Category: Contract and Commercial Law

The paradox of the Billionaires saying that Court Orders have no value, for without Court Orders there could not be Billionaires

11th February 2025

Those saying that Orders of the Court can be freely defied should be careful what they wish for

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Imagine a billionaire, and imagine then their billions being somehow, unlawfully confiscated.

These unlawful confiscations could be in terms of their physical possessions being taken away; or titles to their real property being transferred to someone else; or the transfer away of monies in bank accounts and trust funds; or the titles in intangible property, such as intellectual property rights, being fraudulently assigned; or their contractual entitlements being wrongly nullified; or whatever.

Imagine whatever the species of wealth, it was by some unlawful means no longer to be the wealth of the billionaire.

What is the poor billionaire to do?

The billionaire would contact their lawyers, and the lawyers would then take legal actions; if needs be, the lawyers would apply to the Courts for remedies and sanctions, so that the unlawful confiscations are ceased and desisted from, and the property returned, and so on.

Whatever the species of wealth, there will be some legal means for the billionaire’s lawyers to seek legal redress form a court of competent jurisdiction.

And so in each and every case, the lawyers will be seeking an Order of the Court.

And not only would the lawyers be seeking an Order of the Court, they would be expecting that the Order of the Court would be respected and would be enforced.

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The wealth of any billionaire (or of anybody else) is ultimately a bundle of legal rights – in contract, in property, in trusts, and so on.

It is because these rights are enforceable that the wealth exists and accumulates. Unless the legal rights are enforceable, there simply is no wealth.

And any enforceable legal right usually means ready access to an Order of the Court.

But.

If Orders of the Court have no inherent value – that it is open for others to freely disobey the Orders of the Court – then what ultimately depends on Orders of Court becomes suddenly precarious.

Therefore those – billionaires and others – who say that Orders of the Court can be freely defied, on a pick-and-choose basis should be very careful for what they wish for.

For without compliance with Orders of the Court, there cannot be any billionaires.

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Why Donald Trump is not really “transactional” but anti-transactional

4th February 2025

A contract lawyer’s perspective on how Trump uses deals and deal-making

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Contract law is (for me) the most exciting and satisfying area of law.

(Constitutional law and criminal law and media law are all very interesting in how they regulate real life activity, but only contract law is exhilarating. I once read Patrick Atiyah’s extraordinary Introduction to the Law of Contract in one go on a long plane journey, and the same author’s The Rise and Fall of Freedom of Contract is one of the best intellectual histories ever published.)

And so it is from a contract law perspective that this post looks at the question of whether Donald Trump, the businessman-turned-President, is “transactional” in his political approach.

This is certainly what many pundits are saying:

Are these pundits right?

Has this new conventional wisdom hit upon something?

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From a contract law – and contract lawyer’s – perspective, Trump is not “transactional”.

Indeed, he is the opposite of transactional: he is instead anti-transactional.

A transaction is a two-way process, an exchange where a party agrees to do a thing in return for another party agreeing to do a thing.

To use old-style language, a transaction is a bargain, an exchange of promises.

And for the business people concerned in a commercial transaction, that contract has sanctity. So if a party does not comply or even breaches the contract there are remedies which are intended to place the injured party in the position they would have been had the agreement been properly performed. Often these are “money” remedies, but sometimes they can be injunctions or other court orders.

The court will enforce what the parties had agreed, for the agreement is the thing.

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But for Trump, the agreement is not the thing.

An agreement is there to be opportunistically repudiated, and not to be performed.

An agreement offers an opportunity to gain leverage, for a new negotiation. for a new exertion of power.

This approach has also been spotted by one acute British observer:

For Trump, notwithstanding his ghost-written book The Art of the Deal, deals are not an art but about artfulness.

For Trump, a hire is only of any use so long as they can then be “fired”.

Transactions are just there for suckers.

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There is nothing inherently weak in this anti-transactional approach: and indeed it has proved successful for Trump, both politically and commercially.

And, yes, he does deploy the rhetoric of “the deal”.

But this only makes him transactional in the same way an atheist going on about “God” makes them a Christian. There is instead a positive disbelief in the words and concepts being used.

And so each supposed agreement with Trump is a mere marker for the next use (and abuse) of leverage: few if any transactions will ever be transacted. Things will move on, there will be new exertions of power, and new things demanded.

For Trump, a contract, like Littlefinger’s chaos, is a ladder.

 

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The value of X – making sense of a re-branding, from a lawyer’s perspective

NDAs and the Public Interest – a beginner’s guide for Matt Hancock and others

2nd March 2023

The publication this week by the Daily Telegraph of the WhatsApp messages of Matthew Hancock with several third parties was unusual and striking.

