Litigation through the court system is the main method of dispute resolution used in the Cayman Islands to resolve large commercial disputes.

Litigation in the Cayman Islands is adversarial in nature and the standard of proof in civil matters is on the balance of probabilities. The court has wide powers under the Grand Court Rules to control the conduct of both the parties to the litigation and their legal counsel.

Alternatives to litigation through the courts, such as arbitration and mediation, are increasingly being used (see Question 30). However, they are still rare when compared to the prevalence of litigation initiated through the Cayman Islands courts.

The courts are increasingly conducting remote video hearings and adopting electronic filing of documents. Although these developments emerged as a response to the COVID-19 pandemic, it is expected that at least some aspects of increased use of online technology will remain.

The limitation periods and trigger points differ for the different types of claims and are:

(Limitation Act (1996 Revision).)

Claims by a beneficiary against a trustee for fraud, fraudulent breach of trust or the recovery of trust property have no specified limitations, but will be subject to the law of equity, such as laches.

In most cases, the limitation period commences at the time the claimant acquires the right to bring the action (see above). However, commencement dates can be deferred where:

Large commercial disputes are brought in the Grand Court, which is the superior court of record in the Cayman Islands with unlimited monetary jurisdiction. The Grand Court has five divisions:

Typically, large commercial disputes will be brought in either the Civil Division or the Financial Services Division. The following types of claims must be brought in the Financial Services Division:

All other large commercial disputes will be brought in the Civil Division, except for admiralty cases and matrimonial property disputes that must be brought in the Admiralty and Family Divisions, respectively.

The answers to the following questions relate to procedures that apply in the Civil and Financial Divisions of the Grand Court.

All attorneys generally admitted to practise in the Cayman Islands can appear before all Cayman Islands courts. To be admitted generally, an attorney must be resident in the Cayman Islands and meet the qualification requirements of the Legal Services Act, 2020.

The Grand Court can grant a foreign lawyer limited admission to act in a specific case. The foreign attorney must be instructed by local attorneys for that purpose and comply with the same qualification requirements as a generally admitted attorney. Typically, this discretion is granted only to foreign lawyers who have particular expertise and/or seniority, and will not be granted to junior attorneys except in "unusual and special circumstances."

Cayman Islands attorneys typically charge hourly rates, which is also the basis on which recoverable costs are assessed by the court. While the recoverability of fees is fixed by the Grand Court Rules (see Question 22), the fees that a lawyer can charge their client are a matter of contract between the relevant parties and are not fixed, or in any other way limited, by law.

The scope for conditional fee arrangements and contingency fees in the Cayman Islands was previously limited. However, the Private Funding of Legal Services Act 2020 abolished the common law offences of maintenances and champerty, and conditional fee agreements and contingency fee agreements are now permitted, provided certain conditions are met.

Litigation is typically funded by the parties to the action (or their related entities), but third party litigation funding is permitted in certain circumstances, and is becoming more common.

The Private Funding of Legal Services Act 2020 abolished the common law offences of maintenance and champerty and provided a statutory framework for the entry into different forms of funding agreements.

Third party funding agreements are expressly permitted by the Act, subject to certain conditions. The agreement must be in writing and comply with any requirements prescribed in the regulations (although no regulations relating to third party funding have yet been made). The amount to be paid by the client under the agreement must consist of either:

Although there is an increased use of after the event (ATE) insurance by claimants that are resident in jurisdictions that have an established ATE market (for example, London), there is no established local practice of insuring against adverse litigation costs. The case of Caribbean Islands Development Ltd (in official liquidation) v First Caribbean International Bank (Cayman) Limited [2014] (2) CILR 220 also suggests that a foreign ATE policy will not constitute acceptable security for costs where there are no assets or funds held within the jurisdiction.

Proceedings before the Cayman Islands court are generally held either in open court or in the judge's chambers. Proceedings in open court are open to the public, while proceedings in the judge's chambers are generally considered to be private to the parties to the proceedings. However, the presiding judge can allow other interested parties, including members of the public, to attend a chambers hearing.

In large commercial disputes the substantive trial is generally held in open court. However, interlocutory matters are generally dealt with in the judge's chambers. In insolvency proceedings, while the petition for the winding-up of the company must be heard in open court, interlocutory applications, either before the hearing of the winding-up petition or after the making of a winding-up order, are heard in the judge's chambers.

