A merger between two major international brokers led to two shareholder suits that were settled for an amount totaling $90 million. The attempt to recover the settlement amount from the insurer’s under the securities claim policy was excluded by the court by reason of the “bump-up” exclusion. It excluded from the definition of “Loss” “any
Settlement agreements
Interpreting a settlement agreement
The Supreme Court of Appeal, in Pelham Stephanus Bothma and Others v Tertius Bothma N.O and Another (Case number 748/2019) [2021] ZASCA 46 (15 April 2021), re-affirmed the position regarding the interpretation of legal documents, re-stating the principle that only admissible evidence of context, conservatively applied, may be led in resolving an interpretation dispute.
The…
Effect of settlement agreement
Ten years after the 2010 World Cup the Supreme Court of Appeal has given judgment in a dispute between the South African Football Association and a travel business relating to travel arrangements for the competition. The parties had a settlement agreement which was in ‘full and final settlement’ of the dispute relating to whether SAFA…
A settlement agreement is not governed by the National Credit Act if the underlying dispute is not
The Supreme Court of Appeal found that if the underlying cause of a settlement does not fall within the parameters of the National Credit Act (NCA), then the settlement agreement cannot logically be converted to a credit agreement under the NCA. The underlying cause (in this case the rental agreement) is of vital significance because…
Acceptance of settlement offer must be unconditional
The Supreme Court of Appeal has reaffirmed the principle that where a party alleges that a compromise (settlement) has been effected in an exchange of correspondence it must be proved that the offer of compromise was accepted. The acceptance must be absolute, unconditional and identical with the offer. Otherwise there is no consensus and no…
Dispute not settled if made subject to written agreement
A UK court examined whether a construction dispute had been settled in the course of without prejudice correspondence between the parties’ lawyers. The letter of acceptance of the offer said the settlement was subject to approval by the board of the builder and would only become valid and binding when executed by authorised signatories.
The…
Limited grounds to set aside settlement made order of court
If a settlement agreement is made an order of court it is not enough to try to set aside the agreement without rescinding the court order.
The order of court is not void and must be rescinded but this can only be done on the limited grounds of fraud and justifiable error (justus error…
UK Court rules that settlement with a concurrent wrongdoer does not release other wrongdoers unless it satisfies the whole claim
A UK High Court has decided that settlement of a claim for injuries sustained by a sub-contractor on a construction project would only extinguish a further claim against a hospital for alleged negligent treatment received following the work accident if the settlement satisfied the whole claim.
The defendant hospital brought an application to declare the…
Settlement agreements and waiver of right to approach courts
On 15 September 2016, the Constitutional Court in Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Ltd, held that a full and final settlement clause in an agreement to settle a dispute was lawful, even though the agreement contained a waiver to approach the CCMA or any other court for relief.
The court highlighted the…
Insurers, settlement agreements and fraud
Insurers should remember that, in the absence of fraud, settlement of an ill-founded claim is nonetheless binding and if you settle despite a reasonable suspicion of fraud you will be bound by the settlement.
That was confirmed as a well-established principle of English law recently in Hayward v Zurich Insurance Co.
It is also…