A few pointers to consider before instituting legal action

Upon watching popular court room dramas such as Suits, The Good Wife and Law and Order one may be forgiven for thinking that litigation is easy and all you need is a lawyer with a poker face, good suit, glib charm and an intelligent strategy to play the opposition, and you’ve won your case! Unfortunately the reality of litigation is far removed from these television court rooms, and clients should take care not to have unrealistic expectations when considering the institution of legal action.

When deciding to approach a court for legal relief there are a few important factors to consider before starting.

Prescription

It is vitally important to be familiar with any contractual time-limitation or time-bar clauses or statutory prescriptive periods to ensure that you institute your action in time. The prescription period for delictual and contractual debts are usually three years, six years for debts arising from bills of exchange or negotiable instruments and thirty years for judgments debts and mortgage bonds. Prescription will commence to run as soon as the debt is due and the service of a summons will stop this running of prescription. So make sure you see an attorney before the time period lapses and take the necessary steps to institute action as otherwise you could forfeit your legal rights to take action.

Jurisdiction

Your claim will fall within the jurisdiction of a certain Court. ‘Jurisdiction’ refers to the competence of a Court to hear a matter which has validly been brought before it and to grant relief in respect of that matter. The consequences of instituting action in an incorrect Court can be severe. If the Court lacks jurisdiction it may refuse to adjudicate and dismiss the matter. The Court may also order the plaintiff to pay the wasted costs for incorrectly bringing the action in that Court.

Further to the consideration of jurisdiction, one must also consider whether action should be instituted in for instance the Magistrate’s Court or the High Court, as well as which provincial or local division of the High Court or alternatively in which district of the Magistrate’s Court to proceed in. As of 1 June 2014, new monetary thresholds will apply for civil actions. The Magistrates’ Courts shall have jurisdiction in actions to a value of R200,000, the regional divisions’ jurisdiction will be between R200,000 and R400,000 and matters above R400,000 will fall within the exclusive jurisdiction of the High Court. If a summons is issued in the High Court but it falls within the monetary threshold of a Magistrate’s Court, the High Court has the discretion to award costs on Magistrate’s Court scale.

Costs

Litigation is expensive and all cost orders are in the discretion of the court. The general rule is that the successful party will be awarded his costs, unless there are good grounds to depart from the rule. Even if a party is successful and obtains a cost order in his favour, it must be understood that it seldom results in a complete indemnity. There are always costs and risks associated with a litigation process. Appeals are possible, processes must be followed, and it can become a time consuming process that will increase the financial burden on the litigants. Potential litigants should accordingly mentally and financially prepare themselves for the long haul in order to be successful.

Alternative Dispute Resolution

Parties can also consider cheaper and quicker means of resolving their dispute (e.g. negotiation and mediation) rather than exposing themselves to litigation in a public court. Arbitration is becoming a more regularly considered option, especially in commercial litigation. Arbitration utilizes a neutral third party to hear a dispute between the parties. The hearing is informal and the parties mutually select the arbitrator. The arbitrator decides how to settle the dispute and his decision is final and binding on the parties. Arbitration can accordingly provide an alternative forum where a dispute may be adjudicated and the parties have some control over who adjudicates the matter and the time periods in which the matter will be heard.

Mediation is also starting to become more important in our law. It is a form of alternative dispute resolution where a third party, a mediator, assists the parties to negotiate a settlement rather than arbitrate the matter with a finding.

It is clear that apart from the merits of your case, the above pointers must be carefully considered before you embark on litigation. You should also timeously consult with a litigation attorney that can advise you on how to commence and resolve your dispute in the most commercially satisfactory way.

May 6, 2014
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