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England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Heaton & Ors v Axa Equity & Ors  EWCA Civ 164 (19 May 2000)
Cite as:  Ch 173,  CPLR 505,  3 WLR 1341,  EWCA Civ 164,  CP Rep 10,  4 All ER 673
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CASE NO: CHANF/1999/0793/3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY
MR JUSTICE LADDIE
ROYAL COURTS OF JUSTICE
STRND, LONDON WC2A 2LL
Friday 19 May 2000
The liquidation of Inter City and the assignment of its claims to the individual claimants.
16. As the first of the passages from the judgment of Mr Justice Moses which
I have set out indicates, Inter City had gone into liquidation before the
hearing of the preliminary issues in the Target action. On 18 July 1996 Inter
City had commenced creditors' voluntary winding up upon the basis that by
reason of its liabilities it was insolvent and was unable to pay its debts. It
is said that Inter City was unable to continue trading in the circumstances
that income from renewal commissions had been withheld and serious allegations
of mis-selling were being pursued against it and its employees. A liquidator
was appointed by the creditors at their meeting on 18 July 1996. On the same
day Inter City, acting by its liquidator, assigned to the individual claimants
(who were its directors and shareholders) the full and exclusive benefit of all
that company's rights of action against Target arising out of or in connection
with the termination of the Target agreement; and all its rights of action
against Equity & Law arising out of or in connection with the termination
of the Equity & Law agreement. The assignment was made on terms that any
money recovered in the actions or as a result of anything done by the assignees
in pursuance of their rights under the assignment should be applied first in
full satisfaction of the claims of the creditors of Inter City in its
liquidation, together with the balance of the liquidator's costs. It was only
after the claims of creditors had been satisfied that the fruits of whatever
claims the company might have against Target and Equity & Law would be
available to the individual claimants for their own benefit.
17. An assignment in that form was not unfamiliar in or about 1996. It offered a solution to a problem faced by shareholders in circumstances in which the company had no funds to pursue what they regarded as its proper claims against a third party; that is to say, where the creditors were unwilling to fund litigation and the shareholders, themselves, had exhausted whatever funds of their own they may have had. Legal aid was not available to the company itself. Although the shareholders, as individuals, might qualify for legal aid on an assessment of means, they could not obtain legal aid in order to pursue the company's claims. It was necessary, therefore, for the claims to be assigned to the individuals. The liquidator had power to make such an assignment; and he could properly be advised that to do so on terms that the fruits of the litigation would be applied, first, in satisfaction of the claims in the winding up was of advantage to the creditors. It offered the creditors the chance that they might obtain payment of their debts as a result of the company's claims against third parties being pursued at public expense. That is what happened in the present case. The individual claimants obtained legal aid to pursue the Target action. On 29 July 1996 they were substituted for Inter City as plaintiffs in that action.
The settlement of the claims against Target
18. At the time when the preliminary issues in the Target action were before Mr Justice Moses in June 1997, the claims in that action were limited to (i) a claim by the individual claimants (as assignees of Inter City) for commissions withheld following termination of the Target agreement and (ii) a counterclaim by Target for damages for breach of that agreement. Following the determination of the preliminary issues Target withdrew its counterclaim - although that was not reflected in the pleadings until an amended defence was served on 13 October 1997.
19. On 8 September 1997, by agreement, the individual claimants amended the statement of claim in the Target action to add new claims under the general heading "Destruction of the Plaintiff's Business". The scope of those claims, which are set out in paragraphs 28 to 31 in a re-re-amended statement of claim, is central to the issue on this appeal. It is necessary, therefore, to set out the allegations in some detail. Paragraph 28 of the re-re-amended statement of claim was in these terms:
"28. The Defendant's unlawful termination of the Target Agreement on the basis of wholly unsubstantiated and misconceived allegations of serious misconduct on the part of the Plaintiff was the effective and dominant cause of the following events, each of which was a natural and reasonably foreseeable consequence of the said unlawful termination:
(1) By a letter dated 8 February 1993 and signed by Mr G A Markham (Equity & Law's Head of Associates), Equity & Law purported to terminate the Equity & Law Agreement pursuant to clause 8.1.2 thereof but without otherwise specifying the grounds of such termination;
(2) The Defendant refused to pay any further commissions to the Plaintiff;
(3) Equity & Law refused to pay any further commissions to the Plaintiff;
(4) The Defendant acted in the manner pleaded in paragraph 30 below;
(5) The Plaintiff was forced to cease trading, and to dispose of its staff, equipment and premises;
(6) The Plaintiff was (or would have been) unable to obtain appointment as an appointed representative of any other member of LAUTRO or of the PIA, or certification as an independent financial advisor by FIMBRA or the PIA; and
(7) On 18 July 1996, consequent upon being deprived of its commission income, the Plaintiff went into creditors' voluntary liquidation on the ground that by reason of its liabilities it was insolvent and unable to pay its debts.
20. Paragraph 29 of the re-re-amended statement of claim set out, under fourteen sub-paragraphs, the facts and matters on which the claimants relied in support of the allegations made in paragraph 28. Amongst those allegations, at paragraph 29(7), there was the assertion that, at a meeting at Equity & Law's head office on 16 February 1993, Mr Markham (to whom reference had been made in paragraph 28(1)) had expressed the view that:
". . . in the light of Target's termination of the Target agreement and on the basis of allegations of serious misconduct by the Plaintiff, Equity & Law had itself been forced to terminate the Equity & Law Agreement."
21. Paragraph 30 of the re-re-amended statement of claim contained the allegation that, by reason of the unlawful termination of the Target agreement, Target failed to offer to purchase Inter City's entitlement to future commission by way of "commission buy-out"; and so deprived Inter City of the opportunity of accepting such offer. Paragraph 31 set out particulars of the loss and damage said to have been suffered by Inter City as a result of Target's unlawful termination of the Target agreement. That included: (1) loss of the value of the business of Inter City as a going concern; (2) loss of the commissions which had been withheld by Target or NFMC; (3) loss of further commissions which would have fallen due in respect of pre-July 1991 investment contracts if the Target agreement had not been terminated; (4) loss of the sum that would have been payable under the proposed commission buy-out; (5) the costs and expenses of the winding up; and (6) costs incurred by Inter City in obtaining legal advice in connection with the termination of the Target agreement, so far as not otherwise recoverable in the action. There is no express reference in that catalogue of loss and damage to the loss of commissions withheld by Equity & Law following the termination of the Equity & Law agreement on 8 February 1993 - to which reference had been made in paragraph 28(1) and (3) - but we were told in the course of the hearing of this appeal that the loss of the Equity & Law commissions had been included as an element in the computation of "loss of the value of the business of Inter City as a going concern" in the expert report served in support of the claim under paragraph 31(1).
22. Shortly after the service of the re-re-amended statement of claim - and some three months after the hearing before Mr Justice Moses - the Director of Compliance of Hill Samuel Life Assurance Limited (by which name Target was then known) wrote to the Personal Investment Authority to notify the Authority of the outcome of the trial of the preliminary issues and to withdraw unreservedly all allegations which had been made by Target against Inter City.
23. In response to the re-re-amended statement of claim, Target (under its new name, Hill Samuel), served the amended defence of 13 October 1997 to which I have already referred. Paragraph 19 of that amended defence contained a denial that Target's termination of the Target agreement caused Equity & Law to terminate the Equity & Law agreement. The paragraph was in these terms:
"19. It is specifically denied that the defendant's termination of the Target agreement caused Equity & Law to terminate the Equity & Law agreement. It is averred as follows:
(1) After being told by the defendant on 29 January 1993 that the defendant had terminated the Target agreement, Equity & Law conducted their own investigation into the plaintiff's conduct;
(2) That investigation led Equity & Law to conclude that the plaintiff had engaged in conduct which was or was likely to be prejudicial to the business of Equity & Law; and
(3) Equity & Law exercised an independent judgment in deciding to terminate the Equity & Law agreement pursuant to clause 8.1.2."
Paragraph 21(5) of the amended defence contained a traverse of paragraph 29(7) of the re-re-amended statement of claim; that is to say, the allegation that Mr Markham had expressed the view that Equity & Law had been forced, in the light of Target's termination of the Target agreement, itself to terminate the Equity & Law agreement was put in issue.
