A key issue for parties negotiating any settlement is the extent of the releases being given by one or both parties, including whether they should extend to claims the parties are not aware of at the time of the settlement.
There is an oft-cited “cautionary principle” that, in the absence of clear language, the court should be very slow to infer that a party intended to surrender rights and claims of which it was unaware and could not have been aware. However, three recent decisions suggest a quite narrow operation for that “cautionary principle” where a further claim is pursued following some new factual circumstances coming to light after the settlement.
Jan O'Neill has published a post on Practical Law’s Dispute Resolution blog entitled “Drafting settlement agreements: do you know what claims you're releasing” which considers the recent cases and their implications for parties settling a dispute. Click here to read the post (or here for the Practical Law Dispute Resolution blog homepage).
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