Effect on Unknown Claims

Bank of Credit and Commerce SA (In Compulsory Liquidation) v Ali and Others (H of L TLR 6 March)

BCCI alleged that employees who had entered into redundancy agreements were precluded from claiming stigma damages because of the wording of the agreement. In a test case, the wording of the agreement was ‘[Mr Naeem] agrees to accept the terms set out in the documents attached in full and final settlement of all or any claims whether under statute, common law or in equity of whatsoever nature that exist or may exist and, in particular, all or any claims rights or applications of whatsoever nature that [he] has or may have or has made or could make in or to the industrial tribunal…’. A party might agree to release claims or rights of which he was unaware and of which he could not have been aware, even claims that could not on the facts known to the parties been imagined, if appropriate language was used to make plain that that was his intention. However, a long and salutary line of authority showed that, in the absence of clear language, the court would be very slow to infer that a party had intended to surrender rights and claims of which he was unaware and could not have been aware. Neither BCCI nor Mr Naeem could realistically have supposed that a claim for stigma damages lay within the realm of practical possibility. They could not have intended to provide for the release of rights and the surrender of claims that they could never had in contemplation. If they had sought to achieve so extravagant result, they should have used language that left no room for doubt and that might at least have alerted Mr Naeem to the true effect of what, on that hypothesis he was agreeing to. In a dissenting judgment, Lord Hoffmann thought that that was precisely what the agreement did achieve. ‘It conveyed the impression that the draftsman had meant business. He had gone to some trouble to avoid leaving anything out… No case of suppressio veri had been made out. The stigma claim accordingly fell within the description of claims that Mr Naeem had agreed to release’.