road traffic collision cannot say in evidence
that (in their opinion) the defendant’s speed was ‘excessive in the circumstances’ or ‘too fast’
because it is for the trial judge alone to determine if the defendant was driving negligently.

9.5.2.3 Expert evidence

In contrast to witnesses of fact, experts are permitted to express their opinions in court and
this is considered later in the chapter.
Set out below are two examples of when a witness of fact can give an opinion.

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Table 9.1 Opinion evidence: witnesses of fact

Opinion Based on facts personally perceived

A witness to a road traffic collision gives Although this is clearly an opinion, there are few
evidence that she saw the vehicle being alternatives other than simply describing the speed as
driven ‘at about 60 miles per hour’ ‘fast’, which is of limited value. Many people would be
before it rounded a corner and ran into able to estimate the speed of a vehicle to some extent.
the back of the defendant’s vehicle.

A witness to an assault expresses the The witness is reaching a conclusion based on the
view that the assailant was ‘drunk’. physical characteristics she observed about the assailant
such as slurred speech, glazed eyes, an unsteadiness of
gait, breath smelling of alcohol and so on.

9.5.3 Hearsay evidence

Special considerations apply where hearsay evidence is to be used.

9.5.3.1 Definition
The definition of hearsay is set out in s 1(2) of the Civil Evidence Act 1995. In summary, it is:
• a statement made outside court;
• which is repeated in court;
• to prove the truth of the matter stated.
The statement must be a relevant fact or an admissible opinion. It can be oral or written and
may be repeated in court in a document or by the witness whether in their witness statement
or in oral evidence. The crucial aspect that determines whether such statements are hearsay is
the purpose –​the reason is to prove the truth of the words said. In other words, the trial judge
is being asked to rely on the repetition of the words (the evidence) to reach a decision in the
case. The easiest way to understand hearsay is to work through some examples.

Examples
(a) Richard was involved in a road traffic collision with Samira. He is disputing liability.
Richard gives evidence that the other driver (Samira) got out of her car and said: ‘I’m
so sorry –​I just didn’t see you!’ This is an oral statement made by Samira outside
court –​at the scene of the accident. Richard is repeating it in court to prove the truth
of the matter stated, namely that Samira did not see his vehicle and was, therefore, to
blame for the accident.
(b) When Deiza booked a holiday with Fancy Tours Ltd, the agent assured her that the
hotel would be quiet and peaceful and close to the beach. However, the hotel was
next to a noisy building site and some distance away from the beach. Deiza is now
suing for misrepresentation and wishes to repeat in evidence the oral statements
made to her by the agent. This will be relevant evidence on the issue of liability but
it will not be hearsay because Deiza is not repeating them to show the truth of the
statements –​in fact, the opposite, that she was lied to. This will assist her in proving
that she relied on false representations.
Hearsay evidence may either be first hand or multiple as demonstrated by the examples in
Table 9.2.

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Table 9.2 Hearsay evidence

First hand hearsay Multiple hearsay

Shona gives evidence of something she was Shona also gives evidence of something
told by Padraig (in order to prove the truth of Padraig was told by Himesh (in order to prove
Padraig’s statement). the truth of what Himesh said).

Mary keeps a diary and records what she sees Mary records what she was told by Lucy.
one day. Her diary is used at the trial to prove Mary’s diary is used at the trial to prove the
the truth of its contents. truth of what Lucy said.

The common thread to all of these is that the witness is not giving evidence of what they
personally know. In Shona’s case, she is repeating what Padraig said; whereas with Mary, it is
the diary itself that contains the statement being relied upon. This becomes multiple hearsay
where the information is relayed through more than one person before it is recorded. In the
first example, Himesh tells Padraig who tells Shona so the details are passed down a chain
before being repeated in court. In Mary’s case, the diary is recording what someone else
(Lucy) told Mary –​she did not actually see the event herself.

9.5.3.2 Using hearsay evidence

Section 1(1) of the Civil Evidence Act 1995 provides that hearsay evidence is admissible in
civil proceedings. However, there are notice requirements under s 2 and further details are
contained in CPR Part 33.
• If the party intends to call the witness whose statement contains hearsay evidence, they
simply need to serve the other party with the statement.
• The opponent must then decide whether to ask the court to order that the maker of the
original statement attends for cross-​examination or serve notice of intention to attack the
credibility of the hearsay evidence.

Example
In the scenario above, the claimant wants to rely upon Shona’s evidence and so her
witness statement is served on the defendant. Shona’s statement contains hearsay as she
is repeating what Padraig said to her to prove the truth of the matter stated and the court
will be asked to take this into account when determining the relevant issue. The defendant
reads Shona’s statement and, as Padraig’s (hearsay) statement is crucial to the issue of
liability, decides to request the court to order him to attend court to be cross-​examined.
The defendant also serves notice that, in the event Padraig cannot attend, they will attack
the credibility of the statement he made to Shona.

• If the party does not propose to call the witness to give oral evidence but instead intends
to rely upon the witness statement itself, the whole statement becomes hearsay. This
obviously limits the opponent’s options as they cannot cross-​examine the witness and so
they must be given advance warning of the situation.
How is this achieved? When serving the witness statement, it is essential that the party
intending to rely on the hearsay evidence informs the other parties that the witness is not
being called to give oral evidence and explains the reason why. This is done by way of a
hearsay notice, which should be served at the same time as the witness statement.

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Example
Continuing with the scenario above, Shona cannot attend court to give evidence because
she is ill in hospital. The claimant exchanges her witness statement with the defendant
and serves a hearsay notice in the format below. This will ensure that the hearsay
evidence is admissible at the trial. However, as before, the defendant can make an
application to the court to order that the maker of the hearsay statement (Padraig)
attends for cross-​examination or serve notice of intention to attack the credibility of the
hearsay evidence.

Heading/​title of proceedings
Hearsay Notice
This notice is given pursuant to the Civil Procedure Rules 1998, Rule 33.2(1)(b) and (2) and
s 2(1)(a) of the Civil Evidence Act 1995.
TAKE NOTICE that the Claimant intends to rely on the following hearsay evidence at trial:
The witness statement of Shona McCafferty. A copy is served herewith pursuant to the court
order of 3rd April 20XX. It is not proposed to call Shona McCafferty as a witness at trial as
she is in hospital and is too ill to attend.
[Date]
[Signed]
[Address for service]

If a party does not comply with the notice requirements, the hearsay is still admissible but
the failure may be taken into account when assessing the weight to be given to it, or when
making a costs order at the end of the trial.

9.5.3.3 Weight to be attached

Although hearsay evidence is admissible, it is important to remember that it is ‘second
best’ evidence of a fact. Out-​of-​court statements are not made on oath or with any form of
affirmation. It is not uncommon for a person to lie, or to make ill-​considered statements that
are inaccurate. Furthermore, the greater the number of times a statement is repeated, the
more likely there is to be an error.
Because the maker of the hearsay statement is not present at the hearing, they cannot
be cross-​examined. As a consequence, their memory or powers of observation cannot be
challenged and the trial judge is unable to assess the reliability of the statement by observing
the witness’s demeanour.
So how does the court approach the issue of hearsay? The judge will begin by considering
these questions:
(a) What issue, if any, does the hearsay evidence address?
(b) How important is that issue in the case?
(c) What other evidence is available on the same issue?
(d) Is the hearsay evidence more probative than any other evidence the party could obtain
through reasonable efforts?

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There are also statutory safeguards, which may be found in s 4 of the Civil Evidence Act 1995.
These provide guidelines to assist the judge in assessing the weight that should be attached
to hearsay evidence. It provides that the court must have regard to all the circumstances and,
in particular, to the following:
(a) Whether it would have been reasonable and practicable for the party adducing the
evidence to have called the person who made the original statement as a witness.
Only if the reason is a credible one, such as the person being dead or abroad and not
contactable, is the statement likely be given some weight; otherwise, why not call the
person to give oral evidence?
(b) Whether the original statement was made contemporaneously with the events in question,
so that the facts referred to in it are fresh in the memory of the person making it. A note
made of a car registration number immediately after the car drives off will generally be
more reliable than one made the next day, week or month.
(c) Whether the evidence involves multiple hearsay as there is always the danger of
mishearing, exaggeration and general inaccuracy through repetition.
(d) Whether any person involved had any motive to conceal or misrepresent matters, for
example an employee who makes the statement with a view to pleasing their employer.
(e) Whether the original statement was edited, or was made in collaboration with someone
else, as this may suggest collusion, for instance.
(f) Whether the circumstances suggest an attempt to prevent proper evaluation of the weight
of the evidence, perhaps because notice was given so late that the other party did not
have a fair opportunity to respond to it.
Hearsay may appear quite confusing but below is a clear structure to assist in determining
whether a statement is hearsay or not.

Figure 9.2 Hearsay evidence

HEARSAY EVIDENCE

Is the evidence hearsay?

• statement made outside of court?
• repeated in court?
• to prove the truth of the matter stated?
YES (must answer yes to all 3 questions to be hearsay) NO

Admissible provided:
• it is relevant; and Not hearsay but may
still be relevant and
• there is no other reason making it
admissible evidence.
inadmissible (for example opinion not
based on facts personally perceived).

Check the notice requirements under s 2

CEA 1995.
Opponent may attack the weight to be
attached to the evidence using guidelines
in s 4 CEA 1995.

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9.6 Expert evidence

Expert evidence is often crucial to the outcome of civil proceedings and its use is governed
by Part 35. Such evidence may be required to establish the breach of contract, perhaps a
surveyor in a case involving defective building work; or damages, for example an accountant
to prove loss of profits.
However, the parties do not have an unlimited right to use expert evidence and, as part of
its case management powers, the court will restrict such evidence to that which is reasonably
required to resolve the issues. This may include:
• refusing to allow any expert evidence at all;
• limiting the number of experts either generally or in relation to specific issues;
• directing that the parties must agree experts; or
• limiting expert evidence to written reports.
No party may call an expert without obtaining permission. This will usually be considered
at the directions stage, either when the case is allocated to the fast track or at a case
management conference on the multi-​track.
The court will need to be satisfied that expert evidence is necessary to decide an issue in
dispute or to assist the judge in doing so. Factors taken into account will include the value of
the claim and proportionality, and the likely costs.
The judge will also require information on:
• the name of the expert where practicable;
• the field the person is an expert in;
• their knowledge and experience to ensure they are suitable to give their evidence; and
• the issues the expert will address.
Expert evidence is often crucial to the outcome of the case and so it is in the parties’ interests
to comply with the CPR in this regard.

9.6.1 Admissibility
By s 3(1) of the Civil Evidence Act 1972, ‘where a person is called as a witness in any civil
proceedings, his opinion on any relevant matter on which he is qualified to give expert
evidence shall be admissible in evidence’. This is in contrast to the position with witnesses
of fact.

9.6.2 The expert’s duty

The expert’s duty is set out in Part 35.
3​The duty is to assist the court by providing objective, unbiased opinions on matters within
their own expertise. Although in many cases an expert is instructed by one particular party,
the duty to the court overrides any obligation to the person who instructed them.
X The duty is not to assume the role of an advocate.
However, this does not mean that an expert has no duty to the party who instructed them; for
example, they will be subject to the usual implied term to exercise reasonable care and skill
under s 13 of the Supply of Goods and Services Act 1982 when considering and drafting their
report.

9.6.3 Single joint expert (SJE)

Where both parties wish to submit expert evidence on a particular issue, the court may direct
that the evidence is given by one expert only.

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• When is an SJE appropriate?

The court will decide if an SJE is appropriate by considering a number of factors including
whether:
(a) it is proportionate to have separate experts for each party on a particular issue;
(b) the instruction of an SJE is likely to assist in resolving the issue more speedily and in a
more cost-​effective way; and
(c) there is likely to be a range of expert opinion.
• Who chooses the expert?
If agreement cannot be reached on who this will be, the court will select the expert from
a list prepared by the parties.
On the fast track, the usual order is for an SJE to be appointed unless there is a good reason
not to do so, rather than allowing each party to instruct their own. Where an expert is jointly
instructed, they will send their report simultaneously to both parties with the costs being
shared. Furthermore, in fast track cases, such evidence will normally be given by means of
written reports and the experts will not be permitted to give oral evidence at the trial.

9.6.4 Separate instruction of experts

In contrast, for multi-​track cases, it is more common for the parties to instruct their own experts.
Factors taken into account are the amount in dispute, the importance to the parties and the
complexity of the issue.

Example
Anya has a large amount of money to invest, which she received from an inheritance.
She instructs Clevedon Finance Ltd (Clevedon) to advise her on what investments to make
but, over time, it becomes apparent that the shares are under-​performing. After following
the relevant pre-​action protocol, Anya issues proceedings for professional negligence
for the sum of £450,000, which Clevedon defends. Because of the complexity of the
issues and the amount in dispute, the court grants permission for the parties to instruct
separate experts.
Anya and Clevedon will each instruct an expert to cover the issue of liability, namely
whether Clevedon breached their duty of care to invest the funds with reasonable care
and skill; and to deal with quantum, specifically what would the value of Anya’s share
portfolio have been if they had done so. This will provide the court with information on
what investments Clevedon should have made on behalf of Anya and (consequently) her
losses.

9.6.5 Procedure
If separate experts are ordered, the court will also make further directions in an effort to
streamline the trial as much as possible by narrowing down the issues the experts need to
comment upon. These include the following:
• Exchange: a deadline will be imposed for exchange of the experts’ reports.
• Questions: each party may, within 28 days, put written questions to the expert for
clarification of their report. The expert’s answers are treated as part of the report.
• Discussion: the court may order a without prejudice discussion between the experts,
usually in the absence of the parties or their legal representatives, and the contents will
not be referred to at trial unless the parties agree. The purpose of the discussion is not to
settle the case but to narrow down the issues and to identify:
∘ the extent of any agreement between them;
∘ the points of and short reasons for any disagreement;

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∘ what action, if any, may be taken to resolve these; and

∘ any further material issues not yet raised and the extent to which these are agreed.
• Written joint statement: following the discussion, a written joint statement must be
prepared for the court and signed by the experts stating the issues on which they agree
and those on which they disagree with a summary of the reasons. Copies should be
provided to the parties.
• Oral evidence: the judge will decide whether the expert may give oral evidence at trial.
Although there is a presumption that the court will rely upon written reports, it is common
on the multi-​track for experts to be called to give evidence.

9.6.6 Form of expert evidence

Detailed instructions for the form and content of an expert’s report are to be found in Part 35.
As far as the content is concerned, this will vary from a few pages to a lengthy document
depending upon the complexity of the case. Regardless of this, the formalities must be
complied with and an expert’s report must:
(a) be addressed to the court;
(b) give details of the expert’s qualifications;
(c) give details of any literature or other material that the expert has relied on;
(d) contain a statement setting out the substance of all facts and instructions;
(e) say who carried out any examinations, measurements, tests or experiments, their
qualifications and whether the expert supervised;
(f) where there is a range of opinion, summarise this and give reasons for the expert’s own
opinion;
(g) include a summary of the conclusions reached; and
(h) contain a statement that the expert understands their duty to the court and has complied
with this, and is aware of the requirements of Part 35 and related guidance.
The report must also be verified by a statement of truth as follows:
I confirm that I have made clear which facts and matters referred to in this report
are within my own knowledge and which are not. Those that are within my own
knowledge I confirm to be true. The opinions I have expressed represent my true and
complete professional opinions on the matters to which they refer.

9.6.6.1 Effect of the expert failing to comply with Part 35

If the breach is serious, the party may not be allowed to rely on that expert’s evidence, but
in most cases, the judge will simply take account of the breach when deciding what weight
should be given to the expert evidence.

9.6.6.2 Professional conduct issues

When drafting the report, the expert must set out all the instructions, whether written or oral,
which are material to the opinions expressed or upon which their opinions are based. This
is to ensure that the report is not influenced in any way. For example, a surveyor who is
instructed to value a property on the basis of a quick sale may well arrive at a different figure
than if asked to provide an optimal valuation.
Legal representatives should, therefore, be aware that their instructions are not privileged from
inspection and could be scrutinised by the court should the court find reasonable grounds to
consider the statement of instructions to be inaccurate or incomplete.

