What is Litigation?
Litigation is the most well-known process in which a legal dispute is solved. It typically involves an individual or a group (such as a commercial undertaking) that takes legal action by bringing a claim (or lawsuit) against one or more parties before domestic, and sometimes international courts. A court trial serves as the procedural mechanism by which parties will organize hearings and have their disputes settled by a judge, who acts as a qualified and impartial legal expert appointed by the state to hear and settle disputes. A wide range of disputes which concern both public and private law are resolved through litigation. Litigation is often subdivided into two different procedures. These are criminal procedure, and civil procedure.
Criminal Litigation & Procedure
When litigation is discussed in conversation, the first image that comes to mind for many is a criminal trial. Litigation under criminal procedure is constructed specifically to hear matters that concern alleged criminal offenses. A person accused of committing a criminal offense, known as a defendant, will attend court, and state whether they are guilty or not guilty of an alleged offense. The state’s case against the defendant is then presented by a criminal prosecutor. The defendant is represented by a defense attorney. In many jurisdictions, a collection of laypersons known as a jury will be selected to hear the offenses which a defendant has been charged with and consider if the factual evidence sufficiently proves and warrants legal remedy, through penalties such as community service or imprisonment. Criminal litigation, in most countries, is distinct from civil litigation and may take place in specialized criminal courts.
The primary distinguishing feature of criminal procedure in liberal democracies is the higher standard of proof needed to convict a defendant. This is because the penalties that the state may impose may significantly impact the personal liberty of an individual. In many jurisdictions, a defendant will be found guilty only if the likelihood that the offense was committed is “beyond reasonable doubt”.
Civil Litigation & Procedure
Civil Procedure is the mode of litigation in which civil matters are resolved in a court of law. Different countries define civil litigation differently. As a general rule, civil litigation that is of a private nature typically concerns the legal and/or economic relationships between persons and/or businesses. Examples of disputes that are resolved by private civil litigation relate to property and land, torts, contractual disputes, and many aspects of family law. In civil litigation that is of a public nature, a dispute may involve persons or organizations who bring a claim against a governmental department or authority and a decision that it has taken. Examples include a class action or public inquiry against the failure of a public service, or a review of a city planning decision by a local authority, or administrative decisions that infringe on human rights and environmental protections.
The distinction is not always clear-cut and subject to the legal tradition of a given country. In both Austria and France, public disputes of an administrative or constitutional nature are heard in dedicated administrative courts, with specific procedural rules. In the UK, many public and private civil disputes are ultimately subject to the same higher courts (notwithstanding certain exceptions).
Civil litigation has a lower standard of proof to affirm a claim. For example, a UK court must ask itself, whether “on the balance of probabilities” an offense has been committed.
Commercial Litigation
Commercial Litigation refers specifically to litigation that arises out of a legal dispute that typically concerns commercial contracts, financial regulation, and other matters concerning economic activity. Most commercial disputes are addressed through civil procedural rules and sources of private law. In some cases, a commercial matter also includes a criminal dimension (i.e., white-collar crime, conspiracy, criminal fraud, and other activities categorized as criminal offenses) which may lead to separate parallel proceedings or simply warrant a criminal trial. Otherwise, civil litigation which concerns commercial matters can involve virtually every type of dispute that arises out of economic activity. The most common commercial disputes that are resolved through commercial litigation are shareholder disputes, intellectual property disputes, as well as contractual breaches. Because globalization has increased the number of cross-border commercial relationships, international commercial litigation also often addresses additional matters of procedure and jurisdiction to address conflict of laws. Such areas of law which intersect with international treaties and agreements often run in parallel to international commercial litigation and develop alongside it.
The Role of Litigation Lawyers
A litigation lawyer or litigator (also typically known as an attorney, barrister, or advocate) is a legal practitioner who specializes in representing a litigating party before the relevant court or tribunal. Typically, a litigating lawyer is admitted to a bar in the legal jurisdiction where the court is situated. The bar refers to a legal society that trains and regulates litigating lawyers in a given jurisdiction. In some cases, certain jurisdictions may recognize foreign bar admissions or permit a qualified practitioner to gain domestic admission to represent their client. Generally, a litigation lawyer also serves as a counsel to their client, by giving advice and drafting formal legal opinions. This involves advising the party which instructs them on the procedural aspects of litigation, including case appraisal, the advocacy in trial, and settlement.
Case Appraisal
Case appraisal is the process in which a legal practitioner (usually a dispute resolution practitioner, attorney, expert, or otherwise) acts as a counsel or consultant to the dispute. They will review the given claims of a dispute and provide an assessment of the relevant facts, the strengths of a claim, or what defenses are available. Advice about a given matter (especially where complex) may be provided through a written document known as a legal opinion.
Advocacy
In court, the role of the litigator is to present the case of their instructing client. The scope of the litigator’s role is subject to the nature of the case, whether the client is the claimant or defendant, and the procedural rules of the jurisdiction where the claim is filed. Although there are several types of legal systems, the two most prevalent are the common law and civil law systems.
