What, if any, are the pre-action conduct requirements in your jurisdiction and what, if any, are the consequences of non-compliance?
Litigation (2nd edition)
Generally, there are no legal requirements to initiate any pre-action procedures regarding commercial disputes. In particular, there is no mandatory mediation or alternative dispute resolution mechanism for general commercial matters. However, it is recommended and common practice to request a debtor to fulfil its obligations before commencing legal proceedings. This is because the court may order the plaintiff to bear the court fees and its legal costs, if the defendant immediately complies with the claim or does not contest it.
Moreover, there is no pre-action disclosure under Austrian law. In any event, a party intending to bring a claim should ascertain that it has the evidence necessary to prove its claims as requests for evidence production during the proceeding are rather limited (especially in comparison to document production possibilities in common law jurisdictions).
In principle, pre-action conduct is not required under the CCP. However, there are certain types of disputes for which the plaintiff is required to first file a petition for mediation (such cases include those related to increases or decreases in rent for land or building under the Act on Land and Building Leases).
Although not a legal requirement, in practice, a notification by content-certified mail is often sent to the defendant before a complaint is filed in court, to give the defendant the opportunity to resolve the dispute out of court.
Generally, there are no pre-action conduct requirements to consider.
However, it is recommended to send a formal notice which enables to trigger the accrual of the legal interests.
In general, pre-action conduct is not required in China. Only for employment disputes, the plaintiff shall bring a labour arbitration at the labour arbitration committee before filing of a court trial, no matter whether the plaintiff is an employer or an employee. Otherwise the court would decline the case. No other pre-action requirement is needed for initiating a lawsuit in China.
In Contract law, the usual pre-action conduct requirement consists in communicating the notice of default to the party that has breached the contract.
In case of non-compliance, from the date when the statement of claims is communicated to the defendant, it has a reasonable term for executing the contract. In case the obligation is executed within this term, the claimant will not be able to obtain reparation for the costs of the trial.
At present there are no pre-action conduct requirements with respect to civil and commercial claims.
There are no general pre-action conduct requirements in Danish law. In relation to debt collection, however, it is a requirement for taking legal action that the debtor has received a letter of demand (in Danish: inkassoskrivelse) which contains all information necessary for the debtor to assess the claim and provides a minimum of ten days to make payment. Non-compliance may influence the court’s decision regarding legal costs.
The plaintiff should first notify the defendant of its intention to commence proceedings before the courts. The case writ should serve as a notice to the other party of such intention.
If no proper notification takes place and all procedural requirements are not met, the court may refuse to review the claim if the plaintiff has impeded upon proper proceedings being met.
After amendments adopted in 2016 and 2017, the mandatory pre-trial procedure was introduced with respect to monetary claims, except for certain categories of disputes (e.g. corporate disputes). Before initiating court proceedings, the claimant is required to send a pre-trial complaint to the opponent and wait for 30 days, unless the other period is agreed or specified by the law.
Should the pre-trial procedure be not met, the court may refuse to consider a claim. Also, the court may direct the claimant to reimburse all costs of the proceedings.
In general terms, the are no pre-action conduct requirement before turning to litigation. Even though there are alternate means to solve disputes, they are not mandatory in Mexico, so parties are allowed to present their claims even if a settlement is being explored. For that reason, there are no sanctions for non-compliance.
However, specific actions do have specific requirements. For example, for executive commercial trials, the original note has to be presented for collection. In other cases, when the obligation does not specify a specific date for compliance, a pre-requisite is to demand compliance within the next thirty days. In shareholders disputes, the stocks have to be deposited before a Notary Public or Credit Institution before filing the complaint. In bankruptcy proceedings, it must be demonstrated a generalized default or breach of payment by the Debtor of its obligations, which consists of the default of its obligations of payment to two or more different creditors and the fulfilment of certain conditions. Therefore, before filing a specific action, litigators must analyze the specific requisites provided for in the law regarding the action to be initiated.
