17: Discontinuance before trial

Question 1

What procedural tools can resolve disputes without a trial?

Answer 1

• Default judgment under Part 12: when a defendant fails to respond to served proceedings in time.
• Judgment under Part 14: Against a defendant who admits the claim.
• Summary judgment under Part 24
• Striking out under Part 3.4
• Part 36 agreement to settle.

Question 2

Which part of the Civil Procedure Rules governs discontinuance of proceedings by a claimant?

Answer 2

Discontinuance is governed by Part 38 of the Civil Procedure Rules (CPR).

Question 3

What are the consequences of discontinuing a claim?

Answer 3

The claimant won’t be able to start new proceedings against the defendant and may be liable for the defendant’s costs on the standard basis.

Question 4

When is court permission required for discontinuance?

Answer 4

Permission is required if:
- The court has granted an interim injunction.
- A party has given an undertaking to the court.
- The claim involves a child or protected party and is being settled.

Question 5

What is the procedure for discontinuing a claim?

Answer 5

Serve a notice of discontinuance (Form 279)
File the notice at court.

Question 6

When does discontinuance take effect?

Answer 6

Discontinuance takes effect on the date the notice is served on the defendant.

Question 7

What are the cost consequences of discontinuance?

Answer 7

• All of the claim: Claimant liable for defendant’s costs up to notice of discontinuance.
• Part of the claim: Costs for the discontinued part up to notice date.
• Costs must be on the standard basis, assessed if not agreed, and paid within 14 days of agreement or assessment.

Question 8

What is the process for setting aside a notice of discontinuance?

Answer 8

Applications must be made within 28 days of the notice, often in cases involving QOCS and potential fundamental dishonesty.

Question 9

When is permission required for making another claim after discontinuance?

Answer 9

Permission is needed if the claim was discontinued after a defence was filed or the new claim is based on similar facts to the discontinued claim.

Question 10

When is court approval required for a proposed settlement?

Answer 10

Court approval is needed if the claim involves a child (under 18) or a protected party (lacking mental capacity) under the Mental Capacity Act 2005.

Question 11

What is the process for court approval of a settlement involving children or protected parties?

Answer 11

The process is as follows (under Part 8):
1. Parties agree on proposed terms of settlement.
2. The claimant issues a Part 8 claim for court approval.
3. The claimant files relevant documents.
4. Court fixes a hearing date.
5. The claimant, their litigation friend, and legal representatives attend the hearing.
6. Court decides whether to approve the settlement.

Question 12

What form is used for an order on settlement on behalf of a child or patient?

Answer 12

Form N292 is used for the order on settlement on behalf of a child or patient.

Question 13

What documents must the claimant include in the claim form for settlement approval?

Answer 13

The claimant must include:
- The litigation friend’s approval.
- The age and occupation of the child or protected party.
- Details of the defendant’s liability admission.
- Terms of the settlement (Form N292 Order on settlement on bhalf of child or patient).
- Financial advice related to the settlement.
- Details of the accident and medical reports.
- Schedule of loss and damage.

Question 14

Who should attend the approval hearing for a child or protected party’s settlement?

Answer 14

The child or protected party should attend the approval hearing, along with their litigation friend and legal representative. The defendant’s legal representative should also attend.

Question 15

What happens if the judge approves the terms of the proposed settlement?

Answer 15

If the judge approves the terms, the court will:
- Give directions on how the money is to be dealt with.
- Usually direct that any sums are paid into the Court Funds Office, which will hold and invest the sums until the child attains the age of 18, or the protected party regains mental capacity.
- Complete Court Funds Office Form CFO 320 for pre-investment hearings
- Make an order for costs.

Question 16

What will a judge do with large and small orders for children or patients?

Answer 16

For large orders or settlements, direct that an application be made to the court of Protection to appoint a receiver and transfer funds to the court of Protection.
For smaller settlements or orders, administer and invest the fund.

Question 17

What forms can an agreement take to settle a dispute?

Answer 17

An agreement can be:
- Oral or in writing.
- A written offer to settle (other than a Part 36 offer), such as a Calderbank offer or an offer without prejudice save as to costs.
- An exchange of letters or emails indicating agreement.

Question 18

What is a settlement agreement or compromise agreement?

Answer 18

It is a legally binding contract that includes all agreed terms. If breached, it creates grounds for breach of the agreement, potentially leading to a Part 7 claim and a summary judgment application.

Question 19

Why is Party 36 called a ‘self-contained code’?

Answer 19

Because it does not import principles of ordinary contract law.

Question 20

What are the three ways to end proceedings once court proceedings have started?