In common law countries whose systems originate from customary medieval English law (e.g., UK, US (except Louisiana), Ireland, Australia, Canada, South Africa, Pakistan, Cyprus, Hong Kong), an adversarial system is used. Under this model, litigators have a more prominent role in presenting their client’s factual circumstances, contending with arguments made by opposing counsel and addressing points of procedural law raised by a presiding judge, who acts as an impartial referee.
Civil law countries prioritize a code of state legislated laws as opposed to the common law mix of legislation and case law. Many European civil systems hail from a mixture of Roman Catholic Canon Law and the Napoleonic code (e.g., France, Germany, Italy, Spain, Austria, U.S. state of Louisiana, Turkey, Vietnam), however, others are civil in their own right (South Korea). It is often the case that a civil law system is accompanied by an inquisitorial system at trial. Inquisitorial trials are judge-led. The judge(s) has/have the primary role of investigating a claim and obtaining evidence from the parties’ legal representatives. Both systems may be said to have their own perceived advantages and limitations.
While common law systems are mostly adversarial, and civil law systems inquisitorial, these are not hard rules. For example, the US which is a common law jurisdiction also uses an inquisitorial system for minor infractions and traffic offenses. One of the benefits of instructing an advocate is that they have additional expertise and understanding of the procedural elements which are to be considered in making a claim.
Settlement
A settlement is a negotiated agreement between disputing parties to resolve the dispute. A settlement effectively creates a contract that requires a party to waive their right to bring their claim for some other performance. This can avoid the costly process of conducting a trial and create certainty that the same claim will not be brought again. Collective settlements refer to instances where there are multiple similar claims. Despite the dramatic depiction of litigation in contemporary media, many legal claims are settled and do not proceed to trial.
Plea Bargain
A plea bargain is a specific settlement mechanism that is ubiquitous to criminal litigation within common law legal systems, but which has begun to see more use in some civil systems such as France. It normally involves an agreement whereby a defendant receives a more lenient charge and/or sentence for an admission of guilt to a given charge (or indictment) or to one of several. Sometimes this may lead a prosecutor to drop additional charges.
Litigation Funding
Litigation can be an expensive matter, especially where a claim is factually and procedurally complex. Over the past few decades, different funding strategies have emerged which provide claimants with different channels of access to justice.
Cost-Shifting
Cost-shifting rules (also known as the “loser-pays principle,” the “English rule,” and “fee-shifting”) provide that the party that loses in litigation reimburses the prevailing party for its legal costs. Depending on the applicable rules, these costs may consist of (reasonable) lawyers’ fees, court costs, and/or evidence expenses.
Cost-shifting rules in various forms are the standard practice in most jurisdictions globally. A notable exception is the United States (US), where each party generally covers its legal costs regardless of the outcome of the proceedings, unless a statute or contract provides otherwise (“the American Rule”), in which case costs may be unilateral.
Third-Party Funding
Third-party funding refers to an arrangement whereby a party will partially or fully finance the unrelated legal claim of another. The funding may cover all associated legal costs, including additional adverse costs, but this is not always the case. The third-party funder will assess the risk and prospects of a given claim and provide financial assistance for a party to file their claim. If successful, the funder will recover its investments plus an additional return. If unsuccessful, the funder has already underwritten the legal costs. Third-party funding is generally non-recourse, meaning that a claimant will not have to worry about reimbursing a funder for the costs of an unsuccessful claim.
Third-party funding has not always been permitted. The former president of the UK Supreme Court Lord Neuberger, in a celebrated lecture given in 2013, noted that the practice of those who funded the legal claims of others in ancient Greece was described as “sykopanteia”, from which the English word for sycophancy is derived.[1] Even in medieval England, the political and financial support of legal claims brought by others were categorized as criminal offenses known as barratry, champerty, and maintenance. They were created to deter a practice that had emerged whereby a high-ranking public figure would finance and declare their interest in a dubious legal claim, in order to attract a favorable ruling and draw a profit from subsequent damages. In other words, the prevention if not criminalization of third-party funding has in the past been viewed as a necessary measure to ensure courts were utilized for promoting justice, as opposed to private profiteering.
In the contemporary era, the prohibition of third-party funding has been relaxed in multiple jurisdictions, for much the same reason that it once was prohibited. Namely, third-party funding can increase access to justice which otherwise is out of financial reach. In public law litigation, crowdfunding technologies have enabled claimants to outsource funding for environmental and human rights cases to other politically interested parties. This has been viewed as a modern iteration of a mass claim which democratizes the legal process and ensures that high-value and societally significant cases are heard. In international arbitration, the costs associated with arbitral proceedings may deter smaller parties from pursuing viable claims, against stronger larger parties who have greater financial resources. Third-party funding can equalize the resources of smaller parties to “have their day in court”. In some cases, stronger parties may even be more willing to settle if they discover a smaller party has attracted third-party funding. Third-party funding is now generally available in litigation, arbitration, and adjudication. The availability of third-party funding to fund a plaintiff claim is a clear commercial trend if not a significant new phenomenon.
Legal Aid
Legal aid refers to a form of financial assistance which a state government may provide to its citizens who are involved in domestic litigation whether they have been wronged and seek civil remedy or accused of a criminal offense. The provision of legal aid serves as a means by which state governments guarantee the right of their citizens to legal representation, a fair hearing, and a more equal footing in the administration of justice.