24. The pleadings in the Target action (1993 G 610) did not include claims by the individual claimants in respect of their individual losses. With a view to identifying the whole of the claim with which Target (or Hill Samuel) was faced, the claimants' advisors prepared a pro-forma statement of claim in a further proposed action against Hill Samuel. That pro-forma statement of claim was sent to Hill Samuel's solicitors on 3 February 1998. It contained the following allegations relevant to the present proceedings: (1) at paragraph 36, that it was foreseeable that, by reason of the publication by Target of erroneous and untrue statements to Equity & Law, (i) the individual claimants would be unable to obtain employment in the financial services industry or elsewhere in responsible management positions, (ii) the individual claimants would be forced to borrow monies and to realise assets in order to meet their living expenses and to fund legal proceedings, and (iii) the Equity & Law agreement would be terminated by Equity & Law; (2) at paragraph 37(ii), that it was by reason of the publication of those reports that Equity & Law did purport to terminate the Equity & Law agreement pursuant to clause 8.1.2 by the letter dated 8 February 1993; (3) at paragraph 38, that, by reason of the termination of the two agreements, the individual claimants had each suffered loss and damage (particulars of which were set out); and (4) at paragraph 39, that:
"Further or in the alternative each of the Plaintiffs has suffered additional loss and damage by reason of having lost the ability to obtain a senior management position in the financial services industry in the future as a result of his being unable to continue to work within the said industry on an unrestricted basis during the period of more that 4 years from 29 January 1993 until judgment on the Preliminary Issues in the [Target action 1993 G 610] in consequence of the said erroneous reports and references provided by Target."
25. The position, therefore, on 23 April 1998, when terms of settlement were agreed between the individual claimants, Inter City (through its liquidator) and Abbey Life Assurance Company Limited, as the successor to the business of Hill Samuel (as Target had become) was that the claims made by Inter City and the individual claimants against Hill Samuel had been defined by the re-re-amended statement of claim in the Target action and in the pro-forma statement of claim delivered on 3 February 1998. The settlement agreement was incorporated as a schedule to a Tomlin order made in the Target action. Clause 2 of the settlement agreement was in these terms (so far as material):
"2. In consideration of the Defendant agreeing to pay to the Claimants the sum of £10,000,000 . . . each of the Parties hereto agrees and undertakes as follows:
2.1 This agreement is in full and final settlement of all claims and potential claims of whatsoever nature and kind (including interest and costs) which the Parties have or may have against each other under or in respect of or arising out of or in connection with, whether directly or indirectly :
(1) The termination on 29 January 1993 of the Target Agreement (as defined in paragraph 12 of the Re-Re-Amended Statement of Claim in action number 1993-G-No.-610);
(2) The termination on 8 February 1993 of the Equity & Law Agreement (as defined in paragraph 11 of the Re-Re-Amended Statement of Claim in action number 1993-G-No.- 610);
(3) The personal references, reports and statements made to third parties that were provided in respect of any of the Claimants following the termination of any of the Target Agreement and the Equity & Law Agreement (or either of them)
(4) The matters at issue in action number 1993-G-No.-610; and
(5) Any claims or matters identified in the statement of claim provided by the Plaintiffs' solicitors to the Defendant's solicitors under cover of a letter sent on or about 3 February 1998;
and without prejudice to the generality of the foregoing, the parties hereto agree not to commence or prosecute any proceedings against one another arising out of or in connection with such matters."
In that context "the Claimants" means the individual claimants, Inter City and three other companies (not here material; but which were, I think, companies in which the individual claimants were interested); and "the Defendant" means all and any of Target, Hill Samuel and Abbey Life. "The Parties" means the Claimants, the Defendant and Lloyds TSB Group PLC (and includes any subsidiary, current or former, of Lloyds TSB, together with their respective directors, officers, employees, servants or agents).
26. Clause 5 of the settlement agreement contained a release:
"5. Each of the Parties hereto hereby unconditionally and irrevocably releases and discharges each other, and their respective directors, officers and employees from all or any liabilities, actions, causes of action, suits, demands of whatever nature or kind and howsoever and whenever arising which any of them may be entitled to make, assert or pursue in any jurisdiction whatsoever in relation to or in any way connected with the matter specified in clause 2.1 above."
27. The consideration for the compromise and release in the settlement agreement was the £10 million mentioned in clause 2. Of that sum, £1,540,629.95 had already been paid to the claimants (by way of interim payment and on account of costs) following the trial of the preliminary issues; and a further £2,710,371 was in court. The money in court was paid out pursuant to the Tomlin order of 23 April 1998. It is common ground that the balance (£5,748,999.05) was paid to the claimants in accordance with the terms of the settlement agreement.
The current proceedings against Equity & Law.
28. The current proceedings (HC 1998 06221) were commenced against Equity & Law Life Assurance Society plc and Equity & Law Unit Trust Managers Limited (hereafter "Equity & Law") by the issue of a writ on 23 November 1998. That followed some six months of inconclusive correspondence; culminating in a letter before action, dated 27 October 1998, which had set out the claim in some detail. The individual claimants claim on their own behalf and as assignees of Inter City, under the assignment of 18 July 1996. The validity of that assignment was challenged on behalf of Equity & Law; with the result that a protective writ was issued in the name of Inter City (in proceedings HC 1999 00623) on 3 February 1999; just within the period of six years from the termination of the Equity & Law agreement. By an order dated 28 April 1999 the proceedings were consolidated.
29. The claims in the writs (which are in identical, or substantially identical, terms) may be summarised as follows: (1) damages for breach of the Equity & Law agreement; (2) damages for negligence in publishing (from and after 8 February 1993) unfair, inaccurate and untrue reports and references to LAUTRO and other third parties in respect of Inter City and the individual claimants relating to or in connection with their conduct as appointed representative and company representatives respectively; (3) in the alternative, damages for breach of contract in respect of the same publication; (4) an order that Equity & Law supply the individual claimants with a list identifying the persons to whom Equity & Law had published reports or references in respect of Inter City and the individual claimants; (5) an order that Equity & Law issue a corrective statement retracting the errors and inaccuracies in such reports or references; and (6) a declaration that Equity & Law remain liable to pay Inter City commissions on investment contracts introduced by Inter City, notwithstanding the termination of the Equity & Law agreement on 8 February 1993, and an order for payment of those commissions.
30. The statement of claim in proceedings HC 1998 06221 was served on 10 December 1998. It now stands as the statement of claim in the consolidated proceedings. Paragraphs 1 to 53 of the statement of claim set out the history down to 29 September 1997 (the date of Target's letter to the Personal Investment Authority to which I have already referred). Paragraphs 54 to 69 are grouped under the heading "Equity & Law's duty of care to Inter City and the plaintiffs in respect of the preparation and publication of reports and references". Paragraph 69 is in these terms:
"69. Further, in breach of the duty of care pleaded in paragraphs 61 and 62 above, and/or in breach of the implied term pleaded in paragraph 63 above, Equity & Law have failed or refused to correct the errors and inaccuracies in the said references and reports notwithstanding the unequivocal withdrawal by Target in June and September 1997 of all of its allegations of "churning" and other serious misconduct as pleaded in paragraphs 52 and 53 above."
31. Paragraphs 70-75 are grouped under the heading "Failure or refusal of Equity & Law to pay commissions owed to Inter City and/or the plaintiffs". Paragraphs 76 and 77 set out the claim for "Loss and damage to Inter City as a consequence of Equity & Law's unlawful conduct". Those allegations are indistinguishable from the allegations which had been made in paragraphs 28(5), (6) and (7) and 31(1) and (5) of the re-re-amended statement of claim in the Target action. Paragraphs 78 and 79 set out "Loss and damage to the Plaintiffs in their personal capacities as a consequence of Equity & Law's unlawful conduct". Those allegations are indistinguishable from the allegations which had been made under paragraph 38 in the pro-forma statement of claim delivered to Hill Samuel's solicitors on 3 February 1998; save that the claims in respect of the loss of ability to obtain senior management positions in the financial services industry in the future is put on the basis that each of the individual claimants was "unable to continue to work within the said industry on an unrestricted basis at all times after 8 February 1993". In other words, the period of inability to work is said to have begun some two weeks later than that alleged in the pro-forma statement of claim against Hill Samuel but (more pertinently) to have continued after the judgment of 17 June 1997 on the preliminary issues in the Target action. Paragraph 80 of the statement of claim contains an acknowledgement that the individual claimants will give "appropriate credit for the sums which have been recovered by them from Target in settlement of the [Target] action."
