Settlements

Question 1

Can the prospective claimant party to a PRE-ACTION settlement recover their legal costs?

Answer 1

No, they cannot recover their legal costs unless this has been agreed by the parties.

Question 2

What is a Consent Order?

Answer 2

A consent order is a court order that records the terms of a settlement reached between the parties after proceedings have started.

Question 3

What is required for a consent order to be drawn up?

Answer 3

Where none of the parties is a litigant in person, it’s often possible to avoid an application to the court by drawing up a court order or judgment for sealing by a court officer.

Formalities for a consent order are:

1. The order agreed by the parties must be drawn up in the terms agreed;
2. It must be expressed as being ‘By Consent’; and
3. It must be signed by the legal representatives acting for each of the parties to whom the order relates.

Question 4

What terms may be contained in a consent order?

Answer 4

Only terms that are within the powers of the court to order may be agreed (e.g. the payment of a sum of money).

Question 5

Are consent orders open to public inspection?

Answer 5

Yes, they are.

This makes them undesirable for parties who wish any terms to be confidential.

Question 6

What order can the parties seek to record their settlement if they want the terms to be confidential and/or want enforceable terms that a court does not have power to order?

Answer 6

Here, the parties can seek a Tomlin Order.

Question 7

What does a Tomlin Order do?

Answer 7

A Tomlin Order stays the claim (pauses it) on agreed terms that are set out earlier in a schedule to the order or separately.

Question 8

Which terms must appear in the Tomlin Order itself?

Answer 8

1. That the order is made ‘by consent’ - i.e. there was an agreement.
2. That the proceedings are paused.
3. Liberty to apply - this provision allows any party to apply to the court for the stay of proceedings to be lifted and the court can be asked to enforce the settlement if a party does not perform its part of the agreement.

New court proceedings do not have to be commenced to enforce the terms.

4. Signed by the parties’ solicitors - this is a formal requirement signifying consent to the agreement.

Question 9

Which terms must be set out in a schedule to the Tomlin order or in a separate document?

Answer 9

Any terms that the parties wish to keep confidential.

Any terms that the court does not have power to order.