At a European level, the provision of legal aid is founded upon the general and associated rights to a fair hearing. Article 6(3)(c) of the European Convention on Human Rights (ECHR) guarantees a right of legal aid in criminal cases and requires states, party to the ECHR to provide private persons the means “…to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require”.
The ECtHR has also established that state authorities should provide everyone within their jurisdiction with the assistance of a lawyer in civil cases when this proves indispensable for effective access to court (Airey v. Ireland, Application No. 6289/73, judgment of 9 October 1979) or when the lack of such assistance would deprive a person of a fair hearing (McVicar v. the United Kingdom, Application No. 46311/99, judgment of 7 May 2002).
Member states are expected to follow various criteria established by the case law of ECtHR to decide on the provision of legal aid in an individual case, namely:
- The importance of what is at stake for the applicant (Steel and Morris v. the United Kingdom, Application No. 68416/01, judgment of 15 February 2005;
- The complexity of the case (Airey v. Ireland, Application No. 6289/73, judgment of 9 October 1979);
- The applicant’s capacity to represent him or herself effectively (McVicar v. the United Kingdom, Application No. 46311/99, judgment of 7 May 2002); and
- The existence of a legislative requirement to be legally represented (Gnahoré v. France, Application No. 40031/98, judgment of 19 September 2000).
The scope of legal aid and the degree of support that it may provide is subject to the laws of each state and what they provide. States that are members of the European Union (EU) are subject to the European Charter, and its associated obligations. Article 47 of the Charter provides:
“Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice.”
While the requirement to provide legal representation under the European Charter is legally binding upon individual EU member states, the source of legal aid, its delivery, and scope may all vary in individual EU member states. Further elaboration on access to legal aid in Austria can be found below.
Legal Costs Insurance
Legal costs insurance (or legal expenses insurance) as the name suggests, refers to the possibility of securing financial coverage for legal costs, either as a provision within a policy plan or taken as a standalone insurance plan. Legal costs insurance is a common and widely available means of protection. Legal costs insurance can be taken out on an after-the-event (ATE) and before-the-event (BTE) basis. At the EU level, rules governing legal costs insurance are stipulated by Section 4 of the Solvency II Directive. According to Article 198 of the Directive, legal costs insurance serves the following purposes:
“(a) securing compensation for the loss, damage or injury suffered by the insured person, by settlement out of court or through civil or criminal proceedings;
(b) defending or representing the insured person in civil, criminal, administrative or other proceedings or in respect of any claim made against that person.”
At a national level, country regulations on legal costs insurance vary from state to state.
Document Disclosure
Within the commercial context, another important consideration in litigation concerns disclosure. “Disclosure” (UK) or “discovery” (US) refers to a pre-trial procedure that enables parties to exchange and gain access to internally held documentation that may serve as useful evidence to settle the key aspects of a legal dispute. The primary benefit of disclosure is that it may give parties the chance to assess their prospects of a successful claim and whether there is enough evidence to proceed. Because discovery typically takes place at the pre-trial stage, it also may provide a basis to save considerable costs by settling the dispute instead of initiating full proceedings. The presence of conclusive evidence is more useful when the law is already established and clear on a certain matter, but less so if the matter is unaddressed by law. Because document disclosure often follows procedural rules which are unique in each jurisdiction, three examples are listed below to give a general overview.
England and Wales
In England and Wales, the scope of disclosure is defined by part 31.6 of the Civil Procedure Rules (CPR) as a requirement for a party to provide “only the documents on which he relies; and the documents which – adversely affect his own case; adversely affect another party’s case; or support another party’s case; and the documents which he is required to disclose by a relevant practice direction.” In 2021, the Disclosure Pilot Scheme began operating in the Business and Property Courts in England and Wales. In brief, it has introduced changes to lower the bureaucratic demands of disclosure, as well as to save considerable costs of the parties associated with the hours of research needed to rake through vast amounts of digital data which a party may ‘dump’ on the other to waste time.
United States
In the US, the disclosure of documents is known as discovery. It is more comprehensive in respect to the obligations that it places on individuals and wider in scope as to the admissible evidence which parties may use. “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense” (Rule 26(b)(1) of the Federal Rules of Civil Procedure). Under the Federal Rules, parties also have additional tools to gather evidence. For example, when allowed, “[a] party may, by oral questions, depose any person, including a party, without leave of court.” (Rule 30(a)(1)). In certain cases, a court may even compel a party to attend a deposition through a subpoena which requires court permission (Rule 45).
Austria
An Austrian equivalent to document disclosure can be found in the Austrian Code of Civil Procedure (Zivilprozessordnung, ACCP). Section 303 ACCP gives a court the competence to decide on a party’s request for the opposing party to produce a document or physical item, which is claimed to hold relevance to the case. If accepted, the requested party may have to provide a copy of the document or describe the contents of the document “as accurately and completely as possible” (Section 303(2) ACCP) and explain their ownership of the document in question.
