Tomlin Orders in Personal Injury & Clinical Negligence Litigation: Benefits & Validity, Study notes of Engineering

Download Tomlin Orders in Personal Injury & Clinical Negligence Litigation: Benefits & Validity and more Study notes Engineering in PDF only on Docsity! Tomlin Orders: When and How Should They be Used in Personal Injury and Clinical Negligence Litigation? Justin Valentine Published on 24th February 2021 There is, in general, no need to use a Tomlin order where all that is required is an order that one party shall pay money to another. However, one party may request that the terms of settlement be recorded in a Tomlin order rather than an ordinary consent order. This article reviews the reasons that may be suggested for using a Tomlin order, examines the validity of such reasons, sets out the advantages and disadvantages of such a procedural step and discusses the safeguards which should be employed if a Tomlin order is used. After trial in which the claimant has been successful, there will be judgment for the claimant and an order for costs in the claimant’s favour. An ordinary consent order follows this format, is entitled “Consent Order” and, in its simplest form could be as follows: 1. Judgment for the Claimant in the sum of £x [or “The Defendant shall pay to the Claimant £x”] in full and final settlement of the claim, such sum to be paid to the Claimant’s solicitors by [14 days]. 2. The Defendant do pay the Claimant’s costs of the action to be subject to detailed assessment if not agreed. A Tomlin order is a form of consent order which avoids the entering of judgment. It takes its name from a Practice Note issued by Tomlin J in 1927 though it was in use well before that date. A Tomlin order is in two parts. The first part is the court order proper which stays the proceedings on agreed terms contained in the second part, the schedule. The schedule records the terms of settlement agreed between the parties and amounts to a binding contract. The contract set out in the second part cannot be directly enforced as an order of the court but requires an application to carry the terms into effect in the case of breach, ie failure to pay the agreed damages. In its simplest form in the personal 1 injury/clinical negligence context it is headed “Tomlin Order” and is in the following format: Court Order 1. The claimant and the defendant having agreed to the terms set out in the schedule hereto, it is ordered that all further proceedings in this claim be stayed except for the purpose of carrying such terms into effect. Permission to apply as to carrying such terms into effect. 2. The Defendant do pay the Claimant’s costs of the action to be subject to detailed assessment if not agreed. Schedule 1. The Defendant shall pay to the Claimant’s solicitors the sum of £x in full and final settlement of his claim in this action by [14 days]. The “Permission to apply” provision at paragraph 1 of the court order is the mechanism by which breach, ie failure to pay, can be enforced. The order for costs, paragraph 2, must be in the court order proper otherwise the court will not be able to exercise the judicial function of the detailed assessment process. Absence of Judgment As is apparent, there is no judgment in the sum of £x in a Tomlin order. This has a number of important implications. Interest In the absence of a judgment the settlement sum will not attract statutory interest (currently 8% per annum). Although late payment of damages is rare, it can happen. Accordingly, this is not a theoretical but an actual risk which may prejudice a claimant. This can be remedied by the inclusion of an interest provision in the schedule. 2 v. the judgment creditor applies for a certificate of judgment under rule 8 of CCR Order 22 in Schedule 2 to the 1998 Rules; Pursuant to the above provision, if payment is made on time, then the judgment will not be registered. Moreover, regulation 11 provides that where it comes to the attention of the appropriate officer that the debt to which the entry relates has been satisfied one month or less from the date of the judgment, that officer shall send a request to the registrar to cancel the entry and where it has been satisfied after more than one month, the officer shall send a request to endorse the entry as to the satisfaction of the debt. It is therefore apparent that if payment is made on time of the judgment sum, then the debt will not be registered and there can be no issue of credit worthiness or of the standing of the company. Qualified One-Way Costs Shifting (“QOCS”) There is one situation where the use of a Tomlin order for a claimant is highly advisable, namely where there are multiple defendants and settlement