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What is a standstill agreement?

A standstill agreement is an agreement which has the effect of stopping or suspending time for the purposes of limitation. It may be used to allow negotiations to take place to settle a dispute, and thereby avoiding court action, or perhaps a claimant is not ready to issue a claim form or has issued a claim form but not yet served the particulars of claim.

The effect of a standstill agreement is that the action “stands still”, which means that neither party can complain to the court about the inactivity of the other party.