It is relatively rare for a case to go all the way to trial. Most cases settle before the court proceedings reach that stage and many settle without the need for court proceedings to be issued at all.
Most cases are settled on a “full and final” basis and wording to this effect is used to prevent either party from issuing a new claim in respect of the same dispute. In the recent Court of Appeal case of Kazeminy v Siddiqi (2012), the wording of a settlement agreement came under close scrutiny.
In 2010, proceedings in the High Court between Mr Kazeminy and Mr Siddiqi were settled on a full and final basis. Very wide-reaching language was used in the settlement agreement to try to prevent any other claims being brought in respect of the transaction that formed the subject matter of the proceedings.
The transaction in question involved the parties to the proceedings and also a third party, Mr Grano. He was not a party to the proceedings but he did have potential claims against Mr Siddiqi in respect of the transaction and after the first proceedings had been settled, he assigned those claims to Mr Kazeminy, who then issued another claim against Mr Siddiqi. Mr Kazeminy sought to strike out the claim on the ground that it had been compromised by the settlement agreement.
The Court of Appeal found that both parties had been fully aware that Mr Grano had potential claims against Mr Siddiqi but had not joined Mr Grano into the proceedings or the settlement. The wording of the settlement was not wide enough to prevent Mr Grano from bringing his claims against Mr Siddiqi or from assigning them. The court commented that if the parties intended to prevent such claims, they could have expressly done so in the settlement agreement. The second proceedings could therefore continue.
If you would like advice on this or a related topic, please contact Catherine Mathews. Catherine specialises in commercial and contract litigation. Catherine is a member of the Dispute Resolution Team in Exeter. The Team is described as “exceptional” in the Legal 500 2010 independent directory and “extremely effective” in the Legal 500 2011 independent directory.