Litigation during and after Covid-19: Do we need more breathing space?

The British Institute of International and Comparative Law has called for ‘breathing space’ to prevent courts and tribunals being overwhelmed by a rush of commercial cases arising out of the Covid-19 pandemic. Simon Walsh comments on the reality for English business owners.

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.

CONTACT SIMON

If you would like more information or advice relating to this article or a Commercial Litigation & Dispute Resolution law matter, please do not hesitate to contact Simon Walsh on 01727 798085.

Running your business and fulfilling contractual obligations during the Coronavirus Pandemic
Photo of a red arrow SA Law
Views & Insights
Guidance issued to assist businesses and consumers impacted by COVID-19

Covid cancellations, refunds and contract terms.

Read More
SA Law Commercial Litigation Dispute Resolution pencils
Views & Insights
Alternative dispute resolution: Why should you mediate (and what happens if you don’t)?

Clare Mackay explains mediation in a commercial setting and how it can be employed to resolve disputes.

Read More
Photo of a red arrow SA Law
Views & Insights
COVID19 and the new outlook for insolvency legislation

A look at the temporary and permanent measures under the Corporate Insolvency and Governance Bill 2019-2021 that aims to reduce the Covid-19 pandemic’s…

Read More
SA Law Commercial Litigation Dispute Resolution pencils
Views & Insights
An update on the FCA’s intervention in disputes over business interruption insurance coverage

The FCA’s proposed court action for a declaration on the meaning of certain policy wordings to achieve clarity and certainty for SMEs and others involved…

Read More
SA Law Commercial Litigation Dispute Resolution pencils
Views & Insights
Covid-19 and insurance disputes

As news of insurers rejecting claims continue to spread, Simon Walsh shares guidance about look at if you think you have insurance cover that should respond…

Read More
SA Law Commercial Litigation Dispute Resolution pencils
Views & Insights
Litigation during and after Covid-19: Do we need more breathing space?

Simon Walsh comments on the call for ‘breathing space’ in litigation and the effect of the pandemic on commercial contracts.

Read More
SA Law Commercial Litigation Dispute Resolution pencils
Views & Insights
What is responsible contractual behaviour?

Simon takes a look at what constitues as "Responsible contractual behaviour" in the performance and enforcement of contracts impacted by the COVID-19…

Read More
SA Law Commercial Litigation Dispute Resolution pencils
Views & Insights
Tips for Avoiding CCJs During the Covid-19 Pandemic

Litigator Simon Walsh shares tips for avoiding county court judgements during COVID-19 and a reminder on the time limits.

Read More
SA Law Property Litigation
Views & Insights
The Coronavirus Act 2020 – the impact on residential tenancy agreements

What protections does The Coronavirus Act 2020 offer to residential landlords and tenants?

Read More
SA Law Red arrow neon light image
Views & Insights
Data protection and the coronavirus pandemic

Good news: The ICO provides clarity on common areas of data concerns during the unprecedented coronavirus pandemic.

Read More
SA Law Property Litigation
Views & Insights
March Quarter Day - To pay or not to pay?

With the March “quarter day” coming just days after the Covid-19 lockdown was announced, it isn’t surprising that many commercial landlords and tenants…

Read More
SA Law Commercial Litigation Dispute Resolution pencils
Views & Insights
The impact of Coronavirus on commercial contracts and force majeure clauses

Can we rely on COVID-19 being a force majeure event, in order to avoid our contractual obligations?

Read More
Views & Insights
SA Law's Guide to Working from Home

As the outbreak of coronavirus continues and as society adapts to its challenges there has been a massive increase in employees working from home. Read…

Read More
SA Law Commercial Litigation Dispute Resolution pencils
Article
Tips for renegotiating contract and payment terms

As the UK faces unprecedented uncertainly in the face of Coronavirus, one of the biggest priorities for organisations is cashflow. SA Law’s litigation…

Read More
Stained glass window Employment SA Law
Views & Insights
Measures to help SMEs keep trading during Covid-19 outbreak

Read Keely Rushmore’s comments in the Financial Times

Read More

SA Law's Mailing List

Sign-up to our Knowledge Share update, and get the full weight of SA Law’s expertise behind your decisions

© SA LAW 2020

Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them alone. You are recommended to obtain specific advice in respect of individual cases.