Responding to a Claim

Question 1

what must D do within 14 days of service of the POC?

Answer 1

Within 14 days of service of the POC (not the CF), D must do one of the following or C can apply for default judgment:
o File an admission
o File an AOS
o File a defence

Question 2

what happens if D does not take one of the prescribed steps in 14 days?

Answer 2

C can apply for default judgment

Question 3

re: admission

give an overview of admissions

Answer 3

• Separate admission forms for specified claims and unspecified claims
• The forms asks the amount admitted, employment and financial information and details of any offer of payment (i.e. date for payment or by instalments)

D can admit all or part of the claim

Question 4

re: admission

if an admission form is entered, what can C do?

Answer 4

• An admission gives C the right to enter judgment against D.

Question 5

re: admission

what happens if D admits the whole of a specified claim?

Answer 5

o D sends Form N9A to the claimant who will then enter judgment
o If D has made a request for time to pay and C does not accept the proposals, the court will determine a payment plan

Question 6

re: admission

what happens if D admits part of a specified claim?

Answer 6

D sends Form N9A and Form N9B (defence form) to the court

The court send this to C who has 14 days to decide whether to:
 Accept part admission and request judgment;
 Accept part admission but not D’s proposals for payment (the court will then decide);
 Reject offer entirely. The matter proceeds as defended.

Question 7

re: admission

what happens if D admits all of a unspecified claim and makes an offer?

Answer 7

D can admit liability of the claim on Form N9C.

o Complete Form N9C and sends this to the court
o The court send a notice to C asking whether they accept this sum
o If the sum is accepted, C can request judgment. If C does not accept the payment proposals, the court will determine a payment plan

Question 8

re: admission

what happens if D admit liability but makes no offer or C does not accept the offer?

Answer 8

C will enter judgment for damages (plus costs) to be assessed by the court (maybe at a disposal hearing)

Question 9

re: acknowledgement of service

when must this be filed?

Answer 9

within 14 days of deemed service of POC

Question 10

re: acknowledgement of service

what is the effect of filing this?

Answer 10

If an AOS is filed within 14 days of deemed service of the POC, D will have 28 days from the date of deemed service of the POC to file the defence

o i.e. POC filed 2 Nov, defence due 16 Nov unless AOS filed by 16 Nov, in which case defence is due 30 Nov

Question 11

what must D do if they dispute the court’s jurisdiction?

Answer 11

• If D disputes the court’s jurisdiction, this must be stated on the AOS
• Within 14 days of filing the AOS, D must make the application disputing the court’s jurisdiction
  o NB: application must be filed within 14 days of the AOS. It doesn’t mean D has 28 days from the date of deemed service to make the application

Question 12

if D contests the court’s jurisdiction and this application is granted, what happens?

Answer 12

• If granted (i.e. court doesn’t have jurisdiction) > service of the claim form will be set aside and the proceedings come to an end

Question 13

if D contests the court’s jurisdiction and this application is refused, what happens?

Answer 13

• If refused > the original AOS ceases to have effect and D must file a further AOS within 14 days.

Question 14

re: defence

how can this be prepared?

Answer 14

D can either complete the appropriate form in the response pack or prepare the defence in a separate document.

Question 15

re: defence

what may the defence include?

Answer 15

a counterclaim

Question 16

re: defence

when must the defence be filed?

Answer 16

This must be filed and served within:
o 14 days; or
o 28 days if AOS filed; or
o Up to 56 days after service if POC, if agreed by parties
o Any further extension requires permission of the court

Question 17

re: default judgment

when can C apply for a DJ?

Answer 17

• C can apply for DJ if they have served the POC and D has not responded to the claim

Question 18

re: default judgment

when can C apply for DJ?

Answer 18

• C can make the application the first day after expiry of the relevant time limits

Question 19

re: default judgment

when might DJ be refused?

Answer 19

• A DJ might be refused if there is a pending application by D for summary judgment / to have the case struck out

Question 20

what is the effect if the claim includes specified and unspecified elements?

Answer 20

IMPORTANT TO REMEMBER:

the entire claim is treated as unspecified

Question 21

re: default judgment

what effects the DJ process?

