In the UK, the courts view commercial litigation as a measure of last resort. Parties who are experiencing a business dispute are expected to explore alternative ways of resolving it, such as negotiation or another form of alternative dispute resolution (ADR), before issuing a claim. Litigation can be effective when used appropriately, but it is also demanding, time-intensive, and costly. Before committing to court proceedings, it’s worth reflecting carefully on a few considerations, pulled together by Prosperity’s team of specialist commercial litigation solicitors.
The cost of litigation
Commercial litigation can be expensive, and costs are often difficult to predict. As a case develops, new issues can emerge, procedural steps may increase, and expert evidence may be required. Even if you win, it’s unlikely that all your legal costs will be recovered. Although the losing party is usually ordered to pay a significant proportion of the winner’s expenses, recovery is rarely complete, and there is always a risk that the court will reduce what is recoverable on grounds of proportionality.
Before instructing solicitors, it’s sensible to review your financial position. Ask yourself whether you can fund the process if the case becomes more complex than expected. If you do not have suitable insurance cover, you may wish to consider “after-the-event” (ATE) insurance or external litigation funding. These options can help limit your personal exposure to costs, but they are not appropriate in every case.
The opponent’s financial position
It’s equally important to consider whether the opponent could realistically satisfy a judgment. Even a strong case has limited value if the defending party has insufficient assets or is likely to become insolvent. Enforcement can be difficult, costly, and, in some circumstances, practically impossible. An early assessment of your opponent’s financial standing can prevent wasted time, effort, and legal fees.
The impact on future business relationships
Although commercial and contract disputes often arise between long-standing business partners, litigation can strain – even sever – those relationships. Court proceedings are inherently adversarial and can make it difficult to maintain any form of professional cooperation going forward. If preserving the relationship matters to you, ADR may offer a more constructive and less confrontational route. Mediation, for example, allows both parties to speak openly and work towards an outcome that protects commercial interests without escalating conflict.
Time commitment
Litigation is a time intensive process. Straightforward cases may take a year or more to reach trial, and more complex disputes can continue for several years. Preparing evidence, reviewing documents, attending hearings, and staying engaged throughout the process can be both disruptive and exhausting – particularly for small businesses, their owners, and senior team members. If you need a quicker resolution, certain forms of ADR can be far more efficient.
Disclosure obligations
The disclosure process is a central feature of commercial litigation. Parties must provide all relevant documents in their possession, regardless of whether they support their case or undermine it. Confidential materials can be protected through appropriate orders, but they still need to be disclosed if they are relevant. Before issuing proceedings, consider carefully whether there are documents that could materially weaken your position. A specialist solicitor can help you understand these obligations and assess the potential impact on your case, before you start the process of litigation.
How Prosperity can help
If you’re unsure whether commercial litigation is suitable for your situation, we’re here to help. At Prosperity Law LLP, our commercial litigation solicitors in Manchester and Liverpool has extensive experience guiding clients through complex disputes. We take the time to understand your objectives, evaluate the merits of your case, and advise honestly on whether litigation is likely to be worthwhile or whether an alternative route might better serve your interests.
To discuss your matter, call us on 0161 667 3686 or fill out the form below.
We’ll be happy to talk through your options and support you as you decide on the next steps.
About the author
Andrew is the Office Managing Partner and leads the Manchester litigation team.
He is an experienced commercial litigator who deals with a wide variety of business disputes, including breaches of contract, negligence (by professionals and others), directors’ duties, shareholders’ rights, sale and supply of goods and services, construction and fraud.
Andrew has represented clients in court proceedings up to and including the Supreme Court but is also a strong advocate of using alternative dispute resolution (especially mediation) to find commercial, cost-effective solutions to clients’ disputes.
