Recording Settlement

 The purpose of an ADR process is to resolve a dispute.

 For the dispute to be effectively resolved, there needs to be sufficient clarity about
the outcome.
 Once settlement has been agreed, it needs to be recorded.

Forms of Recorded Outcome

 Forms used to record the outcome of an ADR process is often governed by the
original agreement to enter ADR
 Arbitration should result in an award
 Mediation agreement may include a statement that any compromise will only be
binding if made in writing and signed by parties
 In the absence of such provision, the range of options is broadly as follows:
o An adjudicative process such as arbitration will lead to a written decision such
as an agreed award. The decision should cover all relevant matters, including
interest and cost.
o An expert determination will also produce a written decision.
o A non-adjudicative process can lead to a written report from a third party
(ENE). The report will not provide a final outcome or binding, but it will assist
the parties to resolve their dispute.
o The major processes of mediation and negotiation normally result in an oral
agreement. It is here that most potential issues arise with regard to ensuring
that what is agreed is properly recorded.

i) Compromise agreement
 A successful non-adjudicative ADR should result in a contract compromising the
dispute.

ii) Full and final settlement

 Where the whole dispute is settled, the compromise agreement will normally be
stated to be in ‘full and final settlement’ of the dispute.

iii) Subject to contract

 When an offer is made ‘subject to contract’ there is no concluded agreement, even it
is accepted, until a written contract is signed.

Enforceable Forms for Recording Settlement

 Any form of written or oral agreement can set out the terms of a settlement.
 When a dispute relating to legal rights is settled, it will normally be in the interests of
both parties to record the outcome in a form that is legally enforceable.
 Options:
o An oral contract (non-adjudicative ADR processes often lead to an oral
contract, unless there is an effective ‘subject-to-contract’ clause
 o A written contract (non-adjudicative ADR processes also commonly lead to a
written contract, either because the process was wholly or partly conducted
in writing, or because the oral agreement is reduced to a written contract.
o An award with statutory authority
o A court order (An ADR process can be wholly or partly incorporated into a
court judgment, but only where proceedings have been issued)
o Other legal documents (deed or conveyance, it may be agreed to vary or
amend an existing contract, if the parties agree)

Methods of Recording Settlement Agreements

i) Where proceedings have not been issued

 Exchange of letters or emails
o Common for solicitor to write a letter setting out the terms of settlement to
the other side, who reply to indicate the agreement. Commonly used where
proceedings have not been issued. If proceedings have bene issued, it can be
used if there is no particular need for a court order. Cost effective.
 Written contract
o Appropriate where the terms are complex, or where the outcome is
particularly important and the parties want a formal separate legal document
for later reference. A contract may be appropriate when there is an ongoing
commercial relationship.
 Deed
 Oral agreement

ii) Settlements where there are existing proceedings

 Judgment may be entered for immediate payment of the sum agreed together with
costs
 Judgment may be entered for the agreed sum, subject to a stay of executing pending
payment by stated instalments
 The court may be informed that the case has been settled upon terms endorsed on
counsel’s briefs. This is the most informal compromise of a claim
 The court may be informed that the case has been settled, the terms being recorded
in a contract
 Entry of consent order setting out the agreement in the form of the undertakings by
both parties in a series of number paragraphs. There will also usually be cost
provision.
 Consent order staying all further proceedings upon the agreed terms. If the
agreement is reached immediately before a hearing the terms will usually be
endorsed on counsel’s briefs and the court will be asked to make a consent order in
those terms.
 Consent order providing for ‘no order’ save as to costs, but setting out the agreed
terms in recitals.
 Recording the agreement in a Tomlin order.

a) Endorsement on counsel’s briefs

  When a barrister completes any tasks for which he is briefed, the brief is returned to
their instructing solicitors with a written endorsement on the back sheet.
 The endorsement is primarily to confirm the nature of the work that has been done,
but is commonly used to record the outcome of the case.
b) Interim order
 An interim order will only be a possibility once proceedings have been issued, and if
there has been an application for an interim order.
 Where an agreement is reached outside court on the terms of the application, these
may be recorded as undertakings or in a consent order.

c) Consent order
 A consent order can only be made where proceedings have been issued so that a
court has jurisdiction over the case.
 A court cannot make a consent order without the valid consent of the parties.
 The main benefit of having a consent order relates to enforcement, because a court
order can be enforced with the full range of court enforcement powers without the
need to start a new claim to enforce a separate contract made to compromise a
dispute.

d) Tomlin order
 The Tomlin order is a form of consent order that offers particular advantages.
 Advantages:
o Privacy (for example, the compromise includes the payment of money, and
the defendant does not want it recorded in court judgment as it will become
available for credit-scoring agencies, which may have adverse effects on its
future ability to borrow money or where the amount agreed is of sensitive
nature (that why high-profile case is reported to settle for ‘substantial
damages’)
o Ease of enforcement
o The schedule for Tomlin Order, unlike the order itself, is not limited to those
orders that a judge has jurisdiction to make it to make in the case. A schedule
can set out terms agreed by the parties more fully, including matters that the
judge could not orderly direct
o Better suited to record long or complex terms
 Disadvantages:
o Enforcement powers for the terms of the schedule are more limited than for
the court order itself.
o Any application to vary the terms of the provisions on the face of the order
will be governed by the CPR, which means the court can vary those terms if
there has been a material change of circumstances.

Relitigating after settlement

 An attempt to relitigate a dispute after a claim has been disposed of by a consent
order is likely to be met by an application to strike out the new proceedings as an
abuse of process under CPR r.3.4(2).
 Enforcement of Court Orders

 Where a compromise is reached in a case where there are existing court

proceedings, it is likely that the compromise will be recorded in a court order or
Tomlin order.
 Normally the terms will be complied with but, if they are not, a key question is
whether the party with the benefit of the compromise can immediately use the
court’s enforcement processes, or whether it is first necessary to take some other
step.

Method of recording settlement Enforcement procedure

Judgment entered for immediate payment of the
sum agreed together with costs.
Judgment entered for the agreed sum (and costs),
subject to a stay of execution pending payment
by stated instalments
Consent order setting out the agreement in the
form of undertakings by both parties in a series of
numbered paragraphs.
Tomlin order.
Settlement upon terms endorsed on counsel’s
briefs.
Consent order staying all further proceedings
upon agreed terms.
Consent order providing for ‘no order’ save as to
costs, but setting out the agreed terms in recitals.
Enforcement proceedings (by taking control of
goods, changing order etc) can be taken on such a
judgment immediately (which means 14 days
after judgment). The practical disadvantages for a
defendant in having a judgment entered against
them means that settlements are rarely take this
form.
If the instalments fall into arrears, the stay will be
lifted, and the judgment creditor can immediately
bring enforcement proceedings.
If any of the terms are not complied with,
enforcement may be possible immediately or on
application to the court, depending on the nature
of the term in question.
 Substantive terms in a Tomlin order take
effect and are enforceable as they stand
without the need for any further court
order.
 In the event of the scheduled terms being
breached, enforcement is a two-stage
process. First, the claim must be restored
under the ‘liberty to apply’ clause, and an
order obtained to compel compliance
with the term breached. Secondly, if that
order is itself breached, enforcement can
follow in the usual way.
The effect of this type of arrangement is to
supersede the original claim with the
compromise. Any breach can only be enforced by
issuing fresh proceedings.
The courts are very unwilling to remove the stay
imposed by this type of order, so enforcement
can usually be effected only by bringing fresh
proceedings for breach of contract embodied in
the compromise.
Atkinson v Castan: The recitals in the consent
order could be enforced without the need to
bring a fresh claim.