If this request is accepted, the corresponding party may be compelled under certain grounds to produce the requested document (Section 304 ACCP). A party may have grounds to refuse under Section 305 ACCP. The court may also have the power to require third parties to produce requested documents pertinent to a given case and subject to qualifying grounds (Section 308 ACCP). A more detailed outline of document disclosure in Austria is outlined below.
Judgments
A judgment refers to the decision a court will make about a litigated matter. A judgment will have a statement of the non-disputed facts leading up to the case and, if on appeal, a brief history of the dispute’s procedural journey through the courts including earlier judgments, an outline of the law or laws which are said to apply to the matter, and a ruling which explains how the law operates, how it has been interpreted, and how it applies to the specific matter being judged. In countries where prior case law has binding precedent, a judge will consider if the matter being heard should be distinguished and addressed differently. A court may have a single judge or multiple. In the latter, there may be a requirement for a certain number to agree, normally a simple majority. Some judges may supply an added individual ruling that supports the majority ruling but provides alternative legal reasoning, or clarify points of law that were unaddressed. Other judges may even disagree and provide a dissenting opinion.
Remedies
A legal remedy (sometimes also known as judicial relief) is a legal term that refers to the solution which a court provides to address the issues arising in a legal claim. It is perhaps the most important part of a judgment. Remedies come in different classes and vary in different jurisdictions, in accordance with the applicable powers of the courts. The law on remedies is subject to variation between common and civil law jurisdictions. The following is a non-exhaustive list of the most common remedies and what they entail for litigating parties.
Damages
Monetary damages are a common form of remedy. In both the law of tort (or delict in civil systems) and contract law, damages generally serve to compensate the party who was injured or suffered a loss as a result of the wrongful conduct of another party (“compensatory damages”). Monetary damages are frequently awarded to remedy contractual breaches and compensate a party who has sustained a (direct and/or consequential) loss because the other party failed to fulfill their contractual obligations.
Punitive damages must be distinguished from compensatory damages. Punitive damages are common in the US and aim to punish a party when it is deemed that there was intent behind their unlawful conduct. Punitive damages are prohibited in many jurisdictions, including Austria.
Injunctive Relief
An injunction or injunctive relief is a remedy ordered by the court to either require or prevent a party from engaging in a particular action. Injunctions are useful when monetary damages would not adequately serve as relief for the claims brought by a claimant.
One form of injunction that is typical in commercial litigation, is an interim injunction. An interim injunction is often sought to preserve the status quo and prevent irreparable damage or change before the court decides on the dispute. Often interim injunctions are time-sensitive and must be challenged in a short period to limit the consequence they may have for the party to which it applies.
Courts may generally order the following measures as interim injunctions:
- preventive measures, which are granted to prevent a party from impeding the enforcement of an eventual judgment and may include freezing a particular state of affairs or assets;
- regulatory measures, which are granted to regulate a temporary state of affairs;
- performance measures, which are granted to force a party to perform an alleged obligation.
- Typically, failure to comply with an injunction may lead to being held in contempt of court. This may lead to further civil and even criminal penalties.
Specific Performance
A specific performance is another remedy whereby a court requires a party to perform a certain action or activity. It mostly applies in the context of contractual law. Historically in English law, specific performance would be considered where damages were unavailable, such as in the context of property law where a sale has been made but deprived an individual of its private rights and entitlements associated with a property. Because compelling a person to conduct an activity represents a higher degree of authority, it has only been granted in exceptional circumstances. Unlike English law, civil law jurisdictions treat specific performance as a right of the creditor who can go to court and enforce the debtor to perform in natura. Section 241 of the German Civil Code states that a creditor can “demand” performance from the debtor, while according to Article 1221 of the French Civil Code a party can claim the other “to perform in kind unless performance is impossible.”
Declaratory Remedies
Declaratory relief refers to a declaration from the court made at the request of a party. The court may make a declaration concerning the parties’ rights, the existence of facts, or a principle of law. Declaratory relief may also be accompanied by additional remedies, such as damages and/or specific performance. In commercial disputes, parties may prefer to seek declaratory relief rather than ask the court or tribunal to award damages or an injunction, as receiving an authoritative decision on the parties’ rights and obligations may allow the parties to preserve long-standing business relationships.
Appeal
An appeal is a proceeding where a higher court reviews the decision of a lower court. It serves two purposes, namely, to seek correction if a ruling has been erroneously made and to seek greater declaratory clarity if the applicable law is limited or contains lacunae that could not have anticipated the issue which has arisen at trial. An appellate court, depending on the applicable procedural rules, will consider whether a prior ruling was correct, or whether there was an error in law, facts, or evidence of procedural unfairness.
In many countries, a court of last instance serves as a final appeal forum, which decides and clarifies how the law applies to matters which carry a public interest dimension. In some cases, courts of last instance have a constitutional competence to rule if a law is compatible with the state’s constitution.
An appellate court in turn may confirm, reverse, modify the decision, or remand the matter to the lower forum to reconsider its decision. Sometimes, a court may also refer the case to an international court if a question of international law is raised that concerns the domestic court’s obligations to meet with the state’s international treaty obligations.
