Disposal of Action Without Proof III Flashcards
What is judicial settlement?
Where settlement of an action is achieved by way of a formal Offer by defender (or third party) to pursuer and formal acceptance by pursuer made in the court process.
If there is a counter claim then the pursuer can tender it to the defender.
It is also possible for defenders to tender amongst themselves - Inter-defender tenders. They can be complex.
What is the formal offer of the minute of tender?
It is competent for the judicial offer to be made in the defences or in the answers to the third party or answers to the counter claim.
This is never now seen and invariably if a formal judicial offer is to be made it is made in a Minute of Tender (also competent to make offer in defences).
A minute of tender must be explicit, unqualified, and unconditional.*
Ferguson v. McLennan Salmon Co Ltd 1990 SC 45 - suggests that it might in appropriate circumstances be permissible to qualify the offer made in a tender provided the qualification was stated in clear and unambiguous terms.
In any event a tender must satisfy certain formalities. Rather than discuss this wholly in the abstract you might be able to give a minute of tender.
Example of the appropriate form:
“McLEAN for the defender stated and hereby states to the court that, without admitting liability and under reservation of his whole rights and pleas, the defender tendered and hereby tenders the sum of TEN THOUSAND POUNDS (£10,000.00) STERLING together with the taxed expenses of process to the date hereof, in full of the craves of the initial writ.”
There are several points to note about this:
1. It is made without admission of liability. If not accepted, it cannot be used against you. Tender is not brought to the courts attention unless it has been accepted or there has been a judgement following proof.
- Specific amount offered by way of principal sum, the amount tendered includes all heads of claim and interest (judicial rate is 8%) it is therefore important to decide what level of interest to accrue.
- Interest.
- Benefits - in some situations following an injury the pursuer may be in receipt of state benefits. Some if not all benefits are repayable once the individual is compensation. The amount tendered should be expressed so as to be clear whether it is net or gross amount tendered. If the tender is net then the defender will need to repay the benefits. If it is gross benefits then it will be necessary to determine which proportion are repayable.
Important point is that it must be possible for the pursuer to know precisely what has been offered. - offer of taxed expenses - in order to be effective a tender has to include an offer in respect of expenses, which means the judicial expenses which the pursuer would have been entitled if he succeeded in the action at the date of tender.
CR Perry Ltd v. Connell 1981 SLT (Sh Ct) 90 - in this case the sheriff principal held that in the sheriff court the expenses should be taxed by reference to the current act of sedurent applicable to the sheriff court fees. The current act is the act which the fees of solicitors in the sheriff court etc 1993 which provides that unless the sheriff otherwise directs, the expenses are calculated in respect of the sum discerned for. This means that if the sum offered in the tender is less than 5000 then prima facie the pursuer will only be entitled to expenses on the summary cause scale.
Modification - the sheriff may modify the expenses in some way e.g. Award the pursuer less than he is prima facie entitled if he/she ought to have accepted an offer made prior to the action being raised.
Several pursuers - in some cases e.g. An action arising out of the death of someone. If a defender in an action wishes to tender then he/she must tender an amount to each individual pursuer.
It is not competent to tender a global sum and to leave the pursuers to allocate amongst themselves.
Must lodge 7 tenders each in their individual sums and from that it follows that each pursuer is entitled to decide separately whether to accept the sum or continue the action.
Once a minute of tender is prepared it is lodged in the process and intimated to the pursuer.
At that point the pursuer has the option to accept the tender or not accept it. It is appropriate to mention that the tender can be withdrawn before it is accepted. The defender will draw a tender once he/she has analysed the case and the likely outcome of the case is that he/she will be liable to the pursuer. This may change however, e.g. Information may come to light which shows the extend of the pursuer’s injuries as lesser than first thought or the evidence comes out in an unexpected way. So it is common at proof for the defender to have a Minute of Withdrawal of Tender prepared.
What is the minute of acceptance of tender?
The acceptance of a tender is effected by preparing lodging and intimating a minute of acceptance of tender. The form is as follows:
“McLEAN for the pursuer stated and hereby states to the court that the pursuer accepted and hereby accepts the tender contained int he Minute of Tender (number 15 of Process) in full of the craves of the Initial Writ.”
