During litigation, the parties will be encouraged by the courts (and hopefully their lawyers!) to attempt to reach an agreement to settle the matter to avoid the time and costs of going to a final hearing.
Where an agreement is reached, a consent order will be drafted to record the agreement. This must then be approved by the judge. Once the consent order has been approved by the judge, the order is binding on the parties. If the agreement, prior to a consent order being approved by the judge, amounted to a legally binding contract – the agreement will be binding even before being approved by the court.
There are generally two forms of consent order in civil litigation: the typical Consent Order and Tomlin Orders.
A straightforward agreement covering the arrangements to be implemented to bring the dispute to an end will take the form of a normal consent order. For instance, in the case of a debt action the agreement/consent order will set out the amount to be paid, the date by which the money must be paid, and that the payment will be in full and final settlement of the claim.
In other cases, the agreement will be embodied in a ‘Tomlin’ order. Under a Tomlin Order, the court action is stayed, on terms agreed between the parties and included in a schedule to the order. If one party does not perform its part of the agreement, the action can continue and a new claim does not have to be started.
These are used where complex terms of settlement are agreed, or terms are agreed which extend beyond the boundaries of the action. Tomlin Orders are also used where the parties want to maintain confidentiality as to the terms agreed. The terms of a Tomlin Order typically include a clause such as:
“And, the claimant and the defendant having agreed to the terms set out in the annexed schedule, it is ordered that all further proceedings in this action be stayed, except for the purpose of carrying such terms into effect.”
Entering consent orders
Administrative consent orders
Some consent orders can be entered into by a purely administrative process without the need for obtaining the approval of the court, under the Civil Procedure Rules (particularly rule 40.6) (unless one of the parties is representing themselves as a ‘litigant in person’). Once the draft has been filed with the court it will be treated as legally binding.
The categories of orders which are covered by those provisions include:
- judgment orders for the payment of money;
- judgment orders for the delivery up of goods (other than specific delivery);
- orders setting aside default judgments;
- orders to dismiss part or the whole of the proceedings;
- orders for stays on agreed terms which dispose of proceedings, including Tomlin orders;
- orders for discharge of liability of any party, and;
- orders for the payment, waiver or assessment of cost.
The order must be drawn up incorporating all agreed terms and expressed to be ‘By Consent’. It must also be signed by the solicitor or counsel for each party. In cases where terms are annexed in a schedule, provisions regarding the payment of money out of court should be contained in the body of the order rather than in the schedule.
Consent orders approved by the court
The court must approve consent orders that include provisions going beyond the type of orders listed above, or if one of the parties is a litigant in person. Such an order is drawn up in the same way as administrative consent orders. The court will consider the terms and can reject it, so the parties must take care (with their solicitors) to ensure the terms are such that court will approve the draft order.
Variation or setting aside of the orders
In the case of a Tomlin Order, the court cannot vary the terms of the agreement set out in the schedule. In the case of standard consent order, the court can vary, or even revoke, an order where there has been an unforeseen change of circumstances.
If one of the parties fails to comply with any of the conditions agreed in the consent order, the other party can seek to enforce the order in the same manner as any other court order. This may mean applying to court for an attachment of earnings or charging order against a property of the party in breach, or an injunction.