Covid-19: Litigating During a Pandemic
The current pandemic has changed the way litigation is conducted, both in terms of the process of proceedings and the types of disputes that we see as a consequence.
Litigation trends
In recent months, we have seen clients and their businesses encounter challenges as a result of the crisis, namely:
The inability of businesses or their contract counterparties to discharge contractual obligations. All non-essential businesses have been shut for at least 2 months, which means that there is a likelihood that many businesses may have struggled, or been unable to fulfill their contractual obligations. Contracting parties will be grappling with express contract provisions (such as force majeure) or looking to the common law doctrine of frustration to suspend or avoid obligations altogether. This will have a significant impact on businesses, who may face a delay in obtaining or delivering on orders or services and knock on pressure from others in the supply chain.
Professional negligence claims. A lot of businesses have furloughed a number of staff members and not having a full workforce may mean that resources are stretched. Further, a majority of the professional services sector has been working from home, which splits up teams and makes communication harder. This could potentially lead to damaging mistakes which could in turn result in professional negligence claims.
Businesses will encounter situations where their debtors have cash flow problems owing to the pandemic, meaning that it may be difficult to obtain payment in a timely manner. Debtors may seek to use the pandemic as an excuse not to pay their debts.
Businesses are, often for the first time, seeking to obtain business interruption insurance cover. Many have seen claims declined in circumstances where they would have had a legitimate commercial expectation of cover.
Courts
The current circumstances have required a flexible, new way of conducting litigation. This includes the way in which the Courts approach hearings. The Court has taken the following measures to ensure that litigation is still conducted in accordance with the overriding objective:
Practice Direction 51Y was implemented in late March and provides that all proceedings are to be conducted wholly as video or audio proceedings. Courts have been forced to adapt the way proceedings are traditionally held and instead opt to use technology such as Skype and Zoom. This also has a bearing on the litigators whom are preparing for the proceedings. Bundles will have to be electronic, as opposed to paper, which could take longer. Parties will also have to change the way in which they approach the hearing, making arguments “on screen”, instead of in person.
Further to the above, the Courts implemented a temporary Practice Direction 51YZ, which allows for extension of time limits for compliance with Court deadlines and allow for parties to agree extensions of up to 56 days instead of the usual 28.
Some courts have been closed, which means that any non-urgent application may suffer delays. Measures have been put into place, however, to ensure that any urgent applications are heard promptly. If you or your business have an urgent application, please get in touch with us and we can advice you on the steps that need to be taken.
Practical Steps
There is no right way to prepare for these unprecedented times, and there is no indication of how long they will last. It is therefore vital that businesses react as best they can. If your business has encountered contractual difficulties, late payment of debts or other legal issues as a result of the pandemic, it is prudent to seek early legal advice to see what can be done to best resolve the situation. We are always happy to have an initial, no obligation conversation about a problem and explain how we can help.
Loney Stewart Holland LLP is a specialist dispute resolution practice headquartered in Bristol with a base in London. Please visit our website at https://www.loneystewartholland.co.uk/ for further details on our team and the services we offer.
Alistair Stewart
M: 07869 435226