Unless otherwise ordered by the court, all originating proceedings filed with the court and all judgments and orders issued by the court are available for public inspection, on payment of a small fee. All other documents filed with the court are not available to the public and are generally only available to the parties. However, the court rules provide for a procedure under which non-parties to a proceeding can apply to the court to have access to some or the entire court file.

The court's public registers of originating process orders are accessible online (see Cayman Islands Judicial Administration: Key word searches).

The court does not impose any rules on the parties in relation to pre-action conduct other than in relation to judicial review proceedings (for which there is a specific pre-action protocol). However, the court has a wide discretion to order costs and can consider a party's pre-action conduct when making a costs order.

Typically, proceedings in the Grand Court are commenced by one of the following methods:

The method used will depend on the nature of the cause of action and the relief sought.

Where proceedings are commenced by ordinary writ, the claimant must serve on any local defendant within four months of issue of the writ. Where the defendant is outside the Cayman Islands, the writ must be served within six months.

The time for filing the defence depends on whether a statement of claim was served with the writ. If a statement of claim was served with the writ, the defendant must both:

If a statement of claim is not served with the writ, the defendant must file an acknowledgement of service within 14 days of service of the writ (extended to at least 28 days if the defendant is served outside the Cayman Islands). The claimant must then serve a statement of claim within 14 days of service of the acknowledgement of service and the defendant must serve its defence (and any counterclaim) within 14 days of service of the statement of claim.

All of the above time limits can be extended either by agreement between the parties or by way of court order.

The subsequent stages of a proceeding are as follows:

All subsequent deadlines can be extended by agreement between the parties or by way of court order.

Filing of documents by email has been accepted by the court during the COVID-19 pandemic. The court is also currently trialling online filing software which it hopes to roll out to all Cayman law firms later this year.

Parties can apply to strike out the whole or any part of the other party's statement of claim or defence and seek judgment on the basis that the offending pleading:

Typically, little or no evidence is permitted in support of an application to strike out a pleading, as the document must be considered on the terms pleaded.

Both claimants and defendants can apply for summary judgment, which is an expedited hearing of the dispute based on affidavit evidence only. The court will only grant summary judgment if it is satisfied, on the evidence presented to it, that the claim or the defence has no realistic prospect of success. The court will not grant summary judgment where there are disputes between the parties in relation to matters of law or fact that merit investigations at trial and are inappropriate for summary resolution on affidavit evidence.

A party can apply for the case to be determined on a point of law or on the interpretation of a document without a trial.

In addition, a party can seek the dismissal of a case without a trial for non-compliance with procedural requirements, such as when:

The Grand Court can order a claimant to provide security for costs where the claimant:

If at least one of the above criteria is met, the court will only make an order for security for costs where it thinks it just to do so having regard to all of the circumstances of the case. An application for security for costs can be refused if at least one of the following applies:

The court has jurisdiction to grant prohibitory interim injunctions in all circumstances in which it is just and convenient to do so. The basic test is twofold:

An interim injunction will ordinarily not be granted where an award of damages will provide adequate compensation. An applicant must provide an undertaking to meet any losses suffered by the respondent in the event it is determined that the injunction should not have been granted.

If appropriate, the court can grant an injunction without notice to the respondent. However, the respondent has an automatic right to have the matter heard before the court at the earliest convenient date for an inter partes hearing.

In urgent cases (where the urgency is warranted and properly explained to the court), an injunction can be granted on the same day it is sought (subject to the availability of judges).

The court can grant mandatory interim injunctions. The test for a mandatory injunction is similar to the test for a prohibitory injunction in that the applicant must convince the court that the balance of convenience lies in its favour. However, for mandatory injunctions the applicant must convince the court that there is a "high probably of success at trial" rather than the lesser standard of "serious case to be tried'."

If an interlocutory order has been obtained without notice to the respondent, the respondent can have the matter reheard at an inter partes hearing. At that hearing the court can set aside, confirm the original order or make a different order in its place.

Ordinarily, interlocutory orders granted by the Grand Court cannot be appealed to the Court of Appeal without first obtaining the leave of the Grand Court (see Question 20).

The Grand Court can grant interim orders that freeze assets pending judgment or final order if both:

Freezing orders are necessarily almost always obtained without notice to the defendant because of the requirement that there must be risk of dissipation. In urgent cases (where the urgency is warranted and properly explained to the court), an order can be granted on the same day it is sought (subject to the availability of judges).

The court can grant freezing injunctions (in addition to other interim relief) in support of main proceedings that have been commenced in another jurisdiction, provided that the foreign proceedings are capable of giving rise to a judgment that can be enforced in the Cayman Islands under any law or at common law.

