Analysis of merits of claim or defence - Assessing strengths...

Learning Outcomes

This article examines how to analyse the merits of a claim or defence in a structured, exam-focused way. It explains how to identify the correct cause of action or defence, confirm the right parties, and apply limitation, jurisdiction and governing law. It examines how to test each element of liability in contract, tort and statutory claims, and how to recognise complete and partial defences such as limitation, contributory negligence, consent and set‑off. It analyses how to evaluate the sufficiency, admissibility and weight of evidence, including witness, hearsay and expert evidence, and how privilege and disclosure duties shape case strategy. It explores how to assess causation, remoteness, mitigation, quantum and interest, and how to ensure loss is properly evidenced. It reviews enforceability, security for costs, jurisdictional obstacles and other practical risks that affect the real value of a claim. It discusses costs, proportionality, track allocation, QOCS, and the impact of Part 36 offers and other settlement tools. It also examines the role of pre-action protocols and ADR, and how these influence prospects of success, costs exposure and the client’s overall litigation strategy.

SQE1 Syllabus

For SQE1, you are required to understand how to analyse the merits of a claim or defence, with a focus on the following syllabus points:

• identifying and applying the legal elements of a cause of action or defence (e.g. contract, tort) and common statutory frameworks (e.g. Limitation Act 1980)
• evaluating the sufficiency, admissibility and weight of evidence (witness, hearsay, expert) and understanding legal professional privilege
• assessing causation, remoteness and quantum (including mitigation, interest)
• considering enforceability, security for costs, jurisdiction, and practical obstacles to recovery
• weighing up costs, risks, tracks and proportionality under the overriding objective, including Part 36 consequences and QOCS in personal injury
• understanding pre-action protocols and ADR, and the impact of non-compliance on costs

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What are the essential components you must analyse when assessing the merits of a claim or defence?
2. Why is it important to consider enforceability when advising a client on whether to pursue a claim?
3. How does the burden of proof affect the analysis of a claim or defence?
4. What practical factors might make a strong legal claim unviable in practice?

Introduction

Analysing the merits of a claim or defence is a core skill in civil litigation. A systematic case analysis typically covers: the cause of action and parties, limitation, jurisdiction and governing law, the legal and factual elements to establish liability or a defence, evidence and disclosure issues, causation and quantum, settlement prospects, costs and proportionality, and enforceability. Robust advice requires integrating legal analysis with procedural and practical realities.

Key Term: cause of action
The legal basis on which a claimant seeks a remedy from the court, requiring proof of specific elements.

Key Term: burden of proof
The obligation on the party asserting a fact (usually the claimant) to prove it.

Key Term: standard of proof
In civil cases, facts must be proved on the balance of probabilities (more likely than not).

Identifying the Legal Basis

The first step is to establish the correct legal cause of action or defence. Confirm you have the right defendant (correct legal entity), check limitation, and identify applicable law and forum. Many disputes engage both common law and statute (e.g. negligence alongside statutory duties such as the Occupiers’ Liability Act 1957). Mixed claims (e.g. contract and tort) may be appropriate where facts support multiple bases.

Key Term: limitation period
The statutory time limit for issuing a claim. General time limits: six years for contract and for tort (other than personal injury), three years for personal injury, with latent damage special rules (and a 15‑year long-stop) in negligence.

Where there is a foreign element, consider governing law and jurisdiction clauses. Post‑Brexit, the position depends on CPR service-out gateways and, in some cases, the Hague conventions. If permission is required, the court will consider whether there is a serious issue to be tried, a good arguable case, and whether England and Wales is the proper forum.

Key Term: pre-action protocol
Procedural guidance that sets out steps parties should take before proceedings in particular types of claim or, where no specific protocol applies, under the Practice Direction on Pre‑Action Conduct and Protocols.

Assessing Liability

For a claim to succeed, the claimant must prove each element of the cause of action. For a defence, the defendant must show a valid legal reason why the claim should fail (or damages be reduced).

Key Term: liability
Legal responsibility for an act or omission that gives rise to a claim.

Contract

Confirm a valid contract, terms (express or implied), breach, causation and loss. Terms may be conditions, warranties, or innominate; categorisation affects remedies. Consider implied terms (by statute, custom, or for business efficacy), misrepresentation (and the possibility of rescission/damages), and enforceability of exclusion or limitation clauses (e.g. under the Unfair Contract Terms Act 1977 in suitable contexts).

Tort

In negligence, establish duty of care, breach, causation and damage. Assess remoteness (reasonable foreseeability) and any contributory negligence (which reduces damages under the Law Reform (Contributory Negligence) Act 1945). Consider specific frameworks (e.g. occupiers’ liability) and vicarious liability where acts are done in the course of employment.

