Settling a claim…by mistake?!

In the recent case of Bieber and others v Teathers Limited (in liquidation) [2014] EWHC 4205, the High Court considered whether an exchange of emails was sufficient to constitute a settlement agreement.

The facts of the matter are that, following email negotiations between the parties’ solicitors regarding the settlement sum to be paid to the Claimants, the Claimants accepted a settlement figure. Within the acceptance email, the Claimants’ solicitors indicated that they would be circulating a draft consent order, which would bring the proceedings to a close. The Defendant replied “Noted, with thanks” yet, upon receipt of the draft consent order, went on to draft and send to the Claimants a long and detailed settlement agreement which, amongst other things, provided for an indemnity from the Claimants to the Defendant in the event of third party claims. The Claimants refused to sign the agreement.

The Court was satisfied on the facts that (a) the parties had intended to reach a final and binding settlement on the exchange of emails, without the need to agree further terms; (b) whilst the underlying litigation was complex, there was no complexity about the settlement negotiations that could lead to a conclusion that settlement could only be reached when the parties had signed a further formal agreement; and most tellingly (c) contrary to a previous offer made by the Defendant, the offer that the Claimants accepted was not expressed to be “subject to contract” and could not be construed as impliedly including any such qualification.

This case is yet another reminder that, if a settlement offer is intended to be subject to contract, the parties should expressly say so as the Courts will not otherwise step in to imply it!

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