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Articles | Fri 22nd May, 2020
It is not uncommon for Claimants in personal injury claims where there is either a pleaded allegation of fraud or the suspicion of dishonest conduct, to seek to discontinue the claim for fear of the adverse consequences that a finding of dishonesty would bring. It is likewise not uncommon for Defendants to negotiate a payment of a proportion of their costs to allow the Claimant to walk away from the litigation without having to worry about the Defendant asserting later that the claim was fundamentally dishonest.
When such terms are agreed they are often put into the form of a consent order. However, is this the correct approach? Should, as a matter of law and practice a Tomlin order be used instead of a consent order?
It is important to understand how the two types of order differ. In Vanden Recycling Ltd v Kras Recycling BV  EWCA Civ 354 Hamblin LJ at [§45] noted the various differences between consent and Tomlin orders:
“Thus a court will not make a consent order unless satisfied that it has power to do so, whilst it has no right to disapprove a Tomlin order and such an order can include matters that the court has no power to order. A breach of a consent order may be punishable as a contempt in appropriate circumstances, whilst the remedy for breach of the scheduled terms of a Tomlin order is a claim for breach of contract. In terms of enforcement, the remedies in CPR Part 83 are available for breach of a consent order but not for breach of a Tomlin order. Variation of a consent order is possible in the interests of justice, whilst rectification would be necessary to vary the contractual terms of a Tomlin order. Confidentiality for a consent order requires CPR 39.2 to be satisfied, whilst it can be contractually agreed for a Tomlin order. An appeal of a consent order is possible subject to the usual permission test, whilst there is no appeal from the agreed terms of a Tomlin order. These differences reflect the fact that a consent order is an order of the court whilst the scheduled terms to a Tomlin order are a contractual agreement.”
The first sentence above is important: “Thus a court will not make a consent order unless satisfied that it has power to do so”. On that basis what is the power for a Court to make an enforceable costs order against a Claimant in a consent order? The only means of achieving such an enforceable order is if one of the exceptions to qualified one-way costs shifting found at CPR 44.15 and 44.16 is made out. As such, it is strictly not open for a Court to confirm a consent order that contains an agreement for a Claimant to pay the Defendant a proportion of the costs on an enforceable basis. That can only be achieved by way of a Tomlin order on the basis that the parties contractually agree to such terms.
A Tomlin order may be seen as having disadvantages over a consent order, not least because a breach of the former requires a fresh action to be brought for breach of contract. However, better that than the Defendant finding that the consent order provides no valid basis for seeking recovery of its costs.