It was so unusual and striking that the first response of many was: surely there must be a law against this sort of thing.

And no doubt Hancock himself thought he was legally protected, having entered into (we are told) a Non Disclosure Agreement (NDA) with Isabel Oakeshott, the ghost writer of his recent book about his experiences as health secretary in dealing with the pandemic.

On available information, it appears the ghost writer has in turn disclosed the messages to the Daily Telegraph, and the newspaper then published a selection of these messages (we are told) without prior notice to Hancock or to any of the third parties with whom Hancock messaged.

The messages are certainly of interest to the public and, given the insights they provide into how government (and the media) dealt with the pandemic – especially in respect of what happened with care homes and testing – the publication of the messages can plausibly be said to be in the public interest.

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This post now sets out the general law of England and Wales in respect of NDAs and the public interest, and it then will apply that general law to what appears to be the facts of this incident.

In doing so, I have not had sight of the actual NDA which was signed between Hancock and his ghost writer – and, as will become apparent, a great deal can turn on the terms of a NDA.

For although NDA sounds as if it should be an acronym for a generic thing, there are many ways of framing a NDA.

NDA is not, in and of itself, a legal term of art, but instead a label of convenience.

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To understand NDAs you must first understand what it means not to have a NDA.

If there is not a NDA between two parties there will still be the law of confidentiality.

(Technically, confidentiality is not law but what is called “equity”, which is a set of doctrines and rules which complement law, but I hope I may be permitted to call it law for the purposes of this post.)

Confidentiality usually works as follows: person (A) imparts information to person (B) and when that information has (i) the quality of confidentiality and (ii) been imparted so that it is plain that it is considered confidential, the courts will protect that confidential information when they can.

If tests (i) and (ii) are met then person (B) will be bound to keep the information confidential.

This means that if person (B) wrongly discloses that information to another, or misuses the information, then (A) can obtain an injunction against (B).

(A) can also, depending on circumstances, obtain another remedy against (B) such as an “account of profits” of the monies made by (B) in wrongly disclosing or misusing that information.

Generally, the law of confidentiality is about the remedy of injunctions.

This is because injunctions are the supposed means that confidential information can remain confidential: the cork is put back into the bottle.

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So given there is already a general law of confidentiality, why do parties have NDAs?

There are many reasons.

First, NDAs can serve to identify and list the information which is confidential, so that there is no need to rely on the general test of whether the information has the quality of confidential information.

Second, the NDA will show beyond serious doubt that the parties were aware that the information was imparted on a confidential basis.

These two reasons supercharge the basic law of confidentiality so that the wronged party can show a court the two tests are met at law.

But there are other reasons why parties may want a NDA.

NDAs can provide the financial terms of the parties: in essence how much is being paid to the parties in respect of the exchange of information.

A strong NDA will also provide the financial consequences of what will happen if a party breaches the NDA, such as an indemnity or damages.

A NDA can also provide for the intellectual property position of the imparted information – for example, whether the receiving party also has a licence to use the information and for what purposes.

But.

Generally NDAs are signed as a ceremonial act of trust between the parties, a rite of passage.

Often people will ask for and sign NDAs without much consideration of their contents, so that they can progress with a commercial or media relationship.

NDAs also often suit both parties as a convenient shield, and a NDA can be used as the complete reason not to disclose something.

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NDAs, however, are not magical devices.

They do not, in and of themselves as signed pieces of paper, stop an unwanted disclosure – especially if trust breaks down.

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If party (B) wants to breach a NDA then there will often be little that (A) can do to stop them.

This is especially the case if (A) is not given notice of the breach.

For, as set out above, the law of confidentiality is generally about the remedy of an injunction.

And as injunctions are discretionary remedies of the court, they will not usually be granted if the court order would be futile or academic.

It would be too late to put the cork back in the bottle.

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So if (A) cannot obtain an injunction to restrain publication or some other wrongful disclosure by B, what is there for (A) to do?

Well.

This will come down to the other terms of the NDA – and often with NDAs there will not be other terms.

Sometimes, especially when it is foreseeable that party (B) will breach the NDA, there can be financial terms that would deter (B) from doing so.

For example, there could be structured payments that would not be payable in the event of any breach.

Or there can be an indemnity against the costs of dealing with the consequences of a breach.

But often the NDA will be silent, for – as set out above – the NDA is usually a convenient shield or a ceremonial ornament.

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And now we come to the public interest.

Even if (A) has been given notice of an imminent breach, if (B) pleads the public interest, then the court may not give (A) an injunction.

All (A) would then have, if they have been careful, would be other terms of the NDA.

