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Recycling a Claim Against One Tortfeasor After Settlement with Another

What happens in a case involving multiple Defendants when one of those Defendants is not party to a settlement between the Claimant and one or more of the other Defendants?

The case of Vanden Recycling Ltd v Kras Recycling BV [2017] EWCA Civ 354 deals with such a problem.  Vanden (C) had brought a Claim against a former employee, Ms Tumulty (D1), and two waste management companies, Bolton (D2) and Kras (D3), for conspiring to divert business from Vanden using confidential and commercially sensitive information obtained by Ms Tumulty in the course of her employment.  Interim injunctions were made and following disclosure Consent Orders were made between C and D1 and C and D2.  The Consent Order in respect of C and D1 recorded that C admitted to a number of breaches as alleged in the Claim Form and that there be judgment in favour of C, as well as that C could retain such disclosure as it saw fit for the purposes of its continuing claim against D3.  The Consent Order in respect of C and D2 recorded that a sum would be paid by D2 in full and final settlement of the Claimant’s claims against D2. 

D3 issued an application for summary judgment of the claim against it, citing the well-recognised principle that where a judgment has been satisfied as against one tortfeasor no claim survives in respect of the same loss as against any joint or concurrent tortfeasor.  C objected on the basis that there had been no judgment by a Court or Tribunal, and the reference to a continuing claim against D3 in the terms of the Consent Order against D1 made it clear that the intention of the parties was that the settlement sum was not sufficient to discharge the entire Claim against all the Defendants.

Summary judgment was given on the entire Claim.  C appealed on the basis that it wanted to continue proceedings for both damages and injunctive relief against D3.

The Court of Appeal held that a Consent Order unlike a Tomlin Order or a Settlement Agreement had the same effect as an ordinary judgment of the Court and once satisfied the same loss cannot be revisited as against a different tortfeasor.  The intention of the parties was irrelevant because the judgment was for a particular sum in full and final settlement of the claim against D2, which in respect of the damages for conspiracy was the same loss as that claimed against D3.   There was no need to establish any intention between the parties that the settlement sum represented the whole loss sustained by the Claimant because intention is only relevant in the case of a Tomlin Order or Settlement Agreement.  The Claim could only continue in respect of other heads of loss specifically applicable to D3 which were not settled by way of the Consent Order, and summary judgment was given on the damages for conspiracy claim. 

Joanna Kerr / 1st Jun 2017


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