Answer 20

• Court approval based on an agreed consent order following an application.
• Court approval based on an agreed Tomlin order following an application.
• Acceptance of a Part 36 offer to settle.

Question 21

What is a consent order?

Answer 21

An order made by the court with the consent of all parties, resolving the court proceedings. It usually records the terms of the settlement and is enforceable like any court order.

Question 22

What is a Tomlin order?

Answer 22

A Tomlin order is a type of court order used to record the terms of a settlement agreement reached between parties. It is particularly useful for incorporating terms that go beyond what the court has the power to order directly.

Question 23

What are the parts of a Tomlin order?

Answer 23

1st part: The order - public document
2nd part: The schedule (settlement agreement) - confidential

Question 24

What does the first part of a Tomlin order state?

Answer 24

The first part of a Tomlin order typically states:
- Parties have agreed terms of settlement.
- All further proceedings are stayed.
- Stay is based on the schedule’s terms being complied with.
- Provision for payment and assessment of costs.
- Right to apply if terms are not met.

Question 25

What information is included in the schedule of a Tomlin order?

Answer 25

The schedule includes: - Payment responsibility and amounts. - Payment method (lump sum or installments). - Payment due dates. - Confirmation of full and final satisfaction. - Default provision on interest for non-payment.

Question 26

What is the main advantage of a Tomlin order over a consent order?

Answer 26

A Tomlin order allows for the settlement terms to be confidential and provides a practical way to enforce payment without needing further court proceedings.

Question 27

What is the difference between a consent order and a Tomlin order regarding terms the court can enforce?

Answer 27

- Consent order: Contains only terms the court has power to order directly. - Tomlin order: Contains terms the court has power to order and terms it does not have power to enforce directly.

Question 28

How does a breach of terms differ between consent orders and Tomlin orders?

Answer 28

- Consent order: Breach terms can be enforced only by the court. - Tomlin order: Breach terms can be enforced by returning to the original court for enforcement.

Question 29

What is a Calderbank offer?

Answer 29

A Calderbank offer is an offer to settle a dispute made without prejudice save as to costs. It is an offer made "without prejudice save as to costs," meaning it is a settlement offer that can be revealed to the court when deciding on costs after the trial has concluded. It also allows the offering party to set out the consequences if the offer is accepted. I

Question 30

What is the difference between how offers outside Part 36 and Part 36 offers to settle are regulated?

Answer 30

Offers outside Part 36 are regulated by the law of contract and can include various matters. Part 36 offers are regulated by Part 36, can only include matters within Part 36, and have automatic consequences related to costs.

Question 31

What matters can offers outside Part 36 include?

Answer 31

They can include matters like confidentiality, publicity, an apology, continuing business relationships, and payments to third parties such as charities.

Question 32

What matters can Part 36 offers include?

Answer 32

They can only include matters within the scope of Part 36, such as remedies that can be ordered by a court.

Question 33

What happens if offers outside Part 36 are not accepted?

Answer 33

They will be considered when the court exercises its discretion as to costs.

Question 34

What happens if Part 36 offers are not accepted?

Answer 34

They will have the near-automatic consequences set out in Part 36 when the court exercises its discretion as to costs.

Question 35

When are offers outside Part 36 helpful?

Answer 35

They are helpful when Part 36 does not apply, such as in small claims track cases, or when avoiding near-automatic cost consequences of Part 36.

Question 36

What is the restriction on the disclosure of Part 36 offers?

Answer 36

They are made on a "without prejudice save as to costs" basis and should not influence a trial judge on substantive issues other than costs.

Question 37

What are the consequences if a claimant's Part 36 offer is not accepted?

Answer 37

If a claimant's Part 36 offer is not accepted and they achieve a better outcome at trial, they can benefit from additional damages along with enhanced interest on damages.

Question 38

What can be covered by a Part 36 offer?

Answer 38

In respect of: - A claim under Part 7 or Part 8 claims - a counterclaim - an additional claim

Question 39

Can a Part 36 offer be made in a case allocated to the small claims track?

Answer 39

No, because costs are not generally recoverable in small claim track claims.

Question 40

What are the formal requirements for a Part 36 offer?

Answer 40

It must be in writing, - made clear that it is in pursuant to Part 36 - specify a relevant period (no less than 21 days unless otherwise agreed) - state the offer's scope (part or whole) - consider any counterclaims - if for personal injury, include any claims for provisional damages and welfare benefits.

Question 41

What is the role of the Compensation Recovery Unit (CRU) in personal injury cases involving Part 36 offers?

Answer 41

The CRU identifies certain welfare benefits received by the claimant linked to the accident and issues a certificate showing these benefits.

