Welcome
Welcome to the first issue of Inform: Litigation, a regular email newsletter for our international colleagues. With much litigation around the world governed by English law and litigated in the English courts, Inform is designed to provide a general overview as well as highlight recent developments and cases in English Law.
Speechly Bircham is an independent City of London law firm offering a distinctive blend of transactional, advisory and disputes services. It is a key feature of our practice that we offer dispute resolution services across all five of the core areas of the firm – corporate, private client, employment, property and construction.
Commercial disputes can arise in a wide range of areas and are handled by our Commercial Dispute Resolution team. Our strengths lie in the diverse skills of the members of the group, and our ability to master a brief quickly and deliver prompt and expert advice in a wide variety of fields including commercial contract/tort claim, defamation, insolvency, intellectual property, M&A litigation/arbitration, professional negligence and shareholder disputes.
Much of our work is in the English courts but we regularly represent clients involved in disputes in other countries. Our group includes two CEDR-accredited mediators and to read more about us visit www.speechlys.com/disputeresolution
For more information or if you need advice on any matter, please contact Stephen Dobson at stephen.dobson@speechlys.com or +44(0)20 7427 6400 and Ian Timlin at ian.timlin@speechlys.com or +44(0)20 7427 6546 for further information.
Stephen Dobson
Head of Commercial Dispute Resolution
What is arbitration?
Arbitration is an alternative to court proceedings where parties contract to be bound to a third party private decision or award that is normally enforceable as a court judgment.
Why arbitrate in London?
London is thriving as a world centre for arbitrating disputes:
- The Arbitration Act 1996 provides a comprehensive framework for the resolution of disputes by private tribunals in the UK. This applies equally to disputes involving foreign companies which have no connection with the UK aside from a reference to arbitration in London in an agreement between them as well as to UK companies.
- The quality of London-based arbitrators and solicitors practising in this field is considered particularly high.
- Arbitration is private. Parties are free to agree on timescales, procedure, their choice of ‘Judge’ and having their dispute adjudicated on the basis of fairness rather than in accordance with the laws of a particular country.
- An award by an arbitrator in London or of a foreign arbitral award is enforceable.
For more information contact Stephen Dobson.
In England and Wales there are a series of protocols which lay down guidance for parties contemplating legal action. These are known as ‘pre-action protocols’ and are to be followed before proceedings are commenced.
Pre-action protocols aim to encourage people to commence court proceedings to resolve disputes only as a last resort, and after exploring other more appropriate means where available. They are designed to:
- encourage parties to adopt a ‘cards on the table’ approach, by disclosing sufficient information about the prospective legal claim to allow the other party to the dispute to understand their position
- enable parties to avoid litigation where possible by agreeing a settlement before the commencement of proceedings; and
- support the efficient management of proceedings where litigation cannot be avoided (the information disclosed at the pre-action stage should ensure that the areas of dispute are narrowed down to key issues).
There are currently eight pre-action protocols for specific types of dispute:
- Personal injury
- Clinical negligence
- Construction and engineering
- Defamation
- Professional negligence
- Judicial review
- Disease and illness
- Housing disrepair
Whilst the information to be exchanged by the parties and the timeline for exchange of correspondence differs for each protocol, they all follow the same basic principles. Protocols also include template letters for exchanging information. Further details on all eight pre-action protocols, and the pre-action principles for all disputes can be found here.
The Courts have the power to impose cost penalties on parties who bring a dispute to court without following the relevant protocol procedures.
In general, all disputes should follow the same procedure:
- Communicating the problem to the other party (to include details of the issues in dispute)
- Requiring the other party to respond (within a reasonable period of time) on the following:
- if they accept the issues in dispute
- if they do, to propose a settlement
- if they do not, to put their side of the case
- Where there are still issues in dispute after the initial round correspondence, both parties should consider alternative methods of dispute resolution such as ADR or mediation where appropriate
- Where alternative methods of dispute resolution are not appropriate, or if they have been tried and are unsuccessful, then a party may bring proceedings.
For any dispute not covered by a specific protocol, the parties should adopt a “reasonable” pre-action procedure with the intention of avoiding litigation, before commencing proceedings. Such procedure should include “genuine and reasonable negotiations with a view to settling the claim economically and without court proceedings”. Again, cost penalties can be applied to those who do not comply.
For more information contact Michael Hannon.
New Court of Appeal guidelines for enforcing worldwide freezing orders in a foreign jurisdictionWorldwide freezing orders (WFOs) obtained in England usually include an undertaking by the applicant that they will not seek to enforce the order in another jurisdiction without the Court’s permission. However, until recently, no guidance existed on the circumstances in which such permission should be granted.