32. A comparison of the claims made in the current proceedings with those made in the Target proceedings and in the pro-forma statement of claim sent to Hill Samuel's solicitors on 3 February 1998 may, I think, fairly be summarised as follows:
(1) The claim in the Target action was for damages for breach of contract arising from the termination by Target of the Target agreement on 29 January 1993. The damages claimed in respect of that breach of contract were (i) loss of the value of the business of Inter City as a going concern, (ii) loss of commissions wrongfully withheld by Target and NFMC, (iii) loss of further commissions which would have fallen due in respect of pre-July 1991 investment contracts, (iv) loss of the sum that would have been payable under the proposed commission buy-out, (v) costs and expenses of the winding up and (vi) costs of obtaining legal advice.
(2) The primary claim in the Equity & Law action is for breach of contract arising from the termination by Equity & Law of the Equity & Law agreement on 8 February 1993. The damages claimed in respect of that breach of contract are (i) loss of the value of the business of Inter City as a going concern, (ii) loss of commissions withheld by Equity & Law and (iii) costs and expenses of the winding up, including legal expenses.
(3) It is, I think, clear that the costs and expenses that can be claimed under item (iii) in the Equity & Law action were included in the costs and expenses claimed under items (v) and (vi) in the Target action. It is clear, also, that there is no claim in the Equity & Law action in relation to the loss of commissions claimed under items (ii) and (iii) in the Target action. At first sight, the loss of commissions withheld by Equity & Law following termination of the Equity & Law agreement - claimed as item (ii) in the Equity & Law action - was not the subject of any claim in the Target action; but, as I have said, we were told that the amount of the commissions withheld by Equity & Law was included in the computation of the loss of the value of the business of Inter City as a going concern which was claimed as item (i) in the Target action. There is nothing in the claim for loss of the value of the business of Inter City as a going concern in item (i) in the Equity & Law action which was not also included in the claim under item (i) in the Target action. Indeed, the value of the business as at 8 February 1993 is likely to have been considerably less than it was on 29 January 1993 as a result of what had happened on 29 January 1993.
(4) It follows that the contractual damages claimed in respect of the termination of the Equity & Law agreement are wholly encompassed within the damages claimed in respect of the termination of the Target agreement. The Target claim was more extensive than the Equity & Law claim; but it included all items of loss which are now claimed against Equity & Law under this general head.
(5) The claims of the individual claimants in the pro-forma statement of claim sent to Hill Samuel's solicitors on 3 February 1998 were for damages for negligence in the publication by Target of erroneous and untrue statements to Equity & Law. The damages claimed were (i) loss to each individual claimant of his income, pension rights and other benefits, (ii) loss to each individual occasioned by the need to realise assets or to incur bank charges and interest and (iii) loss to each individual of his ability to obtain employment in a senior management position in the financial services industry as a result of his being unable to work within that industry on an unrestricted basis between 29 January 1993 and 17 June 1997 (the date of Mr Justice Moses' order in the Target action).
(6) The claims of the individual claimants in the Equity & Law action include claims for damages for negligence in the publication by Equity & Law of unfair, inaccurate and untrue reports and references to LAUTRO and other third parties. The damages claimed in respect of losses occasioned by the need to realise assets and incur bank charges and interest, are (at first sight, at least) in the same amounts as those claimed under item (ii) in the pro-forma statement of claim against Target. The claims in respect of loss of income, pension rights and other benefits differ in one respect; that is to say, in relation to the period over which that loss of income has been suffered. The period, for the purposes of the claim against Target, was limited to the period from 29 January 1993 to judgment in the Target action; that is to say the period of five years or so which ended on 23 April 1998. Similarly, the claims in respect of the loss of ability to obtain future employment (at least in relation to Mr Heaton who was aged 51 years at the time when the Equity & Law action was commenced) differ in the respect to which I have already drawn attention; that is to say the period of exclusion from the industry on which the claim against Target was based was limited to the four and a half years from 29 January 1993 to 17 June 1997, but the period of exclusion on which the claim against Equity & Law is based began on 8 February 1993 and is still continuing some seven years later.
(7) There are further claims in the Equity & Law action which were not made against Target. These are the claims in respect of Equity & Law's refusal to withdraw or correct what are said to be the unfair and untrue allegations of churning and other serious misconduct - see paragraph 69 in the statement of claim. I have already set out the relief sought: an order that Equity & Law supply a list of the persons to whom reports and references have been published and an order requiring Equity & Law to issue a corrective statement.
33. A defence and counterclaim was served in the Equity & Law action on 1 February 1999. It was pleaded, in paragraph 1, that the statement of claim was vexatious, embarrassing, and an abuse of the process, that it would prejudice, embarrass or delay the fair trial of the action, and that it should be struck out. At or about the same time, on 27 January 1999, Equity & Law issued a third party notice, under what was then Order 16 rule 1 of the Rules of the Supreme Court 1965, against Hill Samuel (as Target had become) and Abbey Life (as the successor to Target's business) claiming contribution to the full extent of the claimants' claims in the action pursuant to sections 1 and 2 of the Civil Liability (Contribution ) Act 1978.
34. The judgments of the House of Lords in Jameson v Central Electricity Board  2 WLR 141 were handed down on 16 December 1998. The report appeared in the Weekly Law Reports on 22 January 1999. It was, no doubt, that decision which led to the amendment of the defence and counterclaim to include, as paragraph 1B, the assertion that, by reason of the settlement with Abbey Life on 23 April 1998, the claims for damages, commission and interest in the present proceedings have been extinguished in whole or in part.
35. It was in those circumstances that, on 26 April 1999, Master Bragge ordered by consent that the following issue be tried as a preliminary issue:
"What is the consequence for the Plaintiffs' claims in these proceedings of the settlement contained within the Order dated 23 April 1998 in the High Court Queen's Bench Division action number 1993 G No. 610 and made between the Plaintiffs and Abbey Life Assurance Company Limited and satisfied by payment of £10 million paid thereunder."
The judgment below
36. It was in answer to that preliminary issue that Mr Justice Laddie declared, on 8 July 1999, that the consequence for the claimants' claims in these proceedings of the settlement contained in the order of 23 April 1998 and the payment made thereunder was that the claimants were precluded from continuing with these proceedings. He dismissed these proceedings and ordered that the claimants pay to the defendants their costs of the trial of the preliminary issue and of the proceedings.
37. The judge took the view that the losses claimed against Equity & Law were entirely encompassed within what had been sought against Target. In relation to the contractual damages claimed by Inter City in respect of the termination of the Equity & Law agreement he was correct to take that view. Those damages are wholly encompassed within the damages claimed by Inter City in respect of the termination of the Target agreement. The Target claim was more extensive than the Equity & Law claim; but it included all items of loss which are now claimed against Equity & Law under this general head.
38. But, as I have sought to show, that is not the position in relation to the claims made by the individual claimants in respect of the publication by Equity & Law of unfair, inaccurate and untrue reports and references to LAUTRO and other third parties. The damages claimed in respect of losses occasioned by the need to realise assets and incur bank charges and interest are the same; but the claims in respect of loss of income, pension rights and other benefits differ in relation to the period over which the loss has been suffered. The period in respect of which the claim in the present proceedings is brought has continued after the date of the order in the Target action, 23 April 1998. Similarly, the claim in the present proceedings in respect of Mr Heaton's loss of ability to obtain future employment is based on a longer period of exclusion from the industry. And there are the further claims in the present action in respect of Equity & Law's refusal to withdraw or correct what are said to be the unfair and untrue allegations of churning and other serious misconduct. I shall return to the claims made by the individual claimants in respect of the publication by Equity & Law of unfair, inaccurate and untrue reports and references later in this judgment; but, in so far as the judge's order was made on the basis that all claims made in the present action are entirely encompassed within what was sought against Target or Hill Samuel, it is founded on a false premise.
