DR – WS6 Tactical Applications and Settlement TIFF LIAO
Chapter 13.3 Consent Orders and Tomlin Orders 13.4 Part 3 6
13.3 SETTLEMENTS REACHED AFTER THE ISSUE OF PROCEEDINGS
- Preferable for the settlement to be recorded in a court order or judgment = will make enforcement easier if the agreement is not
honoured.
- Enforcement proceedings may be commenced to recover any money due under the settlement (including costs).
- The date by which payment of any debt or damages is due MUST be specified in the judgment or order.
- UNLESS the settlement provides otherwise, interest is NOT payable on costs until judgment is entered
- Where none of the parties is a litigant in person, it will often be possible to AVOID an application to the
court by drawing up a consent order or judgment for sealing by a court officer under r 40.6.
- Although in theory the court retains the power nOT to approve the proposed order, it will in practice be
CONSENT ORDERS referred to a judge only if it appears to be incorrect or unclear.
OR JUDGEMENTS
FORMALITIES FOR A CONSENT ORDER SET OUT IN R 40.6(7)
(a) the order agreed by the parties must be drawn up in the terms agreed;
(b) it must be expressed as being ‘By Consent’;
(c) it must be signed by the legal representative acting for each of the parties to whom the order relates.
IMPORTANT TO NOTE TWO THINGS.
(1) The terms of a consent order will be open to public inspection (PD 5A, para 4.2A(j) and 13.3.2).
(2) The terms agreed MUST be within the powers of a court to order,
eg the payment of a sum of money, specific performance of a contract and the dismissal of a claim.
If the parties want any terms to be confidential and/ or beyond the powers of a court to order, they
should use a special form of consent order known as the Tomlin order (see below).
- Stays the claim on agreed terms that are set out in a schedule to the order, an agreement annexed to the
order or a separate document.
- The basic formalities are in r 40.6(7)
TOMLIN ORDERS
- But the key to drafting a Tomlin order correctly is to appreciate that certain terms MUST appear in the
order itself, whilst others can be put in the schedule, agreement or separate document.
This is because PD 40B, para 3.5 provides as follows
Where the parties draw up a consent order in the form of a stay of proceedings on agreed terms,
disposing of the proceedings, and where the terms are recorded in a schedule to the order, any
direction for:
(1) payment of money out of court, or
(2) payment and assessment of costs
should be contained in the body of the order and NOT in the schedule.
- A direction for the payment of money held by the court will be RARE.
It is most likely to occur where a party has had to pay a sum into court under a previous order,(eg a
conditional order made on a summary judgment application) Where one party is to pay another party’s
costs and/or the parties want the amount of those costs assessed by the court that direction must go in
the order.
- FOUR KEY QUESTIONS WHEN ADDRESSING THE PAYMENT OF COSTS,
(1) Who pays?
(2) For what?
(3) How much?
(4) By when?
FOR EXAMPLE
where there has been a claim and a counterclaim, is the D to pay the claimant’s costs of making the
claim and defending the counterclaim, or is the claimant to pay the defendant’s costs of defending the
1
TIFF LIAO
, DR – WS6 Tactical Applications and Settlement TIFF LIAO
Chapter 13.3 Consent Orders and Tomlin Orders 13.4 Part 3 6
claim and making the counterclaim?
Will the paying party pay all or only some of the receiving party’s costs?
If only some, is that to be a fixed amount or a percentage of what is found to be due?
Is any assessment of costs by the court to be done on the standard or indemnity basis?
Finally, when are the costs to be paid?
Moreover, because there is a possibility that a party may NOT perform its part of the
agreement, the order should include a provision that any party is at liberty to apply for the
stay to be lifted so that the court can enforce the settlement.
= This means that it is NOT necessary to start new proceedings to enforce the terms
(Trebisol Sud Ouest SAS v Berkley Finance Ltd [2021] EWHC 2494 (QB)).
- Whether the terms of the settlement are recorded in a schedule to the Tomlin order, an agreement
annexed to the document or a separate document depends largely on the degree of confidentiality
required.
- Under r 5.4B and r 5.4C, parties and non-parties can apply for permission to obtain copies of documents
filed with the court.
In L’Oreal and Others v eBay International AG and Others [2008] EWHC B13 (Ch), disclosure of the
schedule to a Tomlin order was permitted under r 5.4B.
- Therefore the only way to ensure complete confidentiality is to:
record the settlement in a SEPERATE document which is referred to in the schedule and
clearly identifiable but
NOT filed with the court.
In Zenith Logistics Services (UK) Ltd & Others v Coury [2020] EWHC 774 (QB), the court
confirmed that the fact the terms were referred to but not set out in the schedule was
entirely unobjectionable. The reason was to preserve confidentiality so that the terms were
not accessible to third parties. And there was no breach of the ‘open justice’ principle.
- The schedule, annexed agreement or separate document MAY contain any agreed term - Often this will be
for the payment of a sum of money.
- When this is NOTT in the order, a provision should be made for interest to run on any late payment.
- The schedule, annexed agreement or separate document MUST ALSO record any agreed terms that the
court CANNOT impos
eg that the parties enter into a particular contract, or that in future dealings one party gives the other a
discount.
MAIN POINTS TO CONSIDER WHEN DRAFTING THE ORDER AND SCHEDULE
‘By consent’ Include an agreed term that the court could not order
Stay of proceedings Any payment of money should include provision for
interest or late payment
Liberty to apply
Payment of money out of court
Payment of costs
Detailed assessment of costs
Signed by the parties solicitors
EXAMPLE OF TOMLIN ORDER – page 245
Made ‘by consent’
Proceedings are stayed
There is liberty to apply
D has agreed to pay £10,000 of
the claimants costs
2
TIFF LIAO
Chapter 13.3 Consent Orders and Tomlin Orders 13.4 Part 3 6
13.3 SETTLEMENTS REACHED AFTER THE ISSUE OF PROCEEDINGS
- Preferable for the settlement to be recorded in a court order or judgment = will make enforcement easier if the agreement is not
honoured.
