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Key Points When Dealing With a Vexatious Litigant in a Commercial Dispute

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Commercial disputes sometimes make it as far as the commercial court for legal action.  While this is not usually encouraged, you may find that the other party resists even if you wish to avoid litigation. This may be because they are a vexatious litigant and keen to instigate court proceedings. You must know how to recognise and handle a vexatious litigant to avoid wasting your time and money on vexatious proceedings. Therefore, this article will explain what they are and how to deal with them. 

What is a Vexatious Litigant in a Commercial Dispute?

You may get a party to a commercial dispute, which is a vexatious litigant

The Civil Procedure Rules do not define this formally, but there is a general understanding that a vexatious litigant in a commercial dispute is someone who either:

  • continuously brings commercial court proceedings where they know there is no merit in the dispute, which can be for the same reasons against different parties or different reasons against the same party; or
  • a court claimant who keeps on ignoring court orders. 

A vexatious litigant in commercial proceedings wastes your business’s time and money and causes stress. They also waste the Court’s time. 

How Should You Deal With a Vexatious Litigant?

As a business owner, you may be unfortunate enough to suffer at the hands of another business or party who is a vexatious litigant. They may refuse to accept that their commercial case does not have merit. 

However, you should not have to suffer as there are actions that you or the court can take against a vexatious litigant in commercial claims. You can take this action to stop them from making another claim. We will now explore your potential options below.

Civil Restraint Orders

A standard option for dealing with a vexatious litigant in a commercial trial is to apply for a Civil Restraint Order (CRO). You can do this once they have made at least two claims against you that are ‘totally without merit’. This means that the commercial claim they try to make is ‘bound to fail’. 

If your CRO application is successful, it means that they cannot make another claim without the court’s permission. Although this may be for a particular time frame, particular claim or for a specific court, it is still very significant. A CRO stops a defendant from having to defend a meritless claim, thus saving them some legal costs.

If your CRO application is successful, it means that they cannot make another claim without the court’s permission. Although this may be for a particular time frame, particular claim or for a specific court, it is still very significant. A CRO stops a defendant from having to defend a meritless claim, thus saving them some legal costs.

A Proceedings Order

A proceedings order can be either:

  • a Civil Proceedings Order;
  • a Criminal Proceedings Order; or 
  • an All proceedings Order

These are all detailed in the Senior Courts Act 1981. You can make a Proceedings Order to the Attorney General. You can apply for these where a litigant keeps making court applications despite having a CRO against them. If successful, the order means that the commercial party is defined as a vexatious ligament by law and will be officially and locally listed as one. 

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To determine whether a Proceedings Order Is necessary, the court will conduct a detailed examination of the litigant’s court claim history. If the litigant is considered a vexatious litigant, they cannot make the type of court proceedings the order applies to for as long as the order is, which can often be forever. The result of not obeying the court order can result in contempt of court. 

Key Takeaways

A vexatious litigant can cost your business time and money, so knowing how to deal with them is essential. You can deal with them by applying for a Civil Restraint Order (CRO) or a Proceedings Order.  The effect of these is mainly to prevent a vexatious litigant from bringing endless legal claims against your business. 

If you need help understanding how to deal with a vexatious litigant, LegalVision’s experienced disputes and litigation solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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