Settling Disputes: Settling "All Claims" Includes Unknown Claims Related To Fraud

In a recent judgment, the Court of Appeal ruled that an agreement for the settlement of "all and any claims" extended to unknown claims based on dishonesty and fraud. This is despite the release failing to expressly refer to such claims. In dismissing the claimant's appeal, the Court emphasised that the usual principles of contractual construction apply to settlement agreements and reiterated that there is no rule of law that express words are required in order to release claims in fraud. In this update, we consider the implications of this ruling and the importance of carefully considering the drafting of such releases.

Background

In this case, the claimant company (MRL) purchased a collection of 71 classic cars valued at over €150 million. MRL purchased the cars with the intention of selling them on for a profit at auction. MRL financed the deal by borrowing €90 million from the first defendant. It was agreed that the cars would be sold via the third and