The pursuer is entitled to Reasonable time to consider the tender. What is reasonable depends on the circumstances of the case and the stated procedure. e.g. If the tender is lodged during the adjustment period the pursuer may have a few days to consider the tender. On the other hand, if the tender is lodged in the course of a proof the pursuer may have to make up his/her mind over night:Pagan v. The Miller Group Ltd 2002 SC 150.
If the pursuer decides to accept the tender then he must prepare lodge and intimate a minute of acceptance of tender and together with a motion of decree in terms of the minute of tender and minute of acceptance of tender.
The pursuer is entitled to decree in the agreed amount and for the expense of the process as taxed down to the date of the tender.
In this situation the date of tender is the date that the tender ought to have been accepted. That date is usually determined by the auditor of court and the pursuer’s accounts as taxed.
If there has been delay in accepting the tender then the tender is entitled to expenses from the date that the tender ought to have been accepted.
This can be important if there has been a significant delay in accepting the tender or the tender is lodged close to the diet of proof when quite a lot of expenses are incurred in a relatively short period of time.
Note that while the defender is entitled to expenses from the date of tender, in absence of any motion by the defender the defender will not make any motion to the defender.
Procedure if defender wishes an award of expenses made in his favour after the date of the tender then he/she should oppose the motion of decree in terms of the minute of tender and minute of acceptance of tender and make the motion for expenses from the date of tender when it calls in court. It may be too late after the motion is granted however:
Laing v. Scottish Arts Council 2001 SC 493.
Modification - the sheriff is entitled to modify the award of expenses made to the pursuer. If defender wishes to argue for modification then he/she should oppose motion for decree in terms of the minute of acceptance and minute of acceptance of tender.
What happens if the pursuer does not accept the tender?
In this situation the litigation is progressed to a conclusion and the content of the tender is not disclosed to the sheriff. In reality the sheriff is likely to be aware that a tender has been lodged but they will be well aware that they are a tactical advice and not indicative of true acceptance of liability on the party of the defender. At the end of the proof in am action where a tender has been lodged the sheriff will be asked to reserve questions of expenses.
If the pursuer recovers more than the amount of the tender he is said to have “beaten” the tender. This situation arises in relation to accrued interest. He/she will in a normal case be entitled to an award of the whole expenses of process. This award may be modified in certain circumstances but the reason must be unconnected with the tender.
Not to be drawn to Sheriff’s attention.
Has the tender been “beaten”?
Beaten. - So if the pursuer is awarded more than anything over the tendered 10,000 then he/she will be entitled to the whole award of the process.
Not beaten - if the pursuer recovers an amount equal to or less than the tender then he has failed to beat the tender and he will only be entitled to the expenses of process to the actual date of tender. The defender will be entitled to the expenses after the actual date of tender as the litigation became unnecessary after the tender was lodged. So 10,000 or less then he/she entitled to expenses of process from date of tender and the defender entitled to expenses thereafter including the proof which is almost always the most expenses.
Accrued interest - where the award of proof is only greater than the amount tendered because the interest accrued since the date of the tender lodged.
Manson v. Skinner 2002 SLT 448 - the above situation arose. In this case by an initial writ warranted on 26 feb 1998 the pursuer sought damages of personal injuries sustained in a road traffic accident. When the defender lodged defences on 3 april 1998 he also lodged a tender in the sum of 3000. A proof took place on 5 january 1999 and on 2 march 1999 the sheriff awarded the pursuer the sum of 3047 which comprised principal sum of 2800 and accrued interest of 247 from the date of decree. If that award had been calculated as at the date of tender, the value would be 2992 I.e. 8 pounds less than the tender. The second division said that in those circumstances the refusal of pursuer to accept tender had unecessarily prolonged the litigation and as such they found the defender liable to the pursuer to the expenses to the date of the tender and found the defender entitled to the expenses from the date of the tender. This meant that the pursuer received nothing from the action.
Tactical considerations - a tender is useful for putting legitimate pressure on pursuer to settle a case. If it is calculated with care and lodged sufficiently in advance of a proof then the situation of the pursuer may be such that he/she will feel the commercially sensible decision would be to accept the tender. You must consider the tender and explain the consequences to the pursuer.