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9.6.7 Overview of expert evidence

Figure 9.3 Expert evidence

EXPERT EVIDENCE

Directions Can a party Number Duty

for experts always use (usually)
experts? To assist the court
On allocation Multi-track: by providing
No, the court’s Fast track: joint
or at the case separate objective, unbiased
permission is instruction of a
management instruction of opinions on
required. single expert.
conference. experts. matters within their
expertise.
Procedure Procedure

Expert sends written

Exchange of experts’ reports simultaneously.
report simultaneously
to both parties.
Experts to answer written questions with the
answers being treated as part of the report.
Costs are shared.

Without prejudice discussion to identify issues agreed

At trial: expert evidence
and those in dispute and (possible) future action.
by written report only.

Written joint statement summarising the issues on

which they agree and disagree with reasons.

At trial: oral evidence likely.

Summary
• A witness statement is a written statement containing the evidence the witness would be
allowed to give orally at trial. It must comply with the formalities required by CPR Part 32
and be verified by a statement of truth.
• The function of a witness statement is to set out in writing the person’s evidence-​in-​chief so
it must be expressed, so far as possible, in the witness’s own words. The statement should
address the disputed issues in an orderly manner and this will usually be chronological.
• Only admissible evidence may be included. Facts that are irrelevant to the issues in
dispute are inadmissible, as is opinion evidence unless this is based on facts personally
perceived by the witness.
• The starting point for hearsay evidence is that it is admissible. It only becomes
inadmissible if it contains irrelevant material or opinion evidence that a witness of fact
cannot give. In this way, it is no different from ‘ordinary’ evidence. However, it is second

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best evidence and its weight will be carefully assessed by the court. What makes it
distinct is the notice requirements and the party intending to rely on the hearsay must
comply with these.
• In contrast to witnesses of fact, experts can give an opinion. Their evidence will be
admissible if it is relevant and within the expertise of the expert, in the correct format (as
provided for by CPR Part 35) and the court has given permission for its use.
• An expert’s primary duty is to the court and not to the party that instructed or is
paying them.
• The court may order that such evidence is to be given by a single joint expert, which is the
norm on the fast track, or that each party instruct their own expert and this is usual on the
multi-​track.
• The court can require the experts to answer questions on their reports, take part in a
without prejudice discussion and submit a written joint statement. Furthermore, the experts
can be directed by the court to give evidence orally at the trial or the court may decide to
rely upon the written reports.

Sample questions

Question 1
A lawyer issues proceedings on behalf of their client (a man) against a company for breach
of contract. The lawyer drafts the client’s witness statement and writes to him enclosing it.
The client asks for information about the process –​specifically what formalities are required
and what may be included in the content.
Which of the following should be omitted from the letter of advice to the client?
A The witness statement must comply with the formalities required by the CPR and should
include a statement of truth.
B The statement should, so far as possible, be expressed in the man’s own words.
C The man can only include evidence that he would be allowed to give orally so
irrelevant and inadmissible evidence must be excluded.
D The man may use his witness statement to argue his case and to make observations
about the evidence of other witnesses.
E The man must indicate which statements are made from his own knowledge and
provide the source of any information which is not.

Answer
Option D should be omitted. The man should only give factual evidence and it is not the
function of the witness statement to argue his case or to make observations about the
evidence of other witnesses. Option A correctly identifies that the witness statement must
comply with CPR Part 32. Option B correctly provides that the statement will stand as the
man’s evidence-​in-​chief; and option C correctly states that the witness statement is subject
to the usual rules of evidence. Option E is another requirement of the CPR.

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Question 2
A woman purchases a car from a local garage after the salesman assures her that the
vehicle has never been involved in an accident (statement 1). When she drives the car, it
bursts into flames and, on inspection by an expert, it becomes apparent that the vehicle
had been completely rebuilt after a collision two years previously. The woman sues the
company that sold her the car and includes in her witness statement evidence of the
comment that was made to her by the salesman (statement 1) and also what her friend
told her afterwards, namely that the company was ‘dodgy’ (untrustworthy) –​statement 2.
Which of the following correctly describes the evidence the woman may give in her
witness statement?
A Both statements are admissible hearsay.
B Statement 1 is not hearsay but is admissible as it is relevant to an issue in dispute.
Statement 2 is hearsay but it is inadmissible because it is opinion evidence.
C Both statements are inadmissible opinion evidence.
D Statement 1 is not hearsay but is admissible as it is relevant to an issue in dispute.
Statement 2 is admissible hearsay.
E Statement 1 is admissible hearsay and statement 2 is inadmissible opinion evidence.

Answer
Option B is correct.
Statement 1 is admissible evidence: it is relevant to the issue of misrepresentation as the
woman is alleging that the statement was false and that she relied upon it to purchase the
car. However, it is not hearsay. Although it is an oral statement made by the salesman outside
court (at the garage), which the woman repeats in court, she is repeating it to prove it was
said and not that it is true.
Statement 2 is hearsay: it is an oral statement made by her friend outside court that the
woman is repeating to prove its truth –​that the company is untrustworthy. However, the
evidence is inadmissible because it is opinion and not based on facts personally perceived by
the woman’s friend (just as the friend could not give this evidence herself to the court, so the
woman cannot repeat it to the court).

Question 3
A company wishes to call evidence from experts in support of their claim for breach of
contract. The case involves a dispute about the installation of an online booking system for
the company’s national and international hotel chain. There have been numerous problems
with the system including rooms being double booked and customers’ details being lost.
The defendant argues that this is due to the claimant’s employees’ failure to operate the
system properly rather than the highly technical defects alleged by the company. The
company is claiming £125,000 being the cost of a replacement system and £1,395,250 as
damages for loss of profits.

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Which of the following best describes the approach that the court will take to
expert evidence?
A Each party will be granted permission to instruct experts on the issues of liability and
quantum.
B The experts will be ordered to meet to identify the areas of agreement and
disagreement and the judge will be made aware of these discussions.
C Although it is preferable for the expert’s evidence to be included in the form of a
report, a written statement is also acceptable.
D The duty of the expert is primarily to the party instructing them but they must bear in
mind their additional duty to the court.
E The court will order that the issues are to be decided on the basis of the written
reports alone.

Answer
Option A is correct. Because of the complexity of the issues and the amounts in dispute, this
case is not suitable for a single joint expert and each party would be granted permission to
instruct separate experts on both liability and quantum.
Option B is wrong in that, whilst there would be a discussion between the experts (whether
face to face or by telephone or video conference), this is without prejudice and so the judge
would not be made aware of what was discussed. Option C is wrong as, to be admissible, the
expert’s evidence must be in the form of a report that complies with Part 35. The overriding
duty of the expert is to the court –​hence, option D is wrong –​although the expert also owes
a duty to the party instructing them to exercise reasonable care and skill. Option E is wrong
because, although a court could order that the issues be decided on the basis of written
reports only, this is unlikely in a dispute over technical matters involving the suitability and
operation of an online booking system and the claim for damages of over £1 million is likely
to be hotly contested.

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10 Trials and Appeals

10.1 Introduction 172

10.2 Attendance of witnesses 172
10.3 Preparations for trial 173
10.4 The trial 174
10.5 Appeals 178

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to:
The trial:
• summoning witnesses
• preparations for trial
∘ purpose of pre-​trial checklists and hearings
∘ purpose of trial bundles
• trial procedure
• the nature and effect of judgment
Appeals:
• permission
• destination of appeals
• grounds for appeals
Note that for SQE1, candidates are not usually required to recall specific case names,
or cite statutory or regulatory authorities and these are provided for illustrative
purposes only.

Learning outcomes
The learning outcomes for this chapter are:
• To appreciate how to prepare for trial and what goes into a trial bundle.
• To understand the use of a witness summons.
• To understand the trial procedure and the appeals process.

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10.1 Introduction
Only a small number of cases reach trial as the vast majority settle. However, if this proves
impossible, the parties must prepare for the final hearing although much of the work should
have been completed beforehand. Indeed success depends, to a significant extent, on the
quality of the parties’ preparation, as a judge cannot help but be influenced if the paperwork
is inadequate or the witnesses fail to attend when required.
Once the trial commences, the responsibility for the case will pass to the advocate and more
complex matters will usually be conducted by a barrister or a solicitor advocate. Depending
upon the outcome, the parties may consider appealing the judge’s decision and this raises an
entirely different set of factors, which will also be covered in this chapter.

10.2 Attendance of witnesses

Most witnesses will attend the trial voluntarily –​after all, they have already co-​operated by
providing a witness statement. To ensure there are no issues on the day, witnesses should:
• be asked, at an early stage, if there are any dates when they cannot attend; and
• be notified of the trial date without delay.
Details of a witness’s availability must be given to the court on the directions questionnaire
(thus, early in the proceedings) and also in the pre-​trial checklists as the case approaches the
final hearing. The aim is to ensure that the trial, should it prove necessary, is not delayed for
any reason.

10.2.1 Witness summons

Even where witnesses have been kept fully informed and involved, if there is any doubt about
whether a witness will attend voluntarily, the matter should not be left to chance and a witness
summons should be sought. This is a document issued by the court requiring a witness to:
• attend court to give evidence; and/​or
• produce documents to the court.
A witness summons should be served at least seven days before the date on which the
witness is required to attend court; otherwise, the court’s permission is required. It is binding
and if they fail to appear, the witness may be fined or even, in High Court proceedings,
imprisoned for contempt. The summons will normally be served by the court and, to be
effective, the witness must be offered or paid:
(a) a sum reasonably sufficient to cover their expenses in travelling to and from the court; and
(b) compensation for loss of time as specified in Part 34.
The advantage of serving a summons is that the judge is more likely to be sympathetic to
an adjournment of the trial should the witness fail to attend. However, it would be unusual to
witness summons an expert as they are required to keep those instructing them informed of
their availability.

Example
The case between Eastleigh Forge Ltd (EFL) and their employee, Marek, is listed for
trial on 15 November. Bettina is another employee who worked with Marek. She is an
important witness as she states that Marek did not wear the safety equipment provided in
clear breach of EFL’s policies and procedures. However, Bettina has now left the employ
of EFL and says that she ‘no longer wants to be involved’. She has failed to respond to

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EFL’s solicitors’ letter notifying her of the trial date and asking her to confirm that she will
give evidence. To ensure her attendance, the solicitors apply for a witness summons and
this is served on Bettina with an offer to pay her travel expenses to court and a sum of
money to cover the loss of one day’s wages. Bettina attends the trial as she does not
want to face proceedings for contempt of court.

10.3 Preparations for trial

If counsel is representing the client, it is important that they are briefed in plenty of time for
the hearing to ensure they are fully prepared. In more complex cases, a conference may be
held so that any potential problems can be discussed and removed. In addition, before the
trial, all the steps required by the CPR must be completed and any court orders or directions
complied with.

10.3.1 Pre-​trial checklists (listing questionnaires) and reviews

As the parties approach the trial, there will be a flurry of activity to make sure the hearing
can proceed smoothly to avoid a costly adjournment. On the fast and multi-​tracks, pre-​
trial checklists (also known as listing questionnaires) play a vital role in this and must be
completed fully by the parties.
• Purpose: to ensure the parties have complied with all the directions and the trial is ready
to proceed.
• Timing: the completed pre-​trial checklist must be filed at court no later than eight weeks
before the trial date.
• Role: the judge will review the checklists to decide whether further directions are needed
and whether a review hearing is necessary before the trial. This is referred to as a listing
hearing on the fast track and a pre-​trial review on the multi-​track.
• Failure to comply: if neither party comply, the court will order that unless a completed
checklist is filed within seven days, the claim, defence and counterclaim will be struck out;
if only one party does, the court will fix a hearing to ensure the case is ready for the trial.
In heavy cases, generally those where the trial is likely to last longer than 10 days, the trial
judge may order a pre-​trial review to personally check the progress of the matter. The parties’
representatives are expected to attend to assist in ironing out any last minute glitches before
the case is listed, so the court’s resources are not wasted. To ensure that decisions can be
made, the representative must be familiar with the case and have the authority to deal with
any issues that may arise.
After these steps have occurred, the court will:
(a) give a time estimate and set a timetable for the trial if deemed necessary;
(b) fix the place of trial; and
(c) confirm the actual date of the trial or state the week within which it will begin.
Thereafter, the court will order that a trial bundle of documents be prepared.

10.3.2 Trial bundles

A trial bundle is a file of all the documents the judge may need to decide the case. It is
indexed and paginated for ease of reference so that the documents can be accessed quickly
by all those involved, thus promoting the efficient use of the court’s resources. To ensure the
bundle is not too unwieldly, case law suggests that, generally, it should be no longer than 250
pages in length. So how are trial bundles dealt with in practice?

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• Who: the claimant or (if they are legally represented) the lawyer who has the conduct
of the claim on their behalf will usually prepare the bundle but the contents should be
agreed wherever possible.
• When: the bundle must be filed between seven and three days before the start of
the trial.
• What: the trial bundle should include the key documents, for example:
∘ the claim form and all statements of case;
∘ a case summary and/​or chronology where appropriate;
∘ requests for further information and responses;
∘ witness statements;
∘ notices of intention to rely on hearsay evidence;
∘ experts’ reports and responses;
∘ directions orders; and
∘ any other necessary documents containing evidence that a party intends to rely on.
The party filing the trial bundle should supply identical copies to all other parties to the
proceedings and for use by the witnesses.

10.3.3 Case summary

In multi-​track cases, each party should prepare a case summary​for use at trial. This is
designed to assist both the court and the parties by indicating what points are still in issue,
and the nature of the argument about the disputed matters. The case summary will (concisely):
(a) review the party’s submissions of fact in relation to each of the issues with reference to the
evidence;
(b) set out any propositions of law to be relied upon; and
(c) identify any key documents that the trial judge should, if possible, read before the trial
starts.

10.4 The trial

If the matter cannot be resolved, the parties will have no option but to proceed to a trial so
the judge can break the deadlock.
During the trial, the lawyers should be aware of the following:
(a) Court room etiquette. Although advocates remain seated for hearings in chambers or
before district judges, they should stand when speaking in open court. Witnesses should
be addressed by their title and surname, for example, Mrs Rees, but children are called
by their first name. Mobile phones should be switched off or on silent and food should not
be consumed in court.
(b) Modes of address. When appearing in court, the correct mode of address must be used.
If the wrong one is used, although many judges will not object or will correct gently, some
do mind and will make this clear. The most common that apply to civil litigation are as
follows:

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Court Judge Mode of Address

County Court Circuit Judge Your Honour

District Judge Judge

High Court Judge My Lord/Lady

District Judge Judge

Court of Appeal Lord Justice My Lord/Lady

Supreme Court Supreme Court Justice My Lord/Lady

(c) The difference between leading and non-leading questions. Non-leading questions are
those that facilitate a witness in ‘telling their story’. They are also referred to as ‘open’
questions and will usually start with the words ‘who, what, where, when and how’ to allow
the witness to explain their version of events. An example would be, ‘What was said in the
telephone conversation between you and Miss Usher?’, if the dispute centred around what
oral terms were agreed in a contract.
In a civil trial, the witnesses do not set out their evidence orally in court but will rely upon
their witness statements. Thus, in contrast to a criminal trial, non-leading questions will be
less common.
Leading or ‘closed’ questions suggest the answer and often invite a response of ‘yes’ or
‘no’. They are used in cross-examination and the aim of the advocate is to keep control
of the witness as far as possible, for example, ‘You didn’t make a note of the telephone
conversation did you, Miss Usher?’

10.4.1 Venue
The County Court has hearing centres throughout England and Wales and both fast and multi-​
track cases will take place at these. In contrast, the High Court is based at the Royal Courts of
Justice in London, but there are District Registries in many cities, which act as trial centres.

10.4.2 Trial timetable

For more complex cases, a specific timetable may be determined in advance as the trial will
be listed for several days. However, fast track trials should only last one day and the usual
order of events is as follows:

10.4.2.1 Preliminary issues

Any outstanding issues will be addressed before the trial starts. Although this could include
substantive law, more frequently it will involve points of procedure such as requesting
permission to amend a statement of case or to adduce additional evidence. However,
generally, these matters will have been dealt with earlier in the proceedings.

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10.4.2.2 Opening speeches

If permitted by the judge, the claimant may make an opening speech setting out (briefly) the
background to the case and the facts that remain in issue.

