The British Institute of International and Comparative Law’s call for ‘breathing space’ to prevent courts and tribunals being overwhelmed by a rush of commercial cases arising out of the Covid -19 pandemic seems sensible enough at first glance. However, while it may make sense in the context of ‘bet-the farm’ mega cases in international courts and arbitral tribunals, it has far less to commend it at a practical day-to-day level for businesses that feel that they have no option but to sue for money due to them if their non-legal attempts to get paid have failed. For them, that money is what will give them ‘breathing space’ and they will rightly want to apply maximum pressure to get it.
From an English legal perspective, and regardless of whether claims are issued in the High Court or county court, our pre-action procedures effectively have a built-in ‘breathing space’. Claimants must follow the applicable pre-action protocol to avoid the well established and understood cost consequences that judges will not hesitate to visit on them if they don’t. The spirit, as well as the letter, of those protocols puts in place a pre-issue process which enables parties to understand their opponent’s position and take stock before they choose to sue. My experience is that this leads to a large number of successful outcomes that take account of commercial realities and can often get cash flowing more quickly than litigation can, and without the associated legal spend. Many contracts also include binding dispute resolution clauses that can achieve the same outcome without the need, or cost, of getting into the court. These are sensible provisions that are well worth considering including in agreements that are being drafted now if you are concerned about the potential impact of future delays in the court system and opponents using these to their advantage.
If the pre-action process does not get a result it can still help ensure that only those issues which genuinely need a judge’s attention go to court. The court’s case management powers are also robust enough to enable judges to filter those issues and encourage parties to attempt to resolve disputes through alternative dispute resolution methods, even if one or both of them has been reluctant to attempt ADR before a claim was issued.
Whilst there is no doubt that the impact of the Government’s current restrictions on social and commercial life are introducing unwelcome and difficult delays into the collections and litigation process, businesses should not be discouraged from litigating viable claims against viable defendants if there is no other option.
Sensible claimants constantly reflect on their position and how they can get the best outcome that might be available, but I doubt that defendants who try to use the Institute’s call as an attempt to delay or obfuscate will persuade them to hold back. Defendants would be far better advised to use the pre-action protocols’ ‘cards on the table’ approach to be up front and come to terms that enable both sides to get past their issues and get on with doing business without the distraction of their dispute.