Court of Appeal dismisses appeal against Tomlin order on ground of judicial pressure to settle

The Court of Appeal has considered the grounds on which a Tomlin order, a form of consent order commonly used to record agreed terms of settlement, could be set aside: Watson v Sadiq [2013] EWCA Civ 822.

The claimant contended that he had been driven into agreeing the consent order by improper interventions and pressures to settle the case exerted on him by the judge trying the case. The Court of Appeal concluded that, although the judge's interventions may have "surpassed the desirable levels of judicial encouragement of sensible compromise", they did not infringe common law principles of procedural fairness or the right to a fair trial under article 6 of the European Convention on Human Rights. In any event, the claimant had affirmed the agreement by seeking to enforce its terms.

McCombe LJ, who gave the lead judgment, commented: "I would not wish to say that a Tomlin Order could never be set aside for breach of the principles invoked by [the Claimant] in this case, but I am quite satisfied that there was no relevant breach of those principles here, and certainly none sufficient to undermine [the Claimant's] consent to the agreement."

The decision also reinforces the confidentiality of the terms agreed by way of a Tomlin order. The court commented that the schedule to a Tomlin order is not an order of the court and that the Civil Procedure Rules have no application to it. This would suggest that the schedule should not be available to non-parties even where it is on the court file, a point which has been the subject of some uncertainty (see "Keeping settlement terms confidential"). Given that the point is not directly addressed in the court's decision, however, the safe course must still be to ensure, if possible, that the document setting out the agreed terms is not kept on the court file.

Background

A Tomlin order is a consent order staying proceedings on agreed terms, which are commonly set out in a schedule to the order but may also be set out in a separate agreement referred to in the order, and granting the parties permission to apply to the court for the purpose of enforcing those terms.  Tomlin orders are intended to allow the settlement terms to remain confidential, while enabling the terms to be enforced without having to commence a new action for breach of the agreement.

The order in this case had been made at the end of four days which had been set aside for the trial of the action. The claimant contended that the order should be set aside on the basis of duress / absence of true consent and on the basis that he did not receive a fair trial, contrary to common law and/or article 6.

He complained that the judge had repeatedly adjourned to allow the parties to engage in settlement discussions, so that a conclusion of the trial within the alloted period would have been impossible, and had entered into the detail of those discussions in a manner that was likely to result in him being unable to continue to hear the case if settlement was not achieved. Accordingly, the claimant said he had been backed into a position where the only true avenue was settlement.

Decision

The Court of Appeal dismissed the appeal. The terms of the schedule to an order in Tomlin form amounted to a contract between the parties. The schedule to a Tomlin order was not an order of the court and could only be set aside on the grounds on which any ordinary contract could be set aside.

Insofar as the claimant's case was based on allegations of duress or undue influence, these would need to be tried out either in a new action or by reference to the court below to try any relevant issue. It was impossible for the Court of Appeal, on the papers and without examination of witnesses, to interfere with the contract on these grounds.

The only question was therefore whether the proceedings infringed common law principles of procedural fairness and/or article 6 rights.

The court commented that it is well within a judge's function to indicate the view that an action ought sensibly to be compromised, to enquire as to whether avenues for settlement have been fully explored, and to afford the parties time out of court to explore possibilities of compromise . The judge should try to ensure that this does not interfere with his or her ability to deal with the case and decide it expeditiously if compromise is not possible. However, if the parties are aware that available trial time is slipping away during their negotiations, making a conclusion of a contested trial impossible if settlement negotiations break down, then that is a risk that they run.

The court concluded that what happened in this case did not infringe either common law principles or article 6, saying that the judge's handling of a badly prepared case and intractable settlement negotiations were clearly carried out in good faith and with the best intentions, even if his allowing time to slip by as he did may have amounted to poor trial management. Although some of his interventions may have surpassed desirable levels of judicial encouragement of sensible compromise, that was not the same as offending principles of fairness or article 6.

In any event, the claimant had affirmed the agreement by insisting on its performance by the defendant in subsequent correspondence. He therefore waived any deficiency in the proceedings about which he sought to complain on appeal.