39. The judge held that, because the contractual damages claimed against Equity & Law in respect of the termination of the Equity & Law agreement were entirely encompassed within the contractual damages claimed against Target in respect of the termination of the Target agreement, the claimants must be taken to have released Equity & Law from the claims against it when they entered into the settlement agreement embodied in the Tomlin order of 23 April 1998. His approach, I think, appears clearly from the following passages of the judgment which he handed down. First, at paragraphs 33 and 34:
"33. . . . . It appears to me that this is one of those areas where the courts prevent a litigant from doing something which is inconsistent with the fair conduct of litigation. The effect of a settlement agreement between two parties to litigation may create benefits for third parties who are not in contractual relationship with the plaintiff. The contract acts as a statement, effective against the parties to it, which determines not only the extent of the settlement between them but also acts as a concession of general application which restricts the parties' right to litigate the same or similar issues again against others. So the court looks at the contract of settlement to see whether and to what extent it would be improper to allow the plaintiff to assert rights against a non-party to it. Having settled claims with one defendant it would be contrary to public policy to allow the plaintiff to continue to litigate or to raise the same issues against another. This is part of the public policy against multiplicity of proceedings.
34. When a party settles a claim, the courts look to the terms of the settlement to see whether the intention was to settle the claim in its entirety or only to settle a part of the claim. Although it is possible for the plaintiff to choose the latter course, thereby reserving part of the claim against a number of defendants, he must make it clear that that is what he is doing. This appears to me to have been the view of the majority of the House of Lords in Jameson, . . ."
After referring to passages in the speeches of Lord Hope of Craighead and Lord Clyde in Jameson v Central Electricity Generating Board  2 WLR 141, and to the decision of this Court in Watts v Lord Aldington (unreported, 15 December 1993), the judge went on, at paragraphs 38 and 39, to say this:
"38. This [the test of strict necessity propounded by Lord Justice Steyn in Watts v Lord Aldington] appears to me to be consistent with the approach adopted by the House of Lords in Jameson namely that it is possible for a plaintiff to reserve his claim against some of a number of defendants but it must be clear that that is what he is doing. If he does not make the reservation by express words, it must be a reservation which is made by necessary implication. How, then, do the facts of the present case fit in with those principles?
39. First, the fact that the Settlement Agreement was entered into by the Claimants and Target is one factor but, as Jameson illustrates, is not determinative of whether the Claimants intended to reserve their rights against Equity & Law. Secondly, the overall structure of the Settlement Agreement and the claims made against Target point strongly against such intention. Target was purchasing peace at a high price. One of the core allegations made against it was that Equity & Law originally did not challenge the Claimants' commercial practices but it was persuaded to do so by Target's wrongful acts and statements. All the damage flowing from Equity & Law's breach of contract and wrongful allegations of churning flowed directly or foreseeably from Target's actions. It follows that any reasonable observer at the time of the Settlement Agreement would have recognised that if the Claimants were to bring or reactivate proceedings against Equity & Law, it was inevitable that Equity & Law immediately would seek a contribution for the majority if not the whole of its liability from Target and would rely on just those allegations of responsibility which permeate the Claimants' Statement of Claim. So, if the Claimants reserved their rights against Equity & Law, Target would have paid the price for peace but without achieving it. This appears to me to be the antithesis of the full and final settlement which Clause 2.1 of the Agreement promised. This point is reinforced by the provisions of Clause 2.1(2), (3), (4) and (5) each of which clearly are intended to give Target peace in respect of the activities of Equity & Law."
40. It was, in substance, for those reasons that the judge reached the conclusion, expressed at paragraph 48 of his judgment, that, when the claimants entered into the settlement agreement with Target and Abbey Life, they had not expressly or impliedly reserved rights of action against Equity & Law and so were thereafter precluded from continuing with the present proceedings.
The Civil Liability (Contribution) Act 1978
41. Before turning to an examination of the law as it now stands following the decision of the House of Lords in Jameson, it is, I think, pertinent to have in mind the relevant provisions of the Civil Liability (Contribution) Act 1978. Section 1 is in these terms, so far as material:
"1(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
(2) A person shall be entitled to recover contribution by virtue of subsection (1) above notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred, provided that he was so liable immediately before he made or was ordered or agreed to make the payment in respect of which the contribution is sought.
(3) A person shall be liable to make contribution by virtue of subsection (1) above notwithstanding that he has ceased to be liable in respect of the damage in question since the time when the damage occurred unless he ceased to be liable by virtue of the expiry of a period of limitation or prescription which extinguished the right on which the claim against him in respect of the damage was based.
(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established."
42. The amount of the contribution recoverable from a person in proceedings under section 1 of the 1978 Act is "such as may be found by the court to be just and equitable having regard to that person's responsibility for the damage in question" - see section 2(1) of the Act. Section 3 is in these terms:
"3. Judgment recovered against any person liable in respect of any debt or damage shall not be a bar to an action, or to the continuance of an action, against any other person who is (apart from such bar) jointly liable with him in respect of the same debt or damage."
43. Section 4 provides that if more than one action is brought in respect of any damage by or on behalf of the person by whom it was suffered against persons liable in respect of the damage (whether jointly or otherwise) the plaintiff shall not be entitled to costs in any of those actions, other than the one in which judgment is first given, unless the court is of the opinion that there was reasonable ground for bringing the action. Section 6(1) defines the circumstances in which a person is "liable in respect of any damage" for the purposes of the Act:
"6(1) A person is liable in respect of any damage for the purposes of this Act if the person who suffered it (or anyone representing his estate or dependants) is entitled to recover compensation from him in respect of that damage (whatever the legal basis of his liability, whether tort, breach of contract, breach of trust or otherwise)."
Concurrent tortfeasors: Jameson v CEGB
44. The position under the 1978 Act in a case where damage to one person, say A, has been caused by concurrent tortfeasors, say B and C, is clear enough. A can sue B and C in the same action and obtain judgment against both of them; B and C can claim contribution between themselves in that action (or in a subsequent action) and the court can apportion the damages between them (without affecting A's rights to recover in full from either) as may be just and equitable. Or A can sue B and obtain judgment against him alone; B can claim contribution from C, by third party procedure in the same action or in a subsequent action. Or, having obtained a judgment against B alone which is unsatisfied in whole or in part, A can sue C in a subsequent action; and C can claim contribution from B, by third party procedure in that action or in a further action. A's claim against C is not barred by the judgment which A has obtained against B - see section 3 of the Act; although it will, of course, be extinguished if A recovers the amount of that judgment in full from B, because (in those circumstances) A will have suffered no loss uncompensated upon which to found a claim in tort against C - see Bryanston Finance Ltd v de Vries  1 QB 703, 730E-F.
45. More difficult questions arise where A sues B alone, compromises the action for a sum payable by B to A "in full and final settlement and satisfaction"; and then sues C. The first question is whether A has, any longer, a claim against C. If the amount payable by B to A does, indeed, represent a "full" satisfaction of A's claim against B, then (where C is a concurrent tortfeasor with B in respect of the same damage) it may be said that A's claim against C in tort will have been extinguished by the compromise which A has made with B - at the least, where B actually pays to A the sum due under the compromise. The reason is that, if A has recovered an amount from B as "full" compensation for his loss, there is no remaining loss upon which A can found a claim against C. The second question is whether, if A does, notwithstanding the compromise with B, continue to have a claim against C, it is consistent with A's "final" settlement with B to allow A to pursue that claim. If A does pursue C, then C will be entitled to seek contribution against B under section 1(1) of the 1978 Act; and it will be no defence to that contribution claim for B to assert that he is no longer liable to A by virtue of the compromise - see section 1(3). It may be said that it is inconsistent with the "final" settlement which A has made with B for A to pursue a course of action (by suing C) which will expose B to the risk that he will have to make a further payment - indirectly, as a result of a contribution claim brought against him by C - in respect of the same damage. For convenience I will refer to the first of those questions as the "full satisfaction" question; and to the second of those questions as the "final settlement" question.
46. The "full satisfaction" question arose in the Jameson case. It is convenient to take the following statement of the facts from the judgment of Lord Justice Auld in this Court,  QB 323, at pages 330H-331B:
"Mr Jameson died on 24 April 1988 at the age of 50 from malignant mesothelioma. Shortly before his death he agreed to accept £80,000 in "full and final settlement and satisfaction" from his former employer, Babcock Energy, of his claim in proceedings against it for negligently and in breach of statutory duty causing that disease by exposing him to asbestos. The sum of £80,000 was significantly less than the full liability value of his claim, reflecting both parties' appreciation of the uncertainty of the litigation if it had proceeded.