Under German law, there are no general mandatory requirements for a specific pre-action conduct. However, plaintiffs should be aware of certain procedural rules to avoid cost sanctions or other disadvantages during the proceedings:
- A debtor should always be given prior notice to perform the obligation before an action is filed with the court. Otherwise, the debtor might immediately acknowledge the claim upon the filing, thereby imposing the costs of the proceedings solely on the plaintiff, sec. 93 ZPO.
- Declaratory relief is admissible only if the plaintiff has a legitimate interest in the legal action. As a general rule, actions for performance have priority over actions for declaratory judgments, i.e. a plaintiff lacks the required legitimate interest for declaratory relief if it could request performance of the obligation.
- Furthermore, escalation clauses (e.g. in a company’s articles of association) requiring preliminary alternative dispute resolution efforts (e.g. negotiations at the level of the managing directors or mediation proceedings) have practical importance since any court action that is initiated before the requirements of the escalation clause are fulfilled will be dismissed as inadmissible.
Unlike personal injury proceedings, which require a letter of claim from the plaintiff to the defendant prior to the commencement of proceedings, there are no pre-action conduct requirements for commercial proceedings. However, parties in commercial proceedings may consider seeking mediation before litigation begins. Though the mediation process is voluntary, the court has discretion to order costs on an indemnity basis if it considers a party has unreasonably refused to take part in mediation.
There are no formal pre-action requirements applicable to commercial disputes in Guernsey. Rule 1 of the RCCR provides an overriding objective for all parties engaged in litigation in the Guernsey courts and this should be considered at all stages of proceedings. It is common practice for parties to engage in pre-action correspondence with a view to dealing with any preliminary issues and narrowing areas of dispute. The court has discretion to penalise parties with adverse costs orders in relation to any unacceptable pre-action conduct.
Under the Code, there are no general procedural rules governing the parties' pre-action conduct. However, as per Section 80 of the Code, an action against the government or public officers (in relation to acts done in their official capacity) cannot be brought unless a two-month prior notice is given, stating the cause of action. In urgent matters, it is also provided that the court can dispense with this requirement.
Additionally, certain statutes may also provide pre-requisites that are required to be met prior to initiation of legal proceedings. As an example, under Section 21 of the Arbitration Act, the arbitral proceedings commence on the date on which a request for that dispute to be referred to arbitration is received. For this purpose, the High Court of Delhi has, in Alupro Building Systems Pvt. Ltd. v. Ozone Overseas [2017 SCC Online Del 7228], held that this requirement of issuing a notice invoking the arbitration clause under Section 21 is mandatory unless there is an agreement to the contrary between the parties.
Further, amendments have also been carried out in Section 34(5) of the Arbitration Act to provide that an application for setting aside the arbitral award shall be filed only after issuing a prior notice to the other party. However, there are conflicting decisions of various High Courts on whether this provision is directory or mandatory in nature and this issue is currently pending adjudication before the Supreme Court.
Isle of Man
The RHC does not contain the CPR pre-action protocols but the litigation culture on the Isle of Man requires a reasonable rather than an unduly aggressive and confrontational approach. Disputes need to be resolved within a short space of time and at a reasonable cost (Howell v DHSS 2009 MLR 526; Watson v Jolly 2011 MLR N8).
As mentioned, in some matters (lease, loan, lease of business, insurance, banking and financial contracts), the mediation procedure is a prerequisite of admissibility of the action. Likewise, the assisted negotiation procedure is a prerequisite of the admissibility of the action for payment requests, for any reason, for amounts not exceeding € 50,000.00.
In any case, if one of those compulsory procedures is not performed, at the first hearing the Judge orders the relevant procedure to be carried out within a deadline. Failure to comply leads to the rejection of the claim.
If the individual litigants reside in the same village, prior recourse to barangay (village) conciliation proceedings is required. If the parties have an arbitration agreement, the parties must resolve their dispute through arbitration before seeking judicial relief. If the claim involves deceit or misappropriation, a prior demand is necessary. Further, a party is only considered in default upon non-compliance with a prior demand. Thus, generally, a monetary claim or an action to enforce a contract must be preceded by an extrajudicial demand. Nevertheless, parties are allowed to waive the requirement of prior demand through contract stipulation.
