Recession fuels big rise in commercial litigation

Surge in breach of contract and debt cases

Britain’s economic misery fuelled a big rise in commercial disputes at the High Court last year.

According to MoJ statistics, 982 contract claims were issued in the Chancery Division last year, compared to 683 the year before, a rise of 44 per cent.

Breach of contract claims rose by exactly the same percentage in the Queen’s Bench Division, to a total of 969.

In the Commercial Court, breach of contract or agreement and debt claims surged by 49 per cent to 722.

Nick Rowles-Davies, consultant at litigation funder Vannin Capital, said: “Our own experience, from the ever-growing number of approaches for funding we receive, matches the trends identified by these statistics.

“The kinds of disputes the courts are seeing are often caused by the difficult situations people find themselves in during a recession. This is compounded by the fact that, by definition, they struggle to get the money together to take their case to court.

“That, of course, is where we come in and the demand we are seeing is in part why we recently quadrupled our funding facility to £100m for the coming year. This is litigation funding providing access to justice for people who might very well not be able to afford it otherwise.”

In a separate development, Sweet & Maxwell has reported that 374 commercial and business-related disputes were brought before the ECJ in 2011, an increase of 11 per cent on 2010.

Competition and consumer protection saw particularly big increases, followed by taxation and IP.

A Sweet & Maxwell spokesman said that as the European economic crisis escalated last year, businesses increasingly became embroiled in disputes before the ECJ as they fought for market share and to protect their profitability.