The legal position was recently summarised by a judge:

“The modern (i.e. post-[Human Rights Act 1998]) approach as to the public interest defence is set out in the Court of Appeal’s judgment in Associated Newspapers Limited v HRH Prince of Wales […].

“The four main tenets can be summarised as follows:

“(1)  There is an important public interest in the observance of duties of confidence since those who engage employees, or who enter into other relationships that carry with them a duty of confidence, ought to be able to be confident that they can disclose, without risk of wider publication, information that it is legitimate for them to wish to keep confidential (ibid at [67]).

“(2)  The modern approach as to the circumstances in which the public interest in publication can be said to override a duty of confidence is whether a fetter of the right of freedom of expression is, in the particular circumstances, “necessary in a democratic society”.  The test is one of proportionality: the court will need to consider whether, having regard to the nature of the information and all the relevant circumstances, it is legitimate for the owner of the information to seek to keep it confidential or whether it is in the public interest that the information should be made public (ibid at [67]).

“(3)  It is arguable that a duty of confidentiality that has been expressly assumed under contract carries more weight, when balanced against the restriction of the right of freedom of expression, than a duty of confidentiality that is not buttressed by express agreement; but the extent to which a contract adds to the weight of duty of confidence arising out of a confidential relationship will depend upon the facts of the individual case (ibid at [69] citing Campbell v Frisbee [2003] ICR 141).

“(4)  Thus, in essence, the Court must consider whether, having regard to the nature of the information and all the relevant circumstances, it is legitimate for the owner of the information to seek to keep it confidential or whether it is in the public interest that the information should be made public.”

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Applying these four tests in the instant case, Hancock would say that as the messages had been disclosed to the ghost writer under a contract, this “carries more weight, when balanced against the restriction of the right of freedom of expression, than a duty of confidentiality that is not buttressed by express agreement”.

Hancock would also say there was an “important public interest in the observance of duties of confidence since those […] who enter into other relationships that carry with them a duty of confidence, ought to be able to be confident that they can disclose, without risk of wider publication, information that it is legitimate for them to wish to keep confidential”.

But.

The ghost writer would say “having regard to the nature of the information and all the relevant circumstances […] it is in the public interest that the information should be made public”.

Here the ghost writer would also be able to point to the material being supplied for a book on the pandemic, as well as to the contents of the messages.

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The Daily Telegraph did not sign the NDA and so would not be bound by its terms.

Hancock’s remedies, if any, against the Daily Telegraph would be under the general law of confidentiality, or perhaps under the law of misuse of private information, data protection law, or even copyright.

But whichever way he framed the claim, he would face (in some form) a public interest defence.

The position of third parties with whom Hancock messaged, however, may be stronger.

And one expects the Daily Telegraph legal team has been very careful in respect of third party information it is disclosing from the messages.

The Daily Telegraph must have had very bullish and robust legal advice on the public interest.

They also felt confident enough in their public interest defence not to give Hancock notice of publication.

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Hancock is today quoted as saying:

“There is absolutely no public interest case for this huge breach.  All the materials for the book have already been made available to the inquiry, which is the right, and only, place for everything to be considered properly and the right lessons to be learned.  As we have seen, releasing them in this way gives a partial, biased account to suit an anti-lockdown agenda.”

If Hancock sincerely believes that there is absolutely no public interest defence then presumably there is no bar to him seeking some form of legal remedy against either the ghost writer or the newspaper – for example to restrain publication of messages so far unpublished.

He could even seek to obtain an account of profits from the ghost writer or the newspaper if he believes they are acting uncocionably.

So far it appears that he may not take legal action, he also has said today (emphasis added):

“I will respond to the substance in the appropriate place, at the inquiry, so that we can properly learn all the lessons based on a full and objective understanding of what happened in the pandemic, and why.”

If he believes that, one may wonder why he published a book seeking to give his side of what happened before the inquiry.

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NDAs are usually ornaments or shields.

Unless they are tightly drafted and prudently structured, they offer little protection in practice to an imparting party if the other party deliberately breaches the NDA without notice.

As such NDAs are often articles of trust.

And here is the paradox: given NDAs often depend on trust, they usually are not needed, and if there is lack of trust, then the NDA can make little difference.

On the available information, Hancock was naive to believe a NDA would give firm, still less absolute, protection against onward disclosure of the messages.

And on the available information, there does appear to be a public interest in disclosure to the public of the messages – at least to the extent that they show public policy making and implementation in action.

As Hancock himself has published a book which has been described as misleading based on the same material, then he may struggle to get redress in respect disclosures which expose his own misleading account.

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We do not know what were the terms of the NDA – and so we cannot pass comment on whether the NDA was well drafted for its purpose or not.

