3 September 2019
The statistics are now in and we can see who has been keeping the Courts in England and Wales busy in 2018. In many areas there have been significant increases in cases going to trial. However, interestingly, there has been an overall decrease in the number of commercial litigants ending up at trial in 2018 compared with 2017 possibly as a result of the growing emphasis upon Alternative Dispute Resolution (ADR).
Breakdown of Business Cases in the English Courts*
- In the first quarter of 2018, the construction and property sector litigated the most with a 54% increase of cases compared to the first quarter of 2017. More specifically, 126 construction and property companies litigated to trial in the first quarter of 2018 more than any other commercial sector. This compares to the 82 companies that litigated the year before. The increase of cases brought by construction and property company litigants may be attributed to the construction and property sector's decision to exit low-margin contracts entered into during the recession.
- Between the first quarter and third quarter of 2018, business disputes involving the banking, financial services and insurance sector saw an increase in activity. In this period, a total of 350 companies litigated to trial. This is a 27% increase when compared to the same period in 2017. More specifically, the most substantial growth was in the insurance sector where there was a 61% increase in commercial cases being litigated to trial compared to 2017.
- Information tech companies also litigated more in 2018 with a 44% increase in cases compared with 2017 (78 companies litigated to trial compared to 54 in the previous year). This increase may be a result of more data related claims resulting from a heightened awareness of issues concerning the use and storage of data following the introduction of the GDPR in May 2018.
- However, overall, the number of cases litigated to trial in English courts between the first and third quarters of 2018 amounted to 1,557. When compared to the same period in 2017, this represents a 7% drop.
- Some growth areas concerning cases which went to trial between the first and third quarter of 2018 include:
- Contractual disputes (21% increase compared to 2017)
- Arbitration related litigation (59% increase compared to 2017)
Tax avoidance in the UK has become a top priority for HM Revenue and Customs (HMRC). The growing and controversial powers the HMRC possess such as accelerated payment notices (APN's) have paved the way for taxpayers to litigate by way of judicial review.
126 tax-related disputes reached judgement in the English courts in 2017 representing a 15% increase on 2015. Despite this, tax disputes going to trial decreased by 20% between the first and third quarters of 2018 (from 96 cases to 77). This drop may be linked to the HMRC settling more claims before they reach the court.
Some lawyers predict a surge of tax claims in the English courts before the UK leaves the EU as EU law still remains one of the primary ways for UK taxpayers to challenge domestic tax law.
In 2018, the English courts remained a popular choice for international clients litigating. One of the largest increases was from clients based in Asia with a total of 86 claims being litigated to trial between the first and second quarter of 2018, a 96% increase compared with the same period in 2017.
Other international litigants from Southern Europe and North America/US have increased by 64% and 35% respectively in the first and second quarter of 2018. Between the first and third quarter of 2018, 34% of the 1,765 commercial litigants who litigated to trial were from outside the UK. This is a 5% increase compared with the same period in 2017.
The English Courts continue to maintain high levels of activity for dispute resolution in many areas and remain an attractive forum for commercial litigants from home and abroad. It remains to be seen what will happen in 2019. However, as we enter into an age where technology dominates and regulation increases, it appears likely that disputes in this area will continue to rise.
Authors: Dixson Lee & Neil Meakin, TLT LLP | www.tltsolicitors.com
*The data provided is based on an analysis of judgements handed down by the seven divisions of the High Court, the Supreme Court, the Judicial Committee of the Privy Council, the Court of Appeal (Civil Division), the Intellectual Property Enterprise Court, the Upper Tribunal (Tax and Chancery Chamber) and the Upper Tribunal (Lands Chamber)). The data does not include cases that have been heard but judgements not yet handed down or cases which have reached settlement.