Dispute Resolution - Settlement and Interim Applications

Question 1

Settlement

If a party wants to settle without an application to the court, what should they draw up?

In what circumstance is this not available?

In practice, the proposed order would only be referred to a judge where…

IMPORTANT

Answer 1

A consent order (or judgment for sealing by court officer).

Where either party is a litigant in person.

…it appears to be incorrect or unclear.

Question 2

Settlement: Consent order formalities

What are the three formalities for a valid consent order?

Answer 2

A. It must be:
- drawn up in the agreed terms;
- expressed as “By Consent”; and
- signed by the legal representative acting for each party.

Two things to keep in mind in relation to terms:

• Only terms within the court’s powers may be agreed (e.g. payment of a sum of money).
• The terms are open to public inspection.

Question 3

Settlement: Tomlin Order

When should a Tomlin Order (a special form of consent order) be used?

What are the effects of a Tomlin Order?

The key to an effective Tomlin Order is to appreciate that…

IMPORTANT

Answer 3

If the parties want any terms to be confidential and/or to be beyond the powers of a court to order.

It stays the claim on agreed terms set out in a schedule (or separate document).

certain terms must be in the order itself, while others can be set out in a schedule.

A correctly drafted Tomlin order will be brief and straightforward.

Question 4

Settlement: Tomlin Order

What four terms must be in the Tomlin order itself?

Answer 4

1. That proceedings be stayed upon the agreed terms except for the purpose of enforcing those terms.
2. Each party has permission to apply to court to enforce the terms without needing to bring a new claim.
3. An order for payment of money out of court, if appropriate, and provision for accrued interest thereon.
4. An order for costs.

Order for costs: For example, this might be for the payment and assessment of costs, or for each party to bear its own costs, or for “no order as to costs”. The costs order must be clear to avoid subsequent disputes between the parties and to ensure that the court is able to seal the order without the need for a hearing simply to clarify the parties’ intentions as to costs.

Question 5

Interim Applications

What are the three main interim applications?

Generally speaking, what is the procedure for such applications?

When may a hearing not be required?

Answer 5

Three main interim applications:
- Summary judgments
- Interim injunctions
- Interim payments

Procedure:

1. Complete application notice: Form N244 verified by a statement of truth.
2. Serve the notice on the other party at least 3 clear days before the hearing.
3. The court hearing takes place.

If the parties agree on the order required, in which case they can apply to court for a consent order to be made.

Before making an application, parties should seek to resolve matters between themselves.

The court in which the claim started (or transferred) will hear the case.

Telephone Hearings and Video Conferencing: Interim applications with a time estimate of one hour or less are conducted by telephone if possible. Exceptions apply, e.g. to applications made without notice.

Question 6

Interim applications

The applicant needs to set out the facts they rely upon in support of (or opposing) the application. What should they do if there is insufficient space on the N244?

Except in very simple applications, what should be attached to the N244?

Answer 6

File a witness statement at the same time.

A draft order.

The applicant can rely on the contents of the statement of case.

Question 7

Interim Applications

What should be stated in the witness statement?

Why is it crucial that sufficient detail is given in the witness statement?

Answer 7

• factual information and evidence in support of the application; and
• anticipation of the opponent’s case, where appropriate.

The hearing will not involve oral evidence.

Although the solicitor will make submissions, the judge decides the issue primarily on the basis of written evidence.

If the application is technical (e.g. for amendment of a statement of case), a solicitor is best-placed to make the witness statement. In other situations, it may be the client.

Question 8

Interim applications; Service

What are the two exceptions to the general rule that the application must be served on the opponent before the hearing takes place?

Answer 8

1. There is Exceptional urgency;
2. The overriding objective is best achieved by an order without notice.

Question 9

Interim applications; Applications without notice

• What are the most common examples of applications made without notice?
• What must the evidence explain?
• What is the applicant’s duty? Explain this duty further.

Answer 9

• A freezing order or search of premises.
• Why notice was not given.
• A duty of full and frank disclosure = must draw the court’s attention to evidence and arguments they reasonably anticipate the respondent would wish to make.

Question 10

Interim applications; Applications without notice

If an order is issued after an application without notice, the applicant must serve on the respondent, as soon as practicable after the order is issued:

Answer 10

• the court order;
• the application notice; and
• any supporting evidence.

The respondent may apply to set aside or vary the order within seven days of being served.

Question 11

Interim Costs

When does the judge decide on interim costs?

What is the general rule?

When one party is ordered to pay the other’s costs (e.g. “the defendant’s costs”, the costs are usually assessed ____ and ordered to pay within 14 days.

Provide two other costs orders and explain them briefly.

Answer 11

At the end of any interim application.

The loser pays the winner’s costs.

Summarily (instantly).

1. Costs in the case - the loser of litigation pays the costs of the interim application.
2. No order as to costs - each party bears their own costs.

The type of costs order depends upon the nature of the application and the conduct of the parties, and so these factors may lead to a departure from the general rule.

Costs in the case might apply, for instance, if the court makes a conditional order that the defendant may continue to defend the proceedings only if they file a full defence within 14 days. If they fail to do so, they would need to pay the claimant’s costs of the interim application.

Question 12

Summary Judgment (Part 24, CPR)

When is a summary judgment used?

The court may give summary judgment on the whole of the claim or a particular issue. What are the two conditions?

Answer 12

When the defendant files a weak defence. The claimant can bring the matter to an early conclusion.

1. The respondent has no real prospect of success; and
2. There is no other compelling reason why the case should be disposed of at trial.

Note: the defendant may also make this application against the claimant (for instance, if a litigant in person filed a weak particulars of claim, or one which has no legal basis).

