Disposal of Action Without Proof IV Flashcards
What is extra judicial settlement?
Vast majority of cases settle extra-judicially (without proof or debate).
In general, extra judicial settlements will become the subject of litigation where there is a dispute about the settlement or its meaning or when an extra judicial offer has been declined but one party says it is relevant to the question of expenses.
Limited circumstances when this issue comes before the courts.
What is the method of extra judicial settlement?
Negotiation - the parties may negotiate a settlement or compromise prior to an action being raised. This negotiation may be carried out directly between the parties, or it may be done through solicitors or in the form of some alternative dispute resolution such as mediation.
The aim is to reach agreement about resolving the dispute which will involve paying a sum of money, but this depends on the facts of the case.
Once an agreement is reached, the parties will enter into a Joint Minute and enrol a Motion asking the court to pronounce decree in terms of the joint minute.
The possibilities for disposal include the action being dismissed or decree of absolvitor being pronounced, with or without expenses, or decree being pronounced for a specific sum of money, with expenses.
How do you decide what is an appropriate figure?
There are various factors to weigh in the balance in deciding what might be an appropriate figure - e.g: Factors to consider when negotiating settlement:
Litigation risk - strength of competing positions
Management time - cost in defending or pursuing the action.
Unrecoverable judicial expense even if successful
Possible liability in expenses if unsuccessful.
Always have in mind what may happen if a negotiated settlement is not reached.
When might disputes about extra judicial settlement arise?
Situations in which disputes arise.
The general rule is that settlement negotiations are privileged and they may not be referred to in the litigation.
It will often be the case that any meetings to discuss settlement are expressly stated to be “Without prejudice” discussions and correspondence. It is common for respondents to be marked without prejudice. Whether or not a statement made is truly without prejudice is a matter of construction. If a position is clearly adopted as a hypothetical one then it will be made without prejudice. On the other hand, the correspondence contains a clear and unequivocal admission, then the mere fact that it is marked without prejudice will not prevent it from being relied on in court proceedings.
See Daks Simpson Group plc v. Kuiper 1994 SLT 689.
This appears to be a contrast to position in england and wales.
Withdrawal of pre-litigation admission of liability.
Gordon v. East Kilbride Development Corporation 1995 SLT 62. — There is reasonable extension pre action correspondence. In this the defenders made clear that liability was in dispute. However, subsequently the insurer said that “liability in this case is not in dispute” this resulted in the pursuer solicitor not to undertake a plan and site inspection. In the litigation which followed the defender denied liability. LO held that the insurers had not intended to bind the defender contractually to the pursuer. In the circumstances, the extra judicial admission could be withdrawn subject to an argument about personal bar which required proof before answer.
Van Klaveren v. Servisair UK Ltd 2009 SLT 576.
In this case the pursuer was injured in an accident at work. In the course of pre litigation correspondence the insurers for the defender forgetting that proceedings would be raised in scotland said in a letter that: “we accept that our insured in liable for the purposes of this claim” and paid damages will be assessed when we receive details of this claim, we will also be paying your costs in accordance with the civil procedure rules”. 18 months later the insurers indicated that the defence on liability was to be maintained. The pursuer claimed that the admission of liability was a binding obligation made on behalf of the defender. The extra division said that an extra judicial admission could have contractual force, if constituted by a bilateral undertaking or a unilateral undertaking intended to be binding, but the statement in the letter was no more than an extra judicial admission and did not have contractual force and could accordingly be withdrawn.
Again, subject to a possible argument about personal bar. The rationale for this is that such an admission are made when the facts are not finally ascertained and further investigation may give reason to alter that position.
Views about the applicable law may also alter with more recent decisions of the courts. Only admissions made in the closed record are absolutely binding against the party.
When might disputes about the terms of settlement arise?
e.g. whether settlement has been affected at all. The correct way of dealing with this is that the party that says that settlement has been reached must lodge minute in the process and party disputing to lodge answers.
Minute of Answers. Thereafter the court will have to determine using ordinary contractual principles, whether or not settlement was reached. This may be capable of being done as a matter of legal arguments on the minute in answers or it may be necessary to hear evidence on the matter. Each case will turn on its own facts.
E.g. Catherine Sharp or Chisholm v. Colin Wardrope & Ors, Court of Session (Outer House), 28 October 2004.
Lord emslie’s opinion in this case.
Though there is no dispute and settlement has been affected there is dispute about the meaning and effect of the settlement agreement. Do your best to be as clear as possible about what the situation is:
Ceiling Decor Ltd v. Parratt, Court of Session (Outer House), 5 March 2004.
What are the factors relevant to the court’s discretion?
Factor relevant to exercise of discretion. - Whether an extra judicial offer was made and rejected. Essnetial the question for the court is whether the pursuer acted reasonably or unreasonably in rejecting the offer. If unreasonable then that rejection has caused the subsequent judicial expense and he/she ought to pay for it.