Non-compliance with pre-action conduct requirements may result in the dismissal of the case. In exceptional cases, a court may proceed with the case despite non-compliance in the interest of justice.
In our jurisdiction there are no pre-action conduct requirements to consider. For instance, if there is a breach of contract, the compliant party may resort directly to judicial action.
Slovak law does not set out any procedural formality with which the plaintiff must comply prior to filing a petition.
However, in practice the creditor gives a payment notice to the borrower with an additional period for rectification before going to the court.
There are no legal requirements on pre-action conduct. However, according to the Code of Conduct of the Swedish Bar Association, which governs the conduct of lawyers admitted to the Bar, the main rule is that legal action must not be taken unless the opposing party has first been given reasonable time to consider the claim. Consequently a letter before claim is normally sent.
There are different pre-action protocols for some of the most common types of claims, such as debt claims or professional negligence claims. There is also a general Practice Direction which applies where there is no specific pre-action protocol. These protocols and general practice direction ensure that the parties have exchanged sufficient information to understand each other’s positions, make decisions on how to proceed, attempt to settle issues without proceedings and support the efficient management of proceedings. Compliance with the protocols is not mandatory but the court might take this into account when awarding costs or considering case management directions. It is generally advisable to follow the relevant protocol whenever possible (although in some cases, such as when a limitation period is about to expire, it might be necessary to issue a claim and then engage in correspondence with the other side).
Unless the contracts provide for a mediation or amicable settlement before initiating a case, under Bahraini law, there are no pre-action requirements before filing the proceeding in Bahrain, except the legal notice in certain claims such as the payment order request. If a legal notice is not served, the court will not issue an expedite payment order but will hear it as a normal case.
Generally, no prior requirements are needed to file a complaint. Certain laws, however, demand preliminary actions before conducting formal litigation, such as when an insured party intends to sue its insurance company, as the law provides that plaintiffs need to conduct an imperative mediation before the National Superintendence of Insurance, otherwise all complains would be inadmissible. Another example is the law that governs grantor-agent commercial relationships, which sets forth that a mediation is mandated before the competent chamber of commerce and its omission allows the court to annul the complaint. Nonetheless, there is a strong tendency to limit pre-action requirements based on the constitutional due process clause. Under the Constitution, parties are free to go to court, which leads to courts to omit pre-requirements while applying this constitutional right.
In terms of a civil claim, under Article 1238 of the Indonesian Civil Code, a defaulting party must first be declared to be in default. This will become the norm for the court in considering if both parties have attempted to amicably settle the dispute. To ensure that the parties have exhausted an amicable settlement, the Supreme Court has issued Regulation Number 1 of 2016 on In-Court Mediation, which obliges the disputing parties to mediate before proceeding into trial. The parties are given a minimum 30 days for mediation. If the mediation fails, the case will then proceed to the examination of the case.
There are no pre-action conduct requirements unless it is expressly provided in a contract that alternative dispute resolution mechanism should first take place prior to commencement of legal proceedings.
In Malaysia, one is entitled to commence legal action against another so long as there is a cause of action recognized by law. However, one may still apply to court for discovery against any parties prior to the commencement of an action akin to a Norwich Pharmacal Order.
The usual consequences of the non-compliance of court orders such as an injunction will be committal for contempt of court.
As stated before, there are no procedural step or prerequisites to institute an action in court. Also, the general rule in Chile is that there are no "pre-action conduct requirements", because, as we explained, anyone has the possibility to go directly to the courts of justice by filing a complaint in a lawsuit.
There are exceptional cases where the law requires compliance with prerequisites to sue (typically in cases of compulsory mediation in family matters or in cases of medical liability). In these limited cases, the failure to comply with the previous procedures prevents the respective Tribunal from getting to know the conflict.
There are no set rules under Maltese law determining the applicable pre-action conduct requirements; however it has become customary for the courts of Malta to issue a decree following the appointment of the first hearing of the case imposing a deadline on the applicant to disclose all affidavits and documentary evidence within a set time-frame. An applicant may request the court for an extension of the said time-frame by means of a court application filed in the records of the case. Should a party fail to comply with the said court orders, the Court would have the power to prohibit the said party from submitting the said evidence.
