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Uncompromising decision

A Court of Appeal judgment could pose
problems for practitioners negotiating
litigation settlements. Andrew Butler explains

21 March 2003

In McCollum v Country Residences Ltd [1965] 1 WLR 657, the Court of Appeal held that the court had no jurisdiction to make an order reflecting the terms of a compromise between the parties, where there was no agreement as to the form of order required. This decision represents a serious pitfall for practitioners engaged in negotiating a settlement of litigation. Most solicitors will tend to concentrate on agreeing what might be called the ‘substantive’ terms of the compromise, and only after this first stage has been achieved will they give consideration to the mode of disposal – Tomlin order, consent order, etc. McCollum establishes that at the conclusion of the first stage, the old cause of action falls away, and the new agreement must be enforced by a new action. It seems to follow that the only order a court could make when the proceedings come on for any trial in such circumstances would be to dismiss them, although no doubt its discretion to award costs would be exercised...

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