T Turner v Western Mortgage Services Ltd

A COT3 agreement is construed objectively under ordinary contractual principles. Its terms must be read as a whole, in their relevant shared context, without regard to either party’s subjective understanding.

A provision settling any and all claims in full and final settlement, subject to specified and narrow exceptions, ordinarily encompasses a complaint previously struck out but then subject to an appeal. A related appeal is thereby also compromised unless the agreement expressly preserves it. In any event, an appeal that cannot produce a practical result after a binding settlement is academic. The Employment Appeal Tribunal will not ordinarily entertain such an appeal, absent a very compelling reason.

The claimant had received payments under a permanent health insurance scheme during sickness absence. He brought an employment tribunal claim concerning the ending of those payments and employer pension contributions, but withdrew it.

In a second claim, the tribunal struck out the complaint concerning the insurance payments on issue-estoppel grounds, while leaving the pension and disability-discrimination matters unaffected. The claimant appealed the strike-out decision.

While the appeal was pending, the parties signed an ACAS COT3. It required withdrawal of the tribunal claim and provided for payment in full and final settlement of any and all claims, subject to specified exclusions. The tribunal then dismissed the withdrawn claims. The central issue was whether the COT3 also prevented the claimant from continuing the appeal concerning the struck-out complaint.

1. Appeal dismissed. The COT3 was a binding contract. The claimant did not contend that his ill health, disability, stress or status as a litigant in person vitiated it.

2. A COT3 is interpreted by ordinary principles of contractual construction. The court must determine its objective meaning from the agreement as a whole, its language, the relevant shared background and its context. The parties’ subjective beliefs about its effect, or about why they accepted the settlement sum, are irrelevant.

3. Clause 1 required withdrawal of the tribunal claim, but clause 2 defined the wider bargain. The respondent’s payment was consideration both for that withdrawal and for a full and final settlement of any and all claims the claimant had or might have, subject only to the stated exclusions.

4. Even if clause 1 was ambiguous about a complaint already struck out, clause 2 was wider. Objectively construed, its comprehensive language included the insurance-payments complaint, which was then the subject of the appeal. The narrow express exclusions reinforced that conclusion. Had the parties intended to preserve the appeal and the possibility of reviving that complaint, the agreement would have said so expressly.

5. The settlement of that complaint naturally and logically also compromised the related appeal. Alternatively, the appeal had become wholly academic: the binding settlement meant that a successful appeal could not lead to reinstatement or adjudication of the compromised complaint. The EAT will generally not hear an academic appeal, and the finality of litigation required a very compelling reason to continue. None existed.

• Employment Appeal Tribunal: dismissed the appeal because the ACAS COT3 compromised the struck-out complaint and made the appeal academic.

• Employment Tribunal: in the second claim, struck out the permanent-health-insurance complaint on issue-estoppel grounds, but did not strike out the pension-contributions complaint. After the COT3, the withdrawn claims were dismissed under Rule 52.

• Employment Tribunal: the claimant’s earlier claim concerning the same insurance and pension matters was withdrawn and dismissed upon withdrawal.