Commercial Disputes FAQs

Commercial disputes can arise quickly and escalate just as fast. When contracts are breached, debts go unpaid, or business relationships break down, parties often turn to the courts to protect their interests. But litigation is not a step to take lightly.

Here you will find clear answers to frequently asked questions about the commercial litigation process in England and Wales. Whether you’re a business owner, general counsel, or overseas investor facing a dispute governed by English law, understanding your options and obligations can make all the difference.

What Is Commercial Litigation?

Commercial litigation is the process of resolving business-related disputes through the courts. It covers claims between companies or between individuals and companies over matters like contracts, finance, and commercial fraud.
What sets commercial litigation apart is the complexity and scale of the disputes, often involving high-value claims or industry-specific issues. The Commercial Court, part of the High Court, hears many of these cases and is known internationally for its expertise and efficient handling of commercial matters. Specialist judges with commercial law backgrounds hear these disputes, which helps ensure consistency and quality in judgments.

What Types of Disputes Are Handled in Commercial Litigation?

Typical claims include:

Breach of contract (supply, distribution, consultancy)
Agency and partnership disputes
Banking and financial services litigation
Insurance and reinsurance claims
Shipping, transport, and logistics cases
Technology and digital commerce disputes
Allegations of commercial fraud

Which Courts Hear Commercial Litigation Cases?

The court used depends on the complexity and value of the claim. The main venues include:

The Commercial Court, part of the King’s Bench Division of the High Court, for high-value or complex cases
Circuit Commercial Courts, based in major regional centres, offering a more accessible route for lower-value claims
The County Court, for straightforward claims up to £100,000
The High Court, for cases valued at more than £100,000 or with significant legal issues

If your claim involves technical matters, urgency, or cross-border elements, the Commercial Court in London may be the most appropriate venue.

What Is the Process for Bringing a Commercial Claim?

The commercial litigation process begins before you ever set foot in court. The pre-action stage includes:

Drafting and sending a letter of claim, outlining the dispute and the remedy sought
Engaging in early discussions or alternative dispute resolution (ADR), such as mediation, adjudication, or arbitration.
If the matter cannot be resolved, proceedings start by issuing a claim form and serving particulars of claim, setting out the legal and factual basis for the claim.
The defendant then files a defence and, if appropriate, a counterclaim. Both parties may then engage in disclosure, witness statements, and possibly expert evidence, leading up to trial unless the case settles out of court (which a majority do).

What Are the Civil Procedure Rules (CPR)?

All commercial litigation in England and Wales is governed by the Civil Procedure Rules (CPR). These set out how claims must be conducted, from filing documents to disclosure and trial.

The CPR are underpinned by the overriding objective, which is to ensure that cases are dealt with justly, efficiently, and proportionately.
This includes:

Saving time and expense
Ensuring parties are on equal footing
Encouraging early settlement
Understanding the civil procedure rules for business disputes is essential for avoiding mistakes and managing a claim effectively.

How Long Does a Typical Commercial Litigation Case Take?

The timeline depends on the case’s complexity, the court’s availability, and whether ADR is attempted.

Simple claims may resolve within six to 12 months
Complex, high-value cases can take 18 months or more to reach trial

Delays may arise if the parties need more time for evidence or settlement talks. Courts encourage settlement throughout, and many disputes conclude long before a final hearing.

What Are the Possible Outcomes of Commercial Litigation?

Outcomes may include:

A court judgment in favour of one party, possibly including damages, injunctions, and a legal costs award
Settlement, either formally through mediation or informally via negotiation
Discontinuance, where one party drops the claim
Appeal, if there is a dispute over legal findings or procedural fairness

After judgment, the winning party may need to enforce the order through methods like charging orders, third-party debt orders, or insolvency proceedings.

What is the Small Claims Court?

For commercial disputes valued at under £10,000, the Small Claims Court offers a cost-effective and simple method for resolution.

Common types of claims that are heard in the Small Claims Court include:

Unpaid invoices
Faulty goods
Property damage
Breaches of contract
Professional negligence

The Small Claims Court process is deliberately informal and you designed for people to represent themselves rather than instruct a Solicitor.

Who Pays the Legal Costs in Commercial Litigation?

Generally, costs are not recoverable in the Small Claims Court. Because of this, it is often wise to look at alternative solutions such as negotiation or mediation. In cases involving debt recovery, we provide a specialist, cost-effective service – Debt-Claims Solicitors.

If your case is heard in a higher court, the losing party typically pays a proportion of the winning party’s costs. This includes court fees, solicitors’ fees, barristers’ fees, and expert reports.

However, the court has wide discretion. If either party has acted unreasonably, they may be penalised with reduced cost recovery.

Cost budgeting is also a part of the litigation process, especially in the High Court and for cases above £50,000.

Understanding costs in commercial litigation in England is vital when weighing the risks of bringing or defending a claim.

What Are the Risks and Alternatives to Litigation?

Litigation is time-consuming, public, and expensive. For these reasons, many parties explore alternative dispute resolution (ADR) first. Common forms include:

Mediation, where a neutral third party helps negotiate a settlement
Arbitration, a binding private process governed by the Arbitration Act 1996
Arbitration (for construction disputes)

ADR can often preserve business relationships, reduce legal spend, and resolve disputes more quickly than court.

Settlement discussions can take place at any stage, and courts may penalise parties who refuse ADR without good reason.

Can International Parties Access the English Courts for Commercial Disputes?

Yes. English law is frequently chosen in international contracts for its predictability, neutrality, and the strength of the Commercial Court.

If a contract contains a jurisdiction clause in favour of the English courts, this usually ensures that the claim will be heard in England and Wales.

What are some Common Misconceptions Concerning Commercial Litigation?

“I can’t recover legal costs if I win.” In most cases, the losing party pays some or all of the winner’s costs.
“Going to court is always necessary.” Many disputes settle or are resolved through ADR without issuing proceedings.
“Any solicitor can handle commercial litigation.” Specialist knowledge is from an experienced Commercial Law Solicitor is essential, especially in complex or high-value cases.
“English courts can’t deal with overseas parties.” They can and do, especially where jurisdiction or choice of law clauses exist.
“Litigation always ends in trial.” In fact, most commercial cases settle well before reaching court.

Conclusion

Commercial litigation can be a powerful tool for resolving business disputes, but it should be approached with care. Early advice from a solicitor, a clear understanding of the commercial litigation process in England and Wales, and careful attention to costs and alternatives can help you make informed decisions.

Where possible, consider ADR and look for opportunities to resolve matters early. If court action is necessary, be ready to meet the procedural demands and manage the risks.

If you are unsure how to begin or need help evaluating your case, please call (0115) 955 6555 or fill in our contact form.