Mr Jameson's claim against Babcock Energy was that the harmful exposure had occurred at various premises at which it had employed him, including those of the C.E.G.B. at which Babcock Energy was undertaking work. The fatal disease may have been caused solely by Babcock Energy's negligence or breach of statutory duty as employer, or solely by the negligence or breach of statutory duty of the C.E.G.B. as occupier, or by the respective negligence and breach of statutory duty of both of them. Assuming liability by both, it is accepted by the parties that they are to be regarded as several or concurrent, not joint, tortfeasors.
After Mr Jameson's death his executors issued proceedings against the C.E.G.B. under the Fatal Accidents Act 1976 in respect of the same exposure to asbestos dust as for part of the claim in the settled action against Babcock Energy, alleging similar, but not identical, negligence and breach of statutory duty."
47. The CEGB raised, by way of defence to the Fatal Accidents Act claim, the contention that it could not be liable because Mr Jameson's settlement with Babcock Energy had satisfied his own claim and had thus discharged any claim that he might have had against CEGB as a concurrent tortfeasor. No claim could lie under the Fatal Accidents Act unless the defendant was a person who would have been liable (if death had not ensued) in a suit for damages brought by the deceased. The Court of Appeal rejected the contention that Mr Jameson's settlement with Babcock had discharged any claim he might have had against CEGB. In a judgment with which the other members of the Court (Lord Justice Nourse and Sir Patrick Russell) agreed, Lord Justice Auld, after referring to the authorities on joint tortfeasors and to the judgment of Lord Justice Steyn in Watts v Lord Aldington, said this, at page 337D-E:
"In my view, the principle to be extracted from the authorities to which I have referred is that accord without full satisfaction reached with one tortfeasor does not release a concurrent tortfeasor. That is because the latter is a defendant or a potential defendant to a separate action. Logically, and in the normal expectation of a settling plaintiff, the release of one, unless and to the extent that it amounts to satisfaction of the full value of his several claims, should not be expected to release the others; see, for example Townsend v Stone Toms & Partners  1 WLR 1153 . . ."
Lord Justice Auld went on, at pages 338E-342D, to consider whether the use of the words "in full and final satisfaction" in a negotiated settlement for a sum less than the formulated claim impresses the settlement sum when paid with the quality of full satisfaction for the purpose of the principle which he had already identified. After considering the authorities he reached the conclusion that it did not.
48. The decision of this Court in Jameson was reversed on appeal,  2 WLR 141 (Lord Lloyd of Berwick dissenting). The principal judgment, with which Lord Browne-Wilkinson and Lord Hoffmann expressed agreement, was delivered by Lord Hope of Craighead. It is in his speech, rather than in the speech of Lord Clyde - who was one of the majority, but with whose reasoning the other members of the House did not express agreement - that the reasoning by which this Court is bound must be found.
49. Lord Hope identified the question before the House of Lords, at page 149A-B:
"We are concerned in this case not with an accord and satisfaction which extinguishes the liability in tort of joint tortfeasors, but with the question whether the liability of concurrent tortfeasors for the same harm is discharged by a settlement which has been entered into with one of them."
He explained the basic rule in a passage at page 150E-F:
"The liability which is in issue in this case is that of concurrent tortfeasors, because the acts of negligence and breach of statutory duty which are alleged against Babcock and the defendant [C.E.G.B.] respectively are not the same. So the plaintiff has a separate cause of action against each of them for the same loss. But the existence of damage is an essential part of the cause of action in any claim for damages. It would seem to follow, as a matter of principle, that once the plaintiff's claim has been satisfied by any one of several tortfeasors, his cause of action is extinguished against all of them. As Lord Atkin said in Clark v Urquhart  AC 28, 66, "damage is an essential part of the cause of action and if already satisfied by one of the alleged tortfeasors the cause of action is destroyed".
He went on, at page 151A-B:
"So the first question which arises on the facts of this case is whether satisfaction for this purpose is achieved where the plaintiff agrees to accept a sum from one of the alleged concurrent tortfeasors which is expressed to be in full and final settlement of his claim against that tortfeasor, if that sum is less than the amount which a judge would have held to be the amount of the damages which were due to him if the case had gone to trial and the defendant had been found liable."
50. In expressing the question in those terms Lord Hope must, I think, be taken to have used the expression "in full and final settlement" as a short form for the words actually used in the Tomlin order in that case. The words actually used were "in full and final settlement and satisfaction of all causes of action in respect of which the plaintiff claims in the statement of claim". The question which Lord Hope was addressing in the passages to which I have just referred is, plainly, what I have described as the "full satisfaction" question; not the "final settlement" question. That becomes clear in the following passages; the first at page 151E-G:
"The critical question, as Auld LJ was right to point out, at p. 342B, is whether the claim has in fact been satisfied. I think that the answer to it will be found by examining the terms of the agreement and comparing it with what has been claimed. The significance of the agreement is to be found in the effect which the parties intended to give to it. The fact that it has been entered into by way of a compromise in order to conclude a settlement forms part of the background. But the extent of the element of compromise will vary from case to case. The scope for litigation may have been reduced by agreement, for example on the question of liability. There may be little room for dispute as to the amount which a judge would award as damages. So one cannot assume that the figure which the parties are willing to accept is simply their assessment of the risks of litigation. The essential point is that the meaning which is to be given to the agreement will determine its effect."
51. Lord Hope pointed out that a claim in tort is a claim for unliquidated damages; and that the damages remain unliquidated until the amount is fixed either by the judgment of the court or by agreement. When fixed by judgment against any one of several tortfeasors, full satisfaction would be achieved when the judgment is satisfied. So, he asked, what was the position where the amount of the claim was fixed not by judgment but by agreement between the claimant and one of the tortfeasors. At page 152C-D he said this:
"Is the figure which the plaintiff has agreed to accept in full and final satisfaction of his claim from one concurrent tortfeasor open to review by the judge in the second action against the other concurrent tortfeasor on the ground that, despite the terms of his agreement, he has not in fact received the full value of his claim? Or is the fact that the figure was agreed as to the amount to be paid in full and final satisfaction of the first action to be taken as having fixed the amount of the claim in just the same way as if it had been fixed by a judgment, so that the claim must be held to have been extinguished as against all other concurrent tortfeasors?"
He answered those questions at page 152F-H:
"In the typical case the plaintiff agrees to accept the sum which the defendant is willing to pay in full and final settlement of his claim. Such a settlement normally involves an element of compromise on both sides. Each side will have made concessions of one kind or another to reflect its assessments of the prospects of success if the case were to go to trial. The plaintiff will normally have made a discount from the amount which he regards as full compensation for his loss. He may have withdrawn some elements of his claim, reduced the amounts sought in settlement of others or accepted an overall reduction of the amount claimed. But, whatever the nature and extent of the compromise, one thing is common to all these cases. This is that the agreement brings to an end the plaintiff's cause of action against the defendant for the payment of damages. The agreed sum is a liquidated amount which replaces the claim for an illiquid sum. The effect of the compromise is to fix the amount of his claim in just the same way as if the case had gone to trial and he had obtained judgment. Once the agreed sum has been paid, his claim against the defendant will have been satisfied. . . . I think that it follows that, if the claim was for the whole amount of the loss for which the defendant as one of the concurrent tortfeasors is liable to him in damages, satisfaction of the claim against him will have the effect of extinguishing the claim against the other concurrent tortfeasors." [emphasis added].
52. Lord Hope recognised that there might be cases where the terms of the settlement, or the extent of the claim made against the tortfeasor with whom the plaintiff has entered into the settlement, will show that the parties have not treated the settlement as satisfaction of the full amount of the claim for damages: "In the same way a judge, in awarding damages to the plaintiff in his action against one concurrent tortfeasor, may make it clear that he has restricted his award to part only of the full amount of the claim" - see at page 153B. He referred to the decisions in two Scottish cases, Carrigan v Duncan 1971 SLT (Sh Ct) 33 and Balfour v Baird & Sons 1959 SC 64, and went on, at page 154B-F:
"I think that these cases demonstrate the limits of the inquiry which the judge may undertake in the event of a subsequent action being raised against another alleged concurrent tortfeasor. He may examine the statement of claim in the first action and the terms of the settlement agreement in order to identify the subject matter of the claim and the extent to which the causes of action which were comprised in it have been included within the settlement. The purpose of doing so will be to see that all the plaintiff's claims were included in the settlement and that nothing was excluded from it which could properly form the basis for a further claim for damages against the other tortfeasors. The intention of the parties is to be found in the words of the settlement. The question is one as to the objective meaning of the words used by them in the context of what has been claimed.
