Learning Outcomes
After reading this article, you will understand how a claimant can discontinue a civil claim, the procedural steps and cost consequences of discontinuance, and the main methods for settling a claim, including consent orders, Tomlin orders, and Part 36 offers. You will be able to identify when and how these procedures apply, and explain their practical and strategic significance for SQE1.
SQE1 Syllabus
For SQE1, you are required to understand the options available to a claimant after issuing proceedings, including how to discontinue a claim and how settlement can be achieved. In your revision, focus on:
- the procedural requirements for discontinuing a claim, including notice, timing, and permissions
- the cost consequences and strategic considerations of discontinuance
- the main forms of settlement: consent orders, Tomlin orders, and Part 36 offers
- the effect of settlement on proceedings and enforcement
- the interaction between discontinuance, settlement, and ongoing litigation
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- What must a claimant do to discontinue a claim after a defence has been filed?
- What is the usual costs consequence for a claimant who discontinues proceedings?
- What is the difference between a consent order and a Tomlin order?
- What are the main cost consequences if a claimant rejects a defendant’s Part 36 offer and fails to obtain a better result at trial?
Introduction
When a defendant is served with proceedings, the claim may not always proceed to trial. In many cases, the claimant may wish to discontinue the claim, or the parties may reach a settlement. Understanding the procedures and consequences of discontinuance and settlement is essential for effective litigation management and for SQE1.
Discontinuance of a Claim
A claimant may decide to bring proceedings to an end before trial for various reasons, such as a reassessment of the merits, new evidence, or a negotiated resolution. The Civil Procedure Rules (CPR) set out a formal process for discontinuance.
Key Term: discontinuance
The formal withdrawal of all or part of a claim by the claimant, bringing proceedings (or part of them) to an end.
Procedural Steps for Discontinuance
To discontinue a claim, the claimant must file and serve a notice of discontinuance on every other party to the proceedings. If there is more than one claimant, all must consent in writing or the court’s permission is required. In certain situations, such as where an interim injunction has been granted or a protected party is involved, the court’s permission is also needed.
Key Term: notice of discontinuance
A formal document filed by the claimant to notify the court and all parties that they are withdrawing all or part of their claim.
Timing and Restrictions
A claimant may discontinue at any time, but if a defence has been filed, discontinuance is not effective until the notice is served on all parties. If the claimant has received an interim payment, or if there is an interim injunction or undertaking, the defendant’s consent or the court’s permission is required.
Costs Consequences of Discontinuance
The general rule is that the claimant must pay the defendant’s costs incurred up to the date the notice of discontinuance is served. This applies even if the claimant later brings the same or a similar claim. The court may order otherwise in exceptional circumstances.
Key Term: standard basis
The usual method for assessing costs, where only costs that are reasonable and proportionate are allowed, and any doubt is resolved in favour of the paying party.
Worked Example 1.1
A claimant issues proceedings for breach of contract. After the defence is filed, the claimant discovers new evidence that weakens their case and decides to discontinue. What must the claimant do, and what are the likely costs consequences?
Answer: The claimant must file and serve a notice of discontinuance on all parties. The claimant will usually be ordered to pay the defendant’s costs up to the date of service of the notice, assessed on the standard basis.
Exam Warning
If a claimant discontinues and then brings the same or a substantially similar claim against the same defendant, the court may order that the claimant cannot proceed until the previous costs have been paid.
Settlement of a Claim
Settlement allows parties to resolve a dispute without a trial. The CPR encourage settlement at all stages, and several mechanisms exist to formalise agreements reached between parties.
Key Term: settlement
An agreement between parties to resolve a dispute, which may be recorded in a formal court order or contract.
Consent Orders
A consent order records the terms of a settlement agreed by the parties and is approved by the court. It is enforceable as a court order.
Key Term: consent order
A court order reflecting the terms of a settlement agreed by the parties, enforceable as a judgment.
Tomlin Orders
A Tomlin order is a special type of consent order that stays proceedings on terms set out in a confidential schedule. The schedule may contain terms that go beyond what the court could order.
Key Term: Tomlin order
A court order staying proceedings on terms agreed by the parties, with the detailed terms in a confidential schedule. The court retains jurisdiction to enforce the schedule.
Worked Example 1.2
Two parties settle a claim for damages, agreeing that the defendant will pay in instalments and provide additional services. They want the terms to remain confidential. What is the most suitable order?
Answer: A Tomlin order is appropriate, as it allows the detailed settlement terms to be kept in a confidential schedule and enables the claimant to apply to the court to enforce the terms if necessary.
Part 36 Offers
Part 36 of the CPR provides a formal mechanism for making offers to settle with specific cost consequences.
Key Term: Part 36 offer
A written offer to settle made under Part 36 of the CPR, which carries defined costs consequences if not accepted and the outcome at trial is less favourable.
A Part 36 offer must be in writing, state it is made under Part 36, and specify a period of not less than 21 days for acceptance. If a claimant rejects a defendant’s Part 36 offer and fails to obtain a better result at trial, the claimant may be ordered to pay the defendant’s costs from the end of the relevant period.
Worked Example 1.3
A defendant makes a Part 36 offer of £10,000. The claimant rejects the offer and proceeds to trial, where they are awarded £9,000. What are the likely costs consequences?
Answer: The claimant will usually be ordered to pay the defendant’s costs from the end of the relevant period to judgment, and interest on those costs, as the claimant failed to obtain a better result than the Part 36 offer.
Practical Considerations
Discontinuance and settlement are important tools for managing litigation efficiently. Claimants should always consider the strength of their case, the potential costs, and the benefits of settlement. Defendants should be aware of the costs protection offered by Part 36 offers and the strategic use of consent and Tomlin orders.
Revision Tip
Always advise clients to consider settlement and discontinuance options early, as costs can quickly escalate if proceedings continue unnecessarily.
Key Point Checklist
This article has covered the following key knowledge points:
- Discontinuance allows a claimant to withdraw all or part of a claim by filing and serving a notice of discontinuance.
- The claimant is usually liable for the defendant’s costs up to the date of discontinuance, assessed on the standard basis.
- Settlement can be formalised by a consent order or a Tomlin order, with the latter allowing confidential and flexible terms.
- Part 36 offers are formal settlement offers with specific cost consequences if not accepted and the outcome at trial is less favourable.
- Strategic use of discontinuance and settlement can save costs and court time, and should be considered throughout litigation.
Key Terms and Concepts
- discontinuance
- notice of discontinuance
- standard basis
- settlement
- consent order
- Tomlin order
- Part 36 offer