Statutory Claims

Ensure all statutory requirements are met. Limitation and specific procedural requirements may differ from common law claims.

Defences

Identify complete or partial defences (e.g. limitation, contributory negligence, consent, exclusion or limitation clauses, set‑off, illegality). In personal injury, note QOCS for costs risk rather than liability, but fundamental dishonesty can disapply it.

Evaluating Evidence

A claim or defence is only as strong as the evidence supporting it. Assess whether there is sufficient, reliable, admissible evidence to prove or disprove each element. Evaluate gaps, inconsistencies and credibility risks.

Key Term: evidence
Information presented to the court to prove or disprove facts in issue.

Key Term: hearsay
A statement made out of court relied on to prove the truth of what it asserts. Admissible in civil proceedings subject to statutory notice and weight considerations.

Key Term: legal professional privilege
Protection against disclosure/inspection of confidential communications: advice privilege (client–lawyer for legal advice) and litigation privilege (communications with third parties for the dominant purpose of existing or contemplated litigation).

Key Term: single joint expert
An expert instructed to report for the court on behalf of two or more parties, commonly used to control costs and proportionately resolve technical issues.

Consider:

• documentary evidence (contracts, correspondence, records)
• witness statements prepared under PD 32 (clear chronology, sources of information/belief, exhibits, statement of truth)
• hearsay notices and weight factors under the Civil Evidence Act 1995
• expert reports (CPR 35 compliance, duty to the court, scope, assumptions)
• disclosure duties: relevant adverse documents must be searched for and disclosed on the standard basis; privilege can protect inspection but not existence

Assess whether a single joint expert is appropriate; in multi‑track disputes, anticipate separate experts and expert meetings to narrow issues. Consider whether evidence can be improved or undermined through further disclosure, witness summaries, or third‑party disclosure.

Causation and Quantum

Even if liability is established, the claimant must prove that the defendant’s act or omission caused the loss claimed, and quantify that loss. Evaluate both factual causation and legal remoteness.

Key Term: causation
The requirement to show that the defendant’s breach caused the claimant’s loss.

Key Term: quantum
The amount of damages or loss suffered by the claimant.

• Apply the "but for" test: would the loss have occurred but for the breach?
• Consider remoteness: losses must be reasonably foreseeable (tort) or within the contemplation of the parties at the time of contracting (contract), including special circumstances communicated
• Assess mitigation: claimants must take reasonable steps to reduce their loss; failure reduces recoverable damages
• Interest: absent contractual terms, courts may award interest (e.g. s.35A Senior Courts Act 1981 or s.69 County Courts Act 1984), typically from date of loss to judgment
• Ensure quantum is supported by evidence (invoices, expert valuations, schedules of loss), separating general and special damages where appropriate

Enforceability and Practical Considerations

A judgment is only valuable if it can be enforced. Assess the defendant’s assets, solvency, location, existing charges, and the practicality of enforcement. Consider whether security for costs should be sought, or whether the defendant might seek it.

Key Term: enforceability
The practical ability to recover a judgment or remedy from the defendant.

Key Term: ADR
Alternative dispute resolution processes (e.g. mediation, arbitration) used to settle disputes without trial; encouraged by the CPR and relevant Practice Directions.

Practical factors include:

• limitation periods (is the claim in time?)
• the costs of litigation versus likely recovery
• the impact on ongoing relationships; confidentiality needs
• reputational or commercial risks
• jurisdiction and service-out issues where parties or assets are abroad
• security for costs where a claimant’s financial position may impede a defendant’s cost recovery
• enforcement options: taking control of goods (writ/warrant of control), third‑party debt orders, charging orders (and orders for sale), and attachment of earnings; interest on judgment debts at statutory rates; registration of CCJs and credit impact

Non‑compliance with pre-action protocols or ignoring ADR can attract costs sanctions. Consider whether some form of ADR could achieve a better, quicker, or more cost-effective outcome, particularly where ongoing relationships matter or the dispute includes technical issues suitable for expert determination or mediation.

Key Term: pre-action protocol
Framework requiring early information exchange, consideration of ADR, and proportionate steps before issuing proceedings; non‑compliance can affect costs and interest.

Costs, Risks, and Proportionality

Advise clients on the likely costs of pursuing or defending a claim, the risk of adverse costs orders, and whether the potential benefit justifies the expense and risk. Case strategy should reflect the overriding objective and proportionality.

Key Term: proportionality
The requirement that steps taken and costs incurred are reasonable in relation to the amount, importance, complexity, and parties’ financial positions.

Key Term: Part 36 offer
A formal offer to settle under CPR Part 36 with defined costs consequences; used to encourage settlement and manage litigation risk.

