Conducting Litigation: A Reminder of the Court’s Expectations

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The Court of Appeal has recently given a further reminder to parties to litigation that they are expected to explore settlement and conduct litigation in a collaborative and constructive manner, notwithstanding that they are in dispute. In OMV Petrom SA v. Glencore International AG [1] Petrom succeeded at trial in beating the terms of its own financial offer made to Glencore at the start of the case. Glencore failed to respond to the offer or put forward any proposals of its own.

In his judgment, the Lord Chancellor, Sir Geoffrey Vos QC, set out the Court’s expectations of the conduct of the parties: [2]

“The culture of litigation has changed….Parties are no longer entitled to litigate forever simply because they can afford to do so. The rights of other court users must be taken into account. The parties are obliged to make reasonable efforts to settle, and to respond properly to Part 36 offers made by the other side. The regime of sanctions and rewards has been introduced to incentivise parties to behave reasonably, and if they do not, the court’s powers can be expected to be used to their disadvantage. The parties are obliged to conduct litigation collaboratively and to engage constructively in a settlement process.”

The Court also took the opportunity to remind the lawyers of their obligations: [3]

“The Court will be more ready in the future to penalise opportunism. The duty of care owed by a legal representative to his client takes account of the fact that litigants are required to help the court to further the overriding objective. Representatives should bear this important obligation to the court in mind when considering whether to advise their clients to adopt an uncooperative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions.”

Before embarking on litigation, and during the litigation itself, it is important to ensure that you are regularly reviewing the strategy with your advisers, including all available forms of ADR.

Paul Kite is a Partner and head of the Commercial Dispute Resolution Team at IBB Solicitors. He is a qualified commercial mediator.

References:

[1] [2017] EWCA Civ 195[2] para 39 judgment [3] para 35 judgment quoting Lord Dyson, Master of the Rolls, in Denton v. TH White Limited [2014] 1 WLR 3926