- Enforcement proceedings may be commenced to recover any money due under the settlement (including costs).
- The date by which payment of any debt or damages is due MUST be specified in the judgment or order.
- UNLESS the settlement provides otherwise, interest is NOT payable on costs until judgment is entered
- Where none of the parties is a litigant in person, it will often be possible to AVOID an application to the
court by drawing up a consent order or judgment for sealing by a court officer under r 40.6.
- Although in theory the court retains the power nOT to approve the proposed order, it will in practice be
CONSENT ORDERS referred to a judge only if it appears to be incorrect or unclear.
OR JUDGEMENTS
FORMALITIES FOR A CONSENT ORDER SET OUT IN R 40.6(7)
(a) the order agreed by the parties must be drawn up in the terms agreed;
(b) it must be expressed as being ‘By Consent’;
(c) it must be signed by the legal representative acting for each of the parties to whom the order relates.
IMPORTANT TO NOTE TWO THINGS.
(1) The terms of a consent order will be open to public inspection (PD 5A, para 4.2A(j) and 13.3.2).
(2) The terms agreed MUST be within the powers of a court to order,
eg the payment of a sum of money, specific performance of a contract and the dismissal of a claim.
If the parties want any terms to be confidential and/ or beyond the powers of a court to order, they
should use a special form of consent order known as the Tomlin order (see below).
- Stays the claim on agreed terms that are set out in a schedule to the order, an agreement annexed to the
order or a separate document.
- The basic formalities are in r 40.6(7)
TOMLIN ORDERS
- But the key to drafting a Tomlin order correctly is to appreciate that certain terms MUST appear in the
order itself, whilst others can be put in the schedule, agreement or separate document.
This is because PD 40B, para 3.5 provides as follows
Where the parties draw up a consent order in the form of a stay of proceedings on agreed terms,
disposing of the proceedings, and where the terms are recorded in a schedule to the order, any
direction for:
(1) payment of money out of court, or
(2) payment and assessment of costs
should be contained in the body of the order and NOT in the schedule.
- A direction for the payment of money held by the court will be RARE.
It is most likely to occur where a party has had to pay a sum into court under a previous order,(eg a
conditional order made on a summary judgment application) Where one party is to pay another party’s
costs and/or the parties want the amount of those costs assessed by the court that direction must go in
the order.
- FOUR KEY QUESTIONS WHEN ADDRESSING THE PAYMENT OF COSTS,
(1) Who pays?
(2) For what?
(3) How much?
(4) By when?
FOR EXAMPLE
where there has been a claim and a counterclaim, is the D to pay the claimant’s costs of making the
claim and defending the counterclaim, or is the claimant to pay the defendant’s costs of defending the
1
TIFF LIAO
, DR – WS6 Tactical Applications and Settlement TIFF LIAO
Chapter 13.3 Consent Orders and Tomlin Orders 13.4 Part 3 6
claim and making the counterclaim?
Will the paying party pay all or only some of the receiving party’s costs?
If only some, is that to be a fixed amount or a percentage of what is found to be due?
Is any assessment of costs by the court to be done on the standard or indemnity basis?
Finally, when are the costs to be paid?
Moreover, because there is a possibility that a party may NOT perform its part of the
agreement, the order should include a provision that any party is at liberty to apply for the
stay to be lifted so that the court can enforce the settlement.
= This means that it is NOT necessary to start new proceedings to enforce the terms
(Trebisol Sud Ouest SAS v Berkley Finance Ltd [2021] EWHC 2494 (QB)).
- Whether the terms of the settlement are recorded in a schedule to the Tomlin order, an agreement
annexed to the document or a separate document depends largely on the degree of confidentiality
required.
- Under r 5.4B and r 5.4C, parties and non-parties can apply for permission to obtain copies of documents
filed with the court.
In L’Oreal and Others v eBay International AG and Others [2008] EWHC B13 (Ch), disclosure of the
schedule to a Tomlin order was permitted under r 5.4B.
- Therefore the only way to ensure complete confidentiality is to:
record the settlement in a SEPERATE document which is referred to in the schedule and
clearly identifiable but
NOT filed with the court.
In Zenith Logistics Services (UK) Ltd & Others v Coury [2020] EWHC 774 (QB), the court
confirmed that the fact the terms were referred to but not set out in the schedule was
entirely unobjectionable. The reason was to preserve confidentiality so that the terms were
not accessible to third parties. And there was no breach of the ‘open justice’ principle.
- The schedule, annexed agreement or separate document MAY contain any agreed term - Often this will be
for the payment of a sum of money.
- When this is NOTT in the order, a provision should be made for interest to run on any late payment.
- The schedule, annexed agreement or separate document MUST ALSO record any agreed terms that the
court CANNOT impos
eg that the parties enter into a particular contract, or that in future dealings one party gives the other a
discount.
MAIN POINTS TO CONSIDER WHEN DRAFTING THE ORDER AND SCHEDULE
‘By consent’ Include an agreed term that the court could not order
Stay of proceedings Any payment of money should include provision for
interest or late payment
Liberty to apply
Payment of money out of court
Payment of costs
Detailed assessment of costs
Signed by the parties solicitors
EXAMPLE OF TOMLIN ORDER – page 245
Made ‘by consent’
Proceedings are stayed
There is liberty to apply
D has agreed to pay £10,000 of
the claimants costs
2
TIFF LIAO