What happens if there are several defenders?
This is common in an action which can have important consequences when tendering.
Issues with arise when there are several defenders:
1. A pursuer can only sue several if the ground on which he is suing are the same or are connected although it is competent to sue in the alternative.
Usually where the grounds of action are the same the pursuer will seek a joint and several decree against the defenders. If the pursuer obtains this then each defender is liable for the whole amount with a right of relief against each other. S3 of the law reform (miscellaneous provisions) act 1940 allows the court to proportion blame between two or more defenders and allows a statutory basis for defenders claim for relief.
This has a number of consequences:
- Where pursuer obtains decree against one defender for the whole amount then that decree is not satisfied then the pursuer can continue against the remaining defenders.
- If one of the defenders tenders and the pursuer accepts that tender then if as is usually the case the tender is for less of the whole amount of the claim the pursuer can continue against the remaining defenders. If the whole amount of the claim then the pursuer is precluded from continuing his action unless he is unable to recover the whole sum discerned for in terms of the minute of tender and minute of acceptance of tender.
Secondly, where one defender tenders, issues may arise as to the appropriate way of dealing with expenses as between the pursuer and the other defenders. This can arise where as a result of accepting a tender the pursuer abandons his action against the other defenders.
This was the situation in MacLinden v. Colvilles Ltd & Ors 1967 SLT (Notes) 80 - in the absence of express words in the tender making the defenders position in relation to the other tenders clear, the situation appears to be as follows: if the defender who tenders has made no such averments it will not be liable in respect of expenses incurred by the pursuer in respect of any other defender. The result may be different if the tender contained words which made it clear that the offer did not include an offer in respect of the expenses incurred by the other defenders. In this situation an issue may arise as to whether the tender has or has not been beaten. In either of these situations the tendering defender will be entitled to continue the action in respect of its right of relief but in that even it would need to establish liability no the part of the other defender or defenders and that the level of the tender is appropriate - can be cumbersome and expensive so must reach agreement between defenders as to dispose of action in respect of an acceptance of a tender.
Separate tenders by two or more defenders. e.g. If a defender sues two defenders to be jointly and severally liable. The first defender tenders 30,000 with defences and the second tenders 40,000 after options hearing. Following proof the pursuer is awarded 60,000. See Jackson v. Clyde Navigation Trust 1961 SLT (Sh Ct) 35- the sheriff held the pursuer was entitled to his expenses from the date of the second tender as it was only at that time that the amount offered was in excess of the value of the pursuer’s claim. In this case it was said expressly that there was no doubt that the defenders could pay. That there had been questions about the solvency of one of the defenders then two individual decrees would be of less value than joint and several decree of the same amount.
What are inter-defender tenders?
- Williamson Tenders. Named after decision in Williamson v McPherson 1951 SC 438. In this tender one defender offers to contribute to any damages awarded for pursuer in a particular proportion. If a tender is not accepted and following proof the court determines that liability is to be apportioned in the proportions set out in the tender, or in proportions more favourable to the tender to whom the tendering is directed, then the tendering defender would be entitled to its expenses in relation to the issue of liability from the date of the tender. It does not affect the questions in relation to expenses of quantum. If on the other hand the tender is accepted then the defenders will adopt a joint position perhaps in a form of a joint minute of tender in relation to quantum and thereafter the usual rules of tender will apply.
Form:
“McLEAN for the first-named defender stated and hereby states to the court that without prejudice to and under reservation of its whole rights and pleas, the first-named defender offered and hereby offers to the second-named defender to admit liability to make reparation to the pursuer jointly and severally with the second-named defender, but only on the basis that the defenders shall be liable inter se to contribute to any damages and expenses awarded in the proportions of three-quarters (3/4) to the first-named defender and one-quarter (1/4) to the second-named defender.”
So if following proof the sheriff found the pursuer entitled to damages, and the second defenders are 25% of less to blame for the accident then the second defender would be liable to the first defender in respect of the expenses occasioned in relation to liability as from the date of tender.