[1] Lord Neuberger, “From Barretry, Maintenance and Champerty to Litigation Funding – Harbour Litigation Funding First Annual Lecture”, 8 May 2013, http://www.supremecourt.uk/docs/speech-130508.pdf
Litigation is the most well-known process in which a legal dispute is solved. It typically involves an individual or a group (such as a commercial undertaking) that takes legal action by bringing a claim (or lawsuit) against one or more parties before domestic, and sometimes international courts. A court trial serves as the procedural mechanism by which parties will organize hearings and have their disputes settled by a judge, who acts as a qualified and impartial legal expert appointed by the state to hear and settle disputes. A wide range of disputes which concern both public and private law are resolved through litigation. Litigation is often subdivided into two different procedures. These are criminal procedure, and civil procedure.
Criminal Litigation & Procedure
When litigation is discussed in conversation, the first image that comes to mind for many is a criminal trial. Litigation under criminal procedure is constructed specifically to hear matters that concern alleged criminal offenses. A person accused of committing a criminal offense, known as a defendant, will attend court, and state whether they are guilty or not guilty of an alleged offense. The state’s case against the defendant is then presented by a criminal prosecutor. The defendant is represented by a defense attorney. In many jurisdictions, a collection of laypersons known as a jury will be selected to hear the offenses which a defendant has been charged with and consider if the factual evidence sufficiently proves and warrants legal remedy, through penalties such as community service or imprisonment. Criminal litigation, in most countries, is distinct from civil litigation and may take place in specialized criminal courts.
The primary distinguishing feature of criminal procedure in liberal democracies is the higher standard of proof needed to convict a defendant. This is because the penalties that the state may impose may significantly impact the personal liberty of an individual. In many jurisdictions, a defendant will be found guilty only if the likelihood that the offense was committed is “beyond reasonable doubt”.
Civil Litigation & Procedure
Civil Procedure is the mode of litigation in which civil matters are resolved in a court of law. Different countries define civil litigation differently. As a general rule, civil litigation that is of a private nature typically concerns the legal and/or economic relationships between persons and/or businesses. Examples of disputes that are resolved by private civil litigation relate to property and land, torts, contractual disputes, and many aspects of family law. In civil litigation that is of a public nature, a dispute may involve persons or organizations who bring a claim against a governmental department or authority and a decision that it has taken. Examples include a class action or public inquiry against the failure of a public service, or a review of a city planning decision by a local authority, or administrative decisions that infringe on human rights and environmental protections.
The distinction is not always clear-cut and subject to the legal tradition of a given country. In both Austria and France, public disputes of an administrative or constitutional nature are heard in dedicated administrative courts, with specific procedural rules. In the UK, many public and private civil disputes are ultimately subject to the same higher courts (notwithstanding certain exceptions).
Civil litigation has a lower standard of proof to affirm a claim. For example, a UK court must ask itself, whether “on the balance of probabilities” an offense has been committed.
Commercial Litigation
Commercial Litigation refers specifically to litigation that arises out of a legal dispute that typically concerns commercial contracts, financial regulation, and other matters concerning economic activity. Most commercial disputes are addressed through civil procedural rules and sources of private law. In some cases, a commercial matter also includes a criminal dimension (i.e., white-collar crime, conspiracy, criminal fraud, and other activities categorized as criminal offenses) which may lead to separate parallel proceedings or simply warrant a criminal trial. Otherwise, civil litigation which concerns commercial matters can involve virtually every type of dispute that arises out of economic activity. The most common commercial disputes that are resolved through commercial litigation are shareholder disputes, intellectual property disputes, as well as contractual breaches. Because globalization has increased the number of cross-border commercial relationships, international commercial litigation also often addresses additional matters of procedure and jurisdiction to address conflict of laws. Such areas of law which intersect with international treaties and agreements often run in parallel to international commercial litigation and develop alongside it.
A litigation lawyer or litigator (also typically known as an attorney, barrister, or advocate) is a legal practitioner who specializes in representing a litigating party before the relevant court or tribunal. Typically, a litigating lawyer is admitted to a bar in the legal jurisdiction where the court is situated. The bar refers to a legal society that trains and regulates litigating lawyers in a given jurisdiction. In some cases, certain jurisdictions may recognize foreign bar admissions or permit a qualified practitioner to gain domestic admission to represent their client. Generally, a litigation lawyer also serves as a counsel to their client, by giving advice and drafting formal legal opinions. This involves advising the party which instructs them on the procedural aspects of litigation, including case appraisal, the advocacy in trial, and settlement.
Case Appraisal
Case appraisal is the process in which a legal practitioner (usually a dispute resolution practitioner, attorney, expert, or otherwise) acts as a counsel or consultant to the dispute. They will review the given claims of a dispute and provide an assessment of the relevant facts, the strengths of a claim, or what defenses are available. Advice about a given matter (especially where complex) may be provided through a written document known as a legal opinion.
Advocacy
In court, the role of the litigator is to present the case of their instructing client. The scope of the litigator’s role is subject to the nature of the case, whether the client is the claimant or defendant, and the procedural rules of the jurisdiction where the claim is filed. Although there are several types of legal systems, the two most prevalent are the common law and civil law systems.
