Bermuda Litigation Guides 2023

• Law Firm: Carey Olsen
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Author: Mr Michael Hanson, Kyle Masters, Keith Robinson, Sam Stevens and Henry Tucker
• Published date: 01 February 2023

The new guides provide the latest legal information on litigation funding, initiating a lawsuit, pre-trial proceedings, discovery, injunctive relief, trials and hearings, settlement, damages and judgment, appeals, costs, alternative dispute resolution and (ADR) arbitration.

GENERAL

General Characteristics of the Legal System

Bermuda is a British Overseas Territory. The modern legal system of Bermuda is established by the Bermuda Constitution Order 1968, an Order in Council of the UK. The Constitution established the Supreme Court as the primary court of first instance and the Court of Appeal as the court with jurisdiction to hear appeals from judgments of the Supreme Court. The Appeals Act 1911 further establishes a right of appeal from any judgment of the Court of Appeal to the Judicial Committee of the Privy Council.

Bermuda's legal system is largely based on English common law. The Supreme Court Act 1905 further establishes that (subject to the provisions of any acts of the Bermuda legislature) the common law, the doctrines of equity, and the Acts of the Parliament of England of general application which were in force in England at the date when Bermuda was settled on the 11 July 1612 have force within Bermuda. Trials are conducted using the adversarial model between plaintiffs and defendants who are represented, in large part, by lawyers making both oral and written submissions.

Court System

Section 12 of The Supreme Court Act 1905 established the Supreme Court as Bermuda's superior court of record. The Chief Justice is the president of the Supreme Court and puisne judges rank next in precedence (with appointed assistant judges ranking thereafter). The Supreme Court possesses and exercises the jurisdictions of the court of general assize, the court of chancery, the court of exchequer, the court of probate, the court of ordinary and the court of bankruptcy. There is also a Commercial Court which deals exclusively with commercial and arbitration-related matters.

Appeals from the Supreme Court go to the Court of Appeal. The Court of Appeal is made up of three Justices of Appeal. The Court of Appeal sits for three sessions per year, with each session lasting about a month.

Under the Appeals Act 1911, appeals from the Court of Appeal go to the Judicial Committee of the Privy Council in London.

The Magistrates' Court is below the Supreme Court. Its jurisdiction is limited to matters in dispute with a value of up to BMD25,000. The Magistrates' Court exercises both civil and criminal jurisdiction (summary only). Appeals from judgments and rulings rendered in the Magistrates' Court lie to the Supreme Court.

Court Filings and Proceedings

Save in exceptional circumstances, court proceedings are open to the public. This includes hearings in chambers. Under the Supreme Court (Records) Act 1955, the public has the right, subject to certain exceptions, to access and review the file of any Supreme Court action.

Parties who wish to keep proceedings, or the court file in those proceedings, confidential can apply for an order that the proceedings be held in private, and that the court file be sealed prior to commencing an action. When considering an application for privacy, the court will balance the rights of "open justice" and the public interests against the specific factual circumstances in which the order for privacy is being sought. Typically, where an application is made to protect the interests of minors or certain matters or information relating to a trust, provided the court concludes that the public interest is not served by the hearing being held in public, the courts will grant a confidentiality order. The same applies to a request that the court file be sealed.

Legal Representation in Court

Natural persons can represent themselves in court proceedings but unnatural persons (such as limited liability companies and partnerships) must be represented by an attorney. The Bermuda Bar is made up of legally qualified people referred to as ""barristers and attorneys"" who are admitted to practice at all levels of Bermuda's courts. Barristers and attorneys called to the Bermuda Bar may also act as Commissioners of Oaths. Pursuant to Section 51 of the Supreme Court Act 1905, to be admitted to the Bermuda Bar, a person must, amongst other things:

• have passed the final examinations required for a person to qualify to practise as a barrister or solicitor in England (or the equivalent);
• have completed a period of practical training of not less than 12 months;
• be resident in Bermuda; and
• be either a Bermudian or have the right to work in Bermuda (typically by way of a work permit).