- Houston Tenders - named after form discussed in Houston v British Road Services Ltd 1967 SLT 329. This form of inter-defender tender is designed to operate as a tender by one defender to the pursuer and the other defender or defenders but the consequences of it have not been finally determined.
Purpose: to enable one defender to say I think liability should be proportioned in this way and the pursuers claim has no more than a value of this particular amount.
Form:
“McLEAN for the first-named defender stated and hereby states to the court that, without prejudice to and under reservation of its whole rights and pleas, and without admission of liability, the first-named defender tendered and hereby tenders to the pursuer and the second-named defender to settle this action on the basis: (i) that the first-named defender and the second-named defender shall contribute to the amount of any award of damages and expenses in the proportions of two-thirds (2/3) to the first-named defender and one-third (1/3) to the second-named defender; and (ii) that the pursuer shall be entitled to decree against the defenders jointly and severally in the sum of TEN THOUSAND POUNDS (£10,000.00) STERLING, net of the defenders’ liabilities under section 6 of the Social Security (Recovery of Benefits) Act 1997, together with the taxed expenses of process to date, in full of the craves of the initial writ.”
While it might be possible for the second defender to accept this and thereafter for the defenders to adopt a joint position in relation to the pursuer. It is not possible for this to be met with a plain acceptance by the pursuer. The effect of failure by any party to accept does not mean judicial indeterminate if tender not accepted by other defender then Houston will operate in the same way as Williamson insofar as liability is concerned. There ought to be no affect in relation to the pursuer unless accepted by all the defenders.
The court can take the existence of these into account when exercising its discretion.
What is a pursuer’s offer?
The procedure for tendering is the procedure by which the defender makes a formal offer to the pursuer.
For a short period in CoS this concept of pursuer’s offer existed. The relevant rule is in:
Chapter 34A of the Rules of the Court of Session (now repealed).
The concept was adopted in England and Wales without any acknowledgment that it was borrowed from Scotland. At present, pursuer’s offer is something which the court can take into account when dealing with expenses e.g. In allowing an additional fee.
What happens if the sheriff becomes aware of the content of a tender?
Ronald McDermid Ltd v. Muir Crawford (Builders) Ltd 1977 SLT (Sh Ct) 17.
This is not usually brought to sheriffs attention until after judgement. If the sheriff becomes aware of this before final judgment, he/she should disclose the fact to the parties. In this case the pursuer led evidence about the existence of the tender. The defender argued that this undermined the proof and the proof should be heard again by a diff sheriff. SP held that although the conduct was reprehensible, the defenders had suffered no serious prejudice and it would not be necessary for a sheriff in the same circumstances to recuse themselves.
What happens when formalities are not complied with?
There are strict rules in the form of the tender. The approved formaulteion is: “with the expenses of process and debate”
Brackencroft Ltd v. Silvers Marine Ltd 2006 SC 633. In this case the tender include “together with such expenses as the court may deem appropriate” rather than the approved formulation. The sum awarded was less than the amount offered. The sheriff treated the tender as valid. The first division of CoS said the offer made was not a judicial tender so the normal rules did not necessarily apply. The offer was however a material factor to consider by the court when awarding its expenses. The sheriff nevertheless found the pursuer entitled to expenses until the date of offer and liable therefater. So it may still be relevant to the question of expenses although not a formal offer.
What happens if there is an inaccuracy in a minute of tender?
Manor Lifts Ltd v. JH Gray (Builders) Ltd 1989 SLT (Sh Ct) 63 - the defender lodged a minute of tender. Instead of including the sum it intended to offer, the tender erroneously referred to the sums sued for in the action. Sheriff held that the minute of tender constituted an ex facie valid contract between the parties and allowed the defenders 4 weeks and said it may be necessary to reduce the tender by way of action of reduction in CoS or exception in sheriff court process.
What happens if there is a change of circumstances?
The tender is no longer open for acceptance once judgement is issued by court at first instance which can cause problems in relation to an appeal. If it is desired to obtain further protection in appeal proceedings it is likely to be necessary to re-tender. Howevwer each case turns on its own facts.
Bond v. British Railways Board 1972 SLT (Notes) 47.
Morrison v. Barton 1994 SC 100.
Or where a pursuer who claims substantial future wage loss dies.