10.4.2.3 Examination-​in-​chief
Normally, the claimant and their witnesses of fact will be called first. Because their statement
stands as their evidence-​in-​chief, the witness will usually just be asked to take the oath or
affirm, identify their witness statement in the trial bundle and confirm it is true. Every word in
the statement is then treated as having been said by the witness in evidence.
Only if they need to amplify their statement (perhaps to clarify a point) or to give evidence in
relation to new matters that have arisen since, will the witness say any more. Even then, the
permission of the judge must be obtained. In the event that additional evidence is allowed,
the advocate cannot lead on matters in dispute between the parties and should only ask
open questions, such as: ‘What did you see?’ ‘What happened next?’
Expert evidence will be given as previously directed by the court –​either written reports
or by way of oral evidence. Traditionally, the claimant’s expert will go first, but the court
has the power to make alternative orders such as that the parties’ experts give evidence
simultaneously on an issue by issue basis.

10.4.2.4 Cross-​examination
Next, the witness will be cross-​examined by the opponent’s advocate. The purpose is to put
their own client’s case and whilst, rather optimistically, this may extract favourable evidence,
this is not the main reason. In most instances, the witness will not change their story but cross-​
examining them ensures there is no implied acceptance of that evidence. The advocate will
also seek to discredit the witness by highlighting inconsistencies or gaps in their evidence, so
they appear less believable.
At this stage, there are fewer constraints on the advocate, who may ask leading or closed
questions to keep control of the witness. Such a question is one which suggests the answer, for
example: ‘When the defendant supplied the goods, they did not match the sample, did they?’
Often the response is limited to either yes or no, thus discouraging the witness from expanding
their answer to re-​emphasise their own case.

10.4.2.5 Re-​examination
If necessary, the witness may be re-​examined by their own advocate. However, this can only
relate to matters that have been raised by the cross-​examination and the lawyer should
consider carefully whether doing so would actually improve the situation. As with examination-​
in-​chief, only open questions may be put to the witness.

10.4.2.6 Closing speeches

After the evidence has been given, the defence advocate will usually make a closing speech
followed by the claimant’s advocate. The aim is to summarise the law and the facts in the
most favourable light to convince the judge of the validity of their case.

10.4.2.7 Judgment
The judge will either deliver their judgment immediately or (if the case is complex) reserve
judgment to a later date. The judgment will take effect on the day it is made unless the order
specifies a different date.
The effect of the judgment is to bring the main proceedings to a conclusion. The judge will
begin by determining liability, specifically whether the claimant has established their cause of
action, for example breach of contract or negligence, before going on to review the evidence
and to provide reasons for their decision.

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If the defendant has won, this will be the end of the substantive proceedings. However, if the
claimant has been successful, the court will need to consider what remedies to grant and
this will usually be the payment of a sum of money (quantum). In a specified claim, the total
will be calculated, whereas in an unspecified claim the judge will consider each category of
damage that the party is claiming in turn. The judge will also rule on whether interest will be
paid, the rate and for what period.
Finally, there is the question of costs. The general rule is that the unsuccessful party will be
ordered to pay the costs of the successful party, although the court may make a different
order. At the end of a fast track trial, the judge will also summarily assess the amount
payable. In contrast, at the conclusion of a multi-​track trial, the judge will only determine who
should pay costs and the amount will be determined at a later hearing (known as a detailed
assessment), unless agreement can be reached between the parties.

Figure 10.1 The nature and effect of a judgment

JUDGMENT

NATURE

Liability Quantum Interest Costs

EFFECT

C wins: D wins:
• D pays the judgment, interest • C pays any costs
and costs; or (if not) awarded; and
• C proceeds to enforcement. • proceedings conclude.

Once the judgment has been made, what happens next? If the claimant has succeeded at
trial, they have the right to recover the monies awarded including costs and interest and, if
not paid, enforcement action may be taken. In contrast, if the defendant has won, the only
outstanding issue will be the payment of any costs awarded. Where the court orders the
payment of an amount of money (including costs), this must be paid within 14 days unless the
order specifies otherwise.

10.4.3 Hostile and unfavourable witnesses

Sometimes, witnesses may not ‘perform’ as hoped or anticipated and this may be for a variety
of reasons.
• An unfavourable witness does so for entirely proper reasons –​perhaps they have
genuinely forgotten a fact or now interpret the situation in a different way. This is always

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a risk given the inherent unpredictability of trials and has to be accepted by the party
calling them.
• In contrast, a hostile witness fails to come up to proof because they are unwilling to
support the party who called them. They may refuse to answer or tell lies so their
evidence now differs from what is in their statement. In this instance, the party calling
the person may ask the judge to declare them a hostile witness. The effect is that the
advocate may now attack the witness’s credibility or cross-​examine them as if they were
a witness for the other side. Clearly, this is not ideal but is a useful way of limiting the
damage the witness is inflicting on the party’s case.

10.5 Appeals
Despite the best endeavours of the lawyers and the judge, there will be occasions when
mistakes are made or one party may simply be dissatisfied with the outcome and feel
that justice has not been done. If this occurs, the remedy available is the appeals process.
Appeals serve two purposes: the private purpose, which is to do justice in particular cases
by correcting wrong decisions, and the public one of maintaining public confidence in the
administration of justice by making such corrections and clarifying and developing the law.

10.5.1 Permission to appeal: grounds

For first appeals, permission will be given only where the court considers that the appeal has
a real prospect of success or there is some other compelling reason why it should be heard.
There has to be a realistic, as opposed to a fanciful, prospect of success. A compelling reason
why the appeal should be heard could be, for example, if there is an important question of
law or general policy at stake that requires consideration by the higher courts. If the appeal
is to the Court of Appeal or the Supreme Court, the case must also raise an important point of
principle or practice.
Second appeals are much rarer and permission is required from the Court of Appeal itself
before the judges will hear the case. The grounds are as above.

Example
Leonard issues professional negligence proceedings against his accountants. He
attempted to serve the claim via email without obtaining the defendant’s solicitors’
confirmation that they would accept service in this way as required by the CPR.
Unfortunately for Leonard, his failure to properly serve the document meant the deadline
had expired and the claim was struck out. He appealed the decision to the High Court,
which agreed with the lower court that there was no good reason to validate the service.
Leonard decides to continue to the Court of Appeal, arguing that the appeal has a real
prospect of success or there is some other compelling reason why it should be heard.
Because this is his second appeal and, in any event, is being made to the Court of
Appeal, Leonard must also establish there is an important matter of principle or practice.
He succeeds in this aspect by arguing that his case raises the issue of what (if any)
special consideration and leniency should be given to litigants in person in navigating the
CPR. The Court of Appeal grants permission as the judges agree this is of general public
importance given the increasing presence of litigants in person in the civil justice system.
However, Leonard is disappointed when the judges find against him on the basis that,
although a lack of representation may justify making allowances in case management
decisions and in conducting hearings, it will not usually justify applying a lower standard
of compliance to litigants in person with rules or orders of the court.

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10.5.2 Permission to appeal: procedure

There is no right to appeal and the procedure for obtaining permission is governed by CPR
Part 52.
• In most cases, the request will be made at the end of the trial and the judge will decide
whether to grant permission.
• If the request is unsuccessful, or none is made, then the party can apply for permission
from the appeal court itself. The appeal court will usually deal with such a request on
paper, without a hearing. However, in the Court of Appeal, the judge must list the matter
for an oral hearing no later than 14 days after the relevant direction if they decide that
the application cannot be fairly determined without the presence of the parties.
The requirement to obtain permission acts as a deterrent to those litigants who refuse to
accept a court’s decision.

10.5.3 Timing
The aggrieved party has 21 days to appeal against a County Court or High Court decision;
and 28 days to apply for leave to appeal from the Court of Appeal to the Supreme Court.

10.5.4 Destination of appeals

The appeal will normally lie to the next court up. However, the route of appeal depends on:
• the court from whose decision the appeal is brought (‘the lower court’); and
• who made the decision.
In the civil courts, matters are decided by different levels of judge and this impacts upon the
appeals process. In the High Court, the case may be heard either by a High Court judge,
a master or a district judge. If the decision is made by a High Court judge, the route is
straightforward as the matter must be appealed to the Court of Appeal. However, if the judge
is of lesser seniority, the appeal goes up the next rung of the ladder to a High Court judge.
In the County Court, cases may be decided by circuit judges or district judges. If the former,
the appeal is to a High Court judge; if the latter, to a circuit judge.
The common thread is that the appeal is to a judge who is next in the hierarchy, as
summarised below:

Table 10.1 Destination of appeals

Decision of: Appeal made to:

District judge of the County Court Circuit judge of the County Court

Master or district judge of the High Court High Court judge

Circuit judge High Court judge

High Court judge Court of Appeal

From the Court of Appeal, a further appeal would lie to the Supreme Court but, generally, the
decision of the appellate court will be the final decision and very few cases will reach the
highest courts. This is because judges of the quality of Lords Justices of Appeal are a scarce

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and valuable resource, and it is important that they are used effectively and only on work that
is appropriate to them.

Example
In Leonard’s case (above), the initial decision to strike out his claim was made by a
district judge of the High Court. He appealed to a High Court judge and, thereafter, to
the Court of Appeal (his second appeal). Only in rare cases will judges allow further
appeals but, given the importance of the issue and its implications for others, Leonard
applies for and is granted permission to pursue his case all the way to the Supreme
Court. Unfortunately, he is unsuccessful and the judges confirm the decision of the Court
of Appeal. However, they also take the opportunity to give guidance on the practicalities
of dealing with litigants in person, in particular stating that a solicitor has no obligation to
point out the mistakes of an opposing litigant in person and indeed cannot do so without
their own client’s authority, which is unlikely to be given.

10.5.4.1 Leapfrog appeals

A leapfrog appeal is one that is heard by a higher appellate court than usual. Appeals that
would normally take place in the County or High Court will jump over these to the Court of
Appeal; whereas for appeals that would ordinarily be dealt with in the Court of Appeal, the
destination of the appeal would be the Supreme Court.
It is only on rare occasions that the court has the power to order that the appeal be
transferred straight to the Court of Appeal. Permission may be granted where the matter
raises an important point of principle or practice, or there is some other compelling reason
why the Court of Appeal should hear it.
It is also possible (although very unusual) for cases to proceed straight from the High Court
to the Supreme Court should the issue be deemed of sufficient importance. Leapfrog appeals
only occur in exceptional circumstances, usually related to the urgency of the matter. There are
two stages in the process:
(a) the grant of a leapfrog certificate by the trial judge; and
(b) the grant of permission to appeal by the Supreme Court.
Such appeals arise where the case involves a point of law of general public importance
concerning, for example, the construction of a statute or statutory instrument; or a matter of
national importance.

10.5.5 Grounds of appeal

On what basis may an appeal court grant an appeal? The appellant will have to persuade
the appeal court that the decision of the lower court was either:
(a) wrong (as to law, interpretation of facts or exercise of discretion); or
(b) unjust because of a serious procedural irregularity in the proceedings of the lower court.

Example
In Leonard’s case, it was agreed by all parties that service by email was not effected in
accordance with the CPR. However, the issue for the court was whether service should
be validated given that Leonard had been communicating with the solicitors by email for
some time and they were aware from the email attaching the claim form that proceedings
had been issued. Leonard sought to argue (ultimately unsuccessfully) that the court’s
decision to refuse this was wrong in relation to the exercise of the judge’s discretion in
this regard.

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 Trials and Appeals

10.5.6 Overview of appeals

Figure 10.2 The appeals process

APPEALS

Stage 1: Applying for permission

GROUNDS DECISION

Did the lower court grant permission? Yes

The appeal has:
• a real prospect of No
success; or File Notice of Appeal +
• there is some other Consider what is the any documents in
compelling reason why it and
relevant appeal court support within 21 days
should be heard; and
• (Court of Appeal and
Supreme Court) it raises an Was permission granted on paper? Yes
important point of
principle or practice No

County Court or High Court: Court of Appeal: the judge may list an oral hearing and
request decision be reconsidered must do so within 14 days if the application cannot be
at an oral hearing fairly determined without one

If granted Stage 2: Proceed to appeal

Appeal granted if decision of

lower court wrong or unjust

Summary
• Preparation for trial includes ensuring the attendance of witnesses, drafting a case
summary and preparing trial bundles.
• The court ensures that the case is ready to be listed for trial with the assistance of pre-​trial
checklists and (if necessary) a pre-​trial review.
• The order of events at trial will usually be: opening speech by the claimant’s advocate,
the presentation of the claimant’s case followed by the defendant’s case (including
witnesses and expert evidence) and closing speeches by both.
• At the conclusion of the trial, the judgment will determine the contested issues including
liability, quantum, interest and costs.
• There is no automatic right of appeal in civil cases –​permission is always required.
Permission can be obtained either from the court that made the decision, or from the
court that will hear the appeal.
• The grounds for permission require the appeal to have a real prospect of success or for
there to be some other compelling reason why it should be heard.
• An appeal may be granted if the decision of the lower court was wrong or unjust because
of a serious irregularity.

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Sample questions

Question 1
The claimant has issued proceedings against the defendant. Negotiations break down and
the matter is proceeding towards trial on the multi-​track.
Which of the following statements is correct?
A A witness summons should be issued for all witnesses to ensure their attendance
at trial.
B The parties must complete a pre-​trial checklist.
C The court will list the case for a pre-​trial review in every case.
D Each party must prepare their own trial bundle.
E A case summary is not required as it only applies to the fast track.

Answer
Option B is correct as the parties must complete a pre-​trial checklist to assist the court
in establishing that all directions have been complied with and that the claim is ready
to proceed to trial. Option A is wrong because a witness summons will not be required
in ‘all’ cases. It will only usually be applied for where there is some doubt about a
witness of fact attending voluntarily, although a witness may require a summons to show
their employer. Option C is wrong because the court will not always list the case for a
pre-​trial review.
Option D is wrong as the claimant (or their lawyer if they are legally represented) is
responsible for preparing the trial bundle unless the court orders the defendant to
do so but, in any event, it will be a joint bundle. A case summary may be ordered for
the multi-​track but not generally for cases allocated to the fast track –​hence, option E
is wrong.

Question 2
A claim for breach of contract proceeds to trial and a timetable is set by the court.
Which of the following statements best describes what will happen at trial?
A The order of events is likely to be preliminary issues (if any), examination of the
claimant’s witnesses, examination of the defendant’s witnesses, closing speeches by
both advocates.
B A witness’s statement stands as their evidence so examination-​in-​chief will usually be
limited to requiring the witness to take the oath, identify their personal details and
confirm that the contents of their witness statement are true.
C A witness may always add to or expand their witness statement to clarify a point or to
clear up any ambiguities.
D Witnesses may be asked open, leading or closed questions by the advocates for both
parties.
E The judgment will address all disputed issues of liability and (where relevant) quantum,
but the issue of costs is always reserved for a subsequent hearing.

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Answer
Option B is correct. The witness statement stands as that witness’s evidence-​in-​chief.
Option A is wrong because, ordinarily, the claimant will be given permission to make an
opening speech, once preliminary issues have been addressed and before witnesses are
examined. Option C is also wrong. Although a witness may amplify their statement to clarify
a point or give evidence in relation to new matters which have arisen since they signed
their statement, they will not ‘always’ be able to do so, as permission of the judge must be
obtained first.
Option D is wrong because, when examining their own witness, an advocate can usually only
ask open and non-​leading questions. Closed and leading questions can generally only be
used during cross-​examination.
Option E is not the best answer. If the case is proceeding on the fast track, the judge will
summarily assess costs when giving judgment. If the case is proceeding on the multi-​track,
the judge will, when handing down judgment, usually order who shall pay whose costs, but
will leave the quantification of those costs to a subsequent detailed assessment (if the parties
cannot agree the matter).

Question 3
A claim between the claimant and the defendant is heard by a district judge in the County
Court. At the end of the trial, the judge gives judgment. The claimant is unhappy with the
outcome and wishes to appeal.
Which of the following statements best describes the approach that would apply to the
claimant’s appeal?
A The claimant’s appeal will be heard by a circuit judge.
B The claimant has 14 days in which to appeal the decision.
C The claimant must apply for permission to appeal to the trial judge.
D Permission will be granted but only if the court considers that the appeal would have a
real prospect of success.
E If dissatisfied with the decision of the appellate court, the claimant will usually be
allowed to appeal further to a court higher up in the hierarchy.

Answer
Option A is correct. Because the matter was decided by a district judge in the County Court,
the appeal will be heard by the next level of judge –​a circuit judge. Option B is wrong
because the claimant has 21 days to appeal against a County Court decision (as here).
Option C is wrong because the claimant may also apply for permission to appeal to the
appeal court itself. Option D is wrong as there are two grounds on which permission to
appeal may be granted, the other being that there is some other compelling reason why it
should be heard. Option E is also wrong as in most cases, the decision of the appellate court
will be the final decision as the grounds on which a second appeal may be permitted are
very onerous.

