Conflict of Law

Conflict of law is concerned with the situation where the plaintiff and the defendant reside in different countries; this can present real problems.  The defendant will owe the plaintiff money either as an actual unpaid debt or as a claim for damages.  One way is, of course, to take legal action in the defendant’s own country but the ease with which this can be undertaken will differ considerably from country to country. Expert legal advice is essential because even with a successful outcome, the cost of recovery could easily be more than the sum recovered. A typical example is that in the UK it is quite normal for the loser to have to pay the other side’s legal costs, on top of the outstanding amount plus interest if the judgement favoured the plaintiff. In the USA it is more usual for both sides to bear their own costs regardless of the outcome. Furthermore there is no reciprocal enforcement of judgements between England and the USA. The situation can be made easier if the defendant has assets within the plaintiff’s jurisdiction.  Under English law it is possible to obtain a Freezing Order which was originally called a Mareva Injunction. This was “invented” in 1975 by Lord Denning who used powers which had, in fact, been in existence for half a century. (The title “Mareva” was from the name of one of the companies involved in the dispute at that time).  The effect of such an order is to prevent the defendant’s assets being removed from the jurisdiction of the court and the granting of such an order is very carefully considered for fear that innocent third parties could suffer as result of funds being frozen.