Key issues in transatlantic litigation
The UK and the US have long been key to each other’s economic health. The US is the UK’s largest single trading partner, accounting for 18% of total UK trade. According to the Department for Business and Trade, the two countries have £1.2 trillion invested in each other’s economies.
While trade and political headwinds bring specific challenges for business, the level of transatlantic commercial activity also generates a substantial number of commercial disputes. Transatlantic disputes (whatever the underlying sector or legal issue) typically bring complex questions of jurisdiction, conflict of law, and procedure into play.
This is all well and good in a contractual dispute where the contract contains an effective and explicit jurisdiction and choice of law clause. Outside of that, questions of applicable law, service of process, and jurisdiction can cause significant issues.
This article explores some of the similarities and key differences between litigation in the US and the UK. It also provides an overview of the practical steps litigants can take to maximise efficiency and minimise procedural pitfalls (reference to the ‘UK’ for the purposes of this article is to the legal jurisdiction of England and Wales and the terms are used interchangeably).
Jurisdiction over disputes
In England, if a defendant is physically in England or Wales and is validly served with process, the English court has jurisdiction. This is the case whether or not they are an English national and, broadly, however temporarily they may be there. However, a claimant must generally seek the court’s permission to serve a defendant outside the jurisdiction (Civil Procedure Rules 6.36 (CPR)). Permission will only be granted where the claim falls within certain categories (CPR Practice Direction 6B.3.1); has a reasonable prospect of success; and England is the proper place to bring the claim.
The federal structure of the US, with its scores of overlapping jurisdictions, has given rise to a jurisprudence in which extraterritoriality is the norm. US courts have an extremely long reach. Unsurprisingly perhaps, a corporation can almost always be sued in the state where it is incorporated or has its principal place of business (Daimler AG v Bauman (2014)). But if a corporation has business contacts with a particular US jurisdiction, any lawsuit concerning that business can also be brought there.
Accordingly, a company with its principal place of business in England that exports product directly to customers in the United States can be sued by those customers in the US rather than England (World Wide Volkswagen Corp v Woodson (1980)). There may therefore be situations where the parties have a choice of jurisdiction as between the English and the US courts.
In turn, in the US, there may also be a choice of whether to sue in Federal Court or State Court depending on, among other factors, where the wrongdoing occurred, where the defendants are located, and the claims being brought. Since each state has its own rules of procedure, this article just focuses on the federal system. Whilst both systems are common law systems, their different procedural rules (the CPR and Federal Rules of Civil Procedure (FRCP) respectively) and approach to litigation impacts massively on a potential litigant’s chances of success. So which jurisdiction should you choose?
Commencing proceedings
In England, the CPR has the ‘overriding objective’ of enabling the court to deal with cases justly and at proportionate cost. As part of this regime, parties must follow pre-action protocols before commencing a claim in order to allow the parties every opportunity to settle the claim once the details of the dispute have been identified. Failure to comply with the pre-action protocols may result in a party being penalised at a later stage as to who pays the costs of the litigation. No such formal requirements exist in the US.
A claim is commenced in England by the claimant issuing and serving a claim form and particulars of claim. Similarly, a civil action in the federal court is commenced by filing a complaint, although the complaint need not be ‘particularised’ in as much detail as is required in England. It is also easier to amend the complaint after filing in the US than it is to amend statements of case (once served) in England. Whilst in the Federal Court, the complaint has to list the causes of action in the claims for relief, there is generally more flexibility in the US in formulating the complaint.
Disclosure
The English courts are required to limit disclosure to that which is strictly necessary to deal with the case justly. Disclosure is not automatic; it requires a court order. An order for disclosure in the Business and Property Courts will relate to an agreed list of issues, against which each party will need to disclose their relevant documents. In some instances (depending on the type of disclosure order), parties may have relatively limited disclosure obligations.
By contrast FRCP 26(b)(1) provides that ‘parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense’. ‘Relevant’ in this context is anything ‘reasonably calculated to lead to the discovery of admissible evidence’ (Perry v Schwarzenegger (2009)). Discovery in the US is therefore much broader than in England but also more costly.
Depositions
Depositions are live pre-trial testimony provided by a witness, which is carried out in a similar manner to that at trial. Lawyers from both sides will usually be present, the witness will swear an oath and the evidence will be recorded. No judge will be present however, and the evidence may or may not be used in court. The scope of depositions is very broad and the questioning attorney is generally entitled to wide latitude in the questions asked. This process offers flexibility if there are geographical restraints involved, providing the opportunity for live cross-examination of witnesses outside the trial courtroom. It also allows the parties to analyse the strengths and weaknesses of their case at a relatively early stage in proceedings.
The English courts have no such process, relying instead on written witness statements which are submitted to court. At trial, examination and re-examination are limited to confirmation of the content of the witness statements and the scope of cross-examination only. This can vastly reduce the amount of time the witness spends testifying at trial, although it can also potentially limit the scope of the testimony given.