Question 42

What must a defendant or their insurer do regarding CRU certificates in personal injury cases?

Answer 42

1. Notify the CRU when a claim is made. 2. Deduct any recoverable benefits identified on the CRU certificate from the compensation payable to the claimant. 3. Pay the deducted benefits to the CRU.

Question 43

Why is it important to consider CRU benefits in Part 36 offers for personal injury cases?

Answer 43

To ensure the claimant is not over-compensated by receiving both (double) compensation from the defendant and welfare benefits for the same injury.

Question 44

What does it mean if a Part 36 offer includes a global offer to settle?

Answer 44

It includes all damages, interest, and costs as one lump sum.

Question 45

Why might a global offer not be a valid Part 36 offer?

Answer 45

Because they'd include interest and it is implicit in Part 36 that if accepted, the receiving party has an entitlement to costs in addition to the terms of the offer (i.e. interest). It's a case of limiting the interest and going against Part 36 rules.

Question 46

How are Part 36 offers treated in terms of interest if the offer is made 21 days or more before the trial?

Answer 46

The offer would include interest up to the end of the relevant period.

Question 47

How are Part 36 offers treated in terms of interest if the offer is made less than 21 days before the trial?

Answer 47

The offer would include interest until 21 days after the day the offer was made.

Question 48

What is the "relevant period" for a Part 36 offer?

Answer 48

The time given for the offeree to consider the offer, typically 21 days or another agreed period.

Question 49

Can a Part 36 offer expire?

Answer 49

Only if it is withdrawn. Otherwise, even if the relevant period expires, the offer can still be accepted.

Question 50

What happens if the offeror doesn't include a specific provision in the offer for interest to accrue beyond the standard dates in a Part 36 offer?

Answer 50

If the offer is accepted, the offer will be treated as including all interest up to the date on which the notice of acceptance is served.

Question 51

Can Part 36 offers be withdrawn or amended?

Answer 51

Yes, but only before acceptance, after the relevant period expires, or to improve or reduce the original offer.

Question 52

What should an offeree do if the terms of a Part 36 offer are unclear?

Answer 52

Request clarification in writing within 7 days of service. The reply must be given within 7 days.

Question 53

What does the offeror need to reduce the terms of an unaccepted offer before the end of its relevant period?

Answer 53

The offeror needs the court's permission to reduce the terms of the offer.

Question 54

What can the offeree do if the court does not grant permission to reduce the terms of an offer?

Answer 54

The offeree can still accept the original offer.

Question 55

What are the two ways an offeror may withdraw or amend a Part 36 offer after the relevant period?

Answer 55

1. The offer itself may include an automatic withdrawal provision. 2. The offeror may expressly withdraw or amend the offer with written notice.

Question 56

What happens if an offeror wants to improve an unaccepted offer before the end of its relevant period?

Answer 56

The amended offer is treated as a new Part 36 offer on improved terms, starting a new relevant period from the date of service of the notice of amendment.

Question 57

When is the court's permission needed to accept a Part 36 offer?

Answer 57

- If any of the parties is a child or protected party. - If a trial is in progress. - If the offer is made by some but not all defendants and the claim against other defendants is ongoing. - If the offer is in a personal injury claim where specific rules apply. - If the offer is made in a claim under the Fatal Accidents Act 1976 and Law Reform (Miscellaneous Provisions) Act 1934.

Question 58

What happens if an offeror does not provide for interest accrual beyond the relevant period in a Part 36 offer?

Answer 58

The offer will be treated as inclusive of all interest up to the date on which the notice of acceptance is served.

Question 59

What are split trial cases?

Answer 59

Cases where different issues are tried separately, such as liability and damages.

Question 60

When can't a Part 36 offer be accepted in split trial cases?

Answer 60

If: - the issue has already been decided - the issue hasn't already been decided, it can't be accepted earlier than seven days after judgment on that issue.

Question 61

How is a Part 36 offer accepted?

Answer 61

By serving written notice of acceptance on the offeror using Form N242A Offer to Settle.

Question 62

What happens to proceedings when a Part 36 offer is accepted?

Answer 62

The relevant part of the proceedings is paused (stayed) on the terms of the offer.

Question 63

What happens if only part of the claim is the subject of the offer and it's accepted before the end of the relevant period?

Answer 63

Only the part of the claim which is the subject of the offer is stayed.

Question 64

What are the cost consequences if a Part 36 offer is accepted before the end of the relevant period?

Answer 64

The claimant is entitled to costs up to the date of acceptance.

Question 65

What are the cost consequences if a Part 36 offer is accepted after the relevant period but 21 days before the trial?

