Cameron Developments (UK) Ltd v National Westminster Bank Plc & Anor

A settlement agreement releasing all past, present and future claims, actions and liabilities in any way connected with the sale of an interest rate hedging product may encompass claims concerning the bank’s subsequent review of losses arising from that sale. The expression is broad and is not confined to claims with a direct legal or causal connection. A clear reference to future liabilities can release liabilities arising after the agreement, provided they are connected with the released transaction. Where the review scheme forms a single alternative mechanism for redress, accepting the offer may settle challenges to the review process. On the evidence, the review did not create a separate contract between the bank and customer.

The claimant brought mis-selling claims concerning an interest rate swap and additional claims concerning the defendants’ handling of a regulatory review of consequential losses. The defendants applied under CPR 3.4 and CPR 24.2 for strikeout or summary judgment.

The principal issues were whether the settlement agreement covered the common-law and contractual claims relating to the review, and whether the review gave rise to a separate contract requiring the defendants to assess consequential loss with reasonable skill and care.

1. Application granted. The common-law and contractual claims concerning the review were struck out because they were precluded by the settlement agreement.
2. The court applied the ordinary objective principles of contractual construction, as stated in BCCI SA v Ali [2002] 1 AC 251. The words “in any way connected with” were very broad. They were not limited to claims legally or causally connected with the sale.
3. The review existed only because the claimant had been sold the swap. It was a mechanism for assessing alleged loss arising from that sale. A claim that the review had been conducted in breach of duty was therefore connected with the sale in the ordinary sense.
4. The settlement expressly covered future claims and liabilities, whether or not known when the agreement was made. That language was sufficiently clear to release claims arising from future events, subject to their connection with the sale. The cautionary principle in BCCI SA v Ali did not prevent that construction.
5. The review was a single alternative redress process leading to a final determination. Accepting the basic redress offer therefore settled liabilities concerning both the initial and consequential-loss stages. The claimant retained the alternative of pursuing its underlying consequential-loss rights in contract or tort, but could not challenge the review after accepting the settlement.
6. Alternatively, the contractual claim had no real prospect of success. The Bank’s undertaking arose from its agreement with the FSA, which expressly conferred no enforceable rights on customers. Neither the offer letters nor the factual matrix established a separate contract between the Bank and the claimant. The review of consequential losses was not conditional on acceptance of the basic redress offer.
7. It was consequently unnecessary to consider whether terms concerning reasonable skill and care could be implied under Marks & Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited [2015] UKSC 72.