How Commercial Litigation Solicitors Handle Breach of Contract Cases

The total claims year 2024 has dropped 10% compared to last year. Now the total number of claims has reached 3,380. There was a significant drop in the commercial lawsuits filed in London’s Commercial Courts. This marks six years in a row with decreased claims being filed.

This shift emphasises the changing pattern of commercial litigation in the UK and a new ecosystem where solicitors are crucial in dealing with the complexities that come with breach of contract disputes.

Understanding Breach of Contract

A breach of a contract can happen whenever a party does not perform what they agreed to do in the contract.

 Breach of contracts commonly fall under three categories:

• Minor Breach: A breach in which the offending party deviates from the contract but is still able to fulfill the primary aim of the contract.
• Material Breach: A far-reaching breach where the offending party fails to perform the key terms of the contract. The defending party has the right to terminate the contract and sue for damages.

The common reasons for these disputes tend to be a lack of communication, economic challenges, and sudden outside factors or events.

Breach of contract disputes in the UK requires expert legal advice and extensive knowledge of commercial litigation, two areas where solicitors in the UK seem to thrive the most.

Role of Commercial Litigation Solicitors

When there is a breach in the contract, solicitors have a few important actions to take:

1. Initial Assessment: They check the contract and the specifics of the allegation on its breach as well as whether the claim can be substantiated or not.
2. Client Consultation: In this session, solicitors explain to their clients the legal rights and remedies available to them along with the strategies they can select in making such decisions.

Facing a contract dispute? Summit Law is here to assist with expert legal guidance.

Pre-Litigation Strategies

Before needing to file a suit, all solicitors will generally consider ADR processes like the following:

• Negotiation: Attempting to deal with the other side so that the issue can be settled without further complications.
• Mediation: Enlisting the services of an unbiased person to facilitate the meeting and try to achieve an agreement.
• Demand Letters: Letters explaining the particulars of the breach as well as the corrective actions that need to be taken and implemented. These serve as an indicator that legal action might need to be taken.

Litigation Process

If all reasonable steps before litigation have not yielded an acceptable outcome, the next steps for the solicitors shall be pursuing litigation:

1. Filing a Claim: The first step is submitting a claim for the case in question to the relevant court.
2. Discovery Phase: Both sides of the matter share information and material pertinent to the matter to allow for fairness.
3. Pre-Trial Motions: Clear antecedent issues that may prevent the main hearing are taken care of so that the actual hearing can proceed smoothly.

Alternative Dispute Resolution (ADR)

These problems and expenses associated with court proceedings have made the use of ADR techniques very attractive:

• Arbitration: This is a binding form of arbitration in which an arbitrator evaluates the submissions and decides on a matter within the legal boundary of granted powers.
• Mediation: This is a non-binding process which encourages parties to negotiate towards a compromise settlement.

Allows maximum discretion, speed, and efficiency while reducing cost, and therefore is appreciated by a lot of disputing parties.

Recent Trends in Commercial Litigation

In the UK, commercial litigation is always on the move for a variety of reasons:

• Decline in Court Filings: The decline in commercial lawsuits stems from growing demand for arbitration and early mediation, as well as caution being exercised by funders of litigation.
• Rise of ‘Mega Trials’: These factors have led to a drop in lawsuits within the region: ever since 2024, there has been a steady rise in the high-value and complex cases, reaching an astounding amount of £83 billion altogether.
• Growth in Class Actions: Even with the decline in lawsuits, UK markets are flooded with class action claims in breach of competition law, amounting to a whopping £160 billion and counting.
• Technological Advancements: Whereas integrating AI into legal processes has resulted in improvements, it also serves as a challenge because it will have to be implemented with nuance to ensure that resolution of disputes is served, not hindered.
• Geopolitical Influences: With the rise of sanctions and trade barriers, there is an increase in international conflicts which is causing businesses to re-evaluate contracts and relations.
• Environmental, Social, and Governance (ESG) Claims: With the changing policies as a result of international conflicts, businesses have to reconsider their internal strategies.

Conclusion

While the commercial litigation landscape in the UK saw a change in diversity and complexity, breach of contract disputes have been prevalent and still are. Solicitors specialised in this field have taken advantage and crafted a strong strategy that deals with the initial assessments and pre-litigation negotiations while forecasting what legal trends will evolve in the future so their clients can deal with the disputes and strengthen their interests in the stronger economy.