In common law countries whose systems originate from customary medieval English law (e.g., UK, US (except Louisiana), Ireland, Australia, Canada, South Africa, Pakistan, Cyprus, Hong Kong), an adversarial system is used. Under this model, litigators have a more prominent role in presenting their client’s factual circumstances, contending with arguments made by opposing counsel and addressing points of procedural law raised by a presiding judge, who acts as an impartial referee.
Civil law countries prioritize a code of state legislated laws as opposed to the common law mix of legislation and case law. Many European civil systems hail from a mixture of Roman Catholic Canon Law and the Napoleonic code (e.g., France, Germany, Italy, Spain, Austria, U.S. state of Louisiana, Turkey, Vietnam), however, others are civil in their own right (South Korea). It is often the case that a civil law system is accompanied by an inquisitorial system at trial. Inquisitorial trials are judge-led. The judge(s) has/have the primary role of investigating a claim and obtaining evidence from the parties’ legal representatives. Both systems may be said to have their own perceived advantages and limitations.
While common law systems are mostly adversarial, and civil law systems inquisitorial, these are not hard rules. For example, the US which is a common law jurisdiction also uses an inquisitorial system for minor infractions and traffic offenses. One of the benefits of instructing an advocate is that they have additional expertise and understanding of the procedural elements which are to be considered in making a claim.
Settlement
A settlement is a negotiated agreement between disputing parties to resolve the dispute. A settlement effectively creates a contract that requires a party to waive their right to bring their claim for some other performance. This can avoid the costly process of conducting a trial and create certainty that the same claim will not be brought again. Collective settlements refer to instances where there are multiple similar claims. Despite the dramatic depiction of litigation in contemporary media, many legal claims are settled and do not proceed to trial.
Plea Bargain
A plea bargain is a specific settlement mechanism that is ubiquitous to criminal litigation within common law legal systems, but which has begun to see more use in some civil systems such as France. It normally involves an agreement whereby a defendant receives a more lenient charge and/or sentence for an admission of guilt to a given charge (or indictment) or to one of several. Sometimes this may lead a prosecutor to drop additional charges.
Litigation can be an expensive matter, especially where a claim is factually and procedurally complex. Over the past few decades, different funding strategies have emerged which provide claimants with different channels of access to justice.
Cost-Shifting
Cost-shifting rules (also known as the “loser-pays principle,” the “English rule,” and “fee-shifting”) provide that the party that loses in litigation reimburses the prevailing party for its legal costs. Depending on the applicable rules, these costs may consist of (reasonable) lawyers’ fees, court costs, and/or evidence expenses.
Cost-shifting rules in various forms are the standard practice in most jurisdictions globally. A notable exception is the United States (US), where each party generally covers its legal costs regardless of the outcome of the proceedings, unless a statute or contract provides otherwise (“the American Rule”), in which case costs may be unilateral.
Third-Party Funding
Third-party funding refers to an arrangement whereby a party will partially or fully finance the unrelated legal claim of another. The funding may cover all associated legal costs, including additional adverse costs, but this is not always the case. The third-party funder will assess the risk and prospects of a given claim and provide financial assistance for a party to file their claim. If successful, the funder will recover its investments plus an additional return. If unsuccessful, the funder has already underwritten the legal costs. Third-party funding is generally non-recourse, meaning that a claimant will not have to worry about reimbursing a funder for the costs of an unsuccessful claim.
Third-party funding has not always been permitted. The former president of the UK Supreme Court Lord Neuberger, in a celebrated lecture given in 2013, noted that the practice of those who funded the legal claims of others in ancient Greece was described as “sykopanteia”, from which the English word for sycophancy is derived.[1] Even in medieval England, the political and financial support of legal claims brought by others were categorized as criminal offenses known as barratry, champerty, and maintenance. They were created to deter a practice that had emerged whereby a high-ranking public figure would finance and declare their interest in a dubious legal claim, in order to attract a favorable ruling and draw a profit from subsequent damages. In other words, the prevention if not criminalization of third-party funding has in the past been viewed as a necessary measure to ensure courts were utilized for promoting justice, as opposed to private profiteering.
In the contemporary era, the prohibition of third-party funding has been relaxed in multiple jurisdictions, for much the same reason that it once was prohibited. Namely, third-party funding can increase access to justice which otherwise is out of financial reach. In public law litigation, crowdfunding technologies have enabled claimants to outsource funding for environmental and human rights cases to other politically interested parties. This has been viewed as a modern iteration of a mass claim which democratizes the legal process and ensures that high-value and societally significant cases are heard. In international arbitration, the costs associated with arbitral proceedings may deter smaller parties from pursuing viable claims, against stronger larger parties who have greater financial resources. Third-party funding can equalize the resources of smaller parties to “have their day in court”. In some cases, stronger parties may even be more willing to settle if they discover a smaller party has attracted third-party funding. Third-party funding is now generally available in litigation, arbitration, and adjudication. The availability of third-party funding to fund a plaintiff claim is a clear commercial trend if not a significant new phenomenon.
Legal Aid
Legal aid refers to a form of financial assistance which a state government may provide to its citizens who are involved in domestic litigation whether they have been wronged and seek civil remedy or accused of a criminal offense. The provision of legal aid serves as a means by which state governments guarantee the right of their citizens to legal representation, a fair hearing, and a more equal footing in the administration of justice.
