Any commercial dealing carries the risk of a legal dispute arising. Disputes can arise for a variety of reasons, including:
- Differences in goals and aspirations;
- Differences in the subjective understandings of commercial relationships;
- A party straightforwardly refusing to perform its legal obligations; or
- One party’s inability to perform its legal obligations.
Legal disputes can be resolved both within the context of litigation and without the need for litigation, although a resolution without a Court determination requires agreement between the parties to a dispute.
It is generally desirable for a party who has suffered a legal wrong to attempt to resolve a dispute before determination by a Court for reasons that include the following:
- Litigation of a matter until Court determination can be a lengthy process, and unlikely to be less than a 9-month process in the Local Court of NSW and less than a 12-month process in the higher Courts;
- Litigation is often stressful for parties involved and often requires the distraction from normal life and business in the form of instructing lawyers, the preparation of evidence, attending Court and so forth;
- Court determination involves placing a decision in the hands of the Court. To this extent, the outcome is not within the control of the parties, and there is the potential the Court will not see things ‘your way’;
- Litigation is a time-intensive process for lawyers, which correlates to higher professional fees the further a matter is litigated without resolution by the parties.
Letters of Demand
While some disputes require the commencement of proceedings on an urgent basis, we generally consider it advisable for an aggrieved party to try and see whether the dispute can be resolved without the need for litigation. The way we generally like to approach this is by taking your detailed instructions about the nature of the dispute, and preparing a letter of demand that methodically articulates your entitlement to some outcome, whether it be payment of an outstanding debt, compensation, possession of a property or otherwise.
This allows your legal opponent to get a sense for the strength of your claim, the idea being that if properly advised, your demands should be agreed to without the need for litigation.
Whether such a pre-proceeding demand does not result in total agreement to your demands, it frequently does open a settlement negotiation process.
Frequently Asked Questions
How are Legal Proceedings Commenced?
Generally speaking, legal proceedings are commenced by the preparation and filing of a document called a statement of claim.
A statement of claim requires the setting out, in a very step-wise fashion, the facts a party alleges that:
- it will later be able to prove by evidence; and
- which entitle the party to the relief (Court orders and outcome) the party seeks.
Effectively drafting a statement of claim requires a detailed knowledge of the nature of the dispute and the evidence (including documents) that a party will be able to present to substantiate its claims. It also requires an understanding of what your opponent is likely to allege.
As far as possible, it is in a party’s interest to ensure that the statement of claim is ‘right’ from the outset. For this reason, we generally take very detailed instructions in preparing a statement of claim, including requesting documents and preparing a detailed chronology of relevant evidence.
What Happens When Legal Proceedings are Commenced?
Once a statement of claim is served, a defendant generally has 28 days within which to file a defence.
Once the statement of claim is served, the proceedings need to be finalised in some manner. The options are:
- if no defence is filed, obtaining a default judgment against the defendant;
- discontinuing the proceedings, an option that is rare unless as part of a settlement because it generally has negative costs consequences for the party wanting to discontinue the proceedings;
- settling the matter before the Court hears the dispute and gives its judgment; and
- having the matter determined by the Court (Judge or Magistrate).
How Can Proceedings be Settled?
Proceedings can be settled at any time before the Court gives its judgment.
Settlements can be achieved in a variety of contexts such as:
- through the acceptance of an offer of compromise: an exchange of letters or execution of a settlement agreement;
- at mediation: mediations are meetings attended by parties to a legal dispute with their lawyers and a trained mediator. The purpose of the mediation is to make a concerted effort to settle the dispute, and the role of the mediator is to facilitate that objective. The mediator assists in a variety of ways, including by (a) maintaining decorum, (b) maintaining the focus on a commercial approach to settlement as opposed to an emotional approach, (c) maintaining an impetus to settlement, and (d) to each party individually, pointing out likely weaknesses in its case, and where its approach seems to be unreasonable;
- through informal settlement conferences; and
- even in Court, such as by agreeing consent orders or a settlement agreement.
