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Unit 9 – Tactics In Commercial Disputes Notes

LPC Law Notes > Commercial Dispute Resolution Notes

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Unit 9 - Consolidation CDR

Disadvantages of litigation against a debtor:Time consuming - debtor can stall entry of judgement (14 days from CF to file ack then they get 20 days from CF for defence - you then have to apply to strike out defence or summary judgement - could take weeks) Costs unlikely to be recovered in full - costs for CF/interim app/sol costs ALL unlikely to be paid in full Entering judgement does not guarantee payment - judgement can affect D credit rating but many D will still ignore Judgements can be ignored May need to take steps to enforce judgement - more time and costs Litigation stayed if debtor becomes bankrupt/is wound up - client ranks as 'unsecured creditor'If D owns a property, judgement can be enforced by obtaining a charging order which would mean C is a secured creditor


1. 2.

Clause 7.1/2 has been breached potential breach of clause 6 - not putting notice on invoice Lancashire can check Pipers b/a - clause 19 What client is liable to pay under factoring agreement
- pay the money (PS160,000)to Piper with interest 5% over base

3. What step scan Lancashire Capital Plc take in relation to alleged debt Commence a debt action - CF followed by summary judgement - Piper no reasonable chance of defending CPR 24.2 Enforce their security - COR 8 (fixed over business premises/floating over debtors/stock) Petition for winding up Terminate the contract (Clause 17.2.1.)

4. Further info needed from client
- Has the money been paid by Stockport to Piper
- Had Lancashire previously been offered the debt
- Did they stick notices on the invoices
- Financial situation of Piper (debts)
- What do Lancashire have security over OUTCOME 1 - procedural and tactical steps possible and why takes them D can pay but is stalling for time Advice to C

Corporate insolvency Undisputed amount of
PS750 or more, Piper will WANT to pay, they wont they bad publicity/potential of going insolvent if they owe other creditors/might make it difficult for them to trade/Insolvency procedure takes time and costs money

D can't pay full amount CF + Summary judgement No defence with real prospect of success, C gets a quick judgement, can take enforcement action and become a secured creditor Don't want to do use corporate insolvency as will tell other creditors that D doesn't have enough money to pay everyone

D doesn't think they owe full amount and will resist paying CF + interim payment Disputed debt but at least PS750 undisputed, best option to try and get some money while D and C argue/go to trial over full amount due (no reason not to go for summary judgement at same time as procedure and time limits are the

D is overdrawn but director of D co gave personal guarantee Personal insolvency D must have some assets otherwise you wouldn't have accepted the guarantee

Advice to D

Pay the debt now before a winding up petition is issued

Attempt to negotiate with creditor

same) Negotiate over the amount due

We can't advise D personally as we represent company (O3.5 conflict of interest) tell the director to go and get independent advice

OUTCOME 2 - grounds for interim apps Interim App

Strike out statement of case When When there should it be isn't any used legal basis for the other party's case Grounds CPR 3.4 - strike out statement of case on grounds that:

1. it discloses no reasonable grounds for bringing/defen ding claim

2. it abuses courts process


1. Try to resolve with other side first OO

2. Serve N244 with WS (CPR

24.7) on party at least 3 days before hearing (CPR

23.7(1) - unless other time limits given Other

CF +Summary Judgement

CF + Interim Payment

Security for costs (D only!)

When the opposing parties case isn't very strong

When you want to force D to make an early payment of damages

When D is worries that C will not be able to pay costs

CPR 24-

CPR 25.7
- D admitted liability to pay damages; or
- C has obtained judgement against D for damages to be assessed; or
- C would obtain judgement of a substantial amount of money if went to trial

Court must be satisfied that it is just to make such an order, plus one of the CPR 25.13(2) grounds:

1. C is resident outside of the EU (company or individual)

2. C is a company and there is reason to believe that it will be unable to pay D costs if ordered to do so

Claim has no real prospect of success

24.2(a)(i) Defence has no real prospect 24.2(a)(ii)

If judge refuses summary judgement app then C can apply for a conditional order if give D notice of intention to do so before hearing and judge will order that D pay full amount of % of C's claim

CPR 24.2 - (1)(a) D has to file ack of service or defence
- 24.4(3) C must give 14 days notice of hearing +issue to be decided
- 24.5(1) D can serve evidence at least 7 days before hearing
- 24.5(2) C can serve response at least 3 days before hearing Adv
- Early end to proceedings saves time and costs

- Enforce judgement over premises + turn into a secured creditor Risks to C:
- Other creditor may

Must provide detailed breakdown of costs incurred to date and those likely to be incurred
- CPR 25.6(3) app C must provide notice and evidence - Bank guarantee served at least 14
- Pay money into days before hearing court
- CPR 25.6(4) D may - Pay money into joint serve written account held by evidence in response parties sol at least 7 days before hearing
- CPR 25.6(5) C respond by written evidence before hearing Interim payments How much might D be ordered to pay?
- CPR 25.7(4)
- No more than a reasonable proportion of likely final judgement taking into account contributory negligence and any set off or counterclaim that

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