In Visa Inc v Luxottica Retail UK Ltd [2026] EWHC 615 (Comm), Paul Stanley KC (sitting as a Deputy High Court Judge) on 17.3.26, considered a settlement agreement and in particular, the clauses releasing claims. The dispute was as to whether the release clauses obliged the Defendant Luxottica to: (a) ensure a third party GrandVision's (a company the Defendant Luxottica had, subsequent to the settlement agreement being entered into, acquired a controlling interest in) claims were withdrawn; and (b) indemnify the Claimant Visa Inc, in respect to GrandVision's claims. A more fuller explanation is given in a footnote[1].

This raised 3 questions, and it is the 2nd question which is relevant for this bulletin. But, it is helpful to set out the 3 questions. The Deputy Judge said, at paragraph 5:

'I ... have to decide three questions. First, as a matter of construction, does the settlement agreement have the effect for which Visa contends, or does it - as Luxottica maintains - leave GrandVision's claims untouched? Second, if it does encompass GrandVision's claims, would enforcement in those terms reward "sharp practice" which the law will prevent? Third, if the agreement is enforceable, what relief should be given to Visa?'

On the 1st question, the Deputy Judge found that 'the settlement agreement does oblige Luxottica to ensure that the GrandVision claims are withdrawn, and to indemnify Visa for them.' (paragraph 6)

Later, under the heading 'Sharp practice', the Deputy Judge said, at paragraphs 173 to 188:

'173. I turn to the law on "sharp practice", which was forcefully developed for [counsel for the Defendant].

174. In BCCI v Ali [2000] 3 All ER 51 (CA), a majority of the Court of Appeal (Scott V-C and Chadwick LJ), although finding that the release had extended to the claim at issue, held that there is an equitable principle by which equity would relieve against the "unconscionable" enforcement of releases. A paradigm example of such a case, as they saw it, was one in which A had persuaded B to accept general words which would release a claim which A knew B had, but B did not know they had, where A knew that B was ignorant of the claim.

175. Scott V-C discerned the origins of such an equitable principle in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133 (conventionally regarded as an early case of proprietary estoppel), in the principles governing rectification for unilateral mistake (Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505 (CA) ), and in Lyall v Edwards (1861) H&N 337, 158 ER 139. He expressed the principle thus (at [25]):

"The court will not allow a general release to be enforced so as to bar a claim of which the releasor had been unaware if so to enforce it would in all the circumstances be unconscionable."

Chadwick LJ, too, relied on Taylor Fashions. He gave a more precise statement of the terms in which he considered the doctrine would apply (at [81]):

"I would hold that, where (i) the releasee, say A, knows of facts which give rise to a claim (whether or not he believes that claim to be well-founded as a matter of law), (ii) A deliberately conceals those facts from the releasor, say B, in circumstances where A knows or believes that B cannot discover them for himself, and (iii) B does not know those facts, then A cannot rely on a general release from B as a defence to a claim based on those facts, notwithstanding that, as a matter of construction the words of the release would include all unidentified claims. A cannot rely on the release because, in the circumstances described, it would be unconscionable for him to do so."

Buxton LJ expressed doubts on the existence of such a general equity, and said he would wish to reserve his opinion on it ([97]).

176. In the House of Lords, the majority's conclusion on construction meant that this did not matter. However, both Lord Nicholls and Lord Hoffmann gave some endorsement or encouragement to this approach (Lord Bingham expressly gave no opinion).

177. Lord Nicholls said rather little ([32]):

"Materially different is the case where the party to whom the release was given knew that the other party had or might have a claim and knew also that the other party was ignorant of this. In some circumstances seeking and taking a general release in such a case, without disclosing the existence of the claim or possible claim, could be unacceptable sharp practice. When this is so, the law would be defective if it did not provide a remedy."

Unlike Scott V-C and Chadwick LJ, he did not think that BCCI was such a case. In that respect, at least, he must have been disagreeing with the breadth of the principle that they had stated. In particular, he seems to have thought that it was not enough that BCCI had knowledge of the facts giving rise to a claim, because it did not have any idea that they gave rise to a claim (see [33]).

