Court of Appeal provides guidance as to when court may refuse to accept party's undertakings as part of settlement

The Court of Appeal has unanimously allowed an appeal against a judge's decision refusing to accept certain undertakings agreed between the parties to a settlement agreement: Smith v Backhouse [2023] EWCA Civ 874.

It confirmed that a court may decline to accept undertakings, even if they form part of a settlement agreement, but the circumstances in which it should do so are limited. It rejected the High Court's conclusion that the undertakings in this case were too broad or vague to be enforced by way of committal proceedings, and held that they should have been accepted.

The decision emphasises that there are powerful public policy reasons why the courts should uphold an agreement in which the parties have agreed to settle their dispute. In deciding whether undertakings should be accepted or enforced, the court must give proper weight to the settlement agreement itself and the public interest in encouraging parties to settle their disputes in the confidence that the terms of their settlement will be upheld.

Background

The claimant and the defendant are research scientists working in a similar field. As explained in our blog post on the first instance decision (here), the claimant brought claims against the defendant for harassment, misuse of private information and breach of her data protection rights. She alleged that the defendant carried out a campaign of harassment against her during the course of several months, which included the creation of fake social media accounts impersonating the claimant, anonymous death threats, and misusing the claimant’s contact details to sign her up to various unwanted services and groups, including far-right hate groups and fetish websites.

The claimant made a Part 36 offer to settle the claim in return for the payment of £49,975 in damages and the provision of a signed undertaking to the court from the defendant that he would not:

“(1) Publish by any means, including but not limited to on the worldwide web, social media, telephone or any form of text, email, instant electronic messaging service, any express or implied reference to or any pictorial depiction of the Claimant, save

(a) for the purposes of seeking legal advice or in the context of legal proceedings, and

(b) for complying with any legitimate obligations under his contract of employment.

(2) Attempt to impersonate the Claimant.

(3) Seek to monitor the Claimant’s activities, including but not limited to her activities on the worldwide web, social media or the activities of her friends or family.

(4) Attempt to contact the Claimant by any medium or any platform, including but not limited to telephone or any form of text, email, instant electronic messaging service, in person or otherwise either directly or indirectly save through lawyers or where he is required to do so under a contract of employment for legitimate purposes.

(5) Attempt to contact by any medium or any platform individuals who he knows or suspects are friends, family, acquaintances and/or colleagues of the Claimant save where he is legitimately required to do so under a contract of employment.

(6) Knowingly approach within 50 metres of the Claimant save where he is legitimately required to do so under a contract of employment.

(7) Otherwise engage in any activity that amounts to harassment of the Claimant or any other activity that is likely to cause her distress.

(8) Will not (sic) encourage or permit any third parties to engage in any of the above acts on his behalf”

The defendant accepted the claimant’s Part 36 offer including the provision of the undertakings. However, the High Court (Nicklin J) decided that the undertakings at paragraphs (1), (2), and (3) above were too broad for the court to accept.

This meant that, while the claimant had contractual remedies available to her, in the event that the defendant breached the undertakings, she would not be able to enforce the undertakings by way of committal proceedings against the defendant.

The claimant appealed. As the defendant was not represented in the appeal, the Court of Appeal invited the Attorney General to appoint an advocate to the court, to ensure that all of the relevant arguments were given due emphasis.

Decision

The Court of Appeal unanimously upheld the claimant's appeal, finding that the High Court was wrong to refuse to accept the relevant undertakings. Asplin LJ gave the leading judgment with which Arnold and Warby LJJ agreed.

Asplin LJ confirmed the established principle that a court may decline to accept undertakings even if they form part of a settlement agreement but the circumstances in which it may do so are limited. It was therefore necessary to consider whether Nicklin J erred in law in identifying the limited circumstances which led him to refuse to accept the undertakings. She reiterated some general principles to assist with that analysis:

1. An injunction is a discretionary remedy and a court should be slow to make an order that it would not be willing to enforce;
2. The circumstances in which an injunction might be refused will turn on the facts of each case;
3. An injunction must be expressed in unambiguous language such that it is clear what is forbidden or required by the order and it will be enforceable, if necessary, by contempt proceedings; and
4. An undertaking to the court is a very serious matter, the breach of which can lead to a fine or imprisonment. Therefore, it should be recorded in clear terms and the scope for arguments regarding its interpretation should be kept to a minimum.

Further, Asplin LJ noted that where undertakings are offered in lieu of an injunction, the court will be cautious about accepting them in terms that it would not itself have granted by way of injunction to restrain the conduct complained of. However, there is no firm rule about the extent of the undertakings the court might accept. She agreed with the formulation set out in Cuadrilla Bowland Ltd v Persons Unknown [2020] 4 WLR 29 that:

"although the court must be careful not to impose an injunction in wider terms than are necessary to do justice, the court is entitled to restrain conduct that is not in itself tortious or otherwise unlawful if it is satisfied that such a restriction is necessary in order to afford effective protection to the rights of the claimant in the particular case.”

She also referred to Mionis v Democratic Press SA [2014] EWHC 4104 in which the Court of Appeal emphasised that there are strong public policy reasons to uphold a private agreement between parties to settle a dispute. That case made it clear that, when determining whether undertakings are to be accepted or enforced, proper weight must be given to the settlement agreement and the public interest in encouraging parties to settle litigation in the confidence that the terms of their settlement will be upheld. Further, where a defendant's right to freedom of expression under Article 10 of the European Convention of Human Rights is engaged, proportionality is a key consideration.

Applying these principles to the present case, the Court of Appeal held that Nicklin J had failed to give proper weight to the parties' settlement agreement, and failed to apply the test of proportionality despite the case being concerned with freedom of expression. Instead, he based his decision on the breadth of the undertakings, which he considered would make future disputes more likely. However, breadth in itself was no reason to decline to accept an undertaking, when it arises from a settlement agreement, and the judge’s specific criticisms of the relevant paragraphs were unfounded.

Subject to one suggested modification to undertaking (1) above, to permit the defendant to cite the claimant in his academic or scientific works, the court held that the undertakings should have been accepted at first instance.