Dispute Resolution

More than people expect — but not in the way they fear. Civil cases are decided on the balance of probabilities: which party's version of events is more likely true on the evidence, namely witness statements, documents and (where relevant) expert reports, all prepared and exchanged well before the hearing. On the day the judge hears oral evidence, tests it in cross-examination, listens to argument and applies the law to the facts. Where the judge does have wide discretion is on costs: even a successful party can be penalised for behaving unreasonably — refusing to mediate without good reason, ignoring a Part 36 offer, or making the case more expensive than it needed to be. Judges also make credibility assessments where witnesses contradict each other, which is why the quality of your contemporaneous documents and the consistency of your account matter so much. "It'll depend on the judge on the day" is usually shorthand for "our evidence on this issue is weak" — a precarious position, and a good reason to assess the strength of your evidence honestly before you litigate.

It means that correspondence or conversations marked "without prejudice" — where you are making a genuine attempt to settle a dispute — cannot be shown to the court as evidence against you if settlement fails and the matter proceeds to trial. The purpose is to let parties negotiate openly without fear that an offer or concession will be used against them. Key points: it only applies where there is a genuine dispute and a genuine attempt to settle it; the label alone does not protect ordinary correspondence that is mislabelled; and it protects what you offered to settle, not the underlying facts. The important variant is "without prejudice save as to costs": this stays off the table during the trial itself but can be shown to the judge after judgment when deciding who pays the costs. So if you make an offer and want it to have a sting in the tail on costs if rejected unreasonably, use "without prejudice save as to costs" or a Part 36 offer — plain "without prejudice" correspondence cannot be shown on costs at all.

A Part 36 offer is a formal settlement offer made under Part 36 of the Civil Procedure Rules, designed to create significant costs consequences for a party that unreasonably refuses a reasonable offer. It must be in writing, state that it is made under Part 36, allow at least 21 days for acceptance, and be a genuine offer to settle. If a claimant makes a Part 36 offer, the defendant rejects it, and the claimant then matches or beats it at trial, the claimant is entitled to indemnity-basis costs from the end of the relevant period, enhanced interest of up to 10% above base rate on damages and costs, and an additional payment of up to 10% of the award (capped at £75,000). If a defendant makes a Part 36 offer and the claimant fails to beat it at trial, the claimant pays the defendant's costs from when the relevant period expired — even though they technically won. A well-pitched Part 36 offer creates genuine financial pressure to settle, and it is automatically treated as "without prejudice save as to costs".

Pre-action protocols are rules under the Civil Procedure Rules governing what parties must do before issuing proceedings. Broadly, the potential claimant sends a detailed letter of claim, the other side responds within a specified time, and both exchange relevant information and documents — the aim being to narrow the issues, encourage settlement, and where possible avoid litigation entirely. You have to care because non-compliance is not a technicality the court overlooks: if you issue proceedings prematurely the court can order you to pay costs even if you win, stay the proceedings, or penalise you on assessment. Equally, if the other side stonewalls or ignores the protocol, that counts against them on costs later. A well-drafted letter of claim is also the foundation of your pleadings — it shapes the other side's response and locks them into a position they will have to defend. Treat it as substance, not a box-ticking exercise.

Winning gives you a judgment — a court order requiring payment — but not necessarily the money. If the defendant does not pay voluntarily you must enforce, using options such as a warrant of control (county court bailiffs), High Court enforcement, a third-party debt order (freezing a bank account), a charging order (over property), or attachment of earnings (for an employed individual). If the defendant has no assets, enforcement may be worthless. On legal costs, the starting point is that the loser pays the winner's reasonable costs, but it is only a starting point: in the small claims track you recover no solicitors' fees; in the fast and intermediate tracks you recover Fixed Recoverable Costs (often less than your actual spend); and in the multi-track even a successful party typically recovers only 60–70% of their costs on the standard basis. The economics of litigation are not simply "win = recover everything", which is why advice on the economics matters as much as advice on the merits.

Mediation is a structured, confidential process in which an independent mediator helps the parties reach a negotiated settlement; the mediator does not impose an outcome, and any agreement reached and signed is legally binding. For claims of £10,000 or less, courts now expect parties to engage with the Small Claims Mediation Service as a matter of course. For larger claims mediation is not strictly mandatory, but unreasonably refusing to mediate can result in a costs penalty regardless of the trial outcome. It often makes sense because it resolves the large majority of commercial disputes that go through it, is faster, cheaper and more confidential than litigation, and can produce commercial outcomes a court could never order. Because mediation is without prejudice, nothing said in it can be used in court if it fails.

Longer than most people expect, and it varies by track and complexity. A properly run pre-action stage typically takes 4–12 weeks (longer in complex cases). From issue, the small claims track is typically 6–9 months to hearing; the fast track 9–15 months to trial; the intermediate track 12–18 months; and complex multi-track commercial cases 2–3 years or more. Disclosure, witness statements, expert evidence and costs budgeting each add time — and the pre-trial stage is often where cases settle, frequently within 48 hours of trial after many months of litigation. You can help your own timetable by responding promptly to every direction, gathering and organising documents early, not changing solicitors mid-case without good reason, and complying with the pre-action protocol before issuing.

Because the dispute is never just one dispute. In an owner-managed business the same two or three people often wear several legal hats at once — director (with duties under the Companies Act 2006 to act in the company's interests, avoid conflicts and use their powers properly), shareholder (with rights under the articles, any shareholders' agreement and company law), and employee (with contractual and statutory rights to salary, notice, a fair process and sometimes unfair dismissal protection). So a founder fallout usually operates on several levels at once: "I've been excluded from management" can be an unfair prejudice issue; "they removed me as a director" is a governance issue; "they cut off my salary and access overnight" is an employment and contract issue; and "they're stripping value out of the company" can be a breach of directors' duties. Look at only one layer and you miss the real leverage and the real risks. Removing someone from the board may be technically possible under the articles, but in a quasi-partnership it can still support an unfair prejudice petition under section 994; terminating employment does not remove a shareholding; and removing a director does not settle how their shares are valued or bought out. Winning one skirmish often triggers another, which is why these disputes become so destructive — they affect control, income, dividends, reputation, information and the future ownership of the business.

It means stepping back from the immediate grievance and looking at the whole legal and commercial picture before making a move. A global approach asks what hats each person is wearing (director, shareholder, employee, guarantor, lender); what documents govern each relationship (articles, shareholders' agreement, service and employment contracts, option documents, loan notes, personal guarantees); what the real objective is (return to the business, exit on fair value, an injunction, removal of a wrongdoer, protection of assets, or a clean split); where the pressure points are (cash flow, bank mandates, board control, information rights, salary, dividends, client relationships, restrictive covenants, reputation); and which claim or threat shifts the negotiating position most (unfair prejudice petition, derivative claim, injunction, debt claim, employment action or a negotiated buyout). The opposite — reacting tactically to the latest outrage with a single narrow claim — is often incomplete and can accidentally strengthen the other side or harden the dispute. In multi-hat disputes the endgame is rarely "winning" a single point; it is a controlled commercial outcome: who stays, who leaves, who gets paid what, who keeps the clients, and what happens to the shares. In practice a global approach means preserving evidence immediately, securing company documents lawfully, reviewing the constitution and all service and employment agreements together, identifying urgent risks (bank access, asset diversion, client poaching, misuse of confidential information), deciding whether the priority is an injunction, pre-action correspondence, without prejudice negotiation or a petition, and keeping the settlement structure — especially valuation and exit terms — in view from the outset.