Richard Camidge, Senior Solicitor at BW Legal, looks at a recent High Court decision which discusses the Limitation Act 1980 in respect of Tomlin Orders.
Millions of cases are issued each year at Court because parties find it difficult resolve their disputes. When they do it is often detailed in an agreement known as a Tomlin Order.
A Tomlin Order is a sealed court order which details the terms on which the parties have settled. The live court proceedings are stayed on the basis that the parties adhere to the schedule of terms set out within the agreement.
Such terms can be in a schedule to the order or may be set out in a separate agreement which is referred to in the order. This can include the frequency of payments, values and other detail agreed by the parties such as confidentiality or payment reviews.
They are often used when Defendants wish to make payments towards the balance outstanding without having the burden of a County Court Judgment (CCJ) against them. This can be particularly beneficial to people whose employment require them not to have a Judgment against them.
The benefit for the Claimant is the knowledge that if the Defendant defaults upon a payment they are entitled to enter Judgment for the remaining balance by application to the Court.
In the recent case of Bostani v Pieper 2019 the High Court considered whether the six year limitation period for contract actions, under the Limitation Act 1980, applies where a party seeks to enforce obligations contained in the schedule of a Tomlin Order.
The Claimant sought to enforce the Tomlin Order due to defaults on payments by the Defendant. Although the application was issued more than six years after the first failure to pay, each subsequent failure gave rise to a new right to enter judgment. The last such failure was within six years of the issue of proceedings.
The Judge noted that there was no authority on the point and that such matters should not to be insulated from the Limitation Act.
An application to enforce a Tomlin Order is to enforce contractual rights and on the facts of this case the Judge held that the application was not out of time. The Claimant was entitled to apply for Judgment under the agreement if the Defendant failed to pay any of a number of instalments.
It is clear that whenever a Tomlin Order is drafted the wording should be carefully considered. It also remains as important to ensure you monitor compliance in regards to settlement agreements.
If you are considering your enforcement options in respect of an outstanding balance please feel free to contact our Commercial Litigation team on 0113 468 3000 where we will be happy to discuss all the options available to you.