Answer 65

The court must determine liability for costs unless agreed by the parties.

Question 66

What happens if parties can't agree on costs after accepting a Part 36 offer?

Answer 66

The court will decide the costs, which can include splitting costs between parties.

Question 67

When can the court depart from normal costs orders?

Answer 67

When it is "unjust to do so," considering factors like the terms of the offer, stage of proceedings, and information available.

Question 68

Can the defendant enforce costs even if QOCS applies to the case?

Answer 68

Yes, the defendant can still enforce costs up to the amount of damages and interest awarded to the claimant.

Question 69

How should sums be paid after accepting a Part 36 offer?

Answer 69

As a single lump sum within 14 days of the acceptance notice.

Question 70

What happens if a Part 36 offer is accepted before the relevant period in certain personal injury claims?

Answer 70

If accepted within the relevant period, the claimant is entitled to fixed costs.

Question 71

What happens if a Part 36 offer is accepted after the relevant period in certain personal injury claims?

Answer 71

If accepted after the relevant period, the claimant gets fixed costs plus defendant's costs from the expiry date to the acceptance date.

Question 72

What are the costs consequences if a Part 36 offer is accepted after the protocol stage in personal injury claims?

Answer 72

The claimant is entitled to fixed costs for Stages 1 and 2 of the protocol, plus the defendant’s costs from the protocol’s end date to the acceptance date.

Question 73

What does a Part 36 offer including a defendant’s counterclaim entail?

Answer 73

The offer takes the counterclaim into account, and if accepted, the claimant’s costs include those for dealing with the counterclaim.

Question 74

What does "beating an offer" mean at trial?

Answer 74

If the claimant’s trial outcome is equal to or better than the Part 36 offer, they are considered to have beaten the offer. If not, they have failed to beat it. It is also called 'a judgment more advantageous'.

Question 75

What are the costs consequences at trial if a Part 36 offer is not beaten?

Answer 75

The claimant may have to pay the defendant’s costs from the offer’s relevant period end to the trial date.

Question 76

What happens to costs if the claimant beats the defendant’s Part 36 offer at trial?

Answer 76

The claimant is awarded costs up to the end of the relevant period of the offer.

Question 77

How are recoverable costs between parties handled at trial under Part 36?

Answer 77

Costs can be ordered on a standard or indemnity basis, depending on whether they are reasonably incurred and proportionate.

Question 78

What is the order for costs if the claimant loses at trial?

Answer 78

Loser pays - Claimant pays defendant's costs from start to end of proceedings on a standard basis

Question 79

What is the order for costs if the claimant succeed in recovering some remedy but fails to beat all offers made by the defendant?

Answer 79

- Court makes a split costs order. - Defendant pays claimant's costs up to the end of the relevant period on the standard basis. - Claimant pays defendant's costs from the end of the relevant period to the end of proceedings on the standard basis, plus a standard rate of interest.

Question 80

What is the costs order if the claimant succeeds in recovering some remedy, beats an offer made by the defendant, but does not beat their own offer?

Answer 80

- Defendant pays claimant's costs from the start to end of proceedings on the standard basis, plus a standard rate of interest.

Question 81

What is the costs order if the claimant succeeds in recovering some remedy and beats an offer made by the defendant and an offer made by the claimant?

Answer 81

- Court makes a split costs order - Defendant pays claimant's costs from start to end of relevant period on the standard basis. - Defendant pays costs from end of relevant period to end of proceedings on the *indemnity* basis. - Defendant pays interest on those costs at the *enhanced* rate. - Additional amount calculated on damages (money claim) or costs awarded (non-money claim)

Question 82

What is the additional amount the defendant must pay if the claimant beats their own offer?

Answer 82

- 10% of the sum up to £500,000. - Further 5% of any sum above £500,000. - Subject to a maximum total of £75,000.

Question 83

What are the benefits of accepting a Part 36 offer within the relevant period?

Answer 83

The claimant gets fixed costs applicable at the date of acceptance, reducing further legal costs and resolving the dispute sooner.

Question 84

When is the most advantageous timing to make a Part 36 offer?

Answer 84

As early as possible in the dispute.

Question 85

Who should you talk to before making a Part 36 offer?

Answer 85

Counsel

Question 86

What are some options for clients when considering a Part 36 offer?

Answer 86

Suggest ADR (Alternative Dispute Resolution). Make a counter-offer that is Part 36 compliant.

Question 87

What can be done if it's difficult to decide on a Part 36 offer within the relevant period?

Answer 87

Seek an agreement to extend the relevant period with the opponent, as the offer cannot be withdrawn during the extended period without court permission.