But we can evaluate the wisdom of Hancock in thinking any NDA, on any terms, would protect him against onward disclosure of the messages by a counter-party willing to breach the NDA on the basis of the public interest.

It was a daft thing for him to do.

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This blog enjoys a high standard of comments, many of which are better and more interesting than the posts.

Comments are welcome, but they are pre-moderated and comments will not be published if irksome, or if they risk derailing the discussion.

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Artificial Intelligence and how it will affect commercial lawyering (and legal blogging)

17th January 2023

Here is a thought:

Or, to perhaps put it another way: could Artificial Intelligence replicate, or even replace, the work of your normal contracts lawyer?

As someone who has spent over twenty years as a commercial lawyer (constitutional law is my interest, and contracts law my drudgery) I would say the answer is yes, and no, and but.

And as a coda, I will aver that those of us who write and comment on legal blogs may face a problem too.

Yes

The yes is a recognition that a certain amount of contracts law in practice is ploddery.

You have a standard form contract, and you read every clause, and you put all the clauses together.

Many standard clauses are what is called boilerplate – their effect, and often their very wording, are identical from one contract to another.

And even clauses which can vary from one standard from to another – payment arrangements, service levels, and key allocations of risk – do not vary very much.

In larger law firms, the task of reviewing, and even drafting, such contracts is given to junior lawyers, even trainees.

Many non-legally qualified contracts managers and procurement officers are better than many commercial lawyers in dealing with straightforward commercial contracts.

And so just as a text comparison program can identify differences between contracts better than almost any human, then a computer which has a bank of hundreds, if not thousands, of standard contracts would be able to identify standard and deviant clauses.

Such a computer may even be able to propose amendments to the deviant clauses so as to place the contract onto a more standard basis.

So, yes, some straightforward contracts reviews could be done by Artificial Intelligence.

No

Standard form contracts are subject to special legal rules in case law and statute, especially when they are for business-to-consumer transactions, and so a store of contracts would not enough: external legal expertise can be necessary.

And being able to advise a client on whether a standard form contract will be in their commercial interests or not is not something Artificial Intelligence is likely to be able to do soon.

That is because assessing commercial risk in a particular situation is not a form of abstract calculus, for it requires an understanding of industry, business, economic, social and human factors.

And, of course, not all commercial contracts are on standard forms.

Certain transactions require bespoke contracts, dealing with the allocations of risk of a range of things that could go wrong.

In IT and media contracts, for example, there often needs to be an understanding of technological risks so that the legal risk allocations match and mirror what problems can happen in practice.

A well-drafted and hard-negotiated bespoke commercial contract is as much a work of cooperation, conflict and collective endeavour as you will find anywhere else in human activity.

But

There is a problem.

The good lawyers who can advise on standard and bespoke contracts can do so because of their apprenticeship in dealing with straightforward clauses in everyday contracts.

You do not have child prodigies in practical law: a practice takes, well, a lot of practice.

One reason for this is that contracts are not linear documents but complex instruments: each clause can and should relate to other clauses.

And the only way to master complex instruments is to understand how the elements of that instruments all fit (or do not fit) together in given practical situations.

(I have said before that legal drafting is akin to coding in making sure lines all work together.)

This means that if Artificial Intelligence replicates and then replaces the work of junior contract lawyers it is difficult to see how senior contract lawyers will gain their necessary experience.

Coda

Perhaps a better route for Artificial Intelligence would be to replicate and then replace the work of legal bloggers and their commenters.

Perhaps the blogpost above was written by Artificial Intelligence, and perhaps also some of the comments below will be too.

If so, then Artificial Intelligence can merrily create blogposts and comments, rendering us all redundant.

Brace brace.

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Law vs Lore

8th December 2022

When I decided to start a Substack I also had to decide what to call it.

I could not call it “law and policy” as that is the name of this blog.

Dear old folkloric wizard “Jack of Kent” is safely dead and buried.

And so I settled on “law and lore” as that put together two things which not only interest me but also are more closely connected than many people realise.

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Let me explain.

Many of those reading this blog will not be lawyers and so have had little need to look up the raw black-letter texts of the law – in statutes, case reports and elsewhere.

Even those of you with the unfortunate affliction of being a lawyer, will not always have read the black-letter texts of every law about which you will have a view or an understanding.

And in society generally, a great deal of the law in practice is what people believe it to be – or should be.

“You cannot do that.”

“I cannot do that.”

“That is not allowed.”

“I have my rights.”

“Technically you are not allowed to do this.”

“Technically if you do this you don’t break a law.”

And so on.

Entire areas of law are, in practice, mini belief systems where people are confident about what the law is, free from ever looking it up: data protection, health and safety, consumer rights, Magna Carta.

