By Amanda Hamilton, CEO, National Association of Licenced Paralegals (NALP)
There are times when a business needs specialist legal help; raising finance, checking contracts, and obtaining or granting permissions are among the most common reasons for seeking legal advice. Unfortunately, another thing that is common among SMEs is debt collection. It is always best to do what you can to keep these matters out of court, but sometimes (perhaps because of the aggressive nature of the other party—and/or their solicitor—and an unwillingness to compromise) court is the only option. This may require that you instruct a solicitor of your own, but it is possible to avoid this added expense.
A litigant in person (LIP) can be an unrepresented party (either an individual, company or organisation) or a self-represented party. If you plan to represent yourself in a civil case in court, you need to understand the steps and know where to get help if needed.
This help can be obtained by engaging the services of a licenced paralegal practitioner. They are much more cost effective and can do almost all the same jobs as a solicitor, with a few exceptions, known as ‘Reserved Activities’. For example, they cannot ‘conduct litigation’ meaning that they are not able to be an agent for you to receive service of documents or letters on your behalf, nor can they sign or file court documents on your behalf.
However, they can assist you in your role as a LIP and complete forms and draft documents on your behalf, but you need to sign and submit them yourself.
The first step in a civil action, is to comply with Civil Procedure Rules and this means that the other party (the potential defendant) must be sent a letter describing what the issues are and what is required to resolve them, and to give a date by which this needs to be done. Failing to comply with such resolution or timeline will mean that court action will be taken without further notice. This is known as the ‘pre-action protocol’.
If there is no response, or the matter has not been resolved to the satisfaction of the claimant, then proceedings can be commenced. You need to ensure that you are fully aware of the consequences of taking this step. Some civil actions take many months (sometimes years) to resolve and can be extremely costly.
On one hand, collecting a debt is one type of case that can be dealt with relatively simply if the debt is not more than £10,000, as this can be heard by a District Judge in chambers rather than in open court. On the other hand, anything with a higher claim or more complexity will be dealt with in open court.
Be aware you may need specialist help
If you are dealing with a complex case, the question you need to ask yourself is whether you need to instruct a solicitor or a direct access barrister to assist. There are many areas where a paralegal practitioner can help you, but sometimes, you may have bitten off more than you can chew. A level of specialised expertise may well be required. Think about whether a barrister could be instructed directly. This may cut out a huge amount of cost, but the downside is, that as a LIP, you will be receiving all communications from the other side’s solicitors, and this could add extra stress to what is probably already a stressful situation.
When a claim from is issued, it is done so in triplicate: one is kept by the court, the other is given to the claimant and the third is sent to the Defendant with a response pack. This requires the defendant to respond within 14 days, either by producing a defence or by acknowledging receipt and stating that a defence will follow. Of course, the defendants may just decide to settle the case at this point, but if a defence is filed, then the ball starts rolling and the costs start to pile up.
When the numbers count
At this point, the next stage is very much dependent on what type of case it is. The case will be allocated to a court ‘track’, and this will depend on the subject matter of the case itself. There are three tracks. The first relates to small claims (see earlier). Essentially track allocation depends on the value and complexity of the case and the CPR overriding objective which relates to ‘representation’, ‘fairness’ and ‘proportionate cost’. The other tracks are ’Fast Track’ for claims over £10,000 and up to £50,000 and ‘Multi-Track’ for high claims or complex cases, although sometimes a case could be allocated to the Multi-Track if it is a lower claim amount, but only if it is quite complex. Generally there will be directions that the court will give the parties as to the conduct of the case, and these must be adhered to precisely.
With more complex cases, there may even be a requirement to have a ‘costs budget’ hearing requiring the parties to assess the costs they may incur throughout the court proceedings, and this will include, lawyers’ costs for drafting and attendance at hearings, expert witness costs if required and permitted, and can include your own LIP costs in dealing with the matter personally, plus any incidental costs incurred. At such a hearing the judge will decide what may be fair in the circumstances and adjust the draft budget produced by both parties.
Thereafter, the court case will unfold according to the Direction Order of the court which gives precise dates and times when each stage has to be completed.
So, to sum up, the most important thing to consider is whether you are willing to go ahead with court proceedings given the stress, length of time and cost involved. If not, then you must be willing to compromise. Mediation is sometimes a good avenue to explore possible settlements but only if both parties are willing to meet halfway.
Amanda Hamilton is Chief Executive of the National Association of Licenced Paralegals (NALP), a non-profit membership body and the only paralegal body that is recognised as an awarding organisation by Ofqual (the regulator of qualifications in England). Through its Centres around the country, accredited and recognised professional paralegal qualifications are offered for those looking for a career as a paralegal professional.