Answer 21

whether the claim is specified or unspecified

Question 22

re: default judgment

what is the process in relation to a specified claim?

Answer 22

C files the request for judgment form with the court. Information on form:
o Confirmation that neither an admission or defence has been filed
o Confirmation that C has served the POC
o Judgment details, i.e.:
 Date payment was due
 Up to date total for interest claimed (C may be entitled to contractual / late payment interest. C is also entitled to interest from the date of issue to the date of judgment)
 Daily rate at which interest accrues
 Court fees and legal costs
 Whether any money has been paid since issue

D usually has to pay the judgment debt within 14 days

Question 23

re: default judgment

what information is on the DJ form for a specified claim?

Answer 23

Confirmation that neither an admission or defence has been filed

Confirmation that C has served the POC

Judgment details, i.e.:
 Date payment was due
 Up to date total for interest claimed (C may be entitled to contractual / late payment interest. C is also entitled to interest from the date of issue to the date of judgment)
 Daily rate at which interest accrues
 Court fees and legal costs
 Whether any money has been paid since issue

Question 24

re: default judgment

what is the process in relation to an unspecified claim?

Answer 24

• DJ can be entered but it will be on the basis of liability only with damages to be assessed by the court at a disposal hearing

Question 25

what is a disposal hearing?

Answer 25

* disposal hearing = short court hearing where a judge can decide the amount of money a defendant must pay or give directions for the future of a case

Question 26

re: setting aside a judgment what should take place before an application is made?

Answer 26

* Whilst no formal requirement to do so, D should C whether they agree to the judgment being set aside.

Question 27

re: setting aside a judgment if agreement can't be reached, what happens next?

Answer 27

* If C refuses, D must lodge an N244 with a witness statement and evidence as soon as possible. The court will consider any tardiness.

Question 28

re: setting aside a judgment what evidence will D need to provide with their application?

Answer 28

D must evidence they acted swiftly and the ground they seek to rely upon

Question 29

re: setting aside a judgment what are the grounds?

Answer 29

o Mandatory ground o Discretionary ground

Question 30

re: setting aside a judgment explain the mandatory ground

Answer 30

the court must set aside the judgment if it was wrongly entered i.e. entered into early or the claim was paid in full

Question 31

re: setting aside a judgment explain the discretionary ground

Answer 31

the court may set aside the judgment if:  D has a real prospect of successfully defending the claim; or  There is another good reason why they should be allowed to defend the claim

Question 32

re: setting aside a judgment what order can the court make?

Answer 32

o DJ set aside and D can defend claim o DJ remains in place and C can enforce judgment o Conditional order > DJ is set aside on the condition D pays money

Question 33

re: setting aside a judgment what are the potential costs awards?

Answer 33

o Mandatory ground > C pays D’s costs o Discretionary ground – good reason > costs in the case o Discretionary ground – real prospect > D pays C’s costs o Application fails > D pays C’s costs

Question 34

re: setting aside a judgment what is the cost award if the judgment is set aside on the mandatory ground?

Answer 34

o Mandatory ground > C pays D’s costs

Question 35

re: setting aside a judgment what is the cost award if the judgment is set aside on the discretionary ground?

Answer 35

o Discretionary ground – good reason > costs in the case o Discretionary ground – real prospect > D pays C’s costs

Question 36

re: setting aside a judgment what is the cost award if the application fails?

Answer 36

o Application fails > D pays C’s costs

Question 37

re: discontinuance give an overview of discontinuance

Answer 37

* At any time, C can discontinue all / part of their claim against one of more Ds.

Question 38

re: discontinuance when will C need the court's permission to discontinue a claim?

Answer 38

C will need the court’s permission if: o There is an interim injunction; or o A party has given an undertaking to the court o There is more than 1 C and the others don't consent

Question 39

re: discontinuance can C discontinue a claim if there is more than 1 C?

Answer 39

If there is more than one C, a C can only discontinue the claim if: o They have consent of all other Cs; or o The court gives permission

Question 40

re: discontinuance can C discontinue the claim if an interim payment has been made?