One of the benefits of resolving a dispute by settlement is that there is scope for broader agreement than on the specific subject matter of the legal proceedings, and the agreement can give a party rights that could not be the subject of an order made by the Court in the proceedings. Put another way, the resolution of a dispute by settlement gives its parties a lot of flexibility in how disputes can be finalised.
What Does Litigation Involve?
In broad terms, where legal proceedings are commenced and move to determination by the Court, the proceedings move through various phases.
After a defence is filed, legal proceedings are subject to what is known as case management. Through this process, the Court makes orders to push the matter towards readiness for hearing.
The phases are generally:
- preparation and service of affidavit evidence;
- document production;
- any interim disputes about the above;
- preparation for hearing; and
- hearing.
Evidence Preparation
In the context of civil litigation, evidence is generally given in the form of affidavits (sworn written testimony).
Although in the Local Court of NSW affidavits are often exchanged by the parties at the same time, it is usually the case that the service of evidence is staggered, the plaintiff serving its evidence first, the defendant second, and then the plaintiff serving evidence in reply (responding to new matters raised in the defendant’s evidence).
Although it depends on circumstances, it is fairly common for the plaintiff to have four weeks to prepare its evidence-in-chief, the defendant to have four weeks to prepare its evidence-in-chief, and for the plaintiff to be allowed a similar amount of time to serve its evidence-in-reply.
While parties may think of the matter as relatively straightforward, expressing evidence in an admissible form and a form that best advocates for the party’s case requires a lot of attention to detail.
Generally, affidavits are prepared in sequentially numbered paragraphs in chronological order, and conversations need to be expressed in dialogue form using (as best as can be remembered) the actual words said in conversations.
A witness should expect that his or her affidavit will go through a number of drafts before being ready for swearing.
Having formerly practiced as a barrister, our principal solicitor has a working command of the laws of evidence.
Document Production
A party will often want to obtain documents from another party to the proceedings or a third-party relevant to the dispute. In popular understanding, the means of obtaining such documents is the subpoena, although as between parties to the proceedings there are other means for obtaining documents as well, such as discovery or notices to produce.
Some of the reasons a party would want to call for documents are as follows:
- to support the party’s own case: say, for example, your case involves a telephone conversation on a certain day with an opponent party. Say the opponent party denies having any conversation at all, and also the substance of the alleged conversation. In such circumstances, you might want to:
- call for the telephone records of the opponent party, both from them and from their telephone service provider; and
- call for file notes or internal email correspondence made by the opposing party referencing that conversation.
- to challenge claims made by an opponent witness in an affidavit: the circumstances might be such that if what the opponent party says is true, there would inevitably be documentary evidence of it. If a subpoena is issued for this documentary evidence and no documents are produced, this might be used as a foundation for challenging the plausibility of the opponent’s evidence.
- to obtain information that you could not know yourself. Suppose, for example, you traded a business as a recruitment agency where your fee entitlement was a percentage of an introduced job candidate’s remuneration package. Suppose your client employed the candidate without telling you and has refused to disclose the remuneration package. In the context of legal proceedings, you might want to call for the employment contract and pay slips of the candidate to allow you to precisely quantify your fee entitlement.
Preparation for Hearing
A lot of the preparation for hearing is done by a party’s lawyers. Depending on the Court, it can involve:
- the preparation of written submissions;
- the preparation of a statement of agreed facts and issues (worked through in conjunction with an opponent’s solicitor);
- the preparation of Court books according to Court standards; and
- general preparation by the advocate for hearing (such as preparation for cross-examination, evidentiary objections and so on).
Hearing
Court hearings generally follow a common structure:
- case openings (summaries) given by each advocate;
- objections to the plaintiff’s evidence;
- the calling of the plaintiff’s witnesses (one by one) for their cross-examination by the opponent party’s advocate;
- objections to the defendant’s evidence;
- the calling for the defendant’s witnesses (one by one) for their cross-examination by the plaintiff’s advocate; and
- closing submissions.
Being cross-examined can be an intimidating experience, and many witnesses feel as though they were unable to properly explain themselves or elaborate. Although the stress of cross-examination can never be fully overcome, a witness conference in which what to expect is explained can go a long way to preparing a witness a settling nerves.