Settlements induced by error

In Kyle Bay Ltd v Certain Lloyd’s Underwriters [2006] EWHC 607 (Comm) the assured compromised a claim under a business interruption policy, by entering into a final settlement. The assured then sought to argue that parties had been in error in adopting a construction of the policy that understated the amount actually due, and that the settlement could be overturned. Deputy High Court Judge Jonathan Hirst QC held that the parties had indeed erred in their construction of the policy but that the settlement could not be overturned by the assured.