At a European level, the provision of legal aid is founded upon the general and associated rights to a fair hearing. Article 6(3)(c) of the European Convention on Human Rights (ECHR) guarantees a right of legal aid in criminal cases and requires states, party to the ECHR to provide private persons the means “…to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require”.
The ECtHR has also established that state authorities should provide everyone within their jurisdiction with the assistance of a lawyer in civil cases when this proves indispensable for effective access to court (Airey v. Ireland, Application No. 6289/73, judgment of 9 October 1979) or when the lack of such assistance would deprive a person of a fair hearing (McVicar v. the United Kingdom, Application No. 46311/99, judgment of 7 May 2002).
Member states are expected to follow various criteria established by the case law of ECtHR to decide on the provision of legal aid in an individual case, namely:
- The importance of what is at stake for the applicant (Steel and Morris v. the United Kingdom, Application No. 68416/01, judgment of 15 February 2005;
- The complexity of the case (Airey v. Ireland, Application No. 6289/73, judgment of 9 October 1979);
- The applicant’s capacity to represent him or herself effectively (McVicar v. the United Kingdom, Application No. 46311/99, judgment of 7 May 2002); and
- The existence of a legislative requirement to be legally represented (Gnahoré v. France, Application No. 40031/98, judgment of 19 September 2000).
The scope of legal aid and the degree of support that it may provide is subject to the laws of each state and what they provide. States that are members of the European Union (EU) are subject to the European Charter, and its associated obligations. Article 47 of the Charter provides:
“Legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice.”
While the requirement to provide legal representation under the European Charter is legally binding upon individual EU member states, the source of legal aid, its delivery, and scope may all vary in individual EU member states. Further elaboration on access to legal aid in Austria can be found below.
Legal Costs Insurance
Legal costs insurance (or legal expenses insurance) as the name suggests, refers to the possibility of securing financial coverage for legal costs, either as a provision within a policy plan or taken as a standalone insurance plan. Legal costs insurance is a common and widely available means of protection. Legal costs insurance can be taken out on an after-the-event (ATE) and before-the-event (BTE) basis. At the EU level, rules governing legal costs insurance are stipulated by Section 4 of the Solvency II Directive. According to Article 198 of the Directive, legal costs insurance serves the following purposes:
“(a) securing compensation for the loss, damage or injury suffered by the insured person, by settlement out of court or through civil or criminal proceedings;
(b) defending or representing the insured person in civil, criminal, administrative or other proceedings or in respect of any claim made against that person.”
At a national level, country regulations on legal costs insurance vary from state to state.
[1] Lord Neuberger, “From Barretry, Maintenance and Champerty to Litigation Funding – Harbour Litigation Funding First Annual Lecture”, 8 May 2013, http://www.supremecourt.uk/docs/speech-130508.pdf
Within the commercial context, another important consideration in litigation concerns disclosure. “Disclosure” (UK) or “discovery” (US) refers to a pre-trial procedure that enables parties to exchange and gain access to internally held documentation that may serve as useful evidence to settle the key aspects of a legal dispute. The primary benefit of disclosure is that it may give parties the chance to assess their prospects of a successful claim and whether there is enough evidence to proceed. Because discovery typically takes place at the pre-trial stage, it also may provide a basis to save considerable costs by settling the dispute instead of initiating full proceedings. The presence of conclusive evidence is more useful when the law is already established and clear on a certain matter, but less so if the matter is unaddressed by law. Because document disclosure often follows procedural rules which are unique in each jurisdiction, three examples are listed below to give a general overview.
England and Wales
In England and Wales, the scope of disclosure is defined by part 31.6 of the Civil Procedure Rules (CPR) as a requirement for a party to provide “only the documents on which he relies; and the documents which – adversely affect his own case; adversely affect another party’s case; or support another party’s case; and the documents which he is required to disclose by a relevant practice direction.” In 2021, the Disclosure Pilot Scheme began operating in the Business and Property Courts in England and Wales. In brief, it has introduced changes to lower the bureaucratic demands of disclosure, as well as to save considerable costs of the parties associated with the hours of research needed to rake through vast amounts of digital data which a party may ‘dump’ on the other to waste time.
United States
In the US, the disclosure of documents is known as discovery. It is more comprehensive in respect to the obligations that it places on individuals and wider in scope as to the admissible evidence which parties may use. “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense” (Rule 26(b)(1) of the Federal Rules of Civil Procedure). Under the Federal Rules, parties also have additional tools to gather evidence. For example, when allowed, “[a] party may, by oral questions, depose any person, including a party, without leave of court.” (Rule 30(a)(1)). In certain cases, a court may even compel a party to attend a deposition through a subpoena which requires court permission (Rule 45).
Austria
An Austrian equivalent to document disclosure can be found in the Austrian Code of Civil Procedure (Zivilprozessordnung, ACCP). Section 303 ACCP gives a court the competence to decide on a party’s request for the opposing party to produce a document or physical item, which is claimed to hold relevance to the case. If accepted, the requested party may have to provide a copy of the document or describe the contents of the document “as accurately and completely as possible” (Section 303(2) ACCP) and explain their ownership of the document in question.