And on the political plane, belief is (or was) a great deal of our uncodified convention: a general sense of balance and self-restraint.

This all fascinates me.

I have often wondered what an alien looking down would work out about our laws and legal system just by watching what people do and do not do.

Would such a Martian’s account correspond to what our legal texts say about the law?

And so my view is that to understand law in practice, one has to have an understanding of lore, which I see is helpfully defined online as “a body of traditions and knowledge on a subject or held by a particular group, typically passed from person to person by word of mouth”.

This is not to say that it is consciously invented: those with strong opinions about the law usually believe that they are actually correct.

Sometimes there is a close relationship between law and lore – in, for example, mercantile law, the practices of business folk often give rise to enforceable legal obligations.

And sometimes there are stark discrepancies: for example, data protection in practice often has no relationship with data protection as set out in law.

I would like to explore this distinction between law and lore more in future posts in particular areas.

Let me know if you have any ideas for subjects of such posts.

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Comments are welcome, but they are pre-moderated and comments will not be published if irksome.

A government should not be able to deprive people of possessions and property by mere ministerial diktat

3rd March 2022

Yesterday’s short post turned out to be rather popular, with a number of informed and insightful comments.

(Perhaps that is a hint that I should keep these blogposts succinct!)

The question puzzling me today is whether those clamouring for United Kingdom sanctions against oligarchs realise that it is not a good thing for the government to have summary powers to deprive individuals of possessions and other property.

When the government uses summary powers, say, to deport members of the Windrush generation, or to remove a person’s British citizenship, then liberal rightly are concerned.

Individuals have rights, and there are things no person or group may do to them, without violating their rights.

And if all individuals have rights, and oligarchs are individuals, then it follows that oligarchs have rights.

These rights may not be absolute – and property rights especially can be subject to interferences by the state.

But such interferences need to have a lawful and reasonable basis and follow due process.

And this is the same for oligarchs, as it is for anyone else.

That the government cannot just deprive people of possessions and property by mere ministerial diktat is not a bad thing in a liberal society.

And those who clap and cheer at the prospect of possessions and property being taken by the state without any lawful and reasonable basis, and without due process, should be careful what they wish for.

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Comments are welcome, but they are pre-moderated and comments will not be published if irksome.

A legal look at the Giuffre settlement agreement on which Prince Andrew is seeking to rely

5th January 2022

A happy new year to all the readers of this law and policy blog, and welcome back.

Today’s post is about civil law – that is the law which (broadly) deals with the legal obligations we owe to each other, as opposed to criminal law which (broadly) deals with the obligations we have to the state.

In essence: in civil law you can sue or be sued, and in criminal law you can be prosecuted or not prosecuted.

Civil law – especially contract law – is fascinating, and this post takes a topical legal agreement as the basis for explaining about civil law generally and contract law in particular.

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The topical legal agreement is the recently disclosed settlement agreement between Virginia Giuffre and the now dead Jeffrey Epstein, on which (Prince) Andrew is currently seeking to rely in American litigation.

I have chosen this as a topic because it is rare for the substance of any legal agreement to be newsworthy – and legal commentators have to take our examples as we find them.

I have no view on the underlying litigation as I do not know the facts – and I have no particular view on Andrew other than a general preference for republican government and a disdain for inherited titles.

My sole purpose in this post is to use a topical legal agreement for promoting the public understanding of law.

(By way of background, I am not an American lawyer, but an English lawyer with experience of contracts and civil litigation who has spent part of their career dealing with American contracts and civil litigation, and this post draws on principles I believe are common to English and American contract law.)

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Let’s start by looking at the agreement – click and open tab here.

It is, in essence, a seven-page agreement – and so pages 2 to 8 of the pdf are the ones to focus on.

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A preliminary question is how seriously we should take the agreement as something agreed to by both Epstein and Giuffre – was it a one-sided imposition, or something freely negotiated with both sides getting legal advice?

Clause 9(c) tells us ‘This Settlement Agreement was negotiated and entered into by the Parties with the advice and assistance of respective counsel.’

This means that it is not, say, a standard form contract – but one which has been negotiated by lawyers with each party having legal advice (and the lawyers are even listed at the end of the document).

This in turn means a court will take seriously what was agreed, and it will seek to give effect to what was agreed between the legally advised parties.

This is reinforced by clause 9(a), which provides that the parties ‘confirm and acknowledge that this Settlement Agreement is being entered into without any duress or undue influence, and that they have had a full and complete opportunity to discuss the terms of the Settlement Agreement with their own attorneys.’

Of course, such a provision can – in principle – be disapplied if it is factually untrue and there was actual duress.