is reached with one, some but not all of those defendants. Cartwright v Venduct Engineering Limited [2018] EWCA Civ 165 is authority for the proposition that a winning defendant in a QOCS case may recover its costs from damages ordered against a losing defendant. In that case the claimant sought damages for noise-induced hearing loss against 6 defendants. The claims against D4, D5 and D6 were compromised by way of a Tomlin order with a schedule attached which provided that the claimant accept £20,000 in full and final settlement of his claim. The claims against the other defendants were discontinued. D3 sought its costs arguing that they could be enforced against the claimant out of the £20,000. Judge Hale held that as they had been paid pursuant to a Tomlin order there had been no “order for damages and interest made in favour of the claimant” within the meaning of CPR 44.14(1). D3 appealed and the matter was leap-frogged to the Court of Appeal. 5 The Court of Appeal dismissed the appeal. It held that there was nothing in CPR 44.14(1) to suggest that the fund out of which a costs order against a claimant would be met was limited to damages paid by the defendant who sought to enforce the costs order. However, the judge was right that a Tomlin order was a record of a settlement reached between the parties and since the payment of damages was within the schedule, it was not an order to which CPR 44.14(1) applied. This is clearly a very compelling reason for a claimant, in the case of multiple defendants, to compromise a claim by way of a Tomlin order. Similarly, defendants would be wise to reach agreement between themselves not to compromise claims by way of Tomlin orders. Confidentiality One of the reasons offered by defendants for the use of a Tomlin order is confidentiality. This may be relevant in commercial litigation but is rarely an issue in personal injury and clinical negligence litigation. Confidentiality in relation to a settlement is a serious matter which requires the nature of the confidentiality sought to be set out in the clearest terms, for example, who can the agreement be disclosed to, is the confidentiality agreement a condition of the agreement and what are the repercussions if there is a breach. It would, it is suggested, be very unwise to agree to confidentiality in the personal injury context if breach may result in the repudiation of the agreement. Moreover, it is suggested it would be inappropriate for any public authority (eg the NHS) to request confidentiality of the terms of compromise. Variation of Periodical Payments According to the White Book at note 40.6.2, where a claimant is “pressing for a provisional damages award and an order permitting variation of the periodical payments, should the contingency arise, a Tomlin order may prove to be a useful 6 device for settling quantum on a conditional basis”. The same would hold for a defendant seeking variation of periodical payments. The latter may arise, for example, where a defendant has a certain scepticism that a claimant will move to, or stay within, his own private accommodation as opposed to statutory-funded residential care. The terms of CPR 41.8 and the Practice Direction will not permit a variable periodical payments order where the dates on which and the amount of increase or decrease is uncertain. Such order was sought in AA v CC and MIB [2013] EWHC 3679 (QB) where Swift J held that the court did not have power under CPR 41 to make an order for periodical payments which would start and end on dates which were uncertain. Further, the court found that the Damages (Variation of Periodical Payments) Order 2005 did not assist the parties in the circumstances. Nevertheless, a solution presented itself in the form of making this part of the agreement subject to a Tomlin order. Swift J was then content to approve the Tomlin order. However, as is made clear in a useful discussion of Tomlin orders by Warby J in Zenith Logistics Services (UK) Ltd and others v Keates [2020] 1 WLR 2982 the schedule to a Tomlin order merely records the terms of settlement agreed between the parties. Therefore, the court cannot “approve” those terms for the purposes of CPR 21.10, ie where the claimant is a child or protected party. Approval is an exercise of judicial function representing an external check on the propriety of the settlement; Dunhill v Burgin (Nos 1 & 2) [2014] UKSC 18; [2014] 1 WLR 933. Accordingly, a Tomlin order is not an appropriate mechanism where a party lacks capacity (as he did in AA v CC and MIB). In any event, attempts to sidestep the clear provisions of periodical payment legislation, both procedural and substantive, are unwise. Although it may allow 7