The court can refuse to grant a freezing injunction in support of a foreign proceeding if, in its opinion, it would be unjust or inconvenient to do so. When exercising its power to make a freezing injunction in support of a foreign proceeding, the court must have regard to the fact that its power is both:

A freezing order creates no preferential right or lien in favour of the claimant over the frozen assets and the defendant will usually be allowed to pay their normal business, legal, and living expenses from the frozen assets.

An applicant must give an undertaking to meet any losses suffered by the respondent if it is determined that the injunction should not have been granted.

The court can require security in support of any undertaking and will often do so when the claimant is resident abroad and has no assets in the jurisdiction.

In addition to interim injunctions and freezing orders, the court has jurisdiction, in appropriate cases, to grant the following interim remedies:

Available remedies (in appropriate cases) include:

Although damages are generally intended to be compensatory, the court has the jurisdiction in limited circumstances to award aggravated damages and exemplary/punitive damages.

On the close of pleadings, each party must prepare and serve a list of all documents that both:

A document will be ''relevant'' if it will support or undermine either party's case, or where it will lead the other party on a train of enquiry leading to either of those consequences.

The reference to "documents" extends beyond physical documents, and includes every means by which information is stored or recorded. Although the court rules provide for these lists to be exchanged within 14 days, it is common in more complex matters for this deadline to be extended either by agreement or by court order.

After the list of documents has been exchanged, each party can inspect the documents in the other party's list, except for documents subject to privilege (see Question 17). The obligation to disclose documents relevant to the issues in dispute continues for the duration of the case.

Documents that fall into one of the following categories of privilege will ordinarily be protected from disclosure to other parties to the litigation:

Parties to litigation are also not required to disclose documents where disclosure would either:

Trial evidence must be given orally. However, parties must prepare and exchange written statements for each of the witnesses of fact before the trial. At trial, the witness statements must be accepted as the witnesses' direct evidence without the need for that evidence to be orally read into the record.

For most court hearings other than the substantive trial, evidence is primarily given by way of written affidavit.

All relevant parties can cross-examine the opposing party's witnesses of fact. Outside of trial, parties who wish to cross-examine persons who file affidavits with the court must seek an order from the court permitting the cross-examination.

Ordinarily, expert witnesses are appointed by the party who intends to rely on their evidence. However, the court can appoint an expert directly (either with or without consensus from the parties as to the identity of the expert). The court usually gives directions at a case management conference as to the number of expert witnesses permitted for each party in each area of expertise. Each party must exchange written reports containing the substance of the expert evidence to be given, which will ordinarily include a copy of the instructions given and/or questions posed to the expert witness.

Expert evidence presented to the court must be independent and uninfluenced by the pressures of litigation or any party. An expert witness:

Where both parties intend to engage experts, expert reports will usually be exchanged simultaneously, after which a meeting of experts will often be convened on a "without prejudice" basis to identify the areas between experts that are still in dispute. A party can also cross-examine an opposing party's expert at trial on the contents of their expert report.

An expert's fees are paid by the appointing party. However, the fees (including travel costs in the event that the expert is required to go to the Cayman Islands to give expert evidence) are potentially recoverable on an award of costs.

The parties are jointly and severally liable to pay the costs of an expert appointed by the court.

Appeals from the Grand Court are made to the Cayman Islands Court of Appeal. In certain prescribed circumstances, there can be a further appeal to the Judicial Committee of the Privy Council of the UK.

Although there are certain limited circumstances where there is no right of appeal (such as where legislation specifically provides that the court's decision is final), ordinarily it is possible to appeal matters of law and fact, as well as an exercise of discretion by a lower court. However, appeal courts will be reluctant to overturn findings of fact, particularly where those findings are based on the credibility of witnesses that were before the lower court. The appeal courts will also be reluctant to overturn the exercise of discretion by the lower court unless any of the following apply:

There are certain circumstances where leave of the Grand Court will be required before an appeal can be made to the Court of Appeal, such as in relation to almost all interlocutory orders made by the Grand Court. To obtain leave to appeal from the Grand Court, the appellant must show that the appeal has a realistic (not a fanciful) prospect of success.

Ordinarily, an appeal must be brought by filing a notice of appeal within 14 days from when the relevant order was entered. However, if leave to appeal is required (see above), it must be sought within 14 days of the entry of the order and assuming leave to appeal is granted, the notice of appeal must be filed within 14 days of that grant of leave.