On the face of it, this was not an agreement imposed by one party on the other, but one which was negotiated by both parties with the benefit of legal advice.

So, again on the face of it, this is an agreement by which both Epstein and Giuffre intended to be bound.

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With that preliminary question addressed, we come to the first big question.

What was the purpose of the agreement?

This is what can be called a question of construction – putting together the agreement as a whole so that we can then, as the next stage, interpret any constituent part.

With any legal instrument, and especially contracts, construction precedes interpretation.

Here there is a clue to the purpose in the title: Settlement Agreement and General Release.

This title indicates the agreement is doing two things – and you will see that these two things are, in turn, set out respectively in clauses 1 and 2.

But before we get to clauses 1 and 2 we can also see, almost as a recital, that the parties Giuffre and Epstein both entered the agreement so as to ‘resolve the pending litigation’ between them.

This litigation is then set out in clause 1: the parties agree to dismiss a civil claim brought by Giuffre against Epstein in the Florida courts.

But clause 1 only covers part of what was agreed.

For clause 2 then sets out the General Release.

This further provision sets out a more general release than ending one particular case.

Here Giuffre accepts a substantial sum (US$500,000) – as opposed to say a nominal sum – in return for the release.

In respect of Epstein the release provides that Giuffre shall ‘remise, release, acquit, satisfy, and forever discharge [Epstein][…] from all, and all manner of, action and actions of [Guiffre] , including State or Federal, cause and causes of action (common law or statutory), suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, executions, claims, and demands whatsoever in law or in equity for compensatory or punitive damages that [Giuffre] ever had or now have, or that any personal representative, successor, heir, or assign of [Giuffre] hereafter can, shall, or may have, against Jeffrey Epstein […] for, upon, or by reason of any matter, cause, or thing whatsoever (whether known or unknown), from the beginning of the world to the day of this release.’

This is a comprehensive list of things for which Giuffre agrees she cannot now sue Epstein.

Epstein was not only released from the current case but other cases, State and Federal.

If Giuffre was ever to litigate against Epstein again, then Epstein’s lawyers would have sought to rely on this release and have the case thrown out.

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But.

The release is not just in respect of Epstein, but also for other persons.

I will now quote the provision again but with what I had omitted now in bold:

Giuffre shall ‘remise, release, acquit, satisfy, and forever discharge [Epstein] and any other person or entity who could have been included as a potential defendant (“Other Potential Defendants”) from all, and all manner of, action and actions of [Guiffre] , including State or Federal, cause and causes of action (common law or statutory), suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, executions, claims, and demands whatsoever in law or in equity for compensatory or punitive damages that [Giuffre] ever had or now have, or that any personal representative, successor, heir, or assign of [Giuffre] hereafter can, shall, or may have, against Jeffrey Epstein, or Other Potential Defendants for, upon, or by reason of any matter, cause, or thing whatsoever (whether known or unknown), from the beginning of the world to the day of this release.’

These provisions in bold purport to extend the General Release granted to Epstein to other persons or entities – to give them exactly the same protection from further state and federal lawsuits as Epstein.

The term in bold, however, is not clearly drafted.

One reading is that the Other Potential Defendants are those who, on the facts alleged in the Florida litigation, could have been added as defendants to that litigation.

This would perhaps make sense as a matter of construction, as this agreement settles the case in respect of civil wrongs – torts – alleged to have happened in respect of which the Florida court had or has jurisdiction.

This reading is reinforced by the provision in clause 1 that the Court will be asked to retain jurisdiction to enforce the terms of this settlement agreement.

Clause 7 expressly provides that the parties envisaged this matter also capable of being litigated in federal courts (bold added):

‘In the event of litigation arising out of a dispute over the interpretation of this Settlement Agreement, the prevailing party shall be entitled to recover its cost of litigation, including attorneys’ fees and other reasonable costs of litigation. Should the federal court not retain jurisdiction, the Parties (and any third party) agree that the courts of the 15™ Judicial Circuit of Palm Beach County shall have exclusive jurisdiction over the subject matter and shall have personal jurisdiction over the Parties (and third parties).’

What the agreement does not seem to envisage, however, is the matter being litigated in another state, other than Florida.

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In my view, the General Release probably should be constructed as providing protection to Other Potential Defendants in respect of the issues raised in the Florida proceedings.

(This narrow construction would be notwithstanding the General Release is in more general terms than the dismissal in clause 1.)

So, if Andrew – by reasons of residence/jurisdiction, or the facts alleged by Giuffre in the Florida case – was not capable of being a defendant to the Florida proceedings then – as a matter of construction – then it is difficult for me to see how he can take the benefit of the General Release.

The agreement would not have been for him.

