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What Do You Need to Know About Relief From Sanctions for Your Commercial Dispute?

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If you disagree with another party you do business with, you might encounter a commercial dispute. Resolving your business disagreement quickly and peacefully is the best approach, though it may not always be possible. You can consider alternative dispute resolution (ADR) methods, such as mediation. If mediation fails, both parties may resort to commercial litigation, where you request a court to make a judgment. Commercial litigation involves various court rules, including those regarding relief from sanctions. This article will clarify what you need to know about seeking relief from sanctions for your commercial dispute.

Understanding Relief From Sanctions

Here, we will outline essential details about relief from sanctions for your commercial dispute

What is Relief From Sanctions?

Relief from sanctions is a process outlined in the Civil Procedure Rules (CPR) that allows parties to seek leniency if they fail to meet deadlines in commercial disputes. When a party misses a deadline, the courts can automatically impose sanctions, or they can issue another sanction and specify it in an order. Sometimes, the court might issue an “unless order.” It is crucial to understand that while relief from sanctions exists, courts view non-compliance with agreements seriously during litigation.

When Should You Apply?

If you are involved in a commercial dispute and you have missed deadlines or failed to comply with certain requirements, you might need to seek relief from sanctions. For example, if your court case depends on witness statements, you must serve them within a specific timeframe. Failing to do so could result in the court penalising you by not allowing you to use the evidence from those witnesses.

However, if you miss a:

  • deadline for a rule;
  • practice direction; or
  • order

it does not automatically mean that a party needs to apply for it. Instead, you need to know when the actual sanction is already in effect.

When Might a Court Grant?

When you apply for relief from sanctions in a commercial case, the court must consider the full circumstances. The court will consider:

  • if the breach is serious or significant, the court will examine why you did not cooperate; or
  • the requirement under Civil Procedural Rules states that when conducting litigation, it must be done:
    • efficiently;
    • at a proportionate cost; and
    • in accordance with court orders, rules, and Practice Directions (PD).

These factors make up the ‘three-stage test’. Therefore, the granting of relief against sanctions in a commercial dispute is not automatic but rather depends on careful consideration by the court.

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Key Takeaways

When your business gets involved in a commercial dispute, you can resolve it through court litigation. However, during court cases, you must follow specific procedures within a certain time frame, or else you may face sanctions. Sanctions can be imposed on your company if you fail to comply with the court’s requirements. In such cases, your company can apply for relief from sanctions, such as when you fail to serve witness statements for the dispute on time.

It is important to note that a court does not always grant relief from sanctions for a commercial dispute; instead, it will apply a three-stage test to determine whether the breach is severe or significant. Therefore, you must take court deadlines seriously and comply with them accordingly.

If you need help understanding what you need to know about relief from sanctions for your commercial dispute, our 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. So call us today on 0808 196 8584 or visit our membership page.

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Clare Farmer

Clare Farmer

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