Where there is a group of claimants with a common interest and a common grievance, one or more of them can issue and continue a representative action on behalf of all of the members of that group. A representative action will not be entertained where the relief claimed is not beneficial to all of the represented parties or where there are differing interests among the members.

Any judgment or order made in a representative action will be binding on all persons within the representative group but cannot be enforced against any person who is not a party to the proceedings, except with leave of the court.

Generally, an unsuccessful party must pay the successful party's reasonable costs of the litigation (legal fees and disbursements). However, the court has a wide discretion to make costs orders for or against parties to litigation. In certain limited circumstances, the court also has the power to make costs orders against non-parties to litigation.

When considering whether to make a costs order, the court will typically take into account the parties' conduct during the course of the litigation. This necessarily includes taking into account any payment into court, or any offer of settlement, made by a defendant during the course of the litigation. Where a payment into court, or an offer of settlement, exceeds the amount the claimant ultimately recovers on determination of the litigation, the court will ordinarily refuse the claimant any of its costs after the date that the payment or offer was made.

Costs awards can be made on either the standard basis or the indemnity basis. Where costs are awarded on the standard basis, the legal fees recoverable by a successful litigant are limited by rules prescribing the maximum recoverable hourly rates of the engaged attorneys. The recoverable rates are set by reference to the seniority of the counsel engaged and are typically lower than commercial rates. The maximum recoverable hourly rates for litigation before the Financial Services Division of the Grand Court are higher than those for other commercial proceedings. There are also rules limiting the recoverability of legal fees and disbursements in relation to foreign attorneys.

Where costs are awarded on the indemnity basis, the legal fees and disbursements that may be recovered will only be limited by what is considered to be reasonable and will ordinarily result in full recovery of most commercially reasonable rates. Indemnity costs will only be awarded where one party has conducted itself improperly, negligently, or unreasonably.

Costs are not usually quantified or payable until the conclusion of the matter. However, the court can make interim costs orders in certain circumstances.

Interest is payable from the date of entry of a costs order. The rate is prescribed by the Judgment Debts (Rates of Interest) Rules 2012, which set differing rates depending on the currency in which the judgment is given.

In large commercial disputes, the most common forms of enforcement are:

The Cayman Islands courts generally respects the choice of governing law provisions contained in a contract. However, they can refuse to do so on grounds of public policy. In addition, local regulatory law (employment, health, provision of financial services and so on) will continue to apply to any party to a contract that is resident in the Cayman Islands in relation to its actions within the jurisdiction, regardless of any choice of governing law provisions contained in a contract.

The court will generally exercise its discretion to give effect to a jurisdiction clause in a contract (that is, by granting a stay of proceedings commenced in the Cayman Islands in breach of the jurisdiction clause, or by granting an anti-suit injunction restraining the commencement of proceedings abroad). However, there is no absolute rule that jurisdiction clauses will be enforced and the courts will consider all the facts of the case. The courts will accept jurisdiction despite an exclusive jurisdiction clause where a party can show strong reasons for departing from it.

The procedure for effecting service of a foreign process in the Cayman Islands is generally dictated by the rules of the foreign court. Where the foreign court requires service in accordance with local rules, service in the Cayman Islands can be effected either by an attorney or a private process agent and must be effected by personal service on the intended recipient. Where the intended recipient is an individual, service must be by physical delivery to that individual. Where the intended recipient is a Cayman Islands company, service must be by physical delivery to the registered office.

The HCCH Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters 1965 applies in the Cayman Islands. If proceedings are to be served under this Convention, they are sent to the clerk of the court with a written request for service from the relevant authority in the other jurisdiction.

The principal provisions of the HCCH Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970 have been extended to the Cayman Islands by virtue of the Evidence (Proceedings In Other Jurisdictions) (Cayman Islands) Order 1978.

The process is commenced by the foreign court issuing a letter of request to the Cayman Islands court seeking its assistance to obtain evidence for the purposes of a foreign civil proceeding. An application is then made to the Cayman Islands court to give effect to that written request. On granting the request, the court can order one or more of the following:

Once the ordered evidence is obtained, it is transmitted to the requesting court by appropriate means. The court will not make any order that could not be made in civil proceedings either before it (such as an order to deliver up legally privileged documents) or before the requesting court. The court will also not require a respondent to state what documents it holds that are relevant to the foreign proceedings (there can be no "fishing expeditions" for evidence). A proper application must identify specific documents and set out the basis on which it is said that those documents are, or are likely to be, in the respondent's possession, custody or power.