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newgenprepdf

11 Costs

11.1 Introduction 186

11.2 The general rule 186
11.3 Costs management and budgeting 186
11.4 Procedure for determining costs 187
11.5 Inter-​partes costs: interim 188
11.6 Inter-​partes costs: final 188
11.7 Non-​party costs 191
11.8 Security for costs 192
11.9 Offers to settle and costs 194
11.10 Part 36 offers 194

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to costs as follows:
• costs management and budgeting
• inter-​partes costs orders (interim and final)
• non-​party costs
• qualified one-​way costs shifting
• Part 36 and other offers
• security for costs
• fixed and assessed costs
In this chapter, offers to settle are known as Part 36 offers and may be referred to as
such in the SQE1 assessment. Otherwise, references to cases, statutory and regulatory
authorities are provided for illustrative purposes only.

Learning outcomes
The learning outcomes for this chapter are:
• To understand how costs are decided between the parties including how to
conduct a detailed assessment of costs on the multi-​track.
• To appreciate the difference between fixed costs and summary assessment
of costs.

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• To understand how to safeguard the claimant’s position on costs; when a

claimant is not liable for the defendant’s costs even if they lose; and when a non-​
party may be responsible for costs.
• To evaluate the role and consequences of Part 36.

11.1 Introduction
Costs are an important aspect of litigation and should be considered throughout. The amount
the case is likely to cost and the probability of recovering costs from the opponent will be
crucial factors in a client’s decision as to whether to issue proceedings at all. As the matter
progresses, there may be interim hearings at the end of which costs orders will be made.
Then, at the conclusion of the trial, the judge will determine which party is to be responsible
for paying the outstanding costs.
Because either the claimant or the defendant may be ordered to pay costs, the successful
party is referred to as ‘the receiving party’ and they are entitled to payment of their costs from
the unsuccessful one –​‘the paying party’. These terms will be used throughout this chapter.

11.2 The general rule

The term ‘costs’ includes solicitor’s charges, disbursements such as court fees, expert’s fees and
even pre-​action costs. Provisions relating to costs may be found in CPR Part 44 and the general
rule is that the unsuccessful party pays the successful party’s costs. However, this is only the
starting point and the judge has discretion to make different costs orders if deemed appropriate.

11.3 Costs management and budgeting

Costs will be an issue throughout the case from the moment when the solicitor is first instructed
until its conclusion whether by settlement or at trial. The court becomes involved at an early
stage, particularly in multi-​track cases. Before the case management conference is heard, the
parties must file a costs budget setting out the costs incurred to date and those anticipated for
the future. The court may also impose a costs management order giving greater control over
costs, the effect of which is summarised in Table 11.1.

Table 11.1 Effect of costs management order

Effect of Costs  party awarded its costs on the standard basis at trial will normally recover
•A
Management the amount of its last approved or agreed budgeted costs.
Order on the •O
 n the standard basis, the court may depart from the budgeted costs only if
Multi-​track persuaded there is a good reason to do so, for example where the costs of a
phase were:
∘ not incurred at all; or
∘ much less than budgeted.
 osts awarded on the indemnity basis and incurred costs will be assessed by
•C
the court in the usual way, unless agreed.

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 Costs

Even if such an order is not made, the court will have regard to any costs budgets when
assessing costs. Costs budgets and costs management are covered in further detail in
Chapter 7.

11.4 Procedure for determining costs

How costs are dealt with varies depending upon the track to which the claim has been
allocated.
• Small claims track: legal costs are not recoverable and so the costs payable will only
relate to disbursements.
• Fast track: the costs will usually be summarily assessed.
• Multi-​track: a detailed assessment of the costs will be carried out.
However, although these are the general rules, the situation with regard to costs is often more
complex.

11.4.1 Fixed costs

In certain situations, the CPR fix the amount of costs the party may recover from their
opponent. This is entirely separate from the arrangement between the party and their own
lawyers, which is governed by contract.
The advantage to a litigant of fixed recoverable costs is that they know in advance how much
will have to be paid to the other party should they lose the case. However, fixed costs are less
attractive to the successful party as they are extremely unlikely to recover all their costs and
will often have to pay the shortfall to their own solicitor.
Fixed costs cover various steps in the proceedings. For example, a claimant who applies for
default judgment will usually only be able to claim the costs that are fixed by Part 45 of the
CPR, whatever sums they have actually spent so far. Most of the costs incurred in enforcing
a judgment are also fixed. However, in some instances such as an application for summary
judgment, it may be possible for the parties to agree a higher sum to offset the harshness of
this rule and, in these circumstances, the judge will usually concur.
On the fast track, although fixed costs do not generally apply to the costs of bringing the
claim and pursuing it to a final outcome, they are imposed on the advocate who prepares
and appears at trial.

Example
Kathryn is the advocate representing two clients, both of whom win their cases at trial. The
first is a breach of contract dispute of £7,000; here, the fixed costs for preparing the case
and appearing at trial are £690. The second is a negligence claim for more than £15,000
with fixed costs of £1,650. Because these costs are fixed under Part 45, the court can only
award the exact amount, with these sums being recoverable from the opponent.

11.4.2 Summary assessment

If costs are not fixed, a different process applies. Summary assessment involves the court
determining the amount that is payable immediately, at the end of the hearing. The general
rule is the court should, unless there is a good reason not to do so, make a summary
assessment of the costs:
(a) at the conclusion of a fast track trial; and
(b) at any other hearing that has not lasted more than one day.

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To assist the court, the parties must file and serve a statement of costs –​a detailed
breakdown of their costs –​no less than two days before a fast track trial and at least 24 hours
before an interim hearing. As with any aspect of litigation, there are risks inherent in allowing
a judge to determine the issue and so the parties should seek to agree costs if at all possible.

11.4.3 Detailed assessment

If the court cannot make a summary assessment of costs –​usually because there is insufficient
time –​an order will be made for the detailed assessment of those costs. In the multi-​track,
costs will generally be dealt with in this way.
Within three months of the date of the judgment or order, the receiving party must serve on
the paying party a Notice of Commencement of detailed assessment proceedings together
with their bill of costs and evidence in support, such as receipts. If the paying party wishes to
challenge the bill, the following steps occur:
(a) The paying party has 21 days to serve points of dispute.
(b) The receiving party has 21 days to file a reply.
(c) The receiving party must then file a request for an assessment hearing within three
months of the expiry of the period for commencing detailed assessment proceedings.
(d) If the costs claimed are less than £75,000, the court undertakes a provisional assessment
where the judge decides what costs are allowable in the absence of the parties.
(e) If either party is unhappy with the provisional assessment, they may request an oral
hearing within 21 days; but if the party fails to achieve an adjustment in their favour by
at least 20% they will be ordered to pay the costs of the hearing. This is to discourage
parties from trying their luck at reducing the costs without being confident of success.
Given the robust attitude taken by judges in determining what costs are appropriate, it is
preferable to avoid this procedure by agreeing costs.

11.5 Inter-​partes costs: interim

Inter-​partes is a term that means ‘between the parties’. As the claim progresses towards
trial, there may be hearings along the way to determine interim matters. These could include
applications for summary judgment, to set aside a default judgment or to strike out a party’s
statement of case. At the end of each of these interim hearings, the question of costs must be
considered. The judge will determine who is to pay the costs of the particular application and
will usually summarily (instantly) assess the amount.
The types of costs orders that apply and their effect are detailed in Chapter 6.

11.6 Inter-​partes costs: final

Once settlement has been reached or the court has given its judgment at trial, the question of
costs will arise. There are two issues to consider, namely who pays and how much.
As to the first question, the usual rule is that the loser pays the winner’s costs. However,
establishing the amount of costs that should be paid tends to lead to more discussion or even
dispute.

11.6.1 Factors in assessing the amount of costs

To assist the judge, CPR, r 44.4 sets out factors that the court should take into account in
deciding the amount of costs the receiving party is entitled to. These are:

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(a) the conduct of the parties and the efforts made to try and resolve the dispute;
(b) the value of any money or property involved;
(c) the importance of the matter to the parties;
(d) the complexity of the matter;
(e) the skill, effort, specialised knowledge and responsibility involved;
(f) the time spent on the case;
(g) the place and circumstances in which the work was done; and
(h) the receiving party’s last approved or agreed budget.
Looking at these will ensure that each case receives a full consideration of the issues.
However, before going into the detail of the costs, the judge must first check on what basis
they were ordered –​either on the standard or the indemnity basis.

11.6.2 The standard basis

The standard basis will apply in most cases and costs awarded on this basis must be
proportionate to the matters in issue. The CPR provide that total costs will be proportionate if
they bear a reasonable relationship to the sums in issue, the value of any non-​monetary relief
in issue, the complexity of the litigation, any additional work generated by the conduct of the
paying party and any wider factors.
If there is any doubt, it will be resolved in favour of the paying party.
The effect is that costs that are disproportionate may be disallowed or reduced even if they
were reasonably incurred and reasonable in amount.

Figure 11.1 Assessment of costs: standard basis

ASSESSMENT OF COSTS: STANDARD BASIS

No
Is the item reasonably incurred? Item disallowed so
not recoverable
Yes
No
Is the item reasonable in amount? Item recoverable
but reduced
Yes

Is the total figure for each phase proportionate so that it bears

a reasonable relationship to:
a) the sums in issue
b) the value of any non-monetary relief in issue No Total costs will
c) the complexity of the litigation be disallowed
d) any additional work generated by the paying party’s conduct or reduced
e) wider factors such as reputation or public importance

Yes

Total costs Any doubt is resolved in

will be allowed favour of the paying party

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11.6.3 Approach to determining costs on the standard basis

When the court is asked to assess the amount of costs payable by an unsuccessful party, the
costs judge will adopt a structured approach.

11.6.3.1 Stage 1
The first stage requires the judge to go through the bill on a line by line basis, scrutinising
each point in turn. Any items deemed to be unreasonably incurred or unreasonable in amount
will be disallowed.

Example
ULaws LLP represent Halliday Consultants & Co (Halliday) in their claim against Digby
Surveyors Ltd (Digby) for professional negligence in relation to a survey carried out
prior to their purchase of an office block. Halliday succeed in their claim and Digby are
ordered to pay damages and costs on the standard basis. As the parties have not been
able to reach agreement, ULaws LLP file a Notice of Commencement and the detailed
assessment procedure is set in motion. The judge studies Halliday’s bill and rules as
follows:
• The fees of Expert A, who prepared a report for Halliday to advise on their claim
before proceedings were issued, are totally disallowed on the basis that this expense
was unreasonably incurred. The judge is not implying that Halliday did anything
wrong (and indeed, it is sensible to assess the merits of the case at an early stage),
but the report is unreasonable in the costs’ context because the court did not give
permission for Halliday to rely upon this expert.
• The costs of Expert B who drafted a report and gave evidence at trial for Halliday are
reduced from £30,000 to £23,000. The judge is satisfied that the item was reasonable
to incur as the court gave permission for Halliday to rely upon this expert. However,
after taking into account the factors listed in Part 44 (above), particularly the value
of the money in dispute, the complexity of the issue and the degree of specialised
knowledge involved, the judge decided the fee was too high. This does not mean the
expert will only receive £23,000 for their work as they have a contract with Halliday
for the full amount; it simply means that Halliday will only be able to recover £23,000
from Digby and will have to pay the shortfall of £7,000 themselves.

11.6.3.2 Stage 2
The proportionality of the overall figure must then be assessed by reference to the factors
listed in Part 44 (above).
• If deemed to be proportionate, no further assessment is required.
• If not, the judge will then scrutinise various categories of cost, such as disclosure or factual
evidence, to decide whether they should be further reduced. Once any such reductions
have been made, the resulting figure is the final amount of the costs assessment.
The court’s powers to reduce costs regarded as disproportionate has been demonstrated in
case law.

In May v Wavell, Claim No. A02CL398, Central London County Court, the parties were in
dispute over a private noise nuisance claim. Although the substantive litigation was settled
for £25,000, the costs originally claimed by the claimant, Brian May (previously the
guitarist for the rock group Queen), were £200,000. The judge considered each item in the
bill and decided to reduce it by some £100,000. Thereafter the proportionality test was
applied and this led to a further reduction in the overall costs to £35,000 (although they
went back up to £75,000 on appeal).

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Despite being an extreme example, this case does highlight the forceful approach that the
courts are taking to costs.

11.6.4 The indemnity basis

Costs on the indemnity basis are awarded as a penalty, usually to reflect the court’s
displeasure with the manner in which a party has behaved either pre-​action and/​or during
proceedings. Costs on this basis must be:
(a) reasonably incurred; and
(b) reasonable in amount.
Any benefit of the doubt is given to the receiving party.

Example
In a dispute over the fishing rights of a lake in Northumberland, Greywater Fisheries Ltd
(Greywater) succeed in their claim against Cheviot Landowners Ltd (Cheviot). They are
awarded costs on an indemnity basis due to their opponent’s conduct throughout the
proceedings. When assessing costs, the judge determines that it was reasonable for the
receiving party (Greywater) to instruct a particular expert but doubts the expert’s fee of
£14,000 was reasonable. In this situation, the benefit of the doubt is given to the receiving
party and so Greywater will be able to recover the full amount of £14,000 from Cheviot.

Figure 11.2 Assessment of costs: indemnity basis

ASSESSMENT OF COSTS: INDEMNITY BASIS

No
Is the item reasonably incurred? Item disallowed so
not recoverable
Yes
No Item recoverable
Is the item reasonable in amount?
but reduced
Yes

Item recoverable in full Any doubt is resolved in favour

of the receiving party

There are two key differences between the bases.

• When assessing on the standard basis, the court will only allow those costs that
are proportionate to the matters in issue. There is no test of proportionality on the
indemnity basis.
• Any doubts are resolved in favour of the receiving party on the indemnity basis, and the
paying party on the standard basis.

11.7 Non-​party costs

Winning at trial or obtaining a settlement does not always result in success particularly
if it becomes apparent that the losing party is unable to pay the costs. Fortunately, the

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court has a discretionary power to make an order that a non-​party meets the costs and
this is governed by Part 46. However, although the funding of litigation by third parties is
becoming more common, such an order is still exceptional and the court would have to
be satisfied that the non-​party was the real party interested in the litigation or that they
were responsible for bringing the proceedings. External litigation funders such as family,
friends or people who have given to a fund-​raising campaign and who have no interest in
the outcome will not be at risk of such an order; in contrast, third party funders in a more
formal context may well be.
Before an order can be made, the third party must be added as a party to the
proceedings and may attend the hearing when the court determines the issue of costs.
Note there is no requirement to make a finding that the non-​party acted improperly before
making an order.

Example
(a) Elgin Cars Ltd (Elgin) obtain a judgment for £65,000 against Birmingham Gears Ltd
(BGL) for the supply of faulty gear mechanisms, which they used in the manufacture
of their vehicles. Immediately after the trial, BGL go into liquidation leaving no
assets with which to meet the costs order. Elgin apply for a non-​party costs order
against Henrik Larsen, the father of the managing director of the company, and
provide evidence in support that Henrik personally funded the defence of the
proceedings. The application is refused as Henrik had no interest in the outcome
(other than on a personal level).
(b) Litigation Funders Plc (LFP) commercially funded the claimant, Malvern Technology
Ltd, in their unsuccessful claim against the defendant. An application is made
by the defendant for a non-​party costs order against LFP, which is joined to the
proceedings. The court has a discretion to order LFP to pay the defendant’s costs
and, in this case, despite LFP’s representations, they are ordered to pay half of the
defendant’s costs.

11.8 Security for costs

The time and expense involved in dealing with prospective and actual litigation are often
considerable. However, the claimant does at least have some control over this as they
make the decision whether to proceed or not. In contrast, the defendant has the litigation
imposed upon them. Even if the claim is defeated and the defendant obtains an order
for their costs, they will never recover the full amount. Even worse, the claimant may be
unable or unwilling to pay the costs order, leaving the defendant with the unenviable
choice between bearing their own costs or investing further time and money in trying to
enforce the order. The provisions in Part 25 on security for costs provide some assistance
for defendants who have concerns in this regard.

11.8.1 The order

The court has the discretionary power to make an order for security for costs if:
(a) it is satisfied, having regard to all the circumstances of the case, it is just to make such an
order; and
(b) one or more of the conditions in Part 25 applies.

