Strictly speaking this is one of those stories for lawyers only (and litigation ones at that) but one I think most people will have a view on…
What do you think should happen if, when agreeing to bring some nasty litigation to an end (in what lawyers refer to as a “settlement agreement”), you make some written promises to the court (“undertakings”) that you won’t do certain things your opponent objected to, but then you do them anyway? Obviously, you’ll be in big trouble with the court because that’s what’s known as “civil contempt of court”. But can the other party sue for damages for breach of contract if the wording of those undertakings said the promises were being made to the court but didn’t mention the other party?
The Court of Appeal has confirmed that you will also be in trouble with the other side. Even where there’s no wording in the undertakings made to the court, you have to put those undertakings in the context of the wider settlement agreement in that litigation. So in effect you can read the settlement agreement as if it said “the undertakings you’ve made to the court are also undertakings you’re making to your opponent”. In the view of the Court of Appeal, it would lack common sense to come to any other conclusion.
Sound about right to you? I suppose the good news for litigators is that this offers a comfort blanket in case you forget to put it into the settlement agreement but really the lesson to learn is to double check that whatever undertakings are made to the court are also worded in your settlement agreement as being made to your client too, that way you won't have had to go all the way to the Court of Appeal to sort it out.
It’s worth noting (but only if you’re a lawyer – sensible, normal people really should switch off now…) that this judgment (Independiente Ltd v Music Trading Online (HK) Ltd (2007)) came through on my Lawtel alert not only “unreported” in any of the offical law reports but also “extempore” which means the judgment was given orally, not backed up with a written judgement. Might be a timely point to remind ourselves what the courts think about unreported judgments: the House of Lords hate it, going so far as to ban citing them without prior permission (Roberts Petroleum Ltd v Bernard Kenny Ltd [1983] 1 All ER 564 HL) and the Court of Appeal also discourages it (in paragraph 10.1.5 of Practice Direction (Court of Appeal: procedure) [1999] 2 All ER 490 it says “permission to cite unreported cases will not usually be granted unless advocates are able to assure the court that the transcript in question contains a relevant statement of legal principle not found in reported authority…”). So an extempore judgment must, presumably, carry even less weight.
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