Although the Cayman Islands has enacted the Foreign Judgments Reciprocal Enforcement Act (1996 Revision), which provides a statutory regime for the enforcement of foreign judgments, to date this regime has only been extended to judgments from Australia and its External Territories. Judgments from all other countries are enforced under common law rules, which provide that a foreign judgment will be enforceable where all of the following applies:

The courts will not enforce judgments that relate to the penal or revenue laws of another country.

The procedure for enforcement begins with the issuing of a writ asserting an action arising from the entry of the foreign judgment. As the court will ordinarily not hear again the merits of the dispute that gave rise to the foreign judgment, actions to enforce foreign judgments are usually suitable for summary judgments. Once judgment has been given by the Cayman Islands court, it can be enforced in the ordinary way.

Although traditionally the courts would only enforce foreign judgments for a liquidated sum, the Grand Court case of Bandone v Sol Properties [2008] CILR 301 confirms that in certain circumstances the courts will enforce foreign non-monetary orders and judgments.

The main forms of ADR used in the Cayman Islands are arbitration and mediation.

While it is not uncommon to find arbitration clauses in large commercial contracts between Cayman entities, historically these provisions would provide for the seat of the arbitration to be outside the Cayman Islands (such as New York and London). To address this, the Cayman Islands sought to modernise the law governing arbitrations conducted within the jurisdiction by passing the Arbitration Act (2012 Revision), which is based on the UNCITRAL Model Law on International Commercial Arbitration 1985. All arbitrations in the Cayman Islands are subject to the provisions of this law. It is hoped that the passing of this legislation will lead to a rise in the number of arbitrations conducted in the Cayman Islands, but this remains to be seen.

Mediation is also being increasingly used in the Cayman Islands to resolve disputes. It was recently made a compulsory part of many of the proceedings issued in the Family Division of the Grand Court. Although mediation is not currently required by the courts in relation to civil disputes, if it proves successful for the Family Division, it is likely to be extended to proceedings issued in the Civil and Financial Services Divisions of the Grand Court.

Despite the increased use of arbitration and mediation, the proportion of large commercial disputes resolved by means of ADR (in any form) remains small.

Although the use of mediation for the settlement of all disputes (except criminal matters) is actively supported by the Cayman Islands judiciary, currently it does not form part of the court procedures except in the Family Division (see Question 30). Currently, the court has no jurisdiction to compel parties to commercial proceedings issued in the Civil and Financial Services Divisions of the Grand Court to undertake ADR. However, it is anticipated that this may change in the future.

The procedures adopted in arbitration and mediation are generally agreed by the parties in advance, or determined by the arbitrator or mediator who has been appointed. It is common for parties to exchange written submissions and, where appropriate, copies of relevant documents before the arbitration/mediation.

Typically, all mediations are conducted on a without prejudice basis and therefore statements made in, and documents prepared for, a mediation cannot be put before the court as evidence of admissions against the interest of the party that made them.

Arbitration proceedings must be conducted in private and confidentially (section 81, Arbitration Act). Disclosure of any "confidential information" relating to the arbitration is actionable as a breach of an obligation of confidence, except in certain prescribed situations. "Confidential information" is defined (non-exhaustively) as:

It is usual for the parties to ADR to agree in advance to split the costs of the process. The parties generally agree costs in the terms of reference to ADR. The common provision is to split the ADR process costs equally between the parties. Any other costs, such as those incurred in litigating matters, can be considered during the ADR process.

Unless a contrary intention is expressed, every arbitration agreement is deemed to contain a provision that the costs of the arbitration will be in the discretion of the arbitral tribunal (Arbitration Act).

If costs are not addressed by the arbitral tribunal, any party to the arbitration can, within 14 days of delivery of the award or such time as the tribunal will allow, apply to the tribunal for a direction as to the distribution of costs.

The Cayman Islands Association of Mediators and Arbitrators seeks to promote mediation, arbitration and other options for dispute resolution. However, it does not directly offer ADR services. A list of local professionals who may be engaged to provide mediation and arbitration services can be found on the Cayman Islands Association of Mediators and Arbitrators' website. The anticipated opening of the Cayman International Arbitration Centre should further enhance the availability of ADR in the future. Finally, the Cayman Islands chapter of the Chartered Institute of Arbitrators has recently opened and held its inaugural series of seminars.

There are no current proposals for dispute resolution reform in the Cayman Islands.