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11.8.2 The conditions

The defendant has a number of conditions at their disposal with the most commonly
used being:

11.8.2.1 Claimant resident outside a 2005 Hague Convention State

The defendant may apply for an order for security for costs where the claimant – whether it be
an individual or a company – is resident out of the jurisdiction (namely, England and Wales) and
is not resident in a State bound by the Hague Convention (which includes the EU and the UK).
For individuals this is where they normally and habitually live; whereas for companies it is where
their central control and management are located. This condition recognises the difficulties a
defendant may experience in enforcing a costs order outside those bound by the 2005 Hague
Convention.

11.8.2.2 Claimant is an impecunious company

The defendant must establish there is reason to believe the claimant will be unable to pay
the defendant’s costs if ordered to do so. Evidence of the company’s financial assets and the
likely total costs of the litigation will be essential.

11.8.2.3 Claimant has taken steps to make enforcement difficult

For this condition to be satisfied, the defendant must demonstrate that the claimant has
taken steps in relation to their assets such that, if they lose the case and a costs order
is made against them, the order will be difficult to enforce. The court will consider the
effect of any such action and not the motivation. Thus, an order can be made even if,
for example, the claimant is relocating to Saudi Arabia to take up a new employment
opportunity. However, a failure to disclose assets may be sufficient to establish this
requirement. On a separate note, in circumstances such as this, an application for a
freezing injunction may also be appropriate.

11.8.3 Justness
The court must also be satisfied that it is just to make the order and the following factors are
considered important.
(a) The strength of the claim and the defence: the less likely the defendant is to win at trial,
the less justified they are in seeking security.
(b) The claimant’s ability to provide security: where the claimant has a reasonable prospect
of success, the courts will be reluctant to make an order for security with which they
cannot comply as the effect will be to stifle the claim.
(c) The causes of the claimant’s impecuniosity: the claimant may be able to persuade
the court that their poor finances are caused by or contributed to by the defendant’s
behaviour.
(d) Property within the jurisdiction: where the application is made against a claimant resident
outside the EU, the court is unlikely to grant security if they have sufficient assets within the
jurisdiction that would be available to meet the defendant’s costs.
(e) The timing of the application: the order should be applied for as soon as practicable.

11.8.4 Procedure
As with all interim applications, the defendant should write to the claimant first and ask for
security to be provided voluntarily. If not, the defendant should submit a notice of application
to the court with a witness statement in support. The evidence must establish that a condition

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exists, persuade the court it is just to exercise its discretion in favour of the defendant and
justify the amount sought.
If the order is granted, it will specify the amount of the security, the date by which the claimant
must provide it and the form it will take. Most commonly, the claimant is required to make a
payment into court.

11.9 Offers to settle and costs

The parties are encouraged to negotiate to settle the claim before the litigation starts and, if
unsuccessful, to continue to review the case throughout to seek agreement.
• Where a settlement is reached prior to the issue of proceedings, the prospective claimant
will not be entitled to recover their legal costs unless this has been agreed.
• If settlements are reached after litigation has commenced, the terms should be
recorded in a consent order or a Tomlin order (see Chapter 4) to ensure that
enforcement proceedings may be issued to recover any monies due under the
agreement, including costs.

11.10 Part 36 offers

A party may make an offer to settle in any way they choose and the court will take this into
account when deciding the issue of costs. However, if an offer is made under Part 36, there
are significant penalties attached if the relevant party makes the ‘wrong’ decision and rejects
an offer that the court subsequently deems to be suitable. This puts real pressure on the
opponent to accept an offer made in accordance with the provisions of Part 36, and on their
solicitors to give appropriate advice.

11.10.1 Form and content

A Part 36 offer will be referred to as such and, to be valid, must comply with the relevant
formalities. The offer must:
(a) be in writing;
(b) make clear it is made pursuant to Part 36;
(c) specify a period of not less than 21 days during which, if the offer is accepted, the
defendant will pay the claimant’s costs (known as ‘the relevant period’); and
(d) state whether it relates to the whole of the claim or to part of it, and whether it takes into
account any counterclaim.
In practice, most offers will state that acceptance is required within 21 days, so the offeree
has three weeks to decide what to do. Because this is the norm, references are made in this
chapter to Day 21 and Day 22 to assist in calculating the effect of a Part 36 offer. However,
it is important to be aware that a longer period may be specified and a different time limit
imposed.

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The offer is made when it is served on the other party and the rules of deemed service will
apply here. It is inclusive of interest until the relevant period expires.
A Part 36 offer is treated as ‘without prejudice save as to costs’. As a consequence, the trial
judge will not be made aware of the offer until the case has been decided, both liability
and quantum. Only when the issue of costs falls to be dealt with will any relevant offer be
produced to the judge.

11.10.2 The effect of acceptance

A Part 36 offer may be accepted at any time unless notice has been given of its
withdrawal, making the relevant period of 21 days somewhat redundant. However, there
may be adverse costs consequences of late acceptance so it is preferable to keep within
the deadline.

11.10.2.1 Acceptance within relevant period

If the defendant makes an offer and this is accepted by the claimant within the relevant
period, the sum must be paid to the claimant within 14 days and, if not, the claimant can enter
judgment. The claimant is also entitled to their costs of the proceedings up to the date on
which the notice of acceptance is served on the defendant. If the parties cannot agree costs,
a judge will assess them on the standard basis.
If the claimant makes a Part 36 offer that is accepted by the defendant within 21 days, the
consequences are the same. The claimant will be entitled to their costs up to the date of
acceptance on the standard basis.

11.10.2.2 Late acceptance

If the claimant accepts a defendant’s offer after the relevant period has expired and the
parties cannot agree costs, the court will normally order that:
(a) the defendant pays the claimant’s costs up to the date on which the relevant period
expired; and
(b) the claimant pays the defendant’s costs thereafter until the date of acceptance.
However, if the defendant accepts the claimant’s offer late, the defendant will usually be
ordered to pay the claimant’s costs of the proceedings up to the date of acceptance.
In all these scenarios, the proceedings will be stayed (paused) to allow for the sum offered
and the costs to be paid.
Figure 11.3 summarises the implications of acceptance of a Part 36 offer by either of the
parties.

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Figure 11.3 Consequences of acceptance of Part 36 offer

DEFENDANT SERVES PART 36 CLAIMANT SERVES PART 36

OFFER ON CLAIMANT OFFER ON DEFENDANT

• C accepts the offer • D accepts the offer

• Proceedings are stayed • Proceedings are stayed
• D pays money to C within 14 days • D pays money to C within 14 days

Acceptance within relevant period Acceptance within relevant period

(21 days of service of offer) (21 days of service of offer)

• D pays C’s costs up to the date of • D pays C’s costs up to the date of
acceptance on the standard basis acceptance on the standard basis

‘Late’ acceptance ‘Late’ acceptance

(outside relevant period) (outside relevant period)

• D pays C’s costs up to the date of • D pays C’s costs up to the date of
expiry of the relevant period on the acceptance on the standard basis
standard basis; and then
• C pays D’s costs up to the date of
acceptance on the standard basis

11.10.3 The effect of non-​acceptance

If the offer is not accepted, the proceedings will continue. However, depending upon who made
the offer and whether it is beaten at trial, there may be significant consequences in terms of the
damages, interest and costs awarded. A decision to refuse what subsequently turns out to be a
good offer can prove very expensive indeed. The justification for this tough approach is that the
party who made the error of judgment has caused their opponent additional costs and wasted
their time, as well as that of the court, by not accepting an offer that they should have.
Because of this, the penalties will be imposed from the day after the relevant 21 day period
for acceptance expires (namely, from Day 22) and will apply unless the court rules that it
would be unjust to do so.

11.10.3.1 Justness under Part 36

In deciding whether to make an order to impose penalties for non-​acceptance of a Part 36
offer, the judge will take into account all the circumstances of the case including the terms of
the Part 36 offer, when it was made and in particular how close to the trial, what information
was available to the parties at the time, their conduct and whether it was a genuine attempt
to settle the proceedings. So when is it just to make an order under Part 36?
3​An order will be made in the vast majority of cases and it will be the exception not to do
so. It is irrelevant by how small an amount the offer is beaten.
X It may be unjust where the offeror has not provided sufficient disclosure to allow the
offeree to make an informed decision; or, for example, the Part 36 offer expired only days
before the trial and crucial allegations that had not been pleaded were raised in the
opening of the case.

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11.10.4 Part 36 consequences at trial of a claimant’s offer

If the claimant makes a Part 36 offer, there are three possible outcomes. They could:
(a) win at trial and be awarded a sum that equals or beats their own offer;
(b) win the case but obtain a judgment that is less than their own offer; or
(c) lose at trial.
Each of these will be considered in turn.

11.10.4.1 The claimant wins at trial and equals or beats their own offer
In the words of the CPR, the claimant has obtained a judgment which is at least as
advantageous as their Part 36 offer. In this situation, the claimant will do very well indeed as,
in addition to being awarded damages by the court, the penalties that may be enforced upon
the defendant are potentially draconian. The sanctions, considered below, will be imposed in
every case unless it is unjust to do so.
Additional amount (usually a percentage of the damages)
As the defendant has lost at trial, they will be ordered to pay damages and interest due
under the contract or statute in the usual way (the sum awarded). However, the defendant will
also be required to pay an additional amount –​effectively ‘extra’ damages.
(a) For damages of up to £500,000, the defendant must pay an additional amount of 10% of
the sum awarded.
(b) For damages in excess of £500,000 and up to £1 million, 10% of the first £500,000 is
payable and thereafter, 5% up to a maximum of £75,000.
Where the remedy awarded is non-​monetary, the term ‘sum awarded’ refers to the costs.
Example
Klein Wholesalers Ltd (KWL) are claiming £1.1 million in damages against Freight Services
Ltd (Freight) for failing to deliver a consignment of valuable goods. KWL make a Part 36
offer to settle of £900,000, which Freight refuse. The litigation proceeds and KWL succeed
at trial. The judge awards £950,000 in damages and interest as claimed in the particulars
of claim and so KWL (the claimant) has beaten their own Part 36 offer. They will receive
an additional sum calculated as follows:
£500,000 x 10% = £50,000
+
£450,000 x 5% = £22,500
_​_​_​_​_​_​_​_​_​_​_​_​_​_​_​_​_​_​___​_​
Additional sum = £72,500
_​_​_​_​_​_​_​_​_​_​_​_​_​_​_​_​_​___​_​_​
Freight are ordered to pay £72,500 on top of the initial figure of £950,000 giving a total of
£1,022,500.
The remaining penalties take effect from Day 22, the day after the relevant 21 day period for
the defendant to accept the claimant’s Part 36 offer expires.
Enhanced interest on damages
From Day 22 onwards, the percentage rate of interest that is charged on the damages
awarded increases to a rate not exceeding 10% above the base rate –​higher than the usual
rate claimed in most proceedings (see Chapter 5).
To understand the full implications, it is necessary to identify certain key dates.

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Example
Continuing with the case of KWL and Freight, the breach of contract and loss occurred on
10 February when the goods were not delivered. The claimant made their Part 36 offer
on 26 October. As this is a commercial case, interest was claimed at 1% over base rate
in the particulars of claim. Interest at this rate is awarded from the date of loss up to and
including Day 21 (16 November) when the relevant period for Freight to accept KWL’s
Part 36 offer expired.
From Day 22 onwards, so from 17 November to the date of judgment, enhanced interest
totalling no more than 10% above the base rate is payable. This is a significantly higher
percentage.

Costs on an indemnity basis

As the defendant has been unsuccessful, the usual order would be for them to pay the
claimant’s costs on the standard basis from the date they were incurred up to and including
the trial and judgment. However, the effect of Part 36 is that the defendant is ordered to pay
those costs on the indemnity basis from Day 22 onwards. This will result in the claimant being
able to recover more of their costs.

Interest on indemnity costs

The final penalty imposed is that interest is awarded on those indemnity costs and this may
be as high as 10% above the base rate. This is in contrast with the general rule that interest is
not payable on costs incurred before judgment. Again, the sanction runs from Day 22.

Example
In the case of KWL and Freight, the judge orders Freight to pay the claimant’s costs on
the standard basis from the date KWL instructed solicitors up until Day 21 (16 November).
From Day 22 (17 November) onwards, the costs are awarded on the indemnity basis
together with enhanced interest. Although this may be up to a maximum of 10% above the
base rate, the court decides on a rate of 4% above base rate.

Summary
Set out below is a summary of the penalties that apply under Part 36 in those cases where
the claimant equals or beats their own offer. As these are potentially draconian, involving
many thousands of pounds, the defendant should consider any such offer very carefully
indeed.

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Figure 11.4 Effect of claimant equalling or beating own Part 36 offer at trial

CLAIMANT WINS AT TRIAL AND EQUALS OR

BEATS THEIR OWN PART 36 OFFER

C is awarded:
• damages plus
• for damages up to £500,000 an additional 10% and
• for damages of between £500,000 and £1 million an additional 5%
• up to a maximum of £75,000
+

Up to Day 21:
• interest on the damages from the date of loss as claimed in the particulars of claim
• costs on the standard basis from the date C incurred them
+

From Day 22 to judgment:

• interest on the damages at a maximum of 10% above base rate
• costs on an indemnity basis
• interest on the costs at a maximum of 10% above base rate

11.10.4.2 The claimant wins at trial but does not beat their own offer
The second possible outcome if the case proceeds to trial is that the claimant succeeds
in their claim but is awarded damages that are lower than their own Part 36 offer. In this
instance, no extra penalty is imposed on either party. This is because neither did anything
‘wrong’. The claimant was right to make an offer but pitched it too high whereas the
defendant was correct to turn it down for the same reason.

Example
In the case of KWL and Freight, the claimant makes a Part 36 offer of £900,000. At trial,
KWL are successful in their claim but are awarded £750,000 in damages. The judge
orders Freight to pay interest on the damages as claimed in the particulars of claim and
costs on a standard basis.
Part 36 has no effect.

11.10.4.3 The claimant loses at trial

The final outcome is that the claimant is unsuccessful at trial. As a consequence, the claimant
will not be awarded damages at all and will be ordered to pay the defendant’s costs on a
standard basis in the usual way. Once again, Part 36 has no effect.
In summary, there are no penalties if the claimant makes a Part 36 offer even if it becomes
apparent that it was ill-​judged. However, if the offer is either equalled or beaten, the sanctions
for the defendant are severe.

11.10.5 Part 36 consequences at trial of a defendant’s offer

It is open to either party to make a Part 36 offer and doing so can be just as effective for
a defendant, with the particular advantage being the certainty of the outcome. As with the
claimant, there are three possible scenarios to consider. The claimant:

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(a) wins at trial and beats the defendant’s Part 36 offer;

(b) wins at trial but fails to beat the defendant’s Part 36 offer; and
(c) loses at trial.
As with any Part 36 offer, the prospect of being penalised in costs, should the offer be
rejected unreasonably, acts as an incentive to accept. This is punitive as a claimant
who succeeds in their litigation would not normally be expected to pay any of their
opponent’s costs.

11.10.5.1 The claimant wins at trial and beats the defendant’s Part 36 offer
If the claimant obtains a judgment that is (to quote Part 36) more advantageous than the
defendant’s Part 36 offer, it is clear they were justified in their refusal because it was too low.
In these circumstances the defendant will be ordered to pay:
• the amount of the judgment plus interest as claimed in the particulars of claim; and
• the claimant’s costs on the standard basis.
Part 36 has no effect.

11.10.5.2 The claimant wins at trial but fails to beat the defendant’s Part 36 offer
What if the claimant fails to obtain a judgment that is more advantageous than the
defendant’s Part 36 offer; in other words, the damages awarded are either equal to or less
than the offer? In this instance, the court will, unless it is unjust to do so, make an order that
punishes the claimant financially for continuing with the claim when (in hindsight) they should
have accepted the offer. By failing to do so they have, since the relevant period expired,
wasted the time and money of both the defendant and court.
Ordinarily, a claimant who succeeds at trial would expect the court to order the defendant to
pay their costs for the entire proceedings. However, in the scenario where the claimant fails to
beat the defendant’s offer, the court takes a different approach. The effect of Part 36 is:
(a) the defendant pays the claimant’s costs on the standard basis from when those costs
were incurred until the relevant period expired (Day 21);
(b) thereafter, the claimant pays the defendant’s costs on the standard basis from the date of
the expiry of the relevant period (Day 22) until judgment; plus
(c) interest on those costs (a commercial rate of 1% or 2% above base rate has generally
been adopted).
This is commonly called a ‘split costs’ order because the costs are divided between the
parties with the split occurring at the expiry of the relevant period of 21 days.

