INTRODUCTION:
Settlement out of court is the amicable resolution of a matter between the Claimant and the Defendant without the direct involvement of the presiding judge. In other words, it is ‘the settlement and termination of a pending suit, arrived at without the court’s participation.’
In civil proceedings, for example, recovery of premises or debt recovery, parties are at liberty at any time while the matter is pending, to compromise, settle or agree to settle out of court, all or any of the issues between on any terms or conditions without the prior approval or reference to the court. It is worth noting that matters of public interest or public policy cannot be settled out of court.
The judge sanctions this resolution/settlement thereby making it binding on the parties. Steps toward settlement could be initiated and commenced by either of the parties who deems it fit to settle or the presiding judge on the other hand in exercise of his/her judicial powers.
It is worth noting that where a judge advises parties to explore out of court settlement, the judge is doing so upon an objective evaluation/consideration of the facts of the case before the judge and in exercise of his judicial powers as captured in various Rules and Laws of Courts. For example;
A. Order 19 Of the High Court of the Federal Capital Territory (Civil Procedure) Rules, 2018; mandates judges to encourage settlement and also deals with report of settlement and consent judgment;
B. Specifically, Order 18, Rule 1 of the Federal High Court (Civil Procedure) Rules, 2019 provides that ‘where a matter comes before the Court for the first time, the Judge shall in circumstances where it is appropriate, grant to the parties, time, not more than thirty days within which parties may explore possibilities for settlement of the dispute.’
C. Section 26 of the District Courts Law, CAP 33 (Applicable in the F.C.T.) mandates District Judges to ensure the amicable settlement of matters out of court between parties
FACTORS THAT INFLUENCE OUT OF COURT SETTLEMENT:
The following factors encourage or induce amicable settlement among the parties
I. The matter could be quickly resolved out of court. It saves time, money, energy and other resources unlike the usual court litigation which takes more time and very demanding of energy and resources;
II. Certain circumstances that arise make the continuation of the matter in court not desirable or feasible hence their lack of interest in further prosecuting the matter.
PRACTICE OF OUT OF COURT SETTLEMENT:
A. Out of settlement is usually proposed by either party in a matter suo motu (that is; on its own), or upon advise of Counsel or upon direction by the court having reviewed the facts and circumstances of a case before pending before the court;
B. Upon proposing settlement out of court, the court puts the matter and hold while parties explore settlement among them;
C. The Court adjourns the matter, giving parties enough time to resolve/settle the matter and report the progress of settlement to the court on the next adjourned date;
D. Subsequently, parties meet through their Counsel, present their terms of settlement before each other, evaluate same, make counter or propose alternative terms;
E. Counsel communicate the outcome of the meetings to their clients along with the terms proposed for their opinion, acceptance or otherwise;
F. Thereafter, when parties accept and agree on the terms of settlement, Counsel reports same to the court;
G. Upon reporting the progress and success of settlement to the court, Counsel agree on a date within which to put the agreed terms in writing, both parties sign the agreement, their Counsel countersign it, seal it, before filing in court and serving same on each party;
H. On the next adjourned date, Counsel informs the court that the terms of settlement had been filed and served and they are ready to adopt the said terms;
I. The Court confirms same and Counsel adopt the said terms and urge the court to enter same as the CONSENT JUDGMENT of the Court.
J. Thereafter, the court pronounces the judgment based on the agreement of parties contained in the terms of settlement. Such judgment is known as CONSENT JUDGMENT.
CONSENT JUDGMENT;
A consent judgment is a judgment, the provision and terms of which are settled and agreed to by the parties to the action (definition in DANA IMPEX LTD. v. AWUKAM (2006) 3 NWLR (Pt. 968) 544 at 556).
It is a judgment in accordance with the dictates of the parties and not by the court on the merit of the case, after adjudication. The consent must be consequent to volition, that is, there must be a consensus ad idem free of any form of compulsion. Thus, consent is the fulcrum of this kind of judgment without which there will be no consent judgment. This is succinctly captured in Order 23 Rules 8 and 9 of the Federal High Court (Civil Procedure) Rules, 2019 which provide as follows:
Rule 8; In any cause or matter where the defendant has appeared by a legal practitioner, an order for entering Judgment shall not be made by consent unless the consent of the defendant is given in writing and counter-signed by the defendant’s legal practitioner.