Answer 40

If an interim payment has been made, C can only discontinue the claim if: o D who made the payment consents; or o The court gives permission

Question 41

re: discontinuance how does C discontinue a claim?

Answer 41

* C must file and serve notice of discontinuance (inc. any consent)

Question 42

re: discontinuance what can D do if a notice has been served?

Answer 42

* A D can apply within 28 days of service to have the notice set aside * If there is no response, proceedings are brought to an end.

Question 43

re: discontinuance what is the costs position?

Answer 43

* C will be liable for D’s costs unless the court orders otherwise

Question 44

re: part 36 offers how are these offers treated?

Answer 44

* P36 offers are treated as WPSATC

Question 45

re: part 36 offers what happens when an unaccepted offer has no effect on costs?

Answer 45

* Where non-acceptance of the P36 offer has no effect on costs, damages and costs will be assessed in the usual way (i.e. fixed costs/standard basis and as claimed in the POC), unless there is agreement or the court orders otherwise

Question 46

re: part 36 offers when will an offer be invalid?

Answer 46

if it doesn't comply with formalities

Question 47

re: part 36 offers what are the formalities?

Answer 47

* A P36 offer will be invalid if it does not meet formalities: o It must be in writing and clear it is made pursuant to P36; o Specify a period of at least 21 days, during which if the offer is accepted, D will pay C’s costs (i.e. the ‘Relevant Period’) o State whether it relates to whole or part of the claim and if any CC is inc.

Question 48

re: part 36 offers what is the position regarding interest and the initial offer?

Answer 48

* The offer is inclusive of interest until the Relevant Period expires

Question 49

re: part 36 offers when does a part 36 offer take effect from?

Answer 49

* The offer takes effect from the date of deemed service (use usual counting method to calculate the relevant period)

Question 50

re: part 36 offers what is the time period for offers?

Answer 50

They must be at least 21 days, but they can be longer In practice, most P36 offers are 21 days. Below will refer to ‘Day 21’ and ‘Day 22’ but know it can be longer

Question 51

re: part 36 offers what is the deadline for acceptance?

Answer 51

* An offer can be accepted at any time until it is withdrawn or stipulates a deadline for acceptance (it can be withdrawn at any time before acceptance)

Question 52

re: part 36 offers what is the effect of acceptance?

Answer 52

* Upon acceptance, the proceedings are stayed and D must pay money to C within 14 days,

Question 53

re: part 36 offers if an offer is accepted, what is the position on costs?

Answer 53

Unless otherwise agreed by parties, costs are as follows (this applies regardless of who made the offer): 1. Acceptance within RP > D pays C’s costs up to the date of service of the notice of acceptance 2. Acceptance after RP: a) D made the offer > D pays C’s costs up to the date of expiry of the RP & C pays D’s costs up to the date of acceptance b) C made the offer > D pays C’s costs up to the date of service of the notice of acceptance In all cases, costs will be summarily assessed by a judge on the standard basis unless costs are agreed or fixed costs apply

Question 54

re: part 36 offers what is the position on costs if the offer is accepted within the RP?

Answer 54

1. Acceptance within RP > D pays C’s costs up to the date of service of the notice of acceptance

Question 55

re: part 36 offers what is the position on costs if the offer is accepted after the RP?

Answer 55

a) D made the offer > D pays C’s costs up to the date of expiry of the RP & C pays D’s costs up to the date of acceptance b) C made the offer > D pays C’s costs up to the date of service of the notice of acceptance NB: this is costs of the proceedings (inc. recoverable pre-action, not just costs from the service of the P36 offer)

Question 56

re: part 36 offers if the offer is accepted and money is not paid, what can C do?

Answer 56

the money must be paid within 14 days (unless otherwise agreed), if not judgment can be entered

Question 57

re: part 36 offers what is the effect of non-acceptance?

Answer 57

* Financial penalties may be imposed from the first day after the RP (i.e. Day 22) except in exceptional circumstances.

Question 58

re: part 36 offers what will the court consider when deciding whether to impose financial penalties?

