Cadogan Petroleum Plc & Ors v Tolley & Ors

Confidentiality in a settlement agreement does not prevent disclosure where the agreement is materially relevant to issues at trial and disclosure is necessary to secure a fair trial. Relevance alone is insufficient, but a reasonable apprehension that withholding the material may prejudice a fair trial can outweigh confidentiality. The court should consider protective measures, including restricted inspection and independent counsel. Disclosure should be limited to provisions connected with the subject matter of the proceedings. Clauses dealing with extraneous matters need not be disclosed, although continuing disclosure obligations may require reconsideration if their relevance later emerges.

The claimants had entered into a confidential Settlement Agreement with the former ninth to twelfth defendants. Other defendants applied for disclosure, contending that the agreement might affect the assessment of recoverable loss, mitigation, possible release or waiver, contribution claims, and the availability of witnesses and evidence at trial. The claimants did not oppose disclosure, but the former defendants relied on confidentiality. Following an earlier procedural judgment, partial disclosure had been ordered and independent counsel was appointed to address the remaining provisions without compromising confidentiality.

1. Disclosure ordered in part. The applicants were entitled to the terms of the settlement insofar as they related to the subject matter of the action. Disclosure was relevant to possible recoveries and double recovery, the valuation of the gas plants, mitigation, possible waiver or release, and the availability of witnesses and evidence.
2. Relevance was not sufficient by itself. The guiding consideration was justice at trial. Where withholding the material created a reasonable apprehension that the applicants might not receive a fair trial, that consideration outweighed confidentiality. Protective arrangements should ordinarily be considered, including a confidentiality regime and the use of independent counsel.
3. The settlement provisions concerning settlement of the proceedings and disposal of the gas plants were relevant and were to be disclosed, subject to the specified exclusions. Provisions concerning additional agreements and extraneous matters had no present relevance and were not ordered to be disclosed.
4. Provisions restricting disclosure or the giving of evidence could not fetter the court’s control of the proceedings under the CPR. They were nevertheless relevant because they might explain the absence of documents or witnesses and could bear on future applications for production or attendance.
5. Disclosure of provisions concerning public statements and confidentiality was not presently justified on the pleadings, but the claimants were to consider whether their continuing disclosure duty required later disclosure. The Settlement Agreement itself was not to be available for public inspection, subject to further directions on publication of the judgment.

The judgment arose from disclosure applications made in the same proceedings. An earlier judgment delivered on 16 December 2009 had ordered partial disclosure and established the procedure for independent counsel to address the remaining confidential material. The present court then determined which further provisions were to be disclosed.