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Commercial Dispute Resolution

COMMERCIAL DISPUTE RESOLUTION

Effective dispute resolution can help to minimise the damage and costs to relationships that may arise from commercial disputes between businesses. In a situation where informal negotiations fail to resolve a dispute, there are several options available in order to avoid Court proceedings.

 

Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) can often prove quicker and more cost effective than issuing Court proceedings. ADR may also aid in avoiding unwanted publicity through Court proceedings open for public inspection.

Commercial contracts often specify ADR should be used to resolve disputes. In most cases, courts will expect the parties to a dispute to engage in ADR prior to litigation.

Mediation: parties meet with a mediator to aid in reaching an agreement. Mediation can only be used if both sides agree – the outcome is not binding.

Arbitration: parties present their case to an arbitrator who will make a decision on how to resolve the dispute. Arbitration, although at times more expensive and confrontational, allows for a definite resolution as the arbitrator’s binding decision generally has to be accepted by all parties.

 

In the construction industry, however, disputes are generally handled using a less formal adjudication procedure.

 

Litigation

If the dispute has not been successfully resolved through ADR, we can assist with court proceedings. Even once court proceedings have been issued some forms of ADR – such as mediation – can still be pursued.

At Clarke Barnes Solicitors we have extensive experience in all areas of Commercial Dispute Resolution, and will be able to ensure the most efficient dispute resolution strategy is adopted.

Freezing Injunctions

Freezing injunctions are interlocutory applications that are made to the Court, generally without giving notice to the other party. A successful application for a freezing injunction will result in the Respondent to the application having their assets frozen to a sum fixed by the Court. The Injunction will stay in place from the time granted until trial (except in exceptional circumstances which we can advise on should they arise). Whilst freezing injunctions do not grant the applicant security for the sum that is frozen they do ensure that the monies caught by the application are kept in place until the trial of the claim against the Respondent.

 

The Respondent will be able to spend a fixed weekly sum on their ordinary living expenses and/or business transactions as well as any debts that fall ordinarily due. The Respondent will also be able to spend money on their legal expenses. The exact level they are entitled to spend will be set by the Court. It might be that the level of the injunction being sought will mean the Respondent has other monies not caught by the Freezing Injunction. In such circumstances the Court will generally not allow use of the monies caught by the Freezing Injunction.

 

To succeed in such an application there is a need to show to the Court the following:

– A good arguable case;
– A real risk that the Respondent will dissipate their assets if the order is not given;
– That the order is just and convenient.

 

Freezing Injunctions can be obtained against the Respondent’s assets in England and Wales, and on a worldwide basis. The additional benefit of obtaining a Freezing Injunction is the Respondent will have to serve an affidavit setting out all assets owned within a set time period of the Injunction being served. This will enable the applicant to fully understand what assets the Respondent holds and to make an informed judgement on whether it is commercially viable to bring a claim against the Respondent. If a Freezing Injunction is obtained, an undertaking will need to be given to the Court stating that should it be shown that the Freezing Injunction has caused damage to the Respondent, the damages suffered will be met.

 

Clarke Barnes are experienced in advising on Freezing Injunctions and are well versed in filing the required application at Court. We understand that whilst Freezing Injunctions are, when used correctly, a very useful armoury in litigation, both to protect your position and to gain a tactical advantage, if used incorrectly they can result in substantial liability to the applicant. At Clarke Barnes we are able to advise when such an application is appropriate.

Defence of Freezing Injunctions

Freezing Injunctions are a useful tool for applicants when issued in the correct circumstances. However, when issued (and obtained) in the wrong circumstances they can have negative repercussions for the applicant.

 

An application for a Freezing Injunction is generally issued on an ex parte basis. This means the application is issued and heard by the Court without notice given to the Respondent. At the ex parte hearing the applicant is required to give full disclosure of all material matters and to give a cross-undertaking for damages to the Court. This means they undertake to the Court that should it be shown that the Injunction was obtained incorrectly and it has caused damage to the Respondent, the applicant will meet the costs of the damages incurred.

 

After the Freezing Injunction has been obtained on an ex parte basis there a Return Date set for both parties to attend Court and give reasons for why the Injunction should continue (in the case of the applicant) or be discharged (in the case of the Respondent). A Freezing Injunction will cause immense disruption to the Respondent once it has been served as it will apply to all associated banks and any other known creditors or financial institutions. An Injunction carries a Penal Notice which means that non-compliance with the terms of the Injunction could lead to an application for committal to prison. It is therefore vital to obtain legal advice immediately on being served with an Injunction to prevent acting in contempt of Court.

 

Our solicitors at Clarke Barnes are experienced in providing the specialist advice needed in the immediate aftermath of a Freezing Injunction being served.  We can not only ensure compliance with the terms of the Injunction, but also in the handling of banks and financial institutions and in securing the availability of weekly budgets for general living, business and legal expenses.

 

There are several bases on which a Freezing Injunction can be challenged at the Return Date hearing. For example, the applicant may have misled the Court, or simply failed to disclose all facts. At Clarke Barnes we are experienced in advising on circumstances in which a Freezing Injunction may be discharged. Should you have failed to comply with the terms of a Freezing Injunction and are in contempt of Court we will be able to advise on the steps required to avoid or defeat your committal to prison.

Specific Disclosure

Parties in litigation are under a duty to disclose all documentation that is relevant to the proceedings, whether it assists their case or not. If a party fails to disclose documentation that it is under duty to disclose, the other party is entitled to apply to the Court seeking an order requiring the offending party to disclose the documentation it has failed to disclose in breach of its disclosure obligations. In addition the offending party, should an order for specific disclosure be made against it, will be required to pay the successful party’s costs of the application.

 

At Clarke Barnes we have significant experience in drafting such applications. We have advised on, and issued, numerous specific disclosure applications. For example Arthur Barnes, partner at Clarke Barnes, successfully issued an application against a leading bank in an intellectual property case that resulted in the additional disclosure of 84 ring binders of documentation the bank had previously withheld. The claim settled in favour of our client two weeks after the disclosure of the documentation following an in-depth analysis of its impact on the claim. Specific Disclosure applications can be a useful tool within the litigation process and if issued correctly can result in the successful party obtaining a significant advantage to their benefit.

Pre Action Disclosure

Pre action disclosure applications are often issued in personal injury claims when the proposed Defendant fails to provide requested documentation within the required pre action protocol period. An application is filed at Court seeking an order that the Respondent to the application discloses the documents that have been requested. The application is dealt with at a hearing before a District Judge where an order will be made for the Respondent to disclose the requested documentation, usually within a period of 7 days from the hearing. Such an application is a cost effective way of narrowing issues before significant legal costs are incurred by both parties in the litigation process.

 

However, pre action disclosure applications are not only relevant to personal injury claims and can be issued in many areas of litigation when the proposed Defendant (or in rare cases the Claimant) fails to disclose documentation that is relevant to the proposed claim and could assist the parties in narrowing the issues of dispute. Clarke Barnes Solicitors LLP are able to advise on whether a pre action disclosure application would be appropriate in any potential litigation case and can support in filing the application in Court and in dealing with the advocacy at the hearing of the application.