Answer 58

The court will consider: o All the circumstances (i.e. the information available at the time) o When the offer was made and proximity to trial o Party’s conduct and whether it was a general attempt to settle

Question 59

re: part 36 offers when may a court consider it unjust to impose financial penalties?

Answer 59

The court may consider it to be unjust where: o The offeror hasn’t given sufficient disclosure for the offeree to make an informed decision; or o The offer expired a few days before trial and crucial allegations that were not pleaded were raised at the beginning of the trial

Question 60

re: part 36 offers - claimant's offer if C does not accept an offer made by D, when will this have an impact at trial?

Answer 60

If C made a P36 offer which was not accepted by D, this only has an impact where C obtains a judgment which is at least as advantageous as their Part 36 offer (i.e. C wins and is awarded a sum equal to / beats their offer).

Question 61

re: part 36 offers - claimant's offer if C obtains a judgment which is at least as advantageous as their Part 36 offer, what are the consequences of this?

Answer 61

Damages awarded by judge Payment of an additional amount:  Damages up to £500k  D pays an additional 10% of sum awarded  Damages £500k - £1m  D pays an additional 10% of the first £500k and 5% thereafter with a max of £75k  If the award is non-monetary, the ‘sum awarded’ will be the costs Enhanced interest on damages  From date of loss up to and inc. Day 21, interest is awarded as claimed  From Day 22 to date of judgment, the court has discretion to award a rate of interest not exceeding 10% above the base rate Costs  Multi-track costs on an indemnity basis  Fast & intermediate  35% of the difference between the fixed costs applicable at Day 22 and fixed costs at the date of judgment Interest on costs  From Day 22 to date of judgment, the court has discretion to award a rate of interest not exceeding 10% above the base rate

Question 62

re: part 36 offers - claimant's offer if C obtains a judgment which is at least as advantageous as their Part 36 offer, what effect does this have on damages?

Answer 62

o Damages awarded by judge + payment of an additional amount:  Damages up to £500k  D pays an additional 10% of sum awarded  Damages £500k - £1m  D pays an additional 10% of the first £500k and 5% thereafter with a max of £75k  If the award is non-monetary, the ‘sum awarded’ will be the costs

Question 63

re: part 36 offers - claimant's offer if C obtains a judgment which is at least as advantageous as their Part 36 offer, what effect does this have on interest awarded on damages?

Answer 63

Enhanced interest on damages  From date of loss up to and inc. Day 21, interest is awarded as claimed  From Day 22 to date of judgment, the court has discretion to award a rate of interest not exceeding 10% above the base rate

Question 64

re: part 36 offers - claimant's offer if C obtains a judgment which is at least as advantageous as their Part 36 offer, what effect does this have on interest awarded on costs?

Answer 64

 Multi-track costs on an indemnity basis  Fast & intermediate  35% of the difference between the fixed costs applicable at Day 22 and fixed costs at the date of judgment

Question 65

re: part 36 offers - claimant's offer if C obtains a judgment which is at least as advantageous as their Part 36 offer, what effect does this have on interest awarded on costs?

Answer 65

From Day 22 to date of judgment, the court has discretion to award a rate of interest not exceeding 10% above the base rate

Question 66

re: part 36 offers - claimant's offer when will C's part 36 offer have no effect at trial?

Answer 66

* If C wins and is awarded a lesser offer or loses, the P36 offer has no effect

Question 67

re: part 36 offers - claimant's offer if C obtains a judgment which is at least as advantageous as their Part 36 offer, when does enhanced interest, costs and interest on costs take effect from?

Answer 67

* Enhanced interest, costs and interest on costs only take effect from Day 22. In other words, costs will be assessed in the usual way up to and including Day 21 and the sanctions are imposed from Day 22

Question 68

re: part 36 offers - defendant's offer when will D's unaccepted offer have an impact at trial?

Answer 68

C wins but fails to beat the offer; or C loses at trial

Question 69

re: part 36 offers - defendant's offer what happens if C wins but fails to beat D's offer?