If this request is accepted, the corresponding party may be compelled under certain grounds to produce the requested document (Section 304 ACCP). A party may have grounds to refuse under Section 305 ACCP. The court may also have the power to require third parties to produce requested documents pertinent to a given case and subject to qualifying grounds (Section 308 ACCP). A more detailed outline of document disclosure in Austria is outlined below.
A judgment refers to the decision a court will make about a litigated matter. A judgment will have a statement of the non-disputed facts leading up to the case and, if on appeal, a brief history of the dispute’s procedural journey through the courts including earlier judgments, an outline of the law or laws which are said to apply to the matter, and a ruling which explains how the law operates, how it has been interpreted, and how it applies to the specific matter being judged. In countries where prior case law has binding precedent, a judge will consider if the matter being heard should be distinguished and addressed differently. A court may have a single judge or multiple. In the latter, there may be a requirement for a certain number to agree, normally a simple majority. Some judges may supply an added individual ruling that supports the majority ruling but provides alternative legal reasoning, or clarify points of law that were unaddressed. Other judges may even disagree and provide a dissenting opinion.
A legal remedy (sometimes also known as judicial relief) is a legal term that refers to the solution which a court provides to address the issues arising in a legal claim. It is perhaps the most important part of a judgment. Remedies come in different classes and vary in different jurisdictions, in accordance with the applicable powers of the courts. The law on remedies is subject to variation between common and civil law jurisdictions. The following is a non-exhaustive list of the most common remedies and what they entail for litigating parties.
Damages
Monetary damages are a common form of remedy. In both the law of tort (or delict in civil systems) and contract law, damages generally serve to compensate the party who was injured or suffered a loss as a result of the wrongful conduct of another party (“compensatory damages”). Monetary damages are frequently awarded to remedy contractual breaches and compensate a party who has sustained a (direct and/or consequential) loss because the other party failed to fulfill their contractual obligations.
Punitive damages must be distinguished from compensatory damages. Punitive damages are common in the US and aim to punish a party when it is deemed that there was intent behind their unlawful conduct. Punitive damages are prohibited in many jurisdictions, including Austria.
Injunctive Relief
An injunction or injunctive relief is a remedy ordered by the court to either require or prevent a party from engaging in a particular action. Injunctions are useful when monetary damages would not adequately serve as relief for the claims brought by a claimant.
One form of injunction that is typical in commercial litigation, is an interim injunction. An interim injunction is often sought to preserve the status quo and prevent irreparable damage or change before the court decides on the dispute. Often interim injunctions are time-sensitive and must be challenged in a short period to limit the consequence they may have for the party to which it applies.
Courts may generally order the following measures as interim injunctions:
- preventive measures, which are granted to prevent a party from impeding the enforcement of an eventual judgment and may include freezing a particular state of affairs or assets;
- regulatory measures, which are granted to regulate a temporary state of affairs;
- performance measures, which are granted to force a party to perform an alleged obligation.
Typically, failure to comply with an injunction may lead to being held in contempt of court. This may lead to further civil and even criminal penalties.
Specific Performance
A specific performance is another remedy whereby a court requires a party to perform a certain action or activity. It mostly applies in the context of contractual law. Historically in English law, specific performance would be considered where damages were unavailable, such as in the context of property law where a sale has been made but deprived an individual of its private rights and entitlements associated with a property. Because compelling a person to conduct an activity represents a higher degree of authority, it has only been granted in exceptional circumstances. Unlike English law, civil law jurisdictions treat specific performance as a right of the creditor who can go to court and enforce the debtor to perform in natura. Section 241 of the German Civil Code states that a creditor can “demand” performance from the debtor, while according to Article 1221 of the French Civil Code a party can claim the other “to perform in kind unless performance is impossible.”
Declaratory Remedies
Declaratory relief refers to a declaration from the court made at the request of a party. The court may make a declaration concerning the parties’ rights, the existence of facts, or a principle of law. Declaratory relief may also be accompanied by additional remedies, such as damages and/or specific performance. In commercial disputes, parties may prefer to seek declaratory relief rather than ask the court or tribunal to award damages or an injunction, as receiving an authoritative decision on the parties’ rights and obligations may allow the parties to preserve long-standing business relationships.
An appeal is a proceeding where a higher court reviews the decision of a lower court. It serves two purposes, namely, to seek correction if a ruling has been erroneously made and to seek greater declaratory clarity if the applicable law is limited or contains lacunae that could not have anticipated the issue which has arisen at trial. An appellate court, depending on the applicable procedural rules, will consider whether a prior ruling was correct, or whether there was an error in law, facts, or evidence of procedural unfairness.
In many countries, a court of last instance serves as a final appeal forum, which decides and clarifies how the law applies to matters which carry a public interest dimension. In some cases, courts of last instance have a constitutional competence to rule if a law is compatible with the state’s constitution.
An appellate court in turn may confirm, reverse, modify the decision, or remand the matter to the lower forum to reconsider its decision. Sometimes, a court may also refer the case to an international court if a question of international law is raised that concerns the domestic court’s obligations to meet with the state’s international treaty obligations.