What to do when you receive a claim form16 May, 2023 - Dispute resolution | by Grosvenor Law
Grosvenor Law commercial litigation partner Richard Coopey explains what to do when legal proceedings are served on you.
Oftentimes, the receipt of a claim form is expected. Parties have been in correspondence for months, lawyers are instructed already and the potential defendant is aware that there is not a realistic deal to be done. The thump as the court pack drops through the letterbox is unwelcome but not a surprise. In these circumstances, the response is often easy – the litigators take over and the cogs begin to whir.
Sometimes, however, a claim is received like a bolt from the blue – perhaps a claimant has not bothered with any pre-action correspondence, or maybe a newly acquired company has an issue that the seller omitted to mention (that may generate its own litigation, of course). In any event, when a claim form is received there are a number of key first steps that should be taken in order to avoid prejudicing a defendant’s position going forward.
- Firstly, do not ignore the claim form and read it carefully – in particular, check and double check the date you received the form and diarise the next steps, which will be set out in the claim form and accompanying documents. Whilst theoretically possible to recover from missed deadlines, there are no guarantees and the best case scenario will involve increased costs. It is far better to act as promptly as possible.
- Secondly, check that the claim form has been served on the right person and in the right place. A claim form sent to the wrong company or to the wrong address might not be validly served. Whilst a claimant can likely remedy this easily, if matters are close to a limitation deadline, this could be a crucial point to note.
- Thirdly, consider whether the English courts have jurisdiction or whether you should dispute it. Do you have an agreement to arbitrate or that the courts of another country should hear the dispute? Are you based outside of England and, if so, has the claimant obtained permission to serve you out of the jurisdiction, and would another court be more appropriate?
- Fourthly, consider whether you can oppose the claim – if there is no reasonable prospect of mounting a defence then it may be better to avoid the legal costs involved, especially as England operates (by default) a “loser pays” system so you can pay a proportion of the other side’s costs too. That said, litigation can be a strategic tool – coming up with a viable defence, even one which may not ultimately succeed, can aid negotiation and help to buy, at the least, time. However, if the counterparty is someone you want a continuing commercial relationship with, avoiding the antagonistic litigation process may be desirable. Directors of defendant companies should be mindful of their directors’ duties when determining which course of action to follow.
- Fifthly, preserve all your relevant documents. It is essential that you suspend any routine document destruction that would cause loss of relevant materials – the court can impose harsh penalties if documents are destroyed and it could even materially harm your underlying case. Documents is a broad term – think outside the box – it is not just letters and notices, but word documents, emails, WhatsApp chats and Slack channels.
- Sixthly, consider other ways to resolve the dispute. Might a settlement meeting be helpful? Alternatively, mediation is a useful tool that can help to settle knotty disputes before the litigation process kicks off in earnest. The courts in England are keen to see parties try to resolve their disputes without a trial, and it is often possible to obtain a stay of proceedings to give space for attempts to settle. It is a sad fact that once the court process starts and legal spend mounts, parties can become locked into the litigation and it is harder to settle – until the Court steps
Finally, it goes without saying that instructing experienced, specialist litigation solicitors is a very sensible first step. Grosvenor Law is ready to advise clients who find themselves in the uncomfortable position of receiving a claim. When we are instructed to defend those claims, we fight to win.
Richard Coopey specialises in complex cross-border disputes, especially shareholder and M&A disputes, as well as contentious trust matters acting both for beneficiaries and trustees and disputes arising out of lending secured on residential and commercial property in England and overseas.
Richard has experience of arbitrations under most major institutional rules, as well as in the English Courts and of matters connected to the major common law offshore jurisdictions including in the Caribbean and the Channel Islands. Richard is a solicitor-advocate and sits as a Deputy District Judge.
Richard can be contacted on firstname.lastname@example.org
The contents of our blog posts do not constitute legal advice and are provided for general information purposes only.