As mentioned under question 4, the initiation of state court civil proceedings must usually be preceded by a conciliation hearing before the conciliation authority if no exception applies or if the parties do not agree to waive this obligation in cases where such waiver is admissible. Apart from that, Swiss law (in contrast to other jurisdictions) does not impose any particular pre-action conduct requirements upon the litigating parties.
If the plaintiff does not comply with the obligation to request a conciliation hearing, the court will declare the claim to be inadmissible. If the plaintiff fails to attend such conciliation hearing, the court will deem the claim to have been withdrawn.
After the introduction of law 4512/2018, entering into force in September 2018, the parties are obliged to attempt the resolution of their dispute through mediation prior to the submission of any action before the court for certain categories of disputes (e.g. disputes arising due to violation of trademark and patent rights, stock-market contracts, remuneration claims of certain professionals, etc). For those disputes any action submitted to the court without the prior procedure of mediation, shall be rejected as inadmissible.
There are a few pre-action conducts that are required. A formal notice of commencement of lawsuit is necessary, and the notice shall mention the basis for the claim, as well as important evidence relating to the claim that the defendant must be presumed to be unaware of. The duty to disclose relevant evidence extends even to evidence that is detrimental to the party possessing the evidence. Non-compliance with the above requirements can, however, only affect the court’s decision on recovery of litigation costs.
Parties to a lawsuit are not required to initiate a specific procedure before filing a lawsuit. Parties may, however, freely provide in an agreement that they will endeavor to settle any dispute through a mediation procedure/arbitration, or that any lawsuit will be subject to the prerequisite that notice must be given first.
Indeed, in contractual matters, a letter of notice has to be sent before initiating a lawsuit. This is not a condition for admissibility of the action to be introduced, but this will prove the soundness of the action.
Generally there are no pre-action conduct requirements before commencing a commercial lawsuit. Certain federal district courts have enacted local rules requiring parties to consider mediation. There are occasionally administrative orders and statutes at the state level that require mandatory mediation for certain commercial disputes. For example, Delaware passed the “Delaware Voluntary Alternative Dispute Resolution Act” in 1995, requiring parties to attempt mediation of commercial disputes before going to court. Likewise, in 2017, the Commercial Division in the New York County Supreme Court established a pilot project, which automatically assigns newly filed commercial cases (excluding those in which a self-represented person is a party) to a Justice outside of the Commercial Division for mandatory mediation.
In addition, disputes concerning contracts with mandatory arbitration provisions may be compelled to arbitrate, given the strong judicial presumption in favor of arbitration provisions and support of arbitration as a means of commercial dispute resolution.
There is no mandatory pre-action under Iranian law.
Parties’ agreement on a multi-stage dispute resolution—where measures such as good faith negotiation, mediation or conciliation must be taken prior to court proceedings—will be binding, and a failure to comply will render the dispute inadmissible before court.
In principle, there are no pre-action conduct requirements in the Netherlands, although a notice of default will often be required in order to enforce one’s rights. Pre-trial correspondence is required in cases of mismanagement brought before the Enterprise Chamber (Ondernemingskamer) (section 2:349 DCC) and collective actions (section 3:305a DCC).
Doesn’t exist in our jurisdiction.
Generally, there are no pre-action requirements. However, in specific cases the law requires that a party sends a legal notice to its counterparty before initiating any legal proceedings, such as when a landlord wishes to evict a tenant, or when a party wants to terminate a contract.
RA legislation does not envisage any pre-action conduct requirements as such, but ones foreseen in the contract. Usually, any contract contains terms on commercial dispute resolution through negotiations, and if those do not result in resolution of the dispute parties agree to either hand over the dispute to an arbitrate or decide on the competent court to try the case. Although, if the parties agree on recur to such methods, the statutory period is 30 days from the moment the parties failed to come in agreement if those methods are foreseen in the contract.