178. Lord Hoffmann started with a general discussion of the topic (at [69]):

"It is not difficult to imply an obligation upon the beneficiary of [a general release] to disclose the existence of claims of which he actually knows and which he also realises may not be known to the other party. There are different ways in which it can be put. One may say, for example, that inviting a person to enter into a release in general terms implies a representation that one is not aware of any specific claims which the other party may not know about. That would preserve the purity of the principle that there is no positive duty of disclosure. Or one could say, as the old Chancery judges did, that reliance upon such a release is against conscience when the beneficiary has been guilty of a suppressio veri or suggestio falsi. On a principle of law like this, I think it is legitimate to go back to authority, to Lord Keeper Henley in Salkeld v Vernon 1 Eden 64, 69 [28 ER 608]."

179. Thus far, at least, Lord Hoffmann's dicta need not to be read as stating any special doctrine for releases. A context-specific duty to speak would be consistent with ordinary principles of misrepresentation - as might references to "suppressio veri" and "suggestio falsi". Lord Hoffmann might be saying no more than was said by Rix LJ in ING Bank NV v Ros Roca SA [2011] EWCA Civ 353, [2012] 1 WLR 472 at [92]–[93]:

"92. Outside the insurance context, there is no obligation in general to bring difficulties and defects to the attention of a contract partner or prospective contract partner. Caveat emptor reflects a basic facet of English commercial law (the growth of consumer law has been moving in a different direction). Nor is there any general notion, as there is in the civil law, of a duty of good faith in commercial affairs, however much individual concepts of English common law, such as that of the reasonable man, and of waiver and estoppel itself, may be said to reflect such a notion. In such circumstances, silence is golden, for where there is no obligation to speak, silence gives no hostages to fortune. If, however, the contractor speaks, then he may have to live up to what he says; so also where what is unsaid is sufficiently closely connected with what he has said to render what has been left unsaid misleading.

93. Nevertheless, particular circumstances can make a difference, and it is possible to formulate a general principle as to why that should be so. Thus in Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903 Lord Wilberforce, in a dissenting speech but which in this respect has borne fruit, spoke of the possibility that, in a particular situation which affected two parties, a reasonable man would expect the other party, 'acting honestly and responsibly' either to make something known or face the consequences of not doing so."

180. It is tempting to read Lord Hoffmann's comments along these lines. True, English law generally allows silence to be golden, but not always. There are circumstances when either an implied duty to speak, or understanding silence as a species of fraud ('suppressio veri' or 'suggestio falsi'), gives purchase to doctrines such as estoppel, or misrepresentation. General releases may sometimes exemplify such circumstances. That would not require a special doctrine for releases, but the operation of ordinary contractual and equitable doctrines in the circumstances of a particular general release.

181. Lord Hoffmann, however, went on (at [70]–[71]) to say this:

"70. In principle, therefore, I agree with what I consider Sir Richard Scott V-C … to have meant … and with Chadwick LJ, that a person cannot be allowed to rely upon a release in general terms if he knew that the other party had a claim and knew that the other party was not aware that he had a claim. I do not propose any wider principle: there is obviously room in the dealing of the market for legitimately taking advantage of the known ignorance of the other party. But, both on principle and authority, I think that a release of rights is a situation in which the court should not allow a party to do so. On the other hand, if the context shows that the parties intended a general release for good consideration of rights unknown to both of them, I can see nothing unfair in such a transaction.

71. It follows that in my opinion the principle that a party to a general release cannot take advantage of a suggestio falsi or suppressio veri, of what would ordinarily be regarded as sharp practice, is sufficient to deal with any unfairness which may be caused by such releases."

182. This does make it look as if there is something special, in Lord Hoffmann's mind, about general releases as such. All counsel before me agreed that was so. The limits of such a principle would need to be drawn carefully, for it is in tension with how English contract law operates (not, usually, in contract-specific silos, nor by reference to general principles of good faith directly applied). Nor does it seem highly productive of certainty, as BCCI shows. In that case, of the four very experienced judges who sat in the Court of Appeal and the House of Lords who expressed a view on unconscionability and thought there was such a principle, two (Scott V-C and Chadwick LJ) thought that enforcement would be unconscionable; but two (Lord Nicholls and Lord Hoffmann) thought it would not be.

