English construction ruling highlights need for precise settlement wording and careful handling of emerging claims
Published on 12 November 2026
Contractor United Living can pursue a fresh design defects claim as the court rejects a broader reading of an earlier settlement agreement
At a glance
Settlement agreements should use precise language to define the scope of any release, particularly for future or unknown claims. A court will not rescue a party from an imprecise settlement.
Commercial common sense cannot override clear wording or compensate for the absence of a broader release clause.
Silence about potential future claims that are genuinely uncertain during the process of settlement negotiations will not automatically be considered to be an abuse of process.
Technology and Construction Court has refused to extend a settlement agreement beyond its express terms, allowing contractor United Living to pursue a fresh claim against architects Hawkins Brown, based on a new cause of action arising from the same project.
The decision, in United Living (South) Ltd v Dovista UK Ltd, demonstrates the importance of precise drafting in settlement agreements and when the doctrine of abuse of process will apply in the context of complex, multi-defect construction disputes.
Design dispute
Design and build contractor United Living filed a new claim against architects Hawkins Brown for alleged design failures in relation to a residential development in London. The claim followed earlier proceedings brought by United Living against defendant Hawkins Brown, which had already been settled by a settlement agreement.
These new proceedings concerned the curtain walling system. During the previous proceedings, it was thought that the defects in the system were attributable to poor workmanship. However, it later became apparent that the failures were potentially the result of a design failure. Given that investigations were at a very early stage at the time of the settlement, United Living did not pursue the matter further until sufficient expert evidence had been obtained to confirm the position.
Hawkins Brown applied to strike out the new proceedings as an abuse of process, contending that United Living could and should have brought the claims in the earlier proceedings. It alternatively sought summary judgment on the basis that the claims were within the scope of the settlement agreement or were barred by an estoppel by representation. The court dismissed the application in its entirety.
Settlement wording
The central issue was whether the settlement agreement, which compromised the earlier proceedings, also captured the new design liability claims.
Mr Justice Eyre found that the proper interpretation of the settlement agreement was clear, it could only properly be read as a settlement and release of claims in the previous proceedings that were in issue at the time of the agreement. The claims advanced in the new proceedings were not within its scope.
The court confirmed two foundational principles of contractual interpretation for parties to construction disputes..
The court's task is to identify the objective intention of the parties as shown by the language used in context, not to rewrite the bargain or fill gaps that the parties left open. The clearer the natural meaning of the words, the harder it is for a party to argue for a different reading, and the court will not extend the scope of a release simply because one party would have preferred broader protection.
Commercial common sense has a role in resolving genuine ambiguity, but where the language is clear, it cannot be used to override or supplement it. A party cannot invite the court to use commercial common sense to plug a gap that careful drafting would have closed.
Abuse of process, good faith and risks of silence
Hawkins Brown's primary case was that bringing fresh proceedings, which United Living accepted it could have brought in the earlier litigation, amounted to an abuse of process.
The uncertain nature of the potential further claim at the time of settlement was critical. The court held that United Living was not to be criticised for abandoning the Velfac curtain walling system element of the claim when it genuinely believed that element could not be pursued. That decision had been made in good faith.
The court was clear: parties are to be encouraged to narrow the issues in dispute and to confine their claims to those they believe to be tenable. A court must be wary of penalising a party that has acted in good faith on that basis and later seeks to revisit its position in light of further information.
Although the outcome was favourable to United Living on the facts, the decision has limits. The judgment reinforces an established principle: parties that are aware of, or who reasonably suspect, a connected future claim must not keep it to themselves. A failure to do so creates a material risk that any subsequent action may be found abusive and struck out.
Osborne Clarke comment
Precise language when drafting settlement agreements
The starting point is the natural and ordinary meaning of the language chosen by the parties, read in context. Courts will not rewrite bargains, however commercially inconvenient the result. They will not imply terms or extend the scope of a release simply because one party would have preferred broader protection.
In complex, multi-defect construction projects, the full picture of defects may not be known at the time of settlement. The scope of a release clause is therefore critical: it may refer to the proceedings, the project, the parties' relationship, or some combination of all three. Capturing future or unknown claims, calls for express and unambiguous terms.
Commercial common sense cannot rescue poor drafting
Courts will not depart from the natural meaning of clear language simply because one party argues that a broader construction would have been more commercially sensible. As this case illustrates, the absence of a wider release clause is itself treated as evidence that no wider release was agreed. There is no assurance the court will fill the gap.
Silence on a potential future claim is not necessarily safe
Courts have been clear that parties to ongoing litigation should not keep nascent claims to themselves. Where a party knows, or reasonably suspects, that it has a further connected claim and says nothing about it during settlement negotiations, it runs a material risk that any subsequent proceedings may be struck out as an abuse of process.
This case provides some reassurance. Where a potential claim is genuinely at an early and uncertain stage, the courts will not automatically treat silence as an abuse of process.
Parties should treat this decision as a prompt to review their approach to settlement negotiations on complex projects. Where further claims are possible, as may be the case in building safety disputes where investigations are ongoing, the risk of proceeding to settlement without expressly addressing those claims is a real one. It would be prudent to manage that risk at the point of settlement through a carefully drafted carve-out, an express reservation of rights, or an agreement to stay proceedings until all investigations are completed.
