Compromising unknown future claims deemed permissible by Court of Session

A settlement agreement will normally seek to compromise all claims or potential claims ‘known of or in existence’ at the date of settlement. However, there has always been a great deal of uncertainty around whether unknown future claims can also be compromised.

In Bathgate v Technip Singapore PTE Ltd, the Court of Session in Scotland has held that s.147 of the Equality Act 2010, which allows discrimination claims to be compromised by way of a settlement agreement, permits the settlement of future claims unknown to the parties at the time the agreement was concluded. The wording of s.147 provides the conditions to be satisfied if a settlement agreement is to be binding. In particular, the contract must be in writing and must ‘relate to the particular complaint’.

The Court of Session disagreed with the EAT’s conclusion that Parliament’s intention in enacting s.147 EqA was that it should only be available in respect of complaints that have already arisen between the parties. The Court concluded that s.147 does not exclude the settlement of future claims so long as the types of claim are clearly identified and the objective meaning of the words used is such as to encompass settlement of the relevant claim.

Transcript: https://www.bailii.org/scot/cases/ScotCS/2023/2023_CSIH_48.html

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Authors

Victoria von Wachter

Call 1997

Daniel Hobbs

Call 1998

Related areas

Employment

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