Settlement Agreement in UK Law

That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before.

It may be said that there are other causes of action in the English proceedings which are not exactly mirror images of the allegations in the Greek proceedings but to the extent that they are not, they are essentially the same in the sense that the key assertion in Greece is that there are non-contractual claims and the key assertion in England is that those non-contractual claims have been compromised by the settlement agreements.

To ascertain the intention of the parties the court reads the terms of the contract as a whole, giving the words used their natural and ordinary meaning in the context of the agreement, the parties' relationship and all the relevant facts surrounding the transaction so far as known to the parties. To ascertain the parties' intentions the court does not of course inquire into the parties' subjective states of mind but makes an objective judgment based on the materials already identified.

The wording of a general release and the context in which it was given commonly make plain that the parties intended that the release should not be confined to known claims. The mere fact that the parties were unaware of the particular claim is not a reason for excluding it from the scope of the release. The risk that further claims might later emerge was a risk the person giving the release took upon himself.

That impasse led on 22 August 2007 to the issue by the claimants of the present proceedings for the delivery up by the defendants of the required documents and damages. They followed that up with an interim application to Kitchin J on 3 September 2007 for delivery up. By then the BoI had offered an advance of £1.75m to the claimants, who had executed in escrow a legal charge in its favour which was being held by the claimants' solicitors.

Whilst each case must be considered on its facts, where the relevant contract is one in settlement of litigation, with the benefit of expert legal advice on both sides, particularly where article 10 issues are in play in that litigation, it seems to me that it would require a strong case for the court to conclude that such a bargain was disproportionate and to refuse to enforce it other than on ordinary contractual or equitable principles.

The most important, if obvious, point is that an insurer always has the right to challenge whether the insured's right to indemnity under the policy has been established. Therefore it has the right to challenge whether the insured was, in fact and law, liable to the third party. It has the right to challenge the quantum of the liability.