Abdullah Nasser Bin Obaid & Ors v RLS Solicitors Limited (trading as RLS Law)

A settlement releasing claims against the respective agents of the parties does not ordinarily release claims by a party against its own solicitor merely because that solicitor also acted for another party. The wording must be construed objectively, in the context of the deed as a whole, its defined terms and its purpose. Where the release is directed to claims against an agent in the capacity of another party’s agent, it does not extend to negligence claims based on duties owed specifically to the claimant. A possible contribution claim against another participant, or the absence of an express exclusion for claims against the claimant’s own advisers, does not justify extending the release beyond its proper construction.

The appellants brought claims in contract and tort, and for breach of fiduciary duty, against their former solicitors concerning property transactions in Brighton and Manchester. The claims alleged that the solicitors acted on instructions from another participant, failed to ascertain the appellants’ interests and instructions, and permitted transactions to proceed contrary to those interests.

The claims were struck out by Deputy Master Lampert under CPR 3.4(2)(a), with summary judgment alternatively entered for the defendant. The Deputy Master construed a 2019 settlement deed as barring the claims. Permission to appeal was granted. The central issue was whether, properly construed, the deed released claims by a party against its own solicitors where those solicitors had also acted for another party to the settlement.

1. Appeal allowed. The order striking out the claim and entering judgment for the defendant was set aside. The defendant’s application to strike out or summarily dismiss the claim was dismissed.
2. Ordinary principles of contractual interpretation applied to the settlement deed. The court identified the objective meaning of the language by considering the natural and ordinary meaning of the words, the deed as a whole, its purpose, the relevant background and commercial common sense, while excluding subjective evidence of intention. The deed was a limited settlement directed principally to disputes concerning the identified assets and the Previous Proceedings.
3. The references in clause 4 to the parties’ “respective” affiliates and agents were significant. Read in context, the release was directed to claims against an agent in its capacity as agent for another party. It did not release a party’s claims against its own professional adviser for breach of duties owed specifically to that party, merely because the adviser was also retained by another party.
4. The possible existence of contribution proceedings against another participant did not alter that construction. Nor did the general principle concerning reliance on one’s own wrong provide a blanket rule determining the issue. The wording of the deed, rather than a re-writing of it by reference to possible practical consequences, governed.
5. Schofield v Smith was materially different because its settlement wording was wider, referred to liabilities in whatever capacity and did not contain the same limitation to the respective agents of other parties. The relevant comments relied on from that decision were accepted to have been obiter and did not require a different result.
6. The appellants’ alternative arguments concerning the scope of “Claims” and the date on which RLS was an agent were rejected, but those conclusions did not affect the decisive construction that the present claims were not barred.

• Chancery Appeals (ChD): Appeal allowed against the decision of Deputy Master Lampert dated 11 December 2023, reported at [2023] EWHC 3136 (Ch). The strike-out and summary judgment order was set aside.
• Permission to appeal: Granted by Trower J on 13 March 2024.