183. Apart from its application (incorrectly, according to Lord Nicholls and Lord Hoffmann) by the Court of Appeal in BCCI, the putative doctrine does not seem to have borne modern fruit. In Maranello Rosso Ltd v Lohomij BV [2022] EWCA Civ 1667, at [66] Phillips LJ agreed with a judge's conclusion that, on the facts of the case, the releasing party had been aware at least of the possibility that it had claims for deliberate breach of duty, had chosen not to investigate them, and had decided to release them. He continued at [66]:

"I would add that, where a release is construed as covering unknown claims in fraud, dishonesty and conspiracy relating to the defined subject matter … such a construction entails a finding that the parties mutually intended to settle such claims. That would seem to leave little scope for a finding that one of the parties was guilty of sharp practice in relation to the existence of such a claim."

184. A similar conclusion was reached in Riley v National Westminster Bank plc [2024] EWCA Civ 833, at [79]. Similar points, that where a releasor plainly accepts the risk that it will release unknown claims (which the other party may know about) the doctrine cannot apply, were made by Knowles J in Tchenguiz v Grant Thornton UK LLP [2016] EWHC 3727 (Comm) at [58], and by Moulder J in Yukos Hydrocarbons Investments Ltd v Georgiades [2020] EWHC 173, at [225].

185. At first sight, this emphasis on the agreement's terms seems strange. After all, is not the whole point of the doctrine that it will apply to claims that do fall within the scope of the release as properly construed? That is just when it is needed. The point being made, however, is more subtle and fundamental.

186. In many cases parties settle cases with a known inequality of information. Fraud cases are a prime example, but not the only one. When a claimant who has alleged deliberate misconduct settles, there are obvious reasons to suspect deliberate misconduct, and to suppose that the defendant knows more about it than the claimant does. Even in less colourful cases, a settling claimant will often know that it has not yet fully bottomed out all its possible claims. It may prefer not to do so, taking the bird in the hand for the two that may be in the bush. Defendants often know more; that may be part of the impetus to settle. If, in such circumstances, a claimant is willing to settle not only known but also unknown claims, it is not reasonable to suppose that it does so on the assumption that it is on a level playing field with the defendant, so far as knowledge of possible claims is concerned. They are "known unknowns". To say that it is "suppressio veri" or "suggestio falsi" for a defendant not to make a clean breast to the claimant, and that a settlement on any other basis will be vulnerable to non-enforcement, would risk making such cases incapable of settlement. It would impose unrealistic standards of what the parties would honestly and responsibly expect, given the risks that each agreed to take. If the parties have expressly settled on the basis that there may be other claims of which one may be aware and the other may not be, silence is not sharp practice.

187. There was one further issue of debate. How does the "sharp practice" doctrine relate to rectification? I agree with [counsel for the Defendant]. that one should not draw a bright line between sharp practice about facts and sharp practice about law. Both may be relevant, as BCCI itself and Salkeld v Vernon (an old case to which Lord Hoffmann referred) suggest. But it would be surprising if someone who could not establish the requirements for rectification for unilateral mistake (notably, knowledge of the mistake) could repackage essentially the same argument as a "sharp practice" point. One perhaps telling point is that, in the context of unilateral mistake - a doctrine which itself rests on unconscionability - we distinguish between attempts to exploit known mistakes about what a contract means, and cases where there is no more than a known risk of error, which are not sufficient. [Counsel for the Defendant] may be right that certainty is not required. But once one is in the area merely of "known risk", especially where the risk is one that the releasing party has expressly agreed to take, we are some way short of anything that could be regarded as "unconscionable".

188. If the sharp practice argument applies, I would expect it usually to apply to specific claims. If the suppressio veri is the concealment of a claim, it is the enforcement of the release in relation to that claim which would be unconscionable. If a party wishes to render the whole agreement ineffective, it needs a suitable broader basis for that (such as rescission for misrepresentation). If a party wishes to enforce the agreement but on different terms, it must establish a valid case for rectification.'

On the facts, the Deput Judge found that 'It is not unconscionable to enforce those obligations.' (paragraph 6). 

For completness, on the 3rd question ('if the agreement is enforceable, what relief should be given to Visa?' (paragraph 5)), the Deputy Judge held 'Visa is entitled to declaratory relief, and to damages; but I decline to grant specific performance.' (paragraph 6)

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