Question 13

Summary Judgment (Part 24, CPR)

Give 3 examples of a compelling reason.

Answer 13

• the need for more time to investigate;
• the claim/defence is highly complex or technical.
• the need to hear from witnesses, particularly where one of the central issues is disputed oral evidence.

Important: the hearing is not the trial, and you must concentrate on establishing a compelling reason for the case to continue, and not to argue the case in its entirety.

Question 14

Summary Judgment (Part 24, CPR)

What is the procedure for summary judgment?

Answer 14

1. The applicant applies using Form N244 + a witness statement.
2. The respondent is given at least 14 days’ notice of the hearing date.
3. The respondent must file and serve any written evidence at least 7 days before the hearing.
4. If the applicant wishes to rely upon further evidence, this must be filed and served at least 3 days before the hearing.

Note: the court’s permission is not required unless the claimant wishes to apply before the defendant has filed an acknowledgement of service or defence. Clearly, the claimant would invariably wait until the defence has been filed.

Question 15

Summary Judgment: Possible orders

What are the four possible orders? Briefly explain each.

Answer 15

“Judgment on the claim” = claimant succeeds as applicant, and the matter proceeds to enforcement.

“Striking out or dismissal of claim” = defendant succeeds as applicant, and the case comes to an end.

“Dismissal of application” = applicant fails and the case proceeds to trial.

“Conditional order” = respondent can continue to litigation provided they take a specified step or pay a sum of money into court.

Question 16

Summary Judgment: costs order

a. If the claimant succeeds as applicant for a specified sum, the court may award:

b. If the claimant succeeds as applicant for an unspecified sum:

c. If the defendant succeeds as applicant, the court normally orders that…

d. If the application is dismissed…

Answer 16

a. fixed costs under Part 45.

b. claimant is granted their costs = the general rule applies.

c. claimant pays defendant’s costs of the whole claim, subject to summary assessment.

d. applicant pays the respondent’s costs of the summary judgment hearing.

(a) Re fixed costs, the claimant may request a higher figure, and ask for a summary assessment of the costs

(b) These will be assessed summarily and a disposal hearing will be listed to assess damages payable by the defendant.

If a conditional order is made, the usual order will be costs in the case.

Question 17

Interim injunctions (Part 25 CPR)

Any party can apply for an interim injunction. The injunction remains in force until…

What does it mean that this is a discretionary remedy?

A breach of injunction is punishable as…

When is an interim injunction generally used?

Answer 17

• matter comes to trial, or further order.
• it may only be granted when damages are not an adequate remedy.
• a contempt of court.
• to prevent the defendant taking certain steps, such as soliciting the client’s customers. It can also be used to take action (e.g. to stop committing a nuisance).

Question 18

Interim Injunction: American Cyanamid Guidance

In deciding whether to grant the interim injunction, the court will determine whether:

Answer 18

• there is a serious question to be tried;
• damages are an adequate remedy;
• the balance of convenience favours granting or refusing the injunction; and
• there are any special factors.

Question 19

Interim injunction: applicant’s cross undertaking

What is the applicant’s cross undertaking?

Answer 19

To pay damages that the respondent (or any other party) sustains by reason of the injunction, if it subsequently transpires that the injunction ought not to have been granted.

Procedure

Application notice, supported by evidence (usually a witness statement).

Orders obtained with notice gives the defendant prior warning of the hearing.

Question 20

Interim injunction without notice: Freezing injunction

What does this do?
What are the two conditions that the court must be satisfied of?

Answer 20

Restrains a party from removing assets from the jurisdiction.

1. The applicant has a good, arguable claim;
2. There is a real risk of respondent disposing of their assets.

Question 21

Interim injunction without notice: Search order

A search order compels the respondent to allow their premises to be searched by the applicant where the applicant believes the respondent has…

What are the three conditions that need to be satisfied?

Answer 21

…documents or property belonging to them.

• there is a strong case;
• the applicant will suffer serious harm if order not made; and
• the respondent has incriminating materials in their possession that cannot be obtained by other means.

Question 22

Interim Payments (Part 25)

What is an interim payment?
What is its primary purpose?
When can it be sought?

Answer 22

• An advance payment on account of damages, debt or other sum (excluding costs) that a defendant may be liable to pay.
• To enable the claimant to avoid financial hardship or inconvenience.

Question 23

Interim payments: Procedure

Outline the procedural requirements for an interim payment, including the evidence to be set out by the applicant.

Answer 23

• The acknowledgment of service has expired;
• Notice is served within 14 days before the hearing; and
• The evidence sets out:

1. Amount requested (must be reasonable proportion of sum due)
2. Intended use;
3. Sum of money likely to be awarded at final judgment;
4. Reasons for believing the Part 25 Grounds are satisfied

The respondent, if they wish to counter the application, must serve any evidence at least 7 days before the hearing.

The applicant can respond with further evidence at least 3 days before the hearing.

Question 24

Interim Payments: PART 25 GROUNDS

What are the three Part 25 Grounds?

IMPORTANT

Answer 24

• The defendant has admitted liability;
• The claimant has obtained a judgment against the defendant for damages to be assessed or for a sum of money; or
• The court is satisfied that, if the case went to trial, the claimant would obtain judgment for a substantial amount of money other than costs.

On ground (c), the burden on the applicant is high: they must prove, on the balance of probabilities, that they will succeed.

Question 25

Interim payments: Orders

The court has the discretion as to two things:

In determining this, what must be taken into account?

Answer 25

1. Whether an order for an interim payment should be made;
2. If so, what the amount should be.

Contributory negligence and any counterclaim

Effect on trial

• The trial judge will not be told about any interim payment order until after they have determined liability and quantum.