Methods of settlement using documents

Once parties have reached a settlement, that is, an offer to settle has been accepted or the parties have agreed to settle on certain terms, there are a several ways in which the settlement can be concluded and documented.

Normally parties reach a settlement when one party commences proceedings but before proceedings have been concluded or got to trial. In some cases solicitors prefer to deal with settlement terms via an exchange of letters between each other.

However, where cases involve rather complex commercial points, the terms of the proposed settlement will be set out in a settlement agreement, sometimes also by way of a Deed of Consent. This deed may be necessary instead of an agreement, for when the settlement terms do not involve any consideration passing between the parties. This is a key point and ought to be considered when agreeing methods of settlement.

NOTE: Where the settlement is an out of court compromise, the parties may agree to represent the terms of settlement in a court order or judgment which will enable the parties to enforce the terms of settlement of the existing proceedings rather than having to start new proceedings just to enforce.

The court order or judgment may take a number of different forms, the most common ones are set out under CPR 40.6 and PD 40B.3.1 to 40B.3.5. These include consent judgments and orders which may be entered and sealed by a court. It also explains the circumstances in which this can be settled, and the contents for such judgments and orders.

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