Foreign Attorneys

A foreign attorney who meets all of the requirements under Section 51 of the Supreme Court Act 1905, apart from residency, can be admitted to practice law in Bermuda on a temporary basis if it can be demonstrated that they possess a particular expertise not available in Bermuda or that the matter involves questions of law or practice of considerable complexity or public importance. An application for approval for a foreign attorney to be admitted to the Bermuda Bar must be made to the Supreme Court. An application for a work permit for that attorney must be made to the Department of Immigration on behalf of the attorney by a Bermuda law firm. The Minister responsible for labour will consult the Bermuda Bar Council, which is the governing body for barristers and attorneys in Bermuda, as a part of the consideration process. The Bar Council has significant input into the application but the ultimate decision rests with the Minister.

LITIGATION FUNDING

Third-Party Litigation Funding

Bermuda has yet to enact legislation relating to third-party funding, but in recent years such arrangements have been blessed by the courts, which have rejected arguments that such arrangements are unlawful.

Third-Party Funding: Lawsuits

This firm has seen no examples of restrictions being imposed on the type of litigation that can be funded by a third party. Often, parties to restructuring and insolvency proceedings will enter into funding agreements with the liquidators in order to support actions to recover assets from third parties as well as actions against former directors for breaches of fiduciary duties.

Third-Party Funding for Plaintiff and Defendant

Third-party funding is available for both the plaintiff and the defendant.

Minimum and Maximum Amounts of Third-Party Funding

There are no minimum or maximum amounts a third party will fund.

Types of Costs Considered under Third-Party Funding

The costs a third-party funder will consider funding is entirely a matter between the funder and the party accepting the funding.

Contingency Fees

Contingency fees are prohibited by the Barristers' Code of Professional Conduct 1981, Rule 96.

Time Limit for Obtaining Third-Party Funding

There are no time limits with regard to when a party to litigation should obtain third-party funding.

INITIATING A LAWSUIT

Rules on Pre-action Conduct

Unlike the modern English Civil Procedural Rules, the Rules of the Supreme Court 1985 (Rules) do not impose a rigid pre-action protocol on parties. However, parties to litigation are required, pursuant to the overriding objective set out at Order 1A of the Rules, to assist the court to (among other things) identify issues at an early stage and save expense. To this end, particularly in civil proceedings, parties will typically engage in pre-action correspondence and discussions prior to the issuance of proceedings.

Ultimately, the court is entitled to take into account the reasonableness of the conduct of the parties to any action when determining the issue of costs. Parties who have failed to assist the court to discharge the overriding objective may be at risk of having their entitlement to costs discounted.

Statutes of Limitations

Applicable limitation periods are set out in the Limitation Act 1984. Claims for breach of a contract and in tort are subject to a limitation period of six years. A party bringing a claim based on a contract under seal must do so within 20 years. A 20-year limitation period also applies to claims concerning the recovery of land and the proceeds of the sale of land, or monies secured by a mortgage or a charge.

In contract law, the limitation period typically runs from the date on which the contract was breached. For a tort, the limitation period commences on the date the damage occurred. For claims in defamation, the start of the limitation period is the date of publication.

The Limitation Act 1984 makes provision for latent defects, as well as for cases where the cause of action could not, with reasonable investigation, have been discovered sooner.

Limitation is not an automatic bar to an action or recovery under it. A defendant must raise the Limitation Act as a defence and specifically plead the same.

Jurisdictional Requirements for a Defendant

When determining whether or not a proposed defendant is subject to its jurisdiction, the Bermuda court will consider whether the proposed defendant can be validly served within the Islands of Bermuda or whether a defendant has submitted, or has agreed to submit, to the jurisdiction of the Bermuda courts (for example by contract or by taking steps in the litigation proceedings in Bermuda). It may also consider whether the proposed defendant can be validly served out of the jurisdiction pursuant to Order 11 of the Rules.

Initial Complaint

Subject to the provisions of any enactment and the Rules, civil proceedings in the Supreme Court may be begun by writ, originating summons, originating motion or petition. Which originating process must be used is proscribed by the Rules and depends on the facts and circumstances of each case.

A typical civil action is commenced by filing a generally endorsed writ of summons, which names the parties to the action and provides very brief details of the relief sought. If the defendant defends the claim, then a...