In April 2006, the Court of Appeal issued new guidelines on how the Court should exercise its discretion when considering whether to grant a party permission to enforce a WFO, or seek an order of a similar nature in a foreign jurisdiction. There are eight guidelines known as the Dadourian Guidelines, named after the successful respondent in the appeal (Dadourian Group International Inc and others v Simms and others [2006] EWCA Civ 399). The most important of these guidelines are summarised below:
- The applicant must show that there is a real prospect that assets are located within the jurisdiction of the foreign court in question
- The grant of permission should be just and convenient for the purpose of ensuring the effectiveness of the WFO and not be oppressive to the parties in the English proceedings or to third parties who might be joined in foreign proceedings
- The interests of the applicant should be balanced against the interests of other parties and any new party likely to be joined to the foreign proceedings
- Permission should not normally be given in terms that would enable the applicant to obtain relief in the foreign proceedings which was superior to the relief given by the WFO
- The evidence in support of the application should contain all available information necessary for the Judge to reach an informed decision. This includes evidence about applicable law and practice in the foreign court, the nature of the proposed proceedings, as well as the assets believed to be located in the jurisdiction of the foreign court and the names of the parties who held such assets
- There must be evidence of a risk of dissipation of the assets.
The new guidelines should simplify the position for victims of fraud and those involved in asset recovery.
For more information contact Ian Timlin.
Enforcing foreign judgments in England and WalesThe main legislation governing the recognition and enforcement of foreign judgments in England and Wales is complicated.
The principal factor which determines the applicable rules for enforcing a foreign judgment is the identity of the Court and country which gives the judgment.
Administration of Justice Act 1920 ("AJA 1920")
Under the AJA 1920 and subsequent legislation, judgments obtained in the superior courts of Commonwealth Countries (eg Cyprus, Grenada, New Zealand, Singapore) may be enforced by registration in the UK.
Foreign Judgments Reciprocal Enforcement Act 1933 ("FJREA 1933")
The FJREA 1933 allows the judgments of higher courts in various foreign countries, with which the UK has entered into bilateral treaties, to be enforced by registration. The UK has reciprocal enforcement arrangements with the following countries and territories: Australia (not every territory), Austria, Belgium, Canada (not every territory), France (and all overseas territories), Germany, Guernsey, India, Isle of Man, Israel, Italy, Jersey, Netherlands, Norway, Pakistan, Suriname and Tonga.
Civil Jurisdiction and Judgments Act 1982 (“CJJA 1982”)
Section 4 of CJJA 1982 provides that a judgment of a Court of another contracting state to the Brussels Convention, the Lugano Convention or the Jurisdiction and Judgments Regulation, will, following registration, have the same force and effect as if the judgment had been given in England and Wales. This governs the enforcement of judgments from all EU countries other than Denmark.
The procedure for registration of foreign judgments (pursuant to the above legislation/conventions) is that the judgment or a certified copy of it, together with the translation if the original judgment is in a foreign language, is lodged with the High Court of Justice in London together with the affidavit in support of an application for the judgment to be registered. Full details of the procedure and the grounds upon which a defendant can set aside the registration are set out in Part 74 of the Civil Procedure Rules.
Enforcement of judgments where there is no automatic recognition
Judgments of countries which do not have reciprocal enforcement arrangements with England and Wales (eg USA, Japan and the States of the former Soviet Union) may be enforced by bringing an action on the judgment. The foreign judgment is the cause of action and an application can be made for summary judgment on the grounds that there is no defence to the action.
In order for a foreign judgment to be enforced the English Courts must be satisfied that the foreign court had jurisdiction according to the English rules of private international law.
Please do not hesitate to contact us if you require any assistance in enforcing a judgment obtained in your country against assets in England and Wales.
For more information contact Julie Thrower.
A closer look at termination clausesMany contracts allow one party to terminate when a breaching party fails to remedy its breach within a stipulated period. In Artpower Ltd & Another v Bespoke Couture, a recent judgment from the Court of Appeal (3 November 2006), it was established that, in certain circumstances, the innocent party may, as well as giving notice of the breach, have to take positive steps to notify the breaching party (at the end of the period for remedy) that the contract is terminated in order for the termination to be effective.
- The contract stated that “This agreement may be terminated…[following] a material breach of any term of this agreement which…shall not have been remedied within thirty days”(emphasis added).
- The Court of Appeal decided that the word “may” meant that further action had to be taken to terminate the contract after the period for remedy expired – it did not terminate automatically after thirty days.
- This decision overturned that of the Judge, who found automatic termination, “neither uncommercial nor impractical”.
- The importance of this decision is potentially very high – if an innocent party fails to terminate properly it faces the consequences of still being obligated under the contract.
- However, it is an issue that can be dealt with very simply by good drafting or the conduct of the parties and, as such, one of which contentious and non-contentious lawyers should be aware.
For more information contact Michael Hannon.