Rule 9; Where the defendant has no legal practitioner, the order referred to in rule 8 of this order shall not be made unless the defendant gives consent in person in open court.
It is worth noting that similar provisions exist in various High Court Rules regarding the indispensability of consent for a judgment to be entered by consent.
ELEMENTS AND EFFECTS OF A CONSENT JUDGMENT:
A consent judgment is a final judgment as it determines the final rights of the parties and binds them.
It extinguishes the original cause of action and divests the court of jurisdiction to hear the same subject matter if re-litigated upon by the parties.
The focus of the court must be on the settlement reached by the parties in resolving the dispute. Thus, previous rights not covered in the settlement or compromised during the settlement are deemed abandoned (ABBEY v. ALEX (1999) 12 SCNJ 234 at 246-247).
A CONSENT JUDGMENT:
A. is binding only on the parties to it and does not bind a stranger (ETERNAL SACRED ORDER OF THE CHERUBIM AND SERAPHIM & ANOR v. TALABI & ORS (2001) 6 SCNJ 136 at 144);
B. may be corrected or set aside upon the application of a stranger on grounds of fraud or misrepresentation (VULCAN GASES v. GESELLSCHAFT (2001) 5 SCNJ 55);
C. may be set aside on appeal for mutual mistake but not for unilateral mistake, unless the unilateral mistake was induced by fraud or misrepresentation (UTC (NIG.) LTD v. PAMOTEI (1989) 2 NWLR (Pt. 103) 254 at 299 & AKINWUNMI v. IDEWU (1969) 1 ALL NLR 319.);
D. may also be set aside on any ground for which the agreement upon which it is based may be set aside (VULCAN GASES LTD. v. GESELLSCHAFT (Supra);
E. acts as estoppel regarding the matters decided therein (OSENI v. DAWODU (1994) 4 SCNJ (Pt. 2) 197 at 221;
F. is appealable upon obtaining the leave of the High Court or Court of Appeal (Section 241(2)(c) of the 1999 Constitution and VULCAN GASES LTD. v. GESELLSCHAFT (Supra);
Note that, if a judgment is by consent, it is ideal that it should be so stated on the face of the judgment (JOZEBSON INDUSTRIES CO. LTD. v. LAUWERS IMPORT-EXPORT (1988) 7 SCNJ 93).
MODE OF SETTING ASIDE A CONSENT JUDGMENT:
A consent judgment being a final judgment cannot be set aside by the same court on the agreement of the parties (BABJIDE v. AISA (1966) 1 ALL NLR 254).
Where a consent judgment is to be set aside on grounds of fraud or mutual mistake, the procedure to file a substantive action, that is by filing an originating process in the same court of original jurisdiction and not by an interlocutory motion on notice (BABJIDE v. AISA (Supra); DANA IMPEX LTD. v. AWUKAM (Supra).
A consent judgment may also be available in respect of an appeal, if the parties thereto are in agreement to such judgment (EDUN v. ODAN COMMUNITY (1980) 8-11 SC 103).
CONCLUSION:
It is worth noting that in out of court settlement ultimately leading to a consent judgment, the element of voluntariness must be present all through the stage. Voluntariness is key such that once there is compulsion, the subsequent order cannot be a consent order (AFOLABI v. ADEKUNLE (1983) 8 SC 98 at 112 & 113).
REFERENCES:
B.A. Garner, Black’s Law Dictionary (8th Edition, Boston: West Publishing Company, 2004) p. 4280.
D.I. Efevwerhan, Principles of Civil Procedure in Nigeria (2nd Edition, Enugu: Snaap Press Ltd., 2013) pp. 369, 371.
District Courts Law, CAP. 33 (Applicable in the F.C.T.).
Federal High Court (Civil Procedure) Rules, 2009.
High Court of the Federal Capital Territory (Civil Procedure) Rules, 2018.