What the judge may not do is to allow the plaintiff to open up the question whether the amount which he has agreed to accept from the first concurrent tortfeasor under the settlement represents full value for what has been claimed. That kind of inquiry, if it were to be permitted, could lead to endless litigation as one concurrent tortfeasor after another was sued on the basis that the sums received by the plaintiff in his settlements with those previously sued were open to review by a judge in order to see whether or not the plaintiff had yet received full value for his loss. Different judges might arrive at different assessments of the amount of the damages. The court would then have to decide which of them was to be preferred as the basis for the apportionment between the various tortfeasors. I do not think this can be regarded as acceptable. The principle of finality requires that there must be an end to litigation."
53. Lord Hope expressed his conclusion on what I have described as the "full satisfaction" question at page 154F-G:
"The question therefore is . . . not whether the plaintiff received the full value of his claim but whether the sum which he has received in settlement of it was intended to be in full satisfaction of the tort. In this case the words used cannot be construed as meaning that the sum which the deceased agreed to accept was in partial satisfaction only of his claim of damages. It was expressly accepted in full and final settlement and satisfaction of all his causes of action in the statement of claim. I would hold that the terms of his settlement with Babcock extinguished his claim of damages against the other tortfeasors."
54. The importance of the decision of the House of Lords in Jameson, as it seems to me, is that it shows that A's claim against one concurrent tortfeasor, say C, may be extinguished not only by the satisfaction of a judgment obtained against another concurrent tortfeasor, say B, but also by the payment by B to A of an amount which A and B have agreed shall be accepted in full satisfaction of A's claim. The unliquidated claim which A has against B and C may be converted into a liquidated claim either by a judgment obtained against B or by an agreement with B as to a sum to be accepted in full satisfaction of the claim. In any given case, the question whether or not that is the effect of the agreement between A and B will turn on the common intention to be attributed to A and B when making that agreement. That is a question of construction. But if, on interpreting the agreement between A and B, the court is satisfied that they intended the sum to be accepted in full satisfaction of A's claim, then (on payment of that sum by B) the claim is extinguished as against C also, because there is no longer any loss upon which A can found that claim.
55. It is clear, from the passages which I have set out, that Lord Hope did not base his conclusion on the premise that public policy required that the claimant's executors should not be allowed to pursue an action against CEGB which would have the effect of exposing Babcock to a contribution claim by CEGB because to do so would be inconsistent with the settlement reached between the claimant and Babcock. That was a point addressed by Lord Clyde - see, at page 162C-D:
"In principle it seems to me that where settlement is sought with one alone, where the others are not involved in the proceedings, the intention of the parties should usually be taken to be that they are achieving a complete termination to any claims by the creditor and a complete freedom for the future for the debtor. On the one hand the creditor is being fully compensated for the value of his claim so as to exhaust any right to pursue it further in any direction. On the other hand the debtor is being fully discharged from any possible liability in contribution so that the creditor would be in breach of the agreement were he to sue a third party and create such a liability. Particular circumstances and particular terms in the agreement may obviate such consequences, but, where the matter has been left open and unclear, it seems to me that those are the consequences which should follow upon the settlement of one co-obligant in a joint and several obligation which has been carried out in the absence of any other co-obligant."
But that approach is not reflected in the speech of any other member of the House. The conclusion that the settlement with Babcock extinguished the claim against CEGB made it unnecessary to consider what I have described as the "final settlement" question. That question only arises in a case where the settlement with one wrongdoer does not extinguish the claim against the other wrongdoer. The decision of the House of Lords in Jameson cannot be taken as authority on the "final settlement" question. Authority on that question is found in the decisions of this Court in Watts v Lord Aldington (unreported, 16 December 1993) and Johnson v Davies  2 All ER 649.
Successive contract breakers
56. I have examined the decision of the House of Lords in Jameson at some length, both because the judge relied upon it in reaching the conclusion which he did and because it was put at the forefront of the argument for the respondents on this appeal. But, in the light of that examination, I am not persuaded that that decision provides much assistance in the resolution of the issue in the present case. This is not a case (save, perhaps, in relation to the publication of reports) in which the alleged wrongdoers can be said to be concurrent tortfeasors. Rather, the alleged wrongdoers are successive contract breakers.
57. The contractual claims against Target on the one hand and against Equity & Law on the other hand are claims in respect of consecutive breaches of separate contracts. The claims are linked because it was alleged in the Target action that the wrongful termination of the Equity & Law agreement by Equity & Law was caused by the wrongful termination of the Target agreement by Target. It was that allegation which led to the claim in the Target action for all loss flowing from the termination of the Equity & Law agreement. But the causes of action are independent. An allegation of loss is not a necessary element in a claim for breach of contract. In particular, it cannot be said that the cause of action in respect of the alleged breach of contract by Equity & Law is extinguished by satisfaction of the claim in the Target action. The most that can be said is that, if and to the extent that the claimants were compensated by the settlement of the claim in the Target action for the loss flowing from the termination of the Equity & Law agreement, the claimants cannot make double recovery in respect of the same loss by a claim for damages in the Equity & Law action. So that, if they have received full compensation for that loss under the settlement, the damages recoverable in the Equity & Law action will be nominal.
58. Unless, therefore, the contractual claims in the Equity & Law action should be stayed on the basis that the damages recoverable must, inevitably, be nominal - an issue to which I return later in this judgment - the decision of the House of Lords in Jameson on what I have described as the "full satisfaction" question is not in point. It is impossible, in the present case, to hold that the contractual claims against Equity & Law have been extinguished by any settlement agreement made between the claimants and Target or Abbey Life.
The "final settlement" question.
59. I turn, therefore, to consider whether it is inconsistent with the settlement agreement of 28 April 1998 for the claimants to pursue the present action against Equity & Law. In this context it is pertinent to note that, although Hill Samuel and Abbey Life are the subject of a contribution notice issued by Equity & Law in these proceedings, they have taken no part in the argument before Mr Justice Laddie or on this appeal. If, therefore, Hill Samuel or Abbey Life are prejudiced by the pursuit of the present proceedings - in that they are thereby exposed to contribution claims by Equity & Law - that seems to be a matter of little concern to them. It is a feature of the present appeal that the party who seeks to invoke the protection of the "final settlement" provision in the agreement, Equity & Law, is not a party for whose benefit that provision was included; and the parties for whose benefit it is said that that provision was included, Hill Samuel and Abbey Life, do not seek its protection. Further, of course, nothing in the settlement agreement, and nothing determined on this appeal, can have the effect of protecting Equity & Law from a contribution claim by Hill Samuel or Abbey Life in respect of the payment made under the settlement agreement.
60. In Johnson v Davies  2 All ER 649, in a judgment with which the other members of this Court (Lord Justice Kennedy and Lord Justice Ward) agreed, I sought to analyse the effect on a co-obligor of a "full and final" settlement made by the obligee with the other co-obligor, following the decision in Watts v Lord Aldington  CA Transcript 1578. It was clear that this Court, in Watts, had rejected the traditional distinction between a release and a covenant not to sue. At page 655f-j in Davies, I said this:
"In Watts v Aldington, Tolstoy v Aldington the liability of Mr Watts and Count Tolstoy as judgment debtors was, plainly, several as well as joint. In such a case, for the reasons explained in the judgments in this court, the relevant question is not whether the agreement between the creditor, A, and one of the co-debtors, B, releases the debt which B owes to A. Even if it did, that would, in logic, have no effect on the several debt owed to A by the other co-debtor, C. The relevant question is whether the agreement between A and B precludes A from enforcing the debt owed by C. It is in B's interest that the agreement should have that effect - because, if it does not, C will be in a position (if he pays the debt which he owes to A) to seek contribution from B. It is in A's interest that the agreement should not have that effect - because, prima facie, A will wish to recover from C the balance of the indebtedness. Given the opposing interests of A and B, the question is what have they agreed. As Neill LJ pointed out [in Watts], that has to be determined `having regard to the surrounding circumstances and taking into account not only the express words used in the document but also any terms which can properly be implied' (my emphasis)."
