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Does “full and final settlement” stop the other side suing you again? Only for whatever the settlement agreement actually settles, and if the agreement defines that as the claims in a particular set of proceedings, the other side can still bring a new claim about something else arising out of the same contract. An architect found that out this week, having paid £1.575 million to settle one claim over a building and now facing a second claim, about a different part of the same building, for over £7 million.
The case is United Living (South) Ltd v Dovista UK Ltd [2026] EWHC 2676 (TCC), decided by Mr Justice Eyre in the Technology and Construction Court on 3 November 2026. It was the architect’s application to strike the new claim out, and it failed, so the claim now goes ahead; nothing has yet been decided about whether the architect was actually in breach of its duties.
What happened
United Living was the design and build contractor on the conversion of the Wenlock Building in Wharf Road, London, completed in 2009, and Hawkins Brown was its architect. After Grenfell, the building owner sued United Living over combustible cladding, insulation and missing cavity barriers, and United Living in turn sued Hawkins Brown and others to pass that liability on.
At first United Living’s claim included the Velfac curtain wall and window system on the upper floors. Hawkins Brown’s solicitors said in their response to the letter of claim that the problems were down to poor workmanship rather than design, and United Living came round to the same view and dropped that part of the claim, saying in its particulars of claim that “no claim is addressed to the Defendants” for the Velfac costs.
Then, in late 2022 and early 2023, with a trial fixed for June 2023, the reports changed. One said the Velfac system was beyond repair, another said it “was never designed or intended for the situation it has been used for”, and by late January 2023 United Living’s architectural experts had given a preliminary view that there were grounds for a claim against Hawkins Brown. A mediation in February 2023 led to a settlement agreement in March, under which Hawkins Brown paid £1.575 million, and United Living didn’t mention the possible new claim. In 2024 it sued Hawkins Brown again over the Velfac system and the fire protection of the steelwork behind it, claiming about £3.1 million and £4.2 million.
What the settlement agreement said
Clause 5.1 said the agreement was “in full and final settlement of the Dispute” and released all claims “against any other party in the Dispute”, which it called “the Released Claims”, and clause 6.1 was a promise not to sue over the Released Claims. The difficulty for Hawkins Brown was the definition of “the Dispute” in the recitals, which was the claims and defences in those proceedings about the costs of “elements of the Works”.
Hawkins Brown argued that the parties obviously wanted finality, and pointed to the wide definition of related parties and to the entire agreement clause, but the judge followed the Court of Appeal in Bin Obaid v Al-Hezaimi [2024] EWCA Civ 612, which said that parties settling proceedings normally mean to settle the disputes they’ve been litigating, and that if they want something wider “they usually signal their intention clearly”. Legally advised commercial parties could easily have released all claims arising out of the appointment or the works, and they hadn’t. Bin Obaid also says that a claim which was dropped before the settlement isn’t settled by an agreement covering the claims then in issue, which was exactly the position with the Velfac claim.
Hawkins Brown also argued that United Living was estopped, having represented that the settlement was the end of everything. The judge said that if he had been making a final decision he would have called that argument untenable, partly because the entire agreement clause said neither side was relying on representations outside the agreement.
Keeping quiet about a possible claim
The part that gave the judge most pause was United Living saying nothing at the mediation. Under the rule in Henderson v Henderson, a claim that could and should have been brought in earlier proceedings can be struck out as an abuse of process, and the courts have repeatedly said that a party who knows of a further claim should put its cards on the table and raise it with the court rather than keep it up its sleeve. Hawkins Brown’s evidence was that it would never have settled on those terms if it had known.
The judge accepted that United Living could have brought the claim earlier, as the first expert report in 2020 should have prompted the investigations, but he didn’t think it should have. It had dropped the Velfac claim in good faith, on the basis Hawkins Brown itself had put forward, and parties are supposed to narrow the issues. In February 2023 the new claim was no more than a possibility which needed months of further work, rather than draft particulars ready to serve once the ink was dry, and the issues in the two claims didn’t overlap. He also thought it very unlikely the outcome would have been any different if United Living had spoken up, as it wouldn’t have released the new claim without more money and Hawkins Brown didn’t say it would have paid more. Hawkins Brown could also have asked for a wider release and didn’t.
The judge did say that if he had found an abuse, he would have struck the claim out, so there’s real risk in keeping quiet about a further claim, and on slightly different facts (a claim that was ready to go, or a release that the other side was led to believe was wider than it was) this could easily have gone the other way.
What to do when you settle a dispute
If you’re the one paying, read the definition of what is being settled before you read anything else, because “full and final settlement” means nothing more than that definition allows. If you want to be free of every claim arising out of the contract, the project or the relationship, the release needs to say so in terms, including claims that neither of you knows about yet, and you should expect the other side to want something for giving that up. Don’t rely on the entire agreement clause, or on what you think the other side has told you, to fill the gap.
If you’re the one being paid and you think there may be more to come, keep the release limited to the claims in the proceedings, and take advice before you say anything at a mediation that could be read as giving up a claim you haven’t decided to bring yet. If a further claim is firming up while the first is still live, it’s better to raise it than to settle and sue again later.
I draft and review contracts and settlement agreements for owner-managed businesses. I don’t run litigation myself; construction disputes and other contract disputes go to my Nexa colleagues who handle them day to day. Get in touch if you need some help.
Written by Steven Mather, a business solicitor acting on company sales and purchases. This is general information about the law, not legal advice on your situation. Law correct as at .
