In its judgment handed down on 29 September 2023, the Court (Freedman J) granted an application by National Westminster Bank Plc (“Natwest”) to strike-out and/or for reverse summary judgment on deceit claims for nearly £100 million brought by ex-customers of Natwest, Mr and Mrs Riley (the “Rileys”). Natwest was represented by Paul Sinclair KC and Laurie Brock, instructed by Steven Mills and Sam Parr at TLT LLP.
The Rileys alleged that between 2009-2012 Natwest had made various representations to them and to a company called Riley Holdings Limited (“RHL”) concerning – in summary – its intention towards them; in particular that Natwest intended to support and/or rehabilitate RHL and return it from its Global Restructuring Division (“GRG”) to ‘mainstream’ banking. The Rileys alleged that these representations were false and fraudulently made because, in fact, Natwest had classified RHL as a ‘Non Core’ customer and thus had already determined an intention to ‘run down’ (and seek to profit from) RHL and then exit the relationship.
Natwest, which denied the claims at every level, applied to strike-out and/or for ‘reverse’ summary judgment on the claims on two grounds: (1) that the claims had been compromised and released by reason of a prior Settlement Deed entered into between the parties (the “Settlement/Release Issue”); and (2) that the claims were time-barred (the “Limitation Issue”).
Following a two-day hearing in May 2023, the Court has now found in favour of Natwest on the Settlement/Release Issue and dismissed the claims.
The Court held (in summary) that: (i) the wording of the Settlement Deed was very wide (indicating that the parties had intended to ‘draw a line’ under their relationship); (ii) the background to the Settlement Deed, which included extensive correspondence from the Rileys’ then solicitors advancing various allegations against Natwest and a well-known report criticising GRG (the Tomlinson Report), showed that the Settlement Deed was objectively intended to cover allegations of deliberate wrongdoing; and (iii) the Rileys and/or RHL had derived significant benefit under the terms of the Settlement Deed such that it would objectively have been uncommercial for the parties to have considered that the Rileys were nevertheless free in future to raise the matters which were now alleged.
The Court also applied recent authority concerning the contractual release of fraud claims (Maranello Rosso Limited v Lohomij BV  EWCA Civ 1667), reiterating that for a settlement deed (or other similar document) to compromise/release a claim in fraud it is not necessary for the word ‘fraud’ (or similar) specifically to be used; and holding that reliance on the so-called ‘sharp practice’ doctrine does not avail claimants like the Rileys who seek to repackage prior very similar allegations under a new ‘fraud’ label.
The Court found that, whilst Natwest’s arguments on limitation were “quite strong” and there was “much to be said” in favour of the contention that the claims were also time-barred, the Rileys’ contention to the contrary was at least arguable. However, this conclusion was irrelevant in light of the Court’s conclusion on the Settlement/Release Issue.
The judgment can be found here.