61. Counsel did not seek to persuade us that that was not an accurate summary of the law; and I find nothing in Jameson which is inconsistent with it. Indeed, it seems to me that Lord Hope's observations, at page 151G - "The essential point is that the meaning which is to be given to the agreement will determine its effect." - and at page 154C -"The intention of the parties is to be found in the words of the settlement. The question is one as to the objective meaning of the words used by them in the context of what has been claimed." - provide support for that approach. The question, in each case, is what did A and B intend should be the effect of the agreement which they made. And, given that, in any case where A settles for less than the full amount of his claim against B, A and B will have opposing interests in relation to the effect of the agreement on A's right to pursue C, it seems to me wrong in principle to approach that question on the basis that (in the absence of clear words to the contrary) they must be taken to have intended that the agreement would favour the interests of one rather than the interests of the other.
Construing the settlement agreement
62. On the basis, therefore, that the correct approach is to seek to ascertain, by interpreting the words which they have used in the light of the circumstances in which they have used them, what the parties to the Target settlement agreement intended should be the effect of that agreement on the right of the claimants to pursue Equity & Law, I turn, first, to the words of the agreement itself.
63. Clause 5 of the Target settlement agreement contains a release and discharge, by each of the parties of the others, from "all or any liabilities, actions, causes of action, suits, demands of whatever nature or kind and howsoever and whenever arising which any of them may be entitled to make . . . whatsoever in relation to or in any way connected with the matters specified in clause 2.1 above". The ordinary and natural meaning of those words, as it seems to me, is that each of the parties releases the others from claims which the releasor may be entitled to make against the releasee. In a case where the liability of the releasee to the releasor is a joint liability, the release of the releasee (as one joint co-obligor) will, prima facie, release the other joint co-obligor. In such a case it will be necessary to find words or context which show a contrary intention. Johnson v Davies was, itself, such a case. In a case where the liability of the releasee is a joint and several liability, it may well be appropriate to hold that the intention of the releasor to release those claims should be given effect (as between the parties to the agreement) by treating the release as extending to the several, as well as to the joint, claim against the co-obligor. Whether that was the effect of the agreement between Mr Watts and Lord Aldington was the issue in Watts v Lord Aldington. It was held that it was not. But, in a case where there is no joint liability, it is, as it seems to me, straining the meaning of words such as those used in clause 5 of the Target settlement agreement to hold that (as between the parties to the agreement) the release extends to a separate claim which the releasor may have against a third party who is or may be liable for the same damage. That is not to say that, in an appropriate context, the words cannot be given that effect; but, in the absence of an appropriate context, that is not the effect which the words have in their ordinary and natural meaning.
64. Clause 2.1 of the Target settlement agreement declares that the agreement is "in full and final settlement of all claims and potential claims . . . which the Parties have or may have against each other" arising out of the matters described in paragraphs (1) to (5) of that clause; and goes on to provide that the parties will not commence or prosecute "any proceedings against one another" arising out of those matters. It is, I think, of some importance that, when the parties addressed their minds to the question whether there was to be some restriction on the commencement of further proceedings arising out of the matters listed, they agreed a restriction limited to "proceedings against one another". Had they intended to restrict the right of the claimants to commence proceedings against Equity & Law in respect of, say, the matters described in paragraph (2) - the termination of the Equity & Law agreement - or paragraph (3) - reports made to third parties following the termination of the Equity & Law agreement - they might have been expected to do so; for example by extending the restriction to "proceedings against one another or any other person against whom they may have such claims". They did not choose to do so. Further, when they addressed their minds to the question what "claims and potential claims" were to be the subject of the "full and final settlement" that they were making, they chose to limit those claims to claims "which the Parties have or may have against each other"; they did not choose to include claims which any of the parties to the settlement agreement might have against third parties. And there was an obvious reason for that: Hill Samuel and Abbey Life would not have wished to give up whatever contribution claims they might have against Equity & Law. But if, within the scheme of the clause which they agreed, it was intended that Hill Samuel or Abbey Life should remain free to commence proceedings against Equity & Law, but that the claimants should not be free to commence proceedings against Equity & Law, the parties to the settlement agreement might have been expected to say so. In my view it is impossible to find, in the words of clause 2.1, any clear indication that the parties to the Target settlement agreement intended that the claimants should not be free to bring proceedings against Equity & Law in respect of the matters described in paragraphs (2), (3), (4) or (5) of that clause.
65. Nor, in my view, can that intention be found when the words used are set in the context of the facts known to the parties. The position, which they must be taken to have appreciated, was that, in order to recover, as damages flowing from the termination of the Target agreement, loss which arose from the termination of the Equity & Law agreement - for example, the commissions withheld by Equity & Law - it would be necessary for the claimants to establish, against the defendants to the Target action, that the termination of the Target agreement by Target was the cause of the termination of the Equity & Law by Equity & Law. That was an issue on the pleadings in the Target action; and the claimants' success before Mr Justice Moses in June 1997 had gone no way towards resolving that issue. It was to be expected that, in any settlement between the claimants and the defendants to the Target action, the uncertainty introduced by that issue would be reflected in the settlement figure which the defendants would be willing to agree. But, in proceedings brought by the claimants against Equity & Law, that issue would not arise. It would be no defence for Equity & Law to assert that they were entitled to terminate the Equity & Law agreement summarily on the ground, only, that Target had terminated the Target agreement. Equity & Law would have to assert - as it has done in the present proceedings - that it was entitled to terminate the Equity & Law agreement by reason of Inter City's conduct, not by reason of Target's conduct. And, in the light of the claimants' success before Mr Justice Moses, it must have appeared to the claimants and to the Target defendants that that defence would face obvious difficulties. But it would also have been obvious to the parties to the Target settlement agreement that a claim against Equity & Law in respect of the loss of the business of Inter City would be met by the defence that the business had been reduced, very substantially, by the allegations that were made by Target at the end of January 1993; and that, in the light of those allegations, it was almost inevitable that Equity & Law would have chosen to terminate the Equity & Law agreement on notice, as it was entitled to do under clause 8.1.1 of the Equity & Law agreement, if it had not chosen to do so summarily. So, although there were some elements of loss which might more easily be recovered in an action against Equity & Law, the greater part of the loss would have to be recovered in the Target action if it was to be recovered at all.
66. Those factors lead to the conclusion, as it seems to me, that it would have been commercially sensible for the claimants, on the one hand, and Hill Samuel and Abbey Life, on the other hand, to reach a bargain in April 1998 under which (i) the Target defendants paid a substantial sum in respect of the claims in respect of which they really had no defence - that is to say, the claims in respect of commissions withheld by Target, the claims in respect of the loss of Inter City's business, and the claims of the individual claimants arising out statements made by Target - while taking a discount in relation to the claims which turned on the issue about which there was a real dispute - that is to say, whether Equity & Law's decision to terminate summarily the Equity & Law agreement was independent of Target's conduct - and in respect of which, as it must have appeared to claimants and the Target defendants, Equity & Law would have little or no defence - that is to say, the claims in respect of commissions withheld by Equity & Law, and (ii) the claimants were free to pursue their claims against Equity & Law. The bargain would be commercially sensible because it would have the effect that liability in respect of the claims for commissions withheld by Equity & Law would be passed to the person, Equity & Law, to whom (on Target's view of the case) it properly belonged; without leaving Hill Samuel and Abbey Life (if they were correct in that view) with any real exposure to a contribution claim - because they would already have paid what (on their view) was their proper share of the loss suffered by the claimants.
67. In the circumstances that, as it seems to me, an agreement which left the claimants free to bring proceedings against Equity & Law would (in the circumstances of this case) have been a perfectly sensible commercial bargain both for the claimants and for Hill Samuel and Abbey Life on the other hand to make in April 1998, I can see no reason to give what I would regard as a strained meaning to the language of the Target settlement agreement so as to avoid that result. I can see no reason to impose a restriction on the claimants which Hill Samuel and Abbey Life did not seek and which it is unnecessary to imply.
