In a recent High Court decision, the court considered a breach of a contractual obligation and undertaking, prohibiting the making of derogatory statements about the claimant company, which ultimately saw the defendant facing contempt of court proceedings.
This judgment highlights the importance placed by the court on upholding undertakings (particularly where given to the court) and contractual obligations contained within settlement agreements aimed at preventing an individual or company from making derogatory comments about another party.
Typically, such clauses go further than provided for by the law of defamation because they seek to prevent the party making any negative comment at all, even if it is true. This means clauses of this nature can be incredibly valuable in stemming the flow of potentially reputationally harmful comments often made in the heat of a dispute or in its immediate aftermath.
The defendant was director of a family run business and was accused of sexual misconduct by an employee. A settlement agreement was entered into which included a clause preventing the defendant from making any derogatory comments about the company or its officers and employees. As a result of the allegation, the defendant was subsequently expelled from his church and removed from his role at the company.
The defendant breached the settlement agreement by making various comments about the situation, including derogatory comments about the claimant. Proceedings were consequently brought against the defendant for harassment.
The harassment claim was settled before trial and an order was made which recorded the defendant’s undertakings (essentially promises) to the court not to make any further derogatory comments about the claimant. Despite this undertaking, the defendant went on to send emails to numerous recipients and uploaded a YouTube video in which he made further such comments which included reference to “liars and perjurers” aimed at the parties he had promised not to make derogatory statements about.
The claimant applied to the court to commit the defendant for contempt, asserting that the derogatory comments made were serious and a direct breach of the defendant’s undertaking to the court.
In response, the defendant argued that his Article 10 right under the European Convention of Human Rights (freedom of expression) allowed him to make such comments, notwithstanding the provisions of the settlement agreement and his undertaking. The defendant claimed that it would have been impossible for him to discuss his expulsion from the family business and the church without making such comments. The defendant claimed that the application made against him was an abuse of process, asserting that its predominant purpose was to stifle legitimate and lawful criticism of the church.
The judge disagreed with this assertion, pointing out that the settlement agreement and undertaking were both “entirely voluntary”. The judge explained that:
“in choosing to settle the action and give the undertaking [the defendant] formally and unequivocally gave up his right to pursue these arguments … it matters not that he may now regret having made this solemn promise to the Court; or has now been advised that he could/should have contested issues then before the Court”.
Furthermore, the judge pointed out that the relevant undertaking did not preclude the defendant from criticising the church as he claimed, but only from making derogatory comments about his family and their business (the parties protected by the clause and undertaking). The judge stressed the importance and value of undertakings given to the court, and also considered the likelihood of the repeat offending by the defendant. The judge held that “unless he is stopped by the Court's enforcement of an undertaking it is highly likely that [the defendant] will continue to make derogatory comments”.
The judge ruled in the claimant’s favour by holding that the instances of contempt of court had been sufficiently proved and that the defendant’s undertaking had been breached. In explaining his conclusions, the judge referenced a key point made in a previous judgment in which the judge in that case stated:
“Breach of an undertaking given to the Court will be a contempt: an undertaking to the court represents a solemn commitment to the Court and may be enforced by an order for committal … Orders and undertakings must be complied with even if compliance is burdensome, inconvenient and expensive”.
Importantly, the judge in this case confirmed that whether statements made are true or not is irrelevant to whether they are derogatory, and therefore the truth behind such statements will not provide a defendant with a defence if they are in breach of such an obligation. The judge also placed some weight on the fact that the statements made “were not inadvertent, accidental, or unintended”.
Furthermore, the judge held that it was not necessary for the claimant to evidence that serious harm was caused as a direct result of the derogatory remarks because the harm and/or offence caused by the derogatory comments was clear and self-evident.
This judgment highlights the weight that the court will place on undertakings that have been given voluntarily, notwithstanding the consequent impact on the right to freedom of expression
Clauses preventing a party from making derogatory comments are often found in settlement agreements, particularly in an employment context. Employers should take comfort from this judgment that such clauses will be upheld. Where for any reason those obligations become enshrined by way of undertakings to the court, a defendant faces being found in contempt of court, potentially resulting in a fine or even imprisonment.
If you would like to discuss how best to protect and manage your reputation or any issues addressed above, please contact Liam Tolen.