Example
Rhian instructs solicitors in relation to a claim for misrepresentation on 12 January.
Proceedings are issued on 17 March and the defendant, Luton Garages Ltd (Luton),
makes a Part 36 offer of £20,000 on 2 May. Rhian’s solicitors explain to her that if she
accepts within the relevant period, Luton will pay her costs. She is also made aware that
she can accept the offer at any time thereafter unless it is withdrawn. However, Rhian
decides to continue with the litigation as she is advised that she has a strong case and is
likely to receive at least £25,000 in damages. The trial takes place on 27 October.
Rhian succeeds in her claim but fails to beat the defendant’s Part 36 offer as she is only
awarded £18,000 in damages. The effect on costs will be:
• Luton is ordered to pay Rhian’s costs on the standard basis from 12 January (the date
from when her costs were incurred) up to 23 May (the date of expiry of the relevant
period of 21 days after the defendant’s Part 36 offer).

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• Then, despite having won her claim, Rhian is ordered to pay Luton’s costs on the
standard basis from 24 May (Day 22) until judgment. As this includes the trial on 27
October, the costs are likely to be significant. She will also have to pay interest on
those costs and the court orders this at 1% above base rate.

In addition, Rhian will be liable for her own costs from Day 22.
The Part 36 consequences which apply in this situation are summarised below.

Figure 11.5 Effect of claimant failing to beat defendant’s Part 36 offer at trial

CLAIMANT WINS AT TRIAL BUT DOES NOT

BEAT THE DEFENDANT’S PART 36 OFFER

C is awarded:
• damages and
• interest from the date of loss as claimed in
the particulars of claim

+
Up to Day 21:
• D pays C’s costs on the standard basis
from the date when C incurred them

From Day 22 to judgment:

• C pays D’s costs on the standard basis and
• interest on those costs usually at 1% or 2% above base rate

11.10.5.3 The claimant loses at trial

What if the claimant fails to establish liability so they are not awarded any damages at all?
This would be a financial disaster as far as the claimant is concerned because they turned
down the money offered by the defendant. The general rule as to costs would apply and the
claimant, as the losing party, would be ordered to pay the winner’s (the defendant’s) costs.
However, to penalise the claimant for not accepting the defendant’s Part 36 offer, they would
also be ordered to pay interest on those costs from Day 22 until judgment –​usually at 1% or
2% above base rate.
It is apparent that, although a penalty is imposed on the claimant for their error of judgment,
this is not as significant as those which the defendant could face.

Summary
• The general rule on costs is that the unsuccessful party pays the successful party’s costs,
although the judge has discretion to make a different order, perhaps to show disapproval
of a party’s conduct.
• The judge will also determine the amount of costs that are recoverable, unless the costs
are fixed by the CPR.

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• Costs will be summarily assessed at the end of hearings for interim applications and most
fast track trials. In other cases, there will be a detailed assessment of costs involving fully
particularised bills of costs, formal objections and responses and a determination by a
judge, which may be at an oral hearing.
• There are two bases of assessment, both of which require costs to be reasonably incurred
and reasonable in amount. The standard basis is the most commonly used and will only
allow costs that are proportionate to the matter. Any doubts are resolved in favour of
the paying party. In contrast, if costs are awarded on the indemnity basis, there is no
reference to proportionality and any doubts are resolved in favour of the receiving party.
• A non-​party may be liable for costs in exceptional circumstances.
• A claimant may be protected from liability for a defendant’s costs under qualified one-​
way costs shifting but only in personal injury cases.
• A defendant who has concerns as to whether the claimant will be unable or unwilling to
satisfy a costs order against them may apply for an order for security for costs.
• Both parties can make offers to settle including offers under Part 36. If the offer is
accepted it must be paid by the defendant to the claimant within 14 days of acceptance,
failing which the claimant can enter judgment.
• If a claimant makes a Part 36 offer that is not accepted by the defendant but which the
claimant equals or beats at trial, severe sanctions will be imposed on the defendant.
However, Part 36 has no effect if the claimant wins but is awarded a lesser sum or if they
lose the claim.
• If a defendant makes a Part 36 offer that is rejected by the claimant and which the
claimant fails to beat at trial, a ‘split costs’ order will be made. If the claimant loses,
penalty interest is payable on costs, but Part 36 has no effect if the claimant wins and
beats the defendant’s offer.

Sample questions

Question 1
A claimant is considering issuing proceedings in the County Court against the defendant
for loss of profits estimated at £25,000. Before taking the matter further, the claimant wants
advice from their solicitor about the costs implications and how these will be dealt with by
the court. The solicitor writes to the claimant explaining these.
Which of the following statements contained in the letter of advice is correct?
A If the case proceeds on the fast track most of the costs are fixed by the CPR.
B If the case proceeds on the multi-​track costs are usually subject to summary
assessment.
C Each party will generally bear their own costs in making or responding to interim
applications on the way to trial.
D In most instances, costs will be ordered on the standard basis so that they must be
reasonable to the matters in issue.
E If costs are ordered on an indemnity basis any doubt is resolved in favour of the
receiving party.

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Answer
Option E is correct.
Option A is wrong as although, for example, the costs of the advocate preparing and
attending the trial are subject to the fixed costs regime of the CPR, most costs are not.
Option B is wrong because the costs of multi-​track litigation are generally subject to
detailed assessment. However, the costs associated with interim applications are often
addressed on a summary basis by reference to the usual principle that the unsuccessful
party is responsible for the successful party’s costs –​option C accordingly is wrong.
Option D is wrong. Costs on the standard basis are recoverable if they are proportionate to
the matters in issue –​not ‘reasonable’.

Question 2
A company’s business is dependent upon a few major contracts, including one with the
local Council. As a result of a disagreement, the Council breaks off the relationship.
The company sues, alleging that the Council was not entitled to terminate the contract.
The Council applies for a security for costs order on the basis that the company will
be unable to pay its costs if the Council wins at trial after the company admits it is in
financial difficulties.
Which of the following statements best describes what might happen during the security
for costs application?
A The court cannot take into account the strength of the claim or the defence. Such
matters must be left for determination at trial.
B The Council should provide evidence in support of its application, such as the
company’s accounts and poor credit ratings.
C The court cannot take into account any argument that it would not be just to make
an order because the company’s financial difficulties are as a result of the Council’s
wrongful termination.
D If the court is satisfied that one of the required conditions applies and that it is just to
do so, it must make an order for security for costs.
E Even if the application is successful, the Council will have to bear its own costs in
making that application. The purpose of the application is to provide security for future
costs, not to quantify past costs.

Answer
Option B is correct. The application is likely to be made on the grounds that the claimant
is an impecunious company. In such cases, the defendant should produce evidence of the
company’s poor financial standing (such as the company’s accounts and poor credit ratings).
Option A is wrong. The strength of the claim and the defence are matters that the court may
take into account (although it is true that the court will want to avoid a situation in which the
merits have to be considered in any detail).
Option C is wrong. An application for security for costs may fail where the claimant is able
to persuade the court that its shortage of money has been caused by or contributed to by
the defendant’s behaviour (for example, in terminating a contract and not paying the agreed
contract price when there was no legal basis for doing so).
Option D is wrong because the court’s power to make an order for security for costs is
discretionary rather than mandatory. Option E is also wrong. The usual costs position on any
interim application is still relevant when making or opposing an application for security for
costs, namely the loser pays the winner’s costs.

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Question 3
A claimant makes a Part 36 offer of £40,000 on 1 March to the defendant to settle their
dispute. The offer expires on 22 March (Day 21). The defendant rejects the offer and the
matter proceeds to trial. After considering the evidence, the judge finds in the claimant’s
favour and damages are awarded against the defendant in the sum of £45,000.
Which of the following is a consequence that will apply under Part 36?
A Unless it is unjust to do so, interest will be payable on the claimant’s costs from 23
March onwards at a rate of 1% above base rate.
B Unless it is unjust to do so, interest will be payable by the defendant on the damages
awarded at a rate of up to 10% above base rate from the date of cause of action.
C Unless it is unjust to do so, a split costs order will be made so the defendant is ordered
to pay the costs up to 22 March and the claimant pays the costs from 23 March up to
and including the trial.
D Unless it is unjust to do so, the defendant will pay the claimant’s costs on the standard
basis up to 22 March and thereafter, from 23 March, on the indemnity basis.
E Unless it is unjust to do so, an additional amount of £2250 will be payable by the
defendant to the claimant.

Answer
Option D is correct. Where the claimant secures a judgment which is at least as advantageous
as the claimant’s own Part 36 offer (as here), one of the consequences of the defendant not
accepting the offer is that it will become liable to pay the claimant’s costs on the indemnity
basis from Day 22 onwards, unless it is unjust to do so.
Option A is wrong. Although it is correct to state that one consequence of the claimant
securing a more advantageous judgment is that the defendant will be liable to pay interest
on the claimant’s costs from Day 22 onwards, that interest is payable at a rate of up to 10%
above base rate.
Option B is also wrong because the penalty interest of up to 10% above base rate does
not run from the date of cause of action, but from Day 22. Option C does not apply to this
scenario. A split costs order would be relevant if the defendant had made a Part 36 offer
which the claimant failed to beat. Furthermore, the additional amount payable on the
damages is 10% for the first £500,000 awarded, and so the correct figure is £4500 and not
£2250 as stated in Option E. This is only equivalent to an additional amount of 5% of the
damages.

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12 Enforcement of Money
Judgments
12.1 Introduction 206
12.2 Investigating the judgment debtor’s means 206
12.3 Methods of enforcement 207
12.4 Taking control of goods 207
12.5 Charging orders 209
12.6 Third party debt orders 216
12.7 Attachment of earnings 212
12.8 Enforcement in another jurisdiction 213

SQE1 syllabus
By the end of this chapter you will be able to apply relevant core legal principles
and rules appropriately and effectively, at the level of a competent newly qualified
solicitor in practice, to realistic client-​based and ethical problems and situations in
relation to enforcement of money judgments as follows:
• oral examination (order to obtain information)
• methods of enforcement
• procedure and mechanisms for effecting valid enforcement in another jurisdiction
Note that for SQE1, candidates are not usually required to recall specific case names,
or cite statutory or regulatory authorities and these are provided for illustrative
purposes only.

Learning outcomes
The learning outcomes for this chapter are:
• To appreciate how to investigate a judgment debtor’s means.
• To evaluate when different types of enforcement methods should be used and
how to conduct them.
• To understand how to enforce a judgment outside England and Wales.

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12.1 Introduction
The conclusion of the trial is not always the end of the proceedings. Having obtained
a judgment, the opponent should pay the monies due without any further action being
necessary, but this does not always happen. This may be for a variety of reasons, from a lack
of the means to pay to simple avoidance. Because the court does not automatically enforce
the judgment, it is up to the successful party to pursue their opponent for the money. The
winning party, referred to as the judgment creditor, will have to consider the best method of
enforcing payment.
The question of enforcement should be considered before proceedings are even
commenced; indeed, there is little point in obtaining a judgment against a party who
clearly cannot pay as this would simply be ‘throwing good money after bad’. Appropriate
investigations into the whereabouts and assets of the opponent should be undertaken at an
early stage.

12.2 Investigating the judgment debtor’s means

To determine the best method of enforcing the judgment, it may be necessary to obtain
more information about the judgment debtor’s financial circumstances. There are two
possibilities:
(a) instruct an enquiry agent; and
(b) apply to the court for an order to obtain information from the debtor.
Although an enquiry agent may succeed in locating assets that the debtor seeks to hide
and may be a quicker way forward, this approach does incur expense. The second option,
which is covered by Part 71 and was previously referred to as an oral examination, is
considered next.

12.2.1 Order to obtain information

An order to obtain information from a judgment debtor is a court order requiring the debtor to
attend before an officer of the court to be questioned on oath about their finances or those of
a company of which they are an officer. The procedure is as follows:
(a) The judgment creditor files a notice of application at court setting out details of the
name and address of the debtor, the judgment the creditor is seeking to enforce and the
amount owed. Any specific documents that the creditor wants produced at the hearing
should be listed.
(b) The order is normally personally served on the debtor who can, within seven days,
request payment of their reasonable travelling expenses to and from the court.
(c) The hearing will usually take place in the County Court hearing centre for the area where
the debtor resides or carries on business.
(d) The examination is conducted by an officer of the court, or a judge if requested by the
creditor.
(e) Standard questions are asked, although the creditor may also request additional ones.
The officer will make a written record of the responses given by the debtor, who will be
invited to read and sign it at the end of the hearing.
(f) If the debtor fails to attend court, the judge may make a committal order against them,
which is usually suspended provided the debtor complies with the order.

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12.3 Methods of enforcement

The judgment creditor can, if they wish and can afford to do so, use one or more of several
different means of enforcement, with the four most common being summarised below:

Figure 12.1 Methods of enforcement

METHODS OF
ENFORCEMENT

Taking control Charging Third party Attachment of

of goods order debt order earnings order

An order requiring a An order requiring the

Seizure and A charge on the
third party who owes debtor’s employer to
sale of debtor’s debtor’s land or
money to the debtor to make deductions from
goods securities
pay it directly to the their earnings and pay
creditor them to the creditor

The solicitor must decide, in light of information obtained about the judgment debtor, which
method of enforcement is most suitable. However, there are some restrictions that limit the
choice; for example, when an attachment of earnings order is in force, permission of the court
is required to take control of the debtor’s goods.

12.4 Taking control of goods

This method of enforcement is governed by Part 83 and is used where the amount owed may
be recovered by seizing the debtor’s possessions of an equivalent value. The items are then
sold by public auction.
• Who?
In the High Court, the task is carried out by a High Court Enforcement Officer (HCEO) and
in the County Court, by enforcement officers (often referred to as bailiffs).
• Powers?
Enforcement officers cannot force entry into a debtor’s home, but they can use reasonable
force to enter business premises if they believe the debtor’s goods are inside.
• What may be seized?
The usual contents of a home or business premises including motor cars, computers and
banknotes, but also less common ones for instance boats and securities such as share
certificates.
• What is exempt?
The so-​called ‘necessary items exemption’ only applies to individuals and not to a
judgment debtor that is a partnership, limited company and so on. If applicable, items

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such as clothes, bedding, furniture and household equipment, which are reasonably
required for the basic needs of the debtor and their family, cannot be taken. Neither
can work tools, computers, vehicles and other equipment that are necessary to the
debtor personally for work or study, subject to a maximum aggregate value of £1,350.
In addition, goods that belong solely to another, such as a spouse or other family
member, or those subject to hire or hire-​purchase agreements may not be removed. Any
disputes concerning a co-​owner’s entitlement to a share of the proceeds of sale will be
resolved by the court.

12.4.1 Choice of court

A party who has obtained a judgment in the High Court may issue a writ of control in that
court, regardless of the amount to be enforced. However, where a party has obtained
judgment in the County Court, different provisions apply as follows:

Table 12.1 Enforcement of judgments: County or High Court?

Judgment sum Court in which to enforce judgment Document required Who enforces

Less than £600 County Court Warrant of control Enforcement

officer (bailiff)

£600 or more Either the County or the High Court. Warrant or writ The enforcement
but less than If the High Court is chosen, the of control as agent applicable
£5,000 judgment must be transferred from appropriate to the to the court
the County to the High Court. court

£5,000 or more High Court (except for proceedings Writ of control High Court
under the Consumer Credit Act Enforcement
1974) Officer

12.4.2 Procedure
The procedure differs slightly depending upon the court in which the judgment is to be
enforced.
High Court
(a) The judgment creditor delivers a praecipe (request) and two copies of a writ of control to
the court office, together with the judgment.
(b) The court seals the writ and returns one copy to the creditor.
(c) The creditor then forwards this to the HCEO for the county where the debtor resides or
carries on business, for the writ to be executed.
County Court
(a) The creditor files the form of request for a warrant of control at the County Court hearing
centre that serves the address where the goods are to be seized.
(b) The warrant is executed by the enforcement officer for the district where the debtor
resides or carries on business.