Abuse of process
68. The judge did not base his decision on the ground that the commencement of the current proceedings some months after the termination of the Target action was an abuse of process - in the sense identified in cases such as Henderson v Henderson (1843) 3 Hare 100 and Yat Tung Investment Co Ltd v Dao Heng Bank Ltd  AC 581; and there is no respondents' notice raising that ground. It is unnecessary, therefore, to address the point in this appeal. But the judge was concerned at the prospect of proceedings in which the claim was, as he thought, likely to lead (if successful) to an award of only nominal damages.The judge addressed this point in paragraph 47 of his judgment:
"47. . . . [Mr Kosmin, counsel for the claimants] emphasises the fact that in Jameson Lord Hope's reasoning was founded on the principle that damage is an essential element in tort. Therefore if the claim for damages is satisfied by settlement with one tortfeasor, that ingredient of the cause of action is no longer satisfied and the second cause of action withers. He says that an action for breach of contract is not dependent on damage. It follows that even if no further damages are recoverable, the cause of action survives. I find this argument unattractive. It would result in the action being allowed to proceed for no purpose other than to obtain a declaration that a breach has been committed. No other relief could be obtained. It appears to me that to allow an action to proceed in those circumstances would be futile, a waste of the parties' time and money and would delay the court in disposing of more meaningful disputes. In those circumstances the court should stay or strike out the proceedings."
69. I am bound to say that I find the statement, as a general proposition, that a court can and should stay proceedings brought for the purpose only of obtaining a declaration that a breach of contract has been committed, on the ground that it has other, more meaningful, disputes with which to occupy its time, startling. It has, I think, long been the practice to permit a party to seek the determination of the court that he has been wronged by an alleged contract breaker, notwithstanding that he has suffered no loss, unless he is engaged in an exercise which can properly be characterised as an abuse of process. But the proposition, as stated by the judge, loses whatever force it might otherwise have in the circumstances that this is a case in which the individual claimants have a real interest in establishing that the termination of the Equity & Law agreement was wrongful. Whether or not that caused them financial loss, over and above the loss caused by the prior termination of the Target agreement, it must have given rise to a real and substantial loss to their reputation and standing in the financial services industry.
70. In that context, it is important to have in mind that Equity & Law asserts in paragraph 22.1 of its pleaded defence that it was entitled to terminate the Equity & Law agreement summarily on the ground that Inter City was, indeed, engaged in the improper conduct of "churning" Target investment contracts into Equity & Law investment contracts; and that stance was maintained robustly by counsel on its behalf on the hearing of this appeal. Equity & Law have not thought it right, following the withdrawal by Target in June 1997 of the allegations of improper conduct, to withdraw its own allegations, which are to the like effect. Those allegations remain "live"; and I do not think it possible to brush aside, as counsel for Equity & Law at one stage attempted to do before us, what (as I accept) are the very real concerns of the individual claimants that their integrity is still in question by a major financial institution.
71. The importance to the claimants of the concerns to which I have referred finds expression in the claims made under paragraphs (4), (5) and (6) in the writs, to which I have drawn attention. If I were persuaded (which I am not) that pursuit of these proceedings to a successful conclusion would be unlikely to yield any financial benefit to the claimants, I would still think it right to allow the proceedings to continue in order that the claimants may have the decision of the court (which they seek) on the question whether or not they were guilty of the improper conduct which Equity & Law continues to allege against them.
72. For those reasons I would allow this appeal.
LORD JUSTICE ROBERT WALKER:
73. I agree that this appeal should be allowed for the reasons set out in the judgment of Chadwick LJ. I add a few comments of my own.
74. All the courts which heard Jameson v CEGB seem to have made the working assumption that if Babcock Energy and the CEGB were both liable as concurrent tortfeasors, they were liable for the same damage (see especially the judgment of Auld LJ  QB 323, 334, in which concurrent tortfeasors are defined in those terms). That was no doubt the right assumption to make, although Mr Jameson had during the 1950's worked for Babcock Energy (and, it seems, been exposed to asbestos) at various premises other than those of the CEGB.
75. In that respect therefore the case was (as Lord Lloyd noted in his dissenting speech,  2 WLR 141, 145) comparable to very many personal injury cases, such as traffic accident cases in which a claim is made by a passenger against the drivers of two vehicles which have collided. Similarly The Koursk  P 140, in which this court first clearly spelled out the difference between joint and concurrent (but separate) liability in tort, was a case in which one vessel in a wartime convoy, proceeding at night without lights, was sunk because of the concurrent but separate negligence of those manning two other vessels. In such cases there is no doubt but that the claimant is claiming against both defendants for the same damage. But in other areas (such as clinical negligence) the identity of the damage for which two or more defendants may be liable may depend on difficult and strongly-contested issues of causation.
76. Similarly claims for breach of contract against separate contractors are likely to give rise, not to claims in respect of precisely the same damage, but to overlapping claims (the expression used by both Lord Lloyd and Lord Clyde in relation to Townsend v Stone Toms & Partners  1 WLR 1153, (No 2) (1984) 27 BLR 26, a case of claims in contract against a builder and an architect). Claims against separate but concurrent contract-breakers are much more likely to overlap (rather than to coincide completely), and the fact that they do not coincide completely in this case does to my mind put it some distance away from Jameson.
77. Another area of the law of tort in which the identification and quantification of damage may be highly debatable is in the law of defamation. Because of the individual claimants' concerns about their reputations there is at least a faint parallel between the present case and an action for defamation. That parallel was touched on, but not fully explored, in argument. In the law of defamation the notion of full satisfaction (in the sense in which that expression is used in the judgment of Chadwick LJ) needs careful handling (see for instance Lewis v Daily Telegraph  AC 234, 261; Dingle v Foot  AC 371, 396). The publication of defamatory matter by one person may in some circumstances have the natural and foreseeable consequence that others will republish the same defamatory matter. But it would be surprising if a settlement with the first publisher barred a claim against a republisher, whether or not there were possible claims for contribution between the different defendants.
78. The understandable concerns of the individual claimants about their reputations take this case outside the general run of cases in which further litigation might be futile (and even an abuse of process). Serious allegations against them have been made in the pleadings in the Equity & Law action, and those allegations have not been withdrawn (and were indeed repeated in open court in the course of the hearing). It cannot be an abuse of process for the individual claimants to seek to refute the allegations which are, despite all that happened in front of Moses J, being maintained against them.
SIR ROY BELDAM:
79. I agree that this appeal should be allowed for the reasons given by Chadwick LJ and Robert Walker LJ. The first question raised by the facts so fully and clearly set out by Chadwick LJ is whether by the settlement of 23rd April 1998 the appellants must be taken to have intended to abandon all their claims against the respondents. As has been pointed out, this depends on the proper interpretation of the appellants' agreement with Hill Samuel/ Abbey Life ("Target").
80. The background is significant. The settlement was reached only after seven days of evidence had compelled Target to concede defeat in the trial of the preliminary issue, to withdraw its counterclaim and shortly thereafter to withdraw all the serious and damaging accusations it had made against the appellants.
81. In my view the terms of the settlement are clear and unequivocal and do not support the argument that the agreement was intended to release the respondents from liability. The parties to the agreement are defined and the subject matter is "the claims which the parties have or may have against each other ...."; the parties agreed "not to commence or prosecute any proceedings against one other..." and by clause 5 they agreed to release and discharge each other and their respective directors officers and employees ... .In my view these express references exclude the implication that it was the parties' intention to confer similar benefits on the respondents.
82. Nor do I agree that the sum accepted by the appellants in compromising their claims must necessarily be taken to represent the full amount of their damage. Both the judge and counsel for the respondents emphasised that Target had "paid a high price for peace". The question is not whether the price was high but whether it was full in the sense that it was intended to cover all damage suffered not only by reason of Target's breaches of its agreement but by reason of the respondents' breaches of its agreements. As has been pointed out, the damage claimed is not co-extensive but cumulative and, as it has aptly been described, overlapping. In Jameson's case the extent of each tortfeasor's contribution to causing Mr Jameson's fatal illness was incapable of separate assessment and they were properly to be regarded as jointly liable. The respondents on the contrary are severally liable whether for breach of their contracts or in tort. At most they can argue that due to the settlement the appellants have suffered no additional loss.
83. I do not regard as far-fetched or bound to fail the appellants' assertion that they have suffered additional damage from the respondents' later and continuing assertions of serious financial misconduct. Having terminated their agreements relying on Target's allegations the respondents by refusing to withdraw their own complaints to the regulators may well have caused significant loss both to Inter City and the individual plaintiffs.
84. In my view the appellants are entitled to seek a declaration that the respondents were in breach of contract thereby giving themselves the opportunity, denied them by the respondents when they terminated their agreements, to refute the serious allegations made and apparently still persisted in by the respondents and, if successful, to claim that the statements should be corrected. I do not regard the continuation of the proceedings for this purpose as an abuse or mis-use of process.