Answer 69

1. D will pay C’s costs from the date they were incurred up to Day 21 (either on a standard basis or fixed); and o The effect of this is that C is liable for their own costs from Day 22 2. C will pay D’s costs from Day 22 until judgment plus interest on those costs (usually 1% or 2% above the base rate) * Counsel would invite the judge to make a split costs order

Question 70

re: part 36 offers - defendant's offer what happens if C loses at trial?

Answer 70

* C will pay D’s costs (usual rule) + interest on costs from Day 22 until judgment (usually 1% or 2% above the base rate) as a penalty

Question 71

re: settlement what should happen if settlement is reached prior to issuing?

Answer 71

terms should be clearly drafted so court action can be taken if necessary. Prospective C is not entitled to costs

Question 72

re: settlement what should happen if settlement is reached after issuing?

Answer 72

should be recorded in a court order so enforcement proceedings can be commenced if it is not adhered to

Question 73

re: settlement what are the relevant court orders?

Answer 73

consent orders and tomlin orders

Question 74

re: settlement when can a court officer seal an agreed judgement/order?

Answer 74

if all parties are legally represent and it relates to one of the following: o Consent judgment / order for payment or delivery of goods o Dismissing proceedings wholly or in part o Staying proceedings or enforcement of judgement on agreed terms o Setting aside a DJ o Discharge a party of liability o Payment, assessment or waiver of costs

Question 75

re: settlement when will a court officer refer a consent order they could typically approve to a judge?

Answer 75

* The court officer may refer the order to a judge if it is unclear/incorrect

Question 76

re: settlement in relation to consent orders, what happens if one party is a LIP?

Answer 76

* Where a party is a litigant in person, any party will need to apply to the court for an agreed order/judgement

Question 77

re: settlement what are the formalities of a consent order?

Answer 77

Formalities of the order: o The terms of the order must be agreed; o It must be expressed as being ‘By Consent’; and o It must be signed by the legal rep acting for each party or, where applicable, the litigant in person

Question 78

re: settlement what is the benefit of a consent order over a tomlin order?

Answer 78

* Consent orders are preferable over Tomlin Orders where the basis of settlement is a simple payment of money

Question 79

re: settlement what is the drawback of a consent order?

Answer 79

* Consent orders are limited to the powers of the court * Consent orders are open to public inspection

Question 80

re: settlement what happens if D does not pay in accordance with a consent order?

Answer 80

* If D does not pay in accordance with the order, interest will start to run and the order can be enforced

Question 81

re: settlement what does a tomlin order consist of?

Answer 81

* A Tomlin order consists of a consent order (public) and an annexed schedule / settlement agreement (private).

Question 82

re: settlement what is the effect of a tomlin order?

Answer 82

it stays the proceedings

Question 83

re: settlement what information must be included in the consent order part of a tomlin order?

Answer 83

o That it is by consent; o That proceedings are stayed; o That there is liberty to apply; o Payment of costs / detailed assessment of costs o Signed by legal reps / LIPs

Question 84

re: settlement what information is contained in the schedule?

Answer 84

the agreed terms

Question 85

re: settlement why can a tomlin order be preferred over a consent order?

Answer 85

because the schedule is confidential and the terms do not need to be approved by the court because this is a contract between parties as opposed to a court order

Question 86

re: settlement what can a party do if a tomlin order is not complied with?

Answer 86

* If a party fails to comply with the terms set out in the schedule, a party can apply to the court to enforce the agreed terms within the existing proceedings, however the terms in the schedule cannot be enforced as a judgment because it is a contract between the parties

Question 87

re: settlement what is a drawback of a tomlin order?

Answer 87

the terms in the schedule cannot be enforced as a judgment because it is a contract between the parties

Question 88

re: settlement when is a tomlin order appropriate?

Answer 88

* A Tomlin order would be appropriate where: o The terms of the agreement are complex o The terms go beyond the boundaries of the claim o The agreed terms are confidential or sensitive

Question 89

re: settlement when can a court officer approve a tomlin order?

Answer 89

if all parties are legally represented

Question 90

re: settlement when must the court approve a tomlin order?

Answer 90

if one party is a LIP