A Guide to Commercial Litigation in South Africa

Commercial litigation is a complex area of law that deals with disputes between businesses or individuals relating to commercial transactions. In South Africa, commercial litigation is governed by various laws and regulations, including the Companies Act, the Consumer Protection Act and the Competition Act. In this article, we will provide a guide to commercial litigation in South Africa, including the types of disputes that can arise, the legal process and how to find the right attorney.

What is Dispute Resolution?

Dispute Resolution refers to the process of resolving disputes or conflict and Alternative Dispute Resolution (“ADR”) refers to the process of resolving disputes without litigation through the likes of mediation, arbitration, conciliation and negotiation. Disputes can also be resolved via litigation.

What is Litigation?

Litigation is the process of taking legal action by taking a dispute to a court of law for resolution.

Civil litigation is legal action between private individuals and where criminal charges are not at issue. In civil litigation, there are 2 sides to the dispute, the first being (1) the party/s who starts the process by suing to enforce a legal right and seeks either compensation or certain conduct; and (2) the party/s that is defending itself against the lawsuit filed.

In South Africa, there are 2 ways in which litigation can be instituted, namely by way of motion proceedings or by way of action proceedings.

Motion proceedings are typically argued ‘on the papers’ and are used where there are no material disputes of fact. Motion proceedings typically involve disputes pertaining to the application or interpretation of the law and are instituted by issuing of an application which comprises of a notice of motion and founding affidavit. The parties are called the Applicant and the Respondent. These type of proceedings are typically cheaper (when compared to action proceedings) and take a much shorter time to be heard by a judge and as a result, are usually disposed of more expeditiously than action proceedings.

Action proceedings involve disputes of fact and are instituted by issuing a summons. Given that there are material disputes of fact, action proceedings culminate in a trial at which evidence in a form of testimonies and documents is given to prove (or disapprove) the claims made. The parties are called the Plaintiff and the Defendant.

What is Commercial Litigation?

Commercial litigation deals with a commercial dispute between two or more parties, where one or more of the party is a business entity.

Since businesses are involved in commercial litigation, the issues pertaining to such disputes tend to be more complex and/or specialized than those typically associated with other forms of civil litigation. The majority of commercial litigation cases are instituted in a High Court of competent jurisdiction, as opposed to a Magistrates Court.

Corporate Litigation involves disputes and issues dealing exclusively with matters relating to businesses (e.g. breaches of the Companies Act, breach of contract, disputes over the proper construction of agreements, shareholder disputes, director disputes, disputes over joint ventures, post-mergers and acquisitions disputes.).

The primary difference between commercial and/or corporate litigation (versus other types of litigation) is the parties involved in the litigation and the subject matter of the dispute. Due to the nature of commercial litigation, such litigation tends to be expensive than other forms of litigation as such litigation process involves certain mandatory process, like discovery, the use of forensic experts, etc.

What Does a Commercial Attorney Do?

A commercial litigation attorney is specifically educated, trained and experienced in litigation disputes with a particular emphasis on disputes that involve businesses and business-related matters. Choosing a savvy and experienced commercial litigation lawyer is crucial for any party involved in commercial litigation.

Commercial Litigation matters involve a lot of strategy and these strategies should always be logical and results driven and take into account your needs and your best interests. A top commercial attorney will ensure that you are aware of your legal rights and obligations and will try to proactively resolve the dispute before advising you to make the decision to litigate.

How to Choose a Commercial Litigation Attorney?

When choosing a commercial litigation lawyer, you should be mindful of, inter alia, what your objectives are, how much money do you have to spend on legal fees, will you receive personalized and attentive service from this attorney. Litigation can be stressful and as a result, choose an attorney who can effectively communicate with you and has a good "bedside manner". A top commercial litigation attorney should explain to you succinctly all the options that are available and the practical and legal advantages and disadvantages of the different courses of actions and other matters relevant to your decision.

Commercial litigation can be complex and challenging, and it is essential to have the right attorney on your side.

How to Respond to a Commercial Dispute?

When faced with a commercial or corporate legal dispute, the best course of action is, in the first instance, to get advice from a competent commercial litigation attorney, who should assist youin trying to resolve the dispute before it moves into the litigation realm where such disputes often become more complex and/or costly.

If you have the right commercial litigation attorney representing you, this may very well be the difference between ‘winning or losing’ the dispute and the costs associated with the resolution of the dispute.

Types of Commercial Disputes

Commercial disputes can arise in a wide range of circumstances, including the following:

1. Contract disputes: These disputes arise when one party breaches the terms of a contract, such as by failing to deliver goods or services or failing to pay for them.

2. Shareholder disputes: These disputes arise between shareholders in a company and can relate to issues such as the management of the company, dividend payouts, or the sale of shares.

3. Competition law disputes: These disputes arise when a business engages in anti-competitive behavior, such as price-fixing or market-sharing.

4. Consumer law disputes: These disputes arise when a business engages in unfair or deceptive practices, such as false advertising or misleading product labeling.

Conclusion

Commercial litigation is an important area of law in South Africa that deals with disputes between businesses or individuals relating to commercial transactions. By understanding the types of disputes that can arise, the legal process and how to find the right attorney, you can ensure that your rights are protected and that you have the best chance of obtaining a favorable outcome in any legal proceedings. At Barter McKellar, we pride ourselves on being experts in our chosen fields of practice, being up to date with the latest legal developments and offering our clients the highest quality of service at affordable rates.

If you need assistance with a litigation matter or dispute, contact our offices today to schedule a consultation with one of our specialist litigation attorneys.