In essence: if Andrew could not have been jointly or separately liable for the tort claim within the Florida jurisdiction then the General Release may not apply.

That said: a judge could take a wider view of what the General Release covers, and that it covers not just the Florida allegations.

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There is, however, a possible problem here for Giuffre’s lawyers – for the term Other Potential Defendants must mean something.

The term Other Potential Defendants cannot mean nothing – for this is a negotiated and formal agreement, and the presumption is against surplusage.

If Giuffre’s lawyers contend that the General Release does not extend to Andrew, they must be able to explain who actually was to be covered by by the term Other Potential Defendants.

What Giuffre’s lawyers need to be able to do is to show who would be in the class of Other Potential Defendants – if not Andrew.

And if they can give a plausible meaning to that phrase without it including Andrew then they will address this problem.

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Now we turn to interpretation, as opposed to construction.

Some commentators, with little or no background in contract law, have gone straight to the term Other Potential Defendants and speculated what that phrase could mean.

But a clause is not a legal instrument, and still less a selected quote from a clause.

Yes, Andrew – like you reading this – is a potential defendant: indeed everyone other than Giuffre is.

But a settlement and a General Release in respect of a Florida case is unlikely to create a legal basis of releasing all potential defendants everywhere in the world in respect of any claim brought by Giuffre about anything – not least because the Florida court would not have jurisdiction to enforce such a general release.

In whatever way Other Potential Defendants is to be interpreted as including and not including, it is not an exercise in anything goes.

Other Potential Defendants cannot be interpreted as including Andrew if, as a matter of construction, the agreement would not apply to him.

On the other hand, if Andrew could plausibly have been added as a defendant to the original Florida case, then the phrase can be interpreted so as to include him.

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But.

Even if the agreement can be constructed so as to cover Andrew and the phrase Other Potential Defendant interpreted as including him, there are two further problems for his lawyers.

The first is that, whatever is said on the face of the agreement, there can be rules of law and public policy that may preclude reliance on such an agreement by a defendant in another case in another state.

The essence of Andrew’s objection is that Giuffre should not be allowed to sue him for alleged civil wrongs – that she should not even have access to a court for a determination of her case.

No court will simply nod-along with such a contention – it is a serious matter to remove a person’s right of access to a court.

And so even if Andrew can be brought within the terms of the General Release, a judge may find as a matter of policy that the claim brought by Giuffre should be heard anyway.

A court, of course, would not be likely to do this if the claim was brought against Epstein (or his estate), as he was full square within the terms of the General Release.

But Andrew is at least one step away.

The second further problem is that, even if the agreement can be constructed as to cover Andrew and the phrase Other Potential Defendant interpreted as including him, it may not be legally open to Andrew directly to enforce the provision.

Andrew was not privy – that is, a party – to the original agreement (and, indeed, he is not even named).

This legal principle of privity of contract prevents a stranger to a contract either taking the benefit or bearing the burden of an agreement to which they are not a party.

In essence: it would have been for Epstein (or his estate?) to enforce the term protecting Other Potential Defendants, and not Andrew or another potential defendant directly.

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For completeness, you will see the agreement also provides the following:

‘It is further agreed that this Settlement Agreement represents a final resolution of a disputed claim and is intended to avoid litigation. This Settlement Agreement shall not be construed to be an admission of liability or fault by any party. Additionally, as a material consideration in settling, First Parties and Second Parties agree that the terms of this Settlement Agreement are not intended to be used by any other person nor be admissible in any proceeding or case against or involving Jeffrey Epstein, either civil or criminal.’

Some commentators have leapt on this provision, but I do not think it takes us in any direction very far (though the judge may disagree).

It is not Giuffre who is seeking to rely on the settlement agreement – but a third party.

And the terms are not being relied on by Andrew as admissible evidence of liability or otherwise, but on a question of law in respect of jurisdiction.

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As I aver above, I am not an American lawyer, but an English lawyer with experience of contracts and civil litigation who has spent part of their career dealing with American contracts and civil litigation.

But even if this agreement were under English law, I could not confidently predict what a judge would do.

This is because the agreement – while clear in its primary aim of protecting Epstein from further suit – is not clear about third parties, and this is no doubt because that the position of third parties was not the main purpose of the agreement.

The agreement has been taken from its primary context of protecting Epstein and into a context which the parties perhaps did not envisage.

And so it is not a surprise that the agreement is less clear in this context.

Had the lawyers for the parties in this agreement expected this contract to be used by third parties, then the provisions in respect of third parties would be set out more clearly – but they did not, and so they are not.

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We are currently awaiting the judge’s decision on whether Andrew can rely on this agreement.

In my view, Andrew’s lawyers have the far harder task.