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When executing the writ or warrant of control, the enforcement officers usually immediately
either remove goods or take control of them. However, if the debtor needs time to pay, they
may enter into a controlled goods agreement under which the debtor acknowledges that the
enforcement agent has taken control of the goods and, further, that they will not remove or
dispose of them before the debt is paid. The effect is that the goods remain on the premises
for a few days to allow the debtor one final opportunity to pay.
If payment is still not received, the goods seized will be sold at a public auction and the
amount required to pay the judgment, including costs, will be deducted from the money
raised, with any surplus being returned to the debtor (and any co-​owner).

12.4.3 Advantages and disadvantages

Although often effective, there are limits to the powers of HCEOs and enforcement officers.
As a general rule, they cannot force entry into a debtor’s home and a savvy debtor may
simply refuse them entry. However, they are able to use reasonable force to break into
business premises if there is no living accommodation attached and the debtor’s goods
are believed to be inside –​particularly helpful when enforcing against a commercial
debtor.
There are certain advantages of enforcement in the High Court, one of which is that HCEOs
are usually paid on their results –​based on the amount collected –​and so it is generally
perceived that they are more effective in achieving a successful conclusion. Also, in the
High Court, interest continues to accrue on the debt. However, in many cases, the logistical
difficulties involved (for example, cars can be hidden in garages), the costs of this method of
enforcement and the relatively low re-​sale value of the goods seized mean that the judgment
creditor does not obtain all the monies due to them.

12.5 Charging orders

Under Part 73, it is possible for a charging order to be made either on land or on securities,
such as stocks and shares. The effect is that the creditor is placed in a similar position to a
mortgagee. The charging order will sit on the asset until such time as it is worth the creditor
pursuing the matter further and applying for an order for sale. However, this may involve
a considerable wait until, for example, the land has increased in value such that there is
sufficient equity in the property to cover the judgment debt.

12.5.1 Charging order on land

In addition to being able to apply to the court for an order charging the debtor’s land with
the amount due under a judgment, a charging order can also be made in respect of land
the debtor owns jointly with another person. In this instance, the order is a charge upon the
debtor’s beneficial interest, rather than upon the land itself. Once a charging order has been
made, it should be registered at the Land Registry or (if unregistered) at the Land Charges
Department.
At this point, although the creditor has security for the debt, they still do not have their money.
To obtain this, the creditor would have to apply to the court for an order for sale of the land
charged and the judgment will then be satisfied out of the proceeds of sale.

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12.5.2 Procedure
Where the debt is more than £5,000, the application for a charging order can be made either
in the County or the High Court. However, if it is made to the County Court, the application
must be submitted to the County Court Money Claims Centre.
There are three stages to the procedure.
Stage 1: interim charging order
• The creditor must file an application notice including details of the judgment debt, the
land over which the charging order is sought, and the names and addresses of any other
person affected such as a party with a prior charge over the property. The creditor must
also file a draft interim charging order (ICO).
• The application will usually be dealt with by a court officer without a hearing, who will
either make the ICO or refer the matter to a judge for further consideration.
• The ICO, the application notice and any documents filed in support must be served by the
creditor on the debtor within 21 days.
• The debtor then has 14 days to request that the court officer’s decision be reviewed by
a judge.
Stage 2: final charging order
• If any person objects to the making of a final charging order (FCO), they must file and
serve written evidence stating the grounds of objection within 28 days of service of
the ICO.
• If an objection is received, the court will transfer the application to the debtor’s home
court for a hearing.
• At the hearing the court can make a FCO, discharge the ICO or direct a trial of any issues
in dispute between the parties.
Stage 3: order for sale
• If the interim order is made final, the creditor has a charge on the debtor’s land, which
can be enforced by an order for sale of the property. However, in order to do so, fresh
proceedings must be commenced.

12.5.3 Advantages and disadvantages

A charging order is a useful means of securing payment against those debtors who lack
liquid (available) assets and where other forms of enforcement would not recover the debt.
The main advantages are that, although it does not necessarily result in prompt payment, a
charging order does secure the judgment debt. Furthermore, it may encourage the debtor to
make efforts towards settling the debt, particularly as interest will continue to accrue (unless
the debt falls under the Consumer Credit Act 1974).
However, a charging order will not always be effective. It is not appropriate where there are
significant other prior charges or mortgages over the property so that there may be no or
insufficient equity available to enforce against, or where the debtor has no beneficial interest
over it. Even if granted, payment may not be received for many years if an application for
an order for sale is unsuccessful, perhaps because there are other people in the house such
as children, who will be severely affected by a sale. Nevertheless, it may be the only way
forward if there are no other assets against which the creditor can enforce and it is preferable
to wait for the monies owed rather than lose them entirely.

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12.5.4 Charging order on securities

A creditor may also obtain a charging order on a debtor’s beneficial interest in certain
specified securities including UK government stock, shares and unit trusts. The order will
normally provide for the charge to extend to any interest or dividend payable. The procedure
is similar to that for obtaining a charging order on land.

12.6 Third party debt orders

The debtor may be owed money by a third party, for example:
• bank or building accounts that are in credit; and
• trade debts due to a business.
In these circumstances, the court can make an order under Part 72 requiring the third party to
pay the creditor sufficient of the monies to satisfy the judgment debt and costs. This is known
as a third party debt order.
The debt must belong to the judgment debtor solely and beneficially.

Example
Nafeesa owes £8,500 to Hair Stuff Ltd (HSL) for equipment purchased for her beauty
salon. Judgment is obtained against her and HSL seek an order to obtain information.
Nafeesa admits that she has an account with £5,300 in Barcloyds Bank but HSL cannot
enforce against this, as it is in joint names with her husband. She also discloses that she
is owed £2,200 by Happy Days Ltd for a corporate event. HSL apply for a third party debt
order to compel Happy Days Ltd to pay the debt to them rather than to Nafeesa.

12.6.1 Procedure
An application for a third party debt order must be issued in the court that made the order
being enforced, unless the proceedings have (subsequently) been transferred to a different
court. The procedure is as follows:
(a) The creditor applies to court without notice to the debtor, providing details such as the
name and address of the branch where the money is held and the account number.
(b) The judge will make an interim order, which has the effect of freezing the bank account or
funds held by the third party. At this point, no money is paid to the creditor but a hearing
will be listed no less than 28 days later.
(c) At the hearing, the court will consider any objections and, unless there is a good reason
not to do so, the order will be made final. This requires the third party to pay the money
to the creditor.

Example
Continuing with the scenario above, Nafeesa attends the hearing and objects to the
making of the third party debt order over the £2,200 owed to her by Happy Days Ltd.
She provides evidence that it will cause her and her young children real hardship. She is
already behind on her rent payments, the landlord is threatening to evict her family and
she is having to access food banks to survive. In the circumstances, the judge decides not
to make the order final.

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12.6.2 Advantages and disadvantages

The main benefit of this method of enforcement is the element of surprise as the debtor will
not be aware of the application until after the order has been made. By this time, their bank
account or funds held by a third party will already have been frozen. However, an informed
debtor is likely to be aware of this as a possibility and may move the funds as soon as a
judgment is made (if not before). If the account is not in credit on the day when the order is
served, it is ineffective. Furthermore, to be successful, the bank account must be held in the
sole name of the debtor and, if in joint names, the application will fail.

12.7 Attachment of earnings

An attachment of earnings order is an order that compels the debtor’s employer to make
regular deductions from the debtor’s earnings and pay them into court. For this method of
enforcement, the debtor must be employed.

Example
HSL apply for an attachment of earnings order against Nafeesa. The application fails
because Nafeesa is self-​employed.

12.7.1 Procedure
Applications for an attachment of the debtor’s earnings must be made to the County Court as
the High Court has no power to make these orders. As a consequence, if the judgment has
been obtained in the High Court, the proceedings will have to be transferred to the County
Court before this method of enforcement can be used.
The procedure is set out in Part 89.
(a) The creditor applies to the County Court Money Claims Centre.
(b) The court informs the debtor of the application and requires them either to pay the sum
due, or to file a statement of means giving details of their income and outgoings.
(c) On receipt of the form, a court officer will make an attachment of earnings order, fixing
the repayment rate by applying certain guidelines. Only if there is insufficient information
to do so will the matter be referred to a judge. The order will specify the normal
deduction rate and the protected earnings rate. The latter is the amount that the court
considers is reasonable for the debtor to live on, so if their earnings for a particular week
are equal to or less than this figure, the creditor will receive nothing that week.
(d) The order will be sent to the parties and to the debtor’s employer, with instructions
to deduct the amount ordered from the debtor’s pay and forward it to the court.
The employer is entitled to deduct a small additional sum in respect of their
administrative costs.
(e) If either party objects to the order that has been made, they can apply for the matter to
be reconsidered by the district judge at a hearing.

12.7.2 Advantages and disadvantages

Attachment of earnings orders are an effective means of obtaining payment of a judgment
debt provided the debtor remains in work and is not self-​employed. However, if the debtor
loses their job, the payments will cease and if they move employment, the creditor will have

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to repeat the process. In addition, the court may order a very low value instalment so the
judgment will take a considerable time to satisfy.

12.8 Enforcement in another jurisdiction

Whether an English judgment can be enforced abroad and, if so, the method used will
depend upon the nature of the judgment and the country concerned. In some countries, a
simplified process is available but, if not, the party will have to decide whether to issue fresh
proceedings abroad or to give up entirely.
The situation is complicated by the number of different systems in place.

12.8.1 Scotland and Northern Ireland

Enforcing a judgment in the home countries is relatively quick and straightforward and is
governed by the CPR. Part 74 requires a creditor to:
(a) obtain a certificate confirming the date of the judgment, the sum awarded and details of
interest and costs; and
(b) make an application to the court in Scotland or Northern Ireland, supported by evidence,
to register the judgment within six months.
If the application is successful, the judgment will be registered and may be enforced using
local methods.

12.8.2 The Commonwealth

A company may have dealings with a variety of Commonwealth states including Australia,
Pakistan and Jersey. Enforcement is possible under the Administration of Justice Act 1920
for High Court judgments and the Foreign Judgments (Reciprocal Enforcement) Act 1933 for
judgments of the County Court. The judgment must be final and registered within 12 months
for the 1920 Act but the creditor has six years for matters that fall within the 1933 Act. Failure
to do so means the creditor loses their right to enforce outside of the jurisdiction.

12.8.3 Other countries

For all other countries, including Member States of the EU where proceedings commenced on
or after 1 January 2021, the issue of enforcement is dealt with in two ways.
If the 2005 Hague Convention applies (where the parties have an exclusive choice of court
agreement), the judgment will be enforced and recognised in that country.
Alternatively, the common law rules will apply. The effect is that the creditor’s ability to enforce
an English judgment will be determined by the national law of the particular country where
enforcement is sought. The creditor will usually have to issue fresh proceedings and instruct
local lawyers to pursue their claims with the consequential increase in time and cost. This
process can cause difficulties in many countries including important trading partners such as
the USA, Japan and China.

12.8.4 Practical considerations

Where a claim involves a foreign element, the claimant should consider carefully how realistic
their chances of enforcing the judgment are before commencing proceedings. If enforcement
is likely to require new proceedings to be issued, it may be sensible to start the claim in that
country rather than in the English courts.

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Summary
• The question of enforcement should be considered before proceedings are issued to
avoid wasting time and money on a debtor who cannot or will not pay.
• If further details are required on a debtor’s finances, the creditor can apply to the court
for an order to obtain information.
• The creditor should consider the most cost-​efficient way of enforcing the judgment.
• If the debtor has assets with some value, the creditor can apply for an order to take
control of those goods, bearing in mind that some may be exempt from seizure.
• A charging order may be made over any interest the judgment debtor has in land or
certain specified securities.
• A third party debt order may be made against a bank account or building society
account that is in the sole name of the judgment debtor, or a trade debt owed solely to
the debtor.
• If the debtor is employed, an attachment of earnings order may be an effective method
of enforcement.
• The procedure for enforcing an English judgment in a foreign country depends on where
enforcement is required. In many cases, arrangements are in place to assist but, if not, the
law of the State where the judgment is to be enforced will apply.

Sample questions

Question 1
The claimant has obtained judgment for £147,000 against the defendant. The defendant
disputes that he has the means to pay the judgment debt and points out that he lives in
rented accommodation and has no regular income. The claimant has received information
from a friend that the defendant has significant assets including properties, which he owns
in a nearby town.
Which of the following best describes the action that the claimant should take?
A The claimant should write to the defendant requesting that he provide details of his
income, expenses, assets and liabilities.
B The claimant should instruct an enquiry agent to seek further details about the
defendant’s finances.
C The claimant should apply for an order to obtain information from the defendant
relying upon the court officer to ask standard questions.
D The claimant should apply for an order to obtain information from the defendant and
submit additional questions.
E The claimant should instruct an enquiry agent to seek further details about the
defendant’s finances and then apply to the court for an order to obtain information,
including additional questions.

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Answer
Option E is correct. Although the claimant could write to the defendant asking for details of his
finances, given the debtor has already stated he does not have the means to pay, it is unlikely
he will respond properly –​hence, option A is wrong. The claimant should consider applying
to the court for an order to obtain information as there are sanctions if the defendant fails
to comply. However, as the defendant appears to be hiding assets, he may not answer the
questions fully or truthfully; thus, although options C and D are correct, they may not be the
most effective approach.
The best way forward is option E because the claimant will be able to find out specific details
about the defendant’s finances, enabling them to tailor questions appropriately when they
apply for an order to obtain information. As the judgment is for a significant sum of money, it
would be worth the claimant taking both steps before proceeding to enforcement. Option B is
not wrong, but is not as complete as option E.

Question 2
A creditor wishes to enforce their judgment against the debtor (a limited company). After
carrying out enquiries, the creditor establishes that the debtor has a number of assets. They
own a factory premises and the plant and machinery, but rent offices nearby. The debtor
has a bank account that is overdrawn, but a significant amount of money is owed by a
customer for a trade debt. An expensive motor car driven by the managing director was
recently purchased by her for her own personal use.
Which of the assets could the creditor enforce against?
A The creditor could enforce against the factory premises, the plant and machinery and
the trade debt.
B The creditor could enforce against the factory premises, the trade debt and the
motor car.
C The creditor could enforce against the plant and machinery, the rented offices and the
overdrawn bank account.
D The creditor could enforce against the plant and machinery, the trade debt and the
motor car.
E The creditor could enforce against the factory premises, the plant and machinery, the
trade debt and the motor car.

Answer
Option A is correct. The debtor owns the factory premises and the plant and machinery
so both of these assets are available for enforcement, as is the trade debt because
these monies are owed to the debtor. However, the debtor only rents the offices, so these
cannot be enforced against and nor can the motor car as it is owned by the managing
director personally. There are no monies in the overdrawn bank account so this asset is not
available to pay the debt either. All of the other answers either include assets that cannot
be enforced against or miss those that can.

Question 3
The judgment debtor, who is self-​employed, has the following assets: a house, which she
owns but which is subject to a mortgage equivalent to the value, a warehouse, which she
rents and where she stores valuable stock that she purchased for her business, and a
building society account in which she has £100.

215
Dispute Resolution

Which asset is likely to prove the most effective for the creditor to enforce against?
A The creditor should apply for a charging order against the house.
B The creditor should apply for a taking control of goods order for the warehouse.
C The creditor should apply for an attachment of earnings order.
D The creditor should apply for a taking control of goods order for the stock.
E The creditor should apply for a third party debt order over the building society account.

Answer
Option D is correct as the stock is described as ‘valuable’. Although the creditor could apply
for a charging order over the house, the facts state that there is no equity in the property
(option A, therefore, is not the best answer). The warehouse is rented so cannot be enforced
against –​hence, option B is wrong.
Option C is wrong because the creditor is self-​employed and attachment of earnings orders
only apply to those who are employed. Option E is not the best answer as, while a third party
debt order could be obtained over the building society account, the small amount of money
means that it is not the most effective asset to enforce against.

