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The claim culture
Page 40
Page 41
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How should you react if a customer or a member of the public sues your business?
Richard Booth runs through the steps that
you should take to deal with the situation — and the common pitfalls you need to avoid.
It isn't difficult to find yourself on the wrong end of a legal action for anything from breach of contract — such as selling a vehicle which is said to have been inaccurately described — to a negligence claim for damage not covered by your insurance. It's important to know what to do if and when that claim form lands on your mat.
Since 1999 the courts have been governed by the Civil Procedure Rules. These are designed to ensure that every case is dealt with justly, fairly and quickly For example, a Claim Form should be a last resort so a court will expect to see that the parties have tried to resolve the dispute first.
Anyone who fails to make a genuine attempt to reach an early resolution could suffer financial penalties.
If a claim is received you should ask two questions:
• What are the key dates with which my company must comply?
• What practical steps can be taken? The period in which a defendant is granted to respond to a claim does not start until a Claim Form and Particulars of Claim have been served.The Particulars of Claim should set out the legal grounds for the claim, the facts and the solution sought by the claimant.
Deemed service —the date on which you are judged to have received the claim — is another important consideration. The rules differ depending on the way the papers have been served. Most will be sent by first-class post. where the deemed date of service is the second day after posting. However.service may also be conducted personally by the claimant, by fax or even e-mail.
Timing is everything
Confirm with the court the date of deemed service and find out when a response isdue. If the Claim Form has been served on you personally by the claimant,write acknowledging receipt of the claim and stating the date of service. Some claimants may try to take tactical advantage on the basis that your dates were wrong.
As a defendant, you have 14 days from the date of deemed service to do one of the following:
• File or serve an Admission Form, admitting the claim or the amount claimed.
• File a defence if some or all of the claim is denied.
• File an Acknowledgment of Service if you are unable to file a defence within the 14 days. or if you plan to dispute the court's jurisdiction. This gives a further 14 days within which to file a defence.
If your company fails to file an Acknowledgment of Service or a defence within the time period, the claimant can usually obtain a default judgment — you automatically lose. Only by
application will the court even consider overturning the judgment..
You must consider the following: • Liability— is your company liable for the loss suffered/damages claimed? If you accept liability and the figure claimed by way of loss/ damages then the claim is admitted.
• Value — the real issue in a case may not be liability. You may have accepted your company was at fault but believe the claimant is exaggerating the level of loss or has calculated the level of compensation wrongly.
• Commercial context — is the dispute with a valued customer or supplier? If so, it may be sensible not to resist the claim. Remember that you may not even be able to recover costs, and if you lose you may also have to pay your opponent's costs.
• Outcome — ask yourself what the best commercial outcome would be for your company. Is some kind of commercial settlement the best way forward?
Check if your company has an insurance policy that covers legal disputes.The policy may require that the insurance company's solicitors handle the matter on your behalf. Do not take any steps until you have notified your insurers.
Mounting a defence Instruct solicitors aS L! a rly as possible, especially if you wish to defend part or all of the claim. Disclosure of documents (including e-mails) relevant to the case held by both parties will at some stage he required. There is an obligation to preserve documents for future inspection.
Certain documents attract legal confidentiality. which is known as 'privilege': this usually includes documents relating tc advice. Internal documents producec proceedings have been started will ger not be privileged and are therefore pote diselosable to the other side. Employe( company directors should be made of this.
Are people who have direct knowledge the matters in dispute still with your bus Would they be willing to give eviden the company's behalf? Try to ensure a employment duty to co-operate.
If you are settling out of court, m written record of the settlement. Ensur the settlement terms are clear and are i and final settlement" of the dispute. Th help to make sure that it is not re-opened future. Above all, if a dispute is imminen legal advice. • *Richard Booth is a solicitor at inferno lawfirm Eversheds, specialising in comm litigation.
REX HAULAGE
We recently reported the case of I Haulage which had its licence revc and was disqualified from holding 0-licence for three years (CM November). We have learned that thE subsequently granted a stay of decision pending an appeal to Transport Tribunal.