Litigation: Take Legal Advice as Early as Possible

False perception of the merits of the claim or defence

You may be thinking of making a claim for compensation or some other remedy, or it may be that you are on the receiving end of a claim. You may think you have either a good claim or weak one; similarly, you may believe you have a good defence or a weak one. But you could be wrong – you may have a stronger claim or a weaker defence than you think.

Misplaced confidence, partial or lack of knowledge of contract terms, law and procedure may soon send you down a blind alley or a maze you cannot readily get out of. If you do not actually know for sure how strong or weak your claim or defence is then it cannot make sense to blindly carry on.

Taking early legal advice following a proper assessment of the merits or de-merits is essential to best determine your next step, as the obstacles can be numerous and the process complex.

Early assessment

Early assessment is hugely important. Better knowledge will help you adopt a better strategy and decide whether to settle early or later. Lack of understanding of the meaning of terms in a contract, such as a lease, procedural rules and the law, can be highly prejudicial.

Pitfalls aplenty

Many potential pitfalls await. The claim may have no standing if the court has no jurisdiction; the claim may not be based on any real cause of action; your case may have started in one track and end up being re-allocated to a different track, be it cost-bearing or non-cost-bearing; your claim or the defence may be time-barred; or you may not have complied in time with court directions and need relief from sanction.

The longer the case goes on, the more complicated it can become (if it was not complicated at the outset) and the greater the risks. The issue of cost liability can end up becoming more important than the value or subject matter of the dispute. Worse still, if you win, do not expect to recover all of your costs, and do not expect the court to proactively help you take steps to recover your compensation and costs. There can still be a long road ahead to recovery of losses.

A realistic assessment of your legal position is critical

You need to consider how strong your evidence is, whether there are any issues with any witnesses or expert reports, and whether there are any genuine prospects for succeeding at court against the other party. However, it is important to note that even strong cases can carry a risk of failure at court as it is ultimately up to the presiding judge to make a decision. Favourable outcomes are never guaranteed.

Litigation can take years to reach trial. During this period, time and emotional energy are all tied up in the dispute. An out-of-court settlement can bring a quicker resolution to the dispute, reduce any disruption to personal life and/or business operations, and allow parties to move forward. Some businesses may be inclined to settle on a commercial basis and want to preserve confidentiality.

Read more about why in a commercial dispute, settlement might yield the best outcome for you.

Control over outcome

Settlement gives parties control. Terms can be negotiated creatively including structure of any payments, the outcome of any future business arrangements, and any non-financial remedies such as apology letters or corrective actions. At a trial, the outcome is imposed by the court and even a win may not deliver a satisfactory result.

Enforcement and finality

A judgment following trial provides a clear, enforceable outcome. However, enforcement can still present challenges if the losing party is unwilling or unable to pay. This could result in further court involvement for Court Orders and instructing High Court Enforcement agents to enforce any court decision. Settlement agreements can also be binding and enforceable, particularly when formalised properly, but they rely on both parties’ co-operation.

The Courts in England and Wales actively encourage parties to explore Alternative Dispute Resolution (ADR) options such as mediation or arbitration. Refusing to engage in ADR can have cost consequences, even for the winning party. The courts expect parties to act reasonably in seeking resolution.

Seek legal advice early

Making the right decision whether or not to proceed, or to settle early or later, or bring the claim to court depends on a range of considerations – necessity to obtain redress, assessment of the risks, the legal strengths of the claim or defence, personal and commercial priorities, funding for advice, assistance and representation and recoverability.

A pragmatic approach as opposed to an emotional one will usually lead to the best outcome. A prudent person should take litigation advice early, which can help avoid costly mistakes later on.

If you may be involved in a dispute and are unsure which route to take, seeking specialist legal advice at an early stage can make a significant difference to both the process and the result.

If you think you may be heading towards a dispute, our dispute resolution team can review your position and advise on the best way forward, whether that is an early out-of-court settlement or defending your position. Get in touch to arrange an initial discussion.

Call us on 0161 667 3686 or fill out the form.