The reason I ask this question is that, when I bought my house, the property lawyer acting for the seller would not let me move in until I had paid for the place, whereas it’s standard practice for litigators to settle disputes on the understanding that the defendant is allowed to make payment 14 days after the settlement is reached. Part 36 of the CPR almost encourages parties to agree a deal whereby the defendant is allowed to pay the settlement sum “14 days following the date of acceptance” (see CPR 36.6(2)).
The problem with settling a dispute prior to receiving payment is this: The defendant might not pay up. We receive a lot of Ask queries highlighting this topic. It seems to be quite a significant issue, especially where a defendant can only afford to pay by instalments over time.
In an ideal world, perhaps the litigating parties’ lawyers would instead conduct some sort of telephone exchange and completion settlement procedure, to try to ensure the claimant is covered in the event the defendant fails to hand over the cash. Maybe a claimant’s lawyer shouldn’t sign on the dotted line of the settlement agreement until the defendant’s lawyer provides a watertight solicitor’s undertaking confirming funds will be transferred to the claimant the same day?
A property lawyer wouldn’t dream of handing over the keys to his client’s home until the purchase monies are in the bank. So next time you receive a Part 36 offer in which the defendant obtains the benefit of a stay of the claim upon acceptance (see CPR 36.14(1)), but which doesn’t require the defendant to make payment for a couple of weeks (see CPR 36.14(6)), you might ask yourself this question: Do I trust this guy (who has been battling with me for months and still hasn’t paid a cent) to cough up the dough later this month when I politely ask him to do so?
I would be very interested to know your thoughts on the best way to conclude a settlement. Please feel free to set out your thoughts below.