‘Improper threats’ and contempt proceedings as a ‘bargaining chip’ in the Circuit Commercial Court

Emily Betts, instructed by Capital Law Ltd, acted for the successful Claimant in resisting an attempt to rely on the ‘unambiguous impropriety’ exception to without prejudice privilege in Cardiff City Football Club Ltd v McKay [2025] EWHC 1439 (Comm).

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Litigators may warn their clients that using contempt proceedings to secure a settlement has been repeatedly found to be a gross abuse of process of the Court and itself contempt of court[1].

But the Court has also recognised that once a committal application has been issued, any settlement of the overall commercial dispute is necessarily going to have to address the position of the committal application[2]. For obvious reasons any respondent will want to know that they are not going to be sent to prison for contempt of court and any applicant will want to stop spending time and money on the application. It is likely that both parties will see disposing of the contempt application as an important part of any settlement.

In deciding whether there is an abuse of process or impropriety the Court has to consider whether the committal application is being used to bully a respondent into a settlement, or whether it is no more than genuine attempts at settlement in hard-fought litigation.

This is the issue which came before Nicklin J in the Circuit Commercial Court in Cardiff City Football Club Ltd v McKay in the context of whether certain ‘without prejudice’