216
 Index

A overview of, 181

timing, 179
acknowledgment of service, 59 arbitration, 2, 6
additional claims, 83, 84 advantages, 7
counterclaim, 83 circumstances, 7
defence and counterclaim, structure of, 83 disadvantages, 8
address for service, 47 enforcement, 8–9
admissibility, of evidence, 161–2, 164 legal authority, 7
admissions, 59 and litigating, compared, 8
specified claims, 59 procedure, 7
unspecified claims, 59 attachment of earnings, 212
ADR see alternative dispute resolution (ADR) advantages and disadvantages, 212
affidavits, 158 procedure, 212
allocation procedure, case
management, 115
case management conference (CMC), 119 B
case summary, 120–1 breach of contract, 22–3, 75–7
directions questionnaire, 115–17 burden of proof, 154
fast track, 115, 117, 118 defendant, 155
and multi-track, differences between, exception, 154–5
119 general rule, 154
procedure, 119 Business and Property Courts, 38
value, 118–19
multi-track, 115, 117, 119 C
directions on, 202–3
and fast track, differences between, 119 case management
procedure, 120 allocation procedure, 115
value, 119 case management conference (CMC),
provisional allocation, 115 120
small claims track, 115, 117, 118 case summary, 120–1
procedure, 118 directions questionnaire, 115–17
type, 118 fast track, 115, 117, 118–19
value, 118 multi-track, 115, 117, 119–20,
track allocation, 117 122–3
alternative dispute resolution (ADR), 2, 25 provisional allocation, 115
failure to engage with, 3–4 small claims track, 115, 117, 118
independent third party, 4 track allocation, 117
nature of, 2 costs management, 124
amendments, to statements of case, 85 costs budgets, 124–5
after expiry of limitation period, 85 order, 125
before expiry of limitation period, 85 summary of case and costs manage-
amount assessment see costs ment, 126
appeals, 178 court sanctions, 127
permission to appeal, 179 other sanctions, 128
destination of, 179–80 striking out a statement of cases, 127
grounds of, 178, 180 directions, failure to comply with, 123
leapfrog appeals, 180 overriding objective of CPR, 114–15
relief from sanctions, 128
Index

case management conference (CMC), 120 reasonable time, 25

case summary, 174 in Scotland, 32
causes of action, 21–2, 75 trial, 12
charging orders, 209 types, 20
advantages and disadvantages, 210 specified claims, 20, 45
final charging order, 210 unspecified claims, 20–1, 45
interim charging order, 210 civil courts, 9, 36
on land, 209 Business and Property Courts, 38
order for sale, 210 County Court, 37
procedure, 210 court selection, 36–7
on securities, 210 High Court, 37
civil claim, 10, 11 Civil Procedure Rules, 9
basic rule, 30–1 claim form, 38–40
case analysis, 21 address for service, 47
breach of contract, 22–3 brief details of claim, 45
causes of action, 21–2 defendant’s name and address for
choice of forum, 29–30 service, 46
choice of law, 29 financial summary, 46
commencement of, 12 heading, 44
debt claims, 27 human rights issues, 46
exclusive jurisdiction, 30 particulars of claim, 46
exclusive jurisdiction by agreement, 30 parties’ details, 44–5
foreign element, 30 preferred County Court hearing centre, 46
interim matters, 12 service of, 48
jurisdiction, 29–32 court-authorised methods, 49–50
limitation, 16, 18 electronic communication means, 49
basic rules, 18 first class post or document
contractual limitations, 17 exchange, 49
effect of, 16 leaving at a specified place, 49
extension of, 17 personal service, 49
time limits, 17 statement of truth, 47
negligence claims, 27–8 statement of value, 45–6
in Northern Ireland, 31 claims, responding to, 58, 68–9
parties to, 19 acknowledgment of service, 59
defendant, 19 admissions, 59
defendant’s location, 19 specified claims, 59
defendant’s worthiness for suing, 20 unspecified claims, 59
suing procedure, 19–20 default judgment, 61
post-trial, 12 procedure, 61
pre-action procedure, 24, 26, 28–29, 30–1 setting aside, 62–4
failure to follow the terms, types of, 61–2
consequences for, 25 defence, 60
Practice Direction, 24 counterclaim, 60
Practice Direction on Pre-Action time limit extension, 60
Conduct and Protocols, 25 discontinuance, 64–5
Pre-Action Protocol for Debt Claims, 27 disputing the court’s jurisdiction, 67
Pre-Action Protocol for Professional pre-action settlements, 65
Negligence, 27–8 settlements reached after issue of
pre-action protocols, 24 proceedings, 65
principles, 24–5 consent orders, 65–6
pre-commencement of proceedings, 10 Tomlin orders, 66–7
reasonable and proportionate steps, 25 Commercial Court, 38

218
 Index

consent orders, 65–6 claimant’s offer, 196–7

contractual disputes, 9, 21, 22–3, 29, 31, 75–7 claimant loses at trial, 199
contractual limitations, 17 claimant wins at trial and equals or
contribution, claim for, 84 beats their own offer, 197–8
costs claimant wins at trial but does not beat
costs management and budgeting, 186–7 their own offer, 198–9
CPR Part 36 offers, 194–202 defendant’s offer, 199–201
acceptance, effect of, 195 claimant loses at trial, 201
claimant’s offer, consequences at trial claimant wins at trial and beats the
of, 196 defendant’s offer, 199
defendant’s offer, consequences at trial claimant wins at trial but fails to beat
of, 199 the defendant’s offer, 199–200
form and content, 194 form and content, 194
non-acceptance, effect of, 195 non-acceptance, 195–6
determination, procedure for, 187 justness, 196
detailed assessment, 188 cross-undertaking, 106
fixed costs, 187
summary assessment, 187–8 D
general rule, 186
inter-partes costs, final, 188 debt claims, 27
amount assessment, factors in, 188–9 deemed service, 51
costs determination on standard basis, of claim form, 51
190–1 of other documents, 51–2
indemnity basis, 191 of particulars of claim, 52–3
standard basis, 189 default judgment, 61
inter-partes costs, interim, 188 definition of, 61
non-party costs, 191–2 procedure, 61
offers to settle and costs, 194 setting aside, 62, 63–4
security for costs, 192 and costs, 63
conditions, 193 discretionary ground, 62–3
justness, 193 mandatory ground, 62
order, 192 orders, 63
procedure, 193–4 procedure, 63
costs management, 124, 186–7 types of, 61–2
costs budgets, 124–5 defence, 60, 79
failure to file on time, 125 contents of, 81–2
order, 125 counterclaim, 60, 85
summary, 126 purpose of, 80–1
counterclaim, 60, 83 reply to, 84
defence to, 85 time limit extension, 60
structure of, 83 defendant, 19
County Court, 37 location, 19
County Court hearing centre, preference of, 46 name and address for service, 46
County Court Money Claims suing procedure, 19–20
Centre, 37, 46 worthiness for suing, 20
court manager, 10 detailed assessment, 188
court sanctions, 127 directions questionnaire, 115–16, 115–17
other sanctions, 128 contents of, 116
striking out a statement of cases, 127 failure to file, consequences of, 117
CPR Part 36 offers, 194 disclosure
acceptance, 195, 196 of document, 134
late acceptance, 89 electronic documents, 138
within relevant period, 195 on fast track, 134

219
Index

disclosure (Continued) use at trial, 158

on multi-track, 135 witness summary, 155
non-party disclosure, 149 expert evidence, 164
orders for, 147 failing to comply with CPR Part 33,
disputing privilege, 148 consequence of, 166
specific disclosure, 147–8 form, 166–7
pre-action disclosure, 148–9 overview of, 167
process of, 138–9, 146, 147 experts
on small claims track, 134 duty of, 164
standard disclosure, 135–6 separate instruction of, 165
control of documents, 136
summary of, 146, 147
discontinuance, 64–5
F
documents fast track, 115, 117, 118, 122
control of, 136 costs determination, 187, 188
definition of, 134 disclosure on, 134
electronic documents, 138 evidence, 164, 165
judgment, 177
E and multi-track, differences between, 119
pre-trial checklists and review, 173
electronic documents, 138 procedure, 119
enforcement officer, 10 timetable, 174
evidence, 154, 158 value, 118–19
admissibility, 164 final charging order, 210
affidavits, 158
financial summary, in claim form, 46
burden of proof, 154
first hand hearsay, 161
defendant, 155
fixed costs, 187
exception, 154–5
freezing injunctions, 106
general rule, 154
expert evidence, 164
failing to comply with CPR Part 35, G
consequence of, 166 goods, taking control of, 207–8
form, 166–7 advantages and disadvantages, 209
overview of, 167 court choice, 208
expert’s duty, 166 procedure, 209
hearsay evidence, 160
admissibility, 161–2
definition of, 160 H
first hand hearsay, 161 heading, in claim form, 44
multiple hearsay, 161 hearsay evidence, 160
structure of, 163 admissibility, 161–2
weight to be attached, 162–3 definition of, 160
opinion, 159–60 first hand hearsay, 161
expert evidence, 159 multiple hearsay, 161
general rule, 159 structure of, 163
personally perceived facts, 159, 160 weight to be attached, 162–3
procedure, 165–6 High Court, 37
relevance, 159 divisions, 38
separate instruction of experts, 165 human rights issues, 46
single joint expert (SJE), 164–5
standard of proof, 155
witness statements, 155, 157–8
I
directions for exchange, 156, 158 impecunious company, 191
form and content, 155–6 indemnity claim, 84

220
 Index

independent third party, in alternative dispute indemnity basis, 191

resolution, 4 standard basis, 189
inspection, 128 interim, 188
of documents, withholding, 143–6
legal professional privilege, 143–6 J
waiver of privilege, 143–6
without prejudice correspondence, 146 judges, 10
right of, 147
interim applications, 92 L
interim costs, 100
legal authority, in arbitration, 7
interim injunctions, 104
legal professional privilege, 143
applicants, 104
legal advice privilege, 143
cross-undertaking, 106
litigation privilege, 144
freezing injunctions, 106
guidelines, 105 summary, 144–5
injunction, definition of, 105 limitation, civil claim, 16, 18
obtained with notice, 106 basic rules, 18
obtained without notice, 106–7 contractual limitations, 17
procedure, 106 effect of, 16
search orders, 106–7 extension of, 17
timing, 105 time limits, 17
interim payments, 107 limitation period, amendments
effect on trial, 108 after expiry, 85
grounds, 108 before expiry, 85
orders, 108 litigation, 2, 9
procedure, 107 and arbitration, compared, 8
timing, 107 civil courts, 9
notice, 93–5 Civil Procedure Rules, 9
overview, 99 court personnel, 10
procedure, 92 court manager, 10
consent orders, 98 enforcement officer, 10
content, 94–5 judges, 10
court choice, 97 ushers, 10
draft order, 98 and mediation, compared, 6
evidence in support, 98 terminology, 9
orders made without notice, 98–9
service, 98 M
telephone hearings and video
conferencing, 100 mediation, 4
purpose of, 92 advantages, 6
summary judgment, 101 business relationship preservation, 5
compelling reason, 102 commercial reality, 5
costs, 103 cost and speed, 5
no real prospect, 101 flexibility, 5
overview, 104 privacy, 5
possible orders, 103–4 withdrawal, 5
procedure, 102–3 disadvantages, 5–6
types of, 92 disclosure, 6
interim charging order, 210 privacy, 6
inter-partes costs withdrawal, 6
final, 188 enforcement, 6
amount assessment, factors in, 188–9 and litigation, compared, 6
costs determination on standard basis, procedure, 4–5
190–1 mediators, 4

221
Index

misrepresentation, 22 O
money judgments, 206
attachment of earnings, 212 opinion, 159–60
advantages and disadvantages, 212 expert evidence, 159
general rule, 159
procedure, 212
personally perceived facts, 159, 160
charging orders, 209
order for sale, 210
advantages and disadvantages, 210
overriding objective, of CPR, 104–5
final charging order, 210
vulnerable parties and witnesses, 115
interim charging order, 210
on land, 209
order for sale, 210 P
procedure, 209–10 parties’ details, in claim form, 44–45
on securities, 210 place of service, 49, 50
enforcement in another jurisdiction, 212 pre-action disclosure, 148
Commonwealth, 213 pre-action procedure, 24, 26, 28–30
Northern Ireland, 213 failure to follow the terms, consequences
other countries, 213 for, 25
practical considerations, 213 Practice Direction, 24
Scotland, 213 Practice Direction on Pre- Action Conduct
enforcement methods, 207 and Protocols, 25
goods, taking control of, 207–8 Pre-Action Protocol for Debt
advantages and disadvantages, 209 Claims, 27
court choice, 208 Pre-Action Protocol for Professional
procedure, 208–9 Negligence, 27–8
judgment debtor’s means, investigation pre-action protocols, 24
of, 206 principles, 24–5
order to obtain information, 206 Welsh language, 8
third party debt orders, 211 pre-action settlements, 65
advantages and disadvantages, 211 pre-trial checklists and reviews, 173
procedure, 211 privacy, in mediation, 5, 6
multiple hearsay, 161 privilege, waiver of, 145–6
multi-track, 115, 117, 119 proceedings
case and costs management, 127, 184 adding, removing or substituting the
case management conference parties, 47–8
on, 120, 164 civil courts, 36
case summary, 174 Business and Property Courts, 38
costs determination, 187, 188 County Court, 37
directions on, 122–3 court selection, 36–7
disclosure on, 135 High Court, 37
evidence, 165 claim form, 38–40
and fast track, differences address for service, 47
between, 119 brief details of claim, 45
judgment, 177 defendant’s name and address for
pre-trial checklists, 173 service, 46
procedure, 120 financial summary, 46
value, 121 heading, 44
human rights issues, 46
particulars of claim, 46
N parties’ details, 44–5
negligence claims, 25–6, 81–2 preferred County Court hearing
non-monetary remedy, 197 centre, 46
non-party costs, 191–2 statement of truth, 47
non-party disclosure, 148–9 statement of value, 45–6

222
 Index

claim form, service of, 48 statement of truth, 47

court-authorised methods, 49–50 statement of value, 45–6
electronic communication means, 49 statements of case, 74
first class post or document additional claims, 83, 84
exchange, 49 counterclaim, 83
leaving at a specified place, 49 defence and counterclaim, structure of, 83
personal service, 49 amendments, 85
deemed service, 51 after expiry of limitation period, 85
of claim form, 51 before expiry of limitation period, 85
of other documents, 51–2 claim form, 74–5
of particulars of claim, 52–3 defence, 79
issuing proceedings, 38 contents of, 81–2
parties to, 44 to counterclaim, 85
place of service, 49, 50 purpose of, 80–1
service out of England and Wales reply to, 84
jurisdiction, 53 ethical considerations, 74
time limit, 50–1 generally, 84
see also claims, responding to particulars of claim, 75
provisional allocation, case management, 115 breach of contract, claim based on, 75–6
negligence, claim based on, 77–8
R requests for further information, 86
procedure, 86–7
relief from sanctions, 128 sum awarded, 197
requests for further information, 86–7 summary assessment, 187–9
summary judgment, 101
S compelling reason, 102
costs, 103
search, duty to, 137
no real prospect, 101
limitations, 137–8
overview, 104
scope of search, 137 possible orders, 105
security for costs, 192 procedure, 102
conditions, 193 summons, 172–3
justness, 193
order, 192
procedure, 193–4 T
settlements reached after issue of Technology and Construction Court, 38
proceedings, 65 third party, independence of, 4
consent orders, 65–6 third party debt orders, 211
Tomlin orders, 66, 68 advantages and disadvantages, 212
single joint expert, 164–5 procedure, 211
skeleton argument, 173 time limit, 50–1
small claims track, 115, 117, 118 time limit extension, 60
costs determination, 187 Tomlin orders, 66–8
disclosure on, 134 tort, 19–20, 27, 29
procedure, 118 trial, 174
type, 118 costs, 177
value, 118 preparations for, 173
specified claims, 20, 45, 59 case summary, 174
admissions, 59 pre-trial checklists and reviews, 175
see also civil claim trial bundles, 173–4
spilt costs, 200 timetable, 174
standard disclosure, 135–6 closing speeches, 175
standard of proof, 155 cross-examination, 175

223
Index

trial (Continued) V
examination-in-chief, 175
vulnerable parties and witnesses, 121
judgment, 175–6
opening speeches, 175
preliminary issues, 168 W
re-examination, 175 waiver of privilege, 145–6
venue, 174 withdrawal, in mediation, 5, 6
witnesses without prejudice correspondence,
attendance of, 172 146
hostile witnesses, 178 witness statements, 155, 157–8
summons, 172–3 directions for exchange,
unfavourable witnesses, 177–8 156, 158
trial bundles, 173–4 form and content, 155–6
use at trial, 158
witness summary, 155
U
witnesses
unspecified claims, 20–1, 45, 59 attendance of, 172
admissions, 61 witness summons, 172–3
see also civil claim hostile witnesses, 178
ushers, 10 unfavourable witnesses, 177–8

224