Key considerations:

• track allocation and cost regimes (small claims, fast track, multi‑track)
• costs management and budgeting in multi‑track claims; impact of late or missing budgets
• settlement: Part 36 offers (costs consequences if not beaten), “without prejudice save as to costs” negotiations, Tomlin orders for structured settlements
• QOCS in personal injury: costs risk management where claimants typically do not pay defendants’ costs if they lose (subject to exceptions)
• summary judgment prospects: if one side has no real prospect of success and no other compelling reason for trial, early disposal may reduce risk and cost
• default judgment and setting aside: procedural risks if a party fails to respond or engages late
• the proportionality of pursuing marginal issues or extensive disclosure/expert evidence relative to value

Consider ADR at all stages; the court can stay proceedings to facilitate ADR and may penalise unreasonable refusals. Settlement can crystallise outcomes and reduce enforcement and costs risks.

Key Term: ADR
Processes such as mediation (facilitated negotiation) and arbitration (binding adjudication) used to resolve disputes outside court.

Worked Example 1.1

A client asks if they should sue a supplier for breach of contract after receiving defective goods. The contract is clear, but the supplier is in financial difficulty and has no visible assets.

Answer:
Although the legal claim appears strong, the lack of enforceability means the client is unlikely to recover any damages. You should advise against pursuing litigation unless the supplier’s financial position improves.

Worked Example 1.2

A claimant has strong evidence of negligence against a contractor, but the only witness to the key event is unwilling to attend court.

Answer:
The claim is weakened by the lack of available evidence. Without the witness, it may be difficult to prove breach or causation. Consider whether other evidence can be obtained, serve a hearsay notice if appropriate, explore whether a witness summary or third‑party disclosure could help, and whether settlement is advisable.

Worked Example 1.3

A defendant is sued for £10,000. The defence is weak, but the claimant has failed to issue proceedings within the limitation period.

Answer:
The defendant has a complete defence. Limitation is a procedural bar, so the merits of the initial claim are irrelevant.

Worked Example 1.4

A claimant made a Part 36 offer of £30,000. The defendant rejected it. At trial the claimant succeeds but is awarded £31,000.

Answer:
The claimant has beaten their Part 36 offer. The usual order is that the defendant pays the claimant’s costs, with additional Part 36 consequences from expiry of the relevant period (e.g. indemnity costs and enhanced interest), unless unjust in the circumstances.

Worked Example 1.5

A defendant knows the claimant company is insolvent and suspects they have no assets to meet an adverse costs order. The claim is for £250,000.

Answer:
The defendant should consider an application for security for costs. If the court is satisfied the claimant company is unlikely to be able to pay the defendant’s costs if ordered to do so, and it is just to make the order, the claimant may be required to provide security, which materially affects litigation risk and settlement strategy.

Worked Example 1.6

A claimant seeks summary judgment on a debt claim supported by a signed agreement and contemporaneous delivery notes. The defendant’s defence says they “dispute liability” without particulars and provides no documents.

Answer:
Consider a summary judgment application. If the defendant has no real prospect of successfully defending the claim and there is no other compelling reason for a trial, the court can give judgment, saving time and costs. Ensure evidence is complete and address any arguable defences before applying.

Summary

When analysing the merits of a claim or defence, always:

• Identify the legal basis and ensure all elements are present, including correct parties and limitation.
• Evaluate the quality, admissibility and sufficiency of evidence, including hearsay and expert issues, and privilege.
• Assess causation, remoteness, mitigation and quantum (and interest).
• Consider enforceability, jurisdictional issues, and practical obstacles.
• Weigh up ADR, settlement prospects, Part 36 consequences, costs, risks, and proportionality.
• Keep the overriding objective in view and plan case management steps that are efficient and cost‑effective.

Key Point Checklist

This article has covered the following key knowledge points:

• The merits of a claim or defence depend on liability, evidence, causation, quantum, and enforceability.
• Correct party identification, limitation and governing law/jurisdiction are foundational to merits analysis.
• All elements of the cause of action or defence must be supported by admissible and reliable evidence; manage hearsay and expert evidence properly.
• Causation, remoteness, mitigation and quantum must be proven with evidence; interest may be awarded.
• Enforceability and practical factors (assets, solvency, jurisdiction) may affect the real value of a claim.
• Costs, risks, ADR and proportionality must be considered throughout; Part 36 offers and QOCS materially affect strategy.
• Security for costs, summary judgment, and default judgment may significantly alter prospects and risk.

Key Terms and Concepts

• cause of action
• liability
• evidence
• hearsay
• legal professional privilege
• single joint expert
• burden of proof
• standard of proof
• causation
• quantum
• limitation period
• enforceability
• pre-action protocol
• ADR
• proportionality
• Part 36 offer