Leslie v News Group Newspapers Ltd

A written compromise embodied in a Tomlin order is interpreted objectively, according to what its words would mean to a reasonable reader with the parties’ background knowledge. Where an order provides for the full and final settlement of claims in identified proceedings, the pleaded scope of those proceedings and the accompanying settlement documents determine what has been compromised.

Claims may be compromised even though the parties lack full knowledge of the underlying wrongdoing. This depends on the terms of the agreement. A claimant who knowingly settles before disclosure may therefore compromise further instances of the same wrongdoing and associated damage, although their details remain unknown.

The appellant had brought proceedings against News Group Newspapers Ltd and another for misuse of private information arising from phone hacking. Those proceedings used generic particulars of claim supplemented by claimant-specific details. They were settled by a Tomlin order providing for full and final settlement of the claims, damages, an apology and a statement in open court.

The appellant subsequently commenced a second action alleging further phone hacking involving an additional telephone, other arrangements and participants, and substantial special damage. Mann J held in [2015] EWHC 125 (Ch) that the further allegations fell within the earlier compromise and struck out the relevant paragraphs.

The central issue on appeal was whether, objectively interpreted against the admissible background, the compromise covered all phone hacking alleged against the respondent or only the particular activities then known and particularised.

1. Appeal dismissed. The schedule to the Tomlin order was contractual and fell to be interpreted by applying the usual objective principles of contractual interpretation. The question was what its words would mean to a reasonable reader possessing the parties’ background knowledge. As the order provided for the full and final settlement of the claims in the identified proceedings, the reasonable reader would examine those claims without interpreting them restrictively.

2. The claimant-specific details were to be added to, and read with, the generic particulars. Together they alleged phone hacking extending beyond one telephone, Mr Mulcaire’s activities and the News of the World. They also alleged wrongdoing by journalists and expressly sought disclosure and relief concerning the full extent of wrongdoing which remained unknown. The apology and open-court statement similarly referred to invasions of privacy by employed journalists and acknowledged that the appellant would never know the full extent of the respondent’s activities, yet was content to let the matter rest.

3. There is no legal obstacle to compromising claims of which the parties are unaware. Whether that has occurred depends on the compromise’s terms. This was not analogous to BCCI v Ali [2001] UKHL 8, where the later cause of action was unknown to the law when the earlier claim was compromised. Here the possibility of further phone hacking was known, and the appellant chose to settle before disclosure could reveal its extent.

4. Statements made during negotiations generally provide little assistance in construing a written contract, if admissible at all. The offer letter’s reference to currently available information concerned a proposed lower Part 36 offer, not the enhanced offer which was accepted. A party’s subjective reliance on a negotiating statement was also irrelevant to objective interpretation in the absence of a misrepresentation claim.

5. The newly pleaded special damage arose within the period covered by the first action and could have been pleaded there. Some damage necessarily related to wrongdoing already compromised, and the appellant accepted that it could not be disentangled. The law is not generally concerned with the adequacy of consideration. Heaton v AXA Equity and Law Life Assurance Society plc [2002] UKHL 15 concerned proceedings against a different person after settlement with one concurrent defendant and did not bear on whether the same defendant could be sued again.

1. Court of Appeal (Civil Division): By [2016] EWCA Civ 79, unanimously dismissed the appeal and upheld the conclusion that the disputed allegations were within the earlier compromise.
2. High Court, Chancery Division: Mann J, in [2015] EWHC 125 (Ch), interpreted the Tomlin order as encompassing the later phone-hacking allegations and struck out the relevant paragraphs of the second action.