Compliance with deadlines
The English legal system imposes strict sanctions on parties that fail to comply with court orders or the court timetable. The consequences of missing a deadline, even by a matter of minutes, can be potentially catastrophic to a civil case. Ultimately, it can lead to the claim or defence being struck out. In any event, failure to comply can increase costs due to the need for additional applications or a negative costs award to penalise poor conduct.
In the US, a failure to comply with the rules does not usually carry the same automatic consequences in and of itself. The usual practice is to submit a motion to the court asking it to order the offending party to remedy its failure. If the party disobeys the subsequent court order, it can then be sanctioned, not so much for breaking the rules, but for disobeying the court. Broadly speaking US courts are not as rigid as their English counterparts, and are extremely reluctant to bring litigation to an end or make costs awards. However, a continuous and wilful failure to comply with the rules will eventually lead to sanctions against the non-complying party or even involuntary dismissal of the case.
Juries
One of the biggest differences between English and US litigation is the ability to have a trial by jury in civil cases in the US. This is upon election from either party and will consist of a minimum of six members and a maximum of 12.
The number of jurors is ultimately at the court’s discretion. The decision will depend on a number of factors, including cost, the complexity of the case, and the parties’ preference.
What are the advantages of a jury trial? A jury trial should encourage in-depth discussion of the issues and therefore lead to a more considered verdict. Any decision reached will be based on the jury’s view of what is socially acceptable behaviour, arguably leading to a ‘fairer’ verdict than a case which is decided simply on the legal merits.
On the other hand, jurors can easily be influenced by a myriad of factors, including the likeability of the lawyer and any personal biases they may have. There is also the issue that any decision must be unanimous.
Damages
There are many different types of damages available as a legal remedy in both jurisdictions. The purpose of punitive (or exemplary) damages is to punish the defendant as opposed to compensating the claimant. Punitive damages tend to be much more limited in England, only being used in cases of particularly oppressive or unconstitutional action.
The US legal system has a less reserved approach to awarding punitive damages, often in large amounts. Federal juries nowadays tend to give less consideration to whether or not to award punitive damages, focusing more on how much to award. It should be borne in mind, however, that punitive damages are only available for certain claims, for example for tortious violations or claims involving fraud.
A striking example of the difference in approach between the two jurisdictions is contained within the UK Protection of Trading Interests Act 1980. This prohibits the enforcement in England and Wales of any amount payable under a foreign judgment for multiple (or punitive) damages. The English Court of Appeal recently clarified this includes any ancillary awards connected to the punitive award, for example interest and legal costs (Motorola v Hytera [2025] EWCA Civ 1667).
Legal costs
One of the benefits of litigation in England is the ‘loser pays’ principle: the winning party will ordinarily recover most of their litigation costs (including solicitors’ and barristers’ fees and any disbursements) from the other side. The amount recoverable, if not agreed between the parties, will be assessed by the court and will usually be reduced in line with what is considered to be ‘reasonable and proportionate’.
In recent years, depending on the size of the claim, there has also been a requirement for parties to each submit a costs budget to the court early on in the proceedings. There may be a costs management conference between the court and the parties to discuss and agree budgets in line with what is considered to be ‘reasonable and proportionate’ to the size and complexity of the case. Budgets can then potentially be subsequently amended (on application) if required. Following determination of liability, if the costs sought exceed the budget by more than 20% the receiving party is unlikely to recover the excess without good reason. Costs which are not considered by the courts to be proportionate in amount may be disallowed or reduced, even where they have been reasonably or necessarily incurred (CPR 44.3(2)(a)).
There are no such limitations on legal costs in the US. Further, because US courts believe it discourages people from making use of the court system, there is no ‘loser pays’ principle. That said, there are certain exceptions, for example if the parties’ contract provides for the prevailing party to recover their attorneys’ fees.
Each party usually has to cover their own legal fees, regardless of the outcome of a trial. A successful party will usually be able to recover costs of disbursements, such as court fees, and those of non-attorney professionals. Multi-nationals reported that US litigation costs on average four to nine times more than non-US litigation, despite the fact that FRCP 1 requires ‘the just, speedy and inexpensive determination of every action and proceeding’.
Appeal
In the US, the right to appeal is automatic and must be filed within 30 days of the initial judgment date. Parties are also able to file a motion for reconsideration to the judge in interlocutory applications who provided the judgment although, for obvious reasons, these are rarely successful.
In England, the right to appeal is not automatic. There must be grounds for appeal and an appeal can only be brought with the court’s permission. The appellant must file a notice of appeal with the appeal court within 21 days of the decision against which it is wishing to appeal (although the lower court has discretion to amend this time limit).
Conclusion
Commercial litigation is diverging more rapidly than previously between the US and England. The consequences of not knowing the vagaries of the system can be fatal to a civil litigation claim, particularly in the current climate of compliance and proportionality in England. Some cases will benefit from the stricter procedural confines of the English system; other cases will be better suited to the broader scope of discovery and the front-loaded nature of depositions in the US. In order to maximise their chances of success, potential litigants should seek the advice of local counsel or lawyers who are well-versed in operating transatlantic litigation proceedings.
We are grateful to Paul Llewellyn of Lewis & Llewellyn for his expert contribution on US law.