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If your business faces a commercial dispute, it may go as far as litigation in court. As such, you must understand the processes for commercial litigation. This can involve witness statements, an application notice and, of course, a trial. It is essential to understand the risks associated with these disputes. Assessing whether there are reasonable grounds for a genuine prospect of success, whether acting as the claimant or defendant in court, is similarly vital. When a dispute goes to court, one of the risks is that the court will not see in favour of your argument, and the case may not continue. This means the court may use a strike out order or summary judgment. This article will explain strike out orders and summary judgements.
This guide outlines how to resolve commercial disputes.
What is a Strike Out Order?
A strike out order occurs when a commercial court exercises its case-management power to eliminate one of the parties’ statements from the case or a specific portion of it. Where it uses a strike out order, it must follow a specific statutory process. Strike out orders can occur because:
- the court decides it should; or
- a party to the commercial dispute applies for this.
Why Have a Strike Out Order?
Commercial courts have specific reasons to use strike out orders. However, there are alternative methods for addressing the issues that lead to the use of these orders. Consequently, such orders by a court are uncommon. Reasons, however, for issuing a strike out order include the following:
- one of the commercial parties to the litigation has a defective case;
- a party has no reasonable basis for their argument;
- the commercial litigation is a waste of time and money; or
- a party to the commercial dispute has not adhered to the court’s rules.
What is the Effect of a Strike Out Order?
When a court issues a strike out order, it means that the court deletes part of, or the whole statement of the case. This means that the party involved cannot rely on it as evidence. If a strike out order refers to the entire statement, it means that the litigation will not proceed any further. This is because the court will likely, in these circumstances, give the judgement to the opposing commercial party. This naturally saves money for the parties to the case.
What is a Summary Judgement?
A summary judgement has a similar impact on commercial litigation as a strike out order. It is a procedure the court uses to carry out a judgement on one of the commercial parties for the entire claim or for specific issues.
Why Have a Summary Judgement?
A court may issue a summary judgement where:
- a party’s argument or issue within it seems like it has no chance of success; or
- the court cannot see a good enough reason for the commercial trial to go ahead.
A summary judgment becomes a viable option only in cases where there are no complicated factual or legal issues to be resolved as part of the commercial litigation. Where there are, there may need to be a trial.
What is the Effect of a Summary Judgment?
If a court issues a summary judgement on a commercial party, the case will be in favour of the other party. The commercial court hearing will be short as a result. This means business resources are not lost in terms of time and money. However, it follows the court can issue costs to the party to which it grants the summary judgment.
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Key Takeaways
If you are involved in a commercial dispute, you may enter commercial litigation in court. In doing so, you could receive a strike out order or summary judgement by the judge overseeing your case. A strike out order involves a court removing all or part of a party’s case. It can do this, for example, if it is a defective case. In the case of a whole-removal, this action results in the case not proceeding. On the other hand, a summary judgement is when the court issues you or the other party with a judgement for the claim or for an issue within it. This may be because the court cannot see a reason for the trial. In such cases, this means that the other party wins the case.
If you need help understanding strike out orders or summary judgements, our experienced disputes lawyers 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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