They have to show that, as a matter of construction and interpretation, the General Release covers him when he is not named and is not a party to the agreement; that no rule of law and policy means he loses that protection; and that he can enforce the protection regardless of the lack of privity.

All this, so as to extinguish Giuffre’s right of access to the court, which no court will do lightly in any case.

Giuffre, in turn, only has to succeed on one of these points – though her lawyers will need to explain what Other Potential Defendants means if not the likes of Andrew.

And even if Andrew succeeds on this technical defense, Giuffre may still win on appeal.

In summary and in conclusion: Andrew’s lawyers should be prepared to defend the substantial claim, rather than to rely on this technical defense.

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The story of Jack and Harry – what the respective Grealish and Kane contract situations tell us about all legal agreements, including the Brexit deal

6th August 2021

On the face of it, this blogpost may be about football – but the point it is seeking to advance is about all legal agreements, including the Brexit deal.

So if you are not a football fan, bear with the context, for the post is really about a more important general principle.

By way of background, there have been two football transfer stories in England in the last week.

One is the completed record £100 million transfer of Jack Grealish from Aston Villa (the club I happen to support) to a Manchester club.

The other is the potential and, as yet, frustrated transfer of England captain Harry Kane from a London club to that same Manchester club.

(I hope the supporters of those other clubs do not mind my gentle teasing – Aston Villa fans have not had a great few years, and we have to take pleasures as we can.)

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The story of Jack

The reason why the transfer of Jack took place is that he (with his agent and his lawyers) negotiated a particular provision in his contract with Aston Villa.

This provision appears to have been a clause with the following form:

In the event that

(a) there is a transfer bid of £100 million is received from

(b) a club taking part in the European champions league and

(c) Aston Villa is not taking part in the European champions league,

then a release option can be triggered by the player.

This provision appears to have been inserted in the new contract that the player negotiated and signed with the club last year.

It seems that Aston Villa did not want to sell Jack at less than £100 million nor in circumstances that would adversely affect the club’s chances in the European champions league in the happy (and then unlikely) event the club qualified for the competition.

The £100 million amount selected was a record fee for a transfer between domestic clubs and would have (then) been regarded as prohibitively high, but it also was a sincere and fair estimate of the value to the club of the club’s captain, who they perceived to a be a world-class footballer.

On the other hand, Jack did not want any old transfer from Aston Villa, but he wanted to have the real option of joining a club where he could play alongside and against players of a similar standard to himself in European champions league football.

Both parties agreed that this would not and should not happen if Aston Villa itself was playing in the European champions league.

So both parties agreed that in the foreseeable circumstances of interest from a club taking part in the European champions league, what the allocation of risk would then be, and they agreed a practical provision accordingly.

And when interest came from such a club, the parties then know what their interests and positions would be.

Wise Jack.

Wise Aston Villa.

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The story of Harry

Harry also wants to join the same Manchester club.

But it appears Harry and his advisers did not negotiate such a provision in his contract with his London club, who are not taking part in the European champions league.

This was even though it was foreseeable that clubs taking part in the European champions league would want to purchase the England captain and leading goal scorer.

And because there is no such provision to trigger, Harry is reduced to refusing to turn up for training.

It appears he is seeking to use extra-contractual means to end his contract with present club, so as to force through a desired transfer.

This tactic may or may not work, but it is certainly unseemly.

A better approach would have been for him (and his advisers) and the London club to have sat down and discussed the possibility of such a transfer.

The London club, like Aston Villa, could have stipulated onerous conditions to protect their legitimate interests which would have to be met, and Harry could have accepted these conditions in return for the right to trigger the option of a release if those conditions were met.

Of course, it take takes two parties to agree a contract – and it may be that one (or both) of the parties could have refused such a provision outright.

But such a lack of realism has only resulted in the current messy situation, and stubbornness would have achieved little.

It would have been better for both parties if such a realistic option had been provided for.

Instead Harry is at home upset and frustrated.

He appears to have believed there was a ‘gentleman’s agreement’ that would bind the London club, rather than the club being bound by the actual wording of the contract.

Unfortunate Harry.

Unfortunate London club.

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The story of Brexit

With Brexit, the United Kingdom appears to have adopted the Harry Kane approach to contracts – of signing some agreement and then hoping the agreement does not mean what it says.

And so the United Kingdom government is, in effect, also sulking in its plush London home, hoping to force the European Union to move from what was actually agreed.

A more sensible United Kingdom government would – at the time the agreement was negotiated – have dealt with foreseeable risks by allocating the risks as between the parties.

The United Kingdom should have been more like Jack.

But instead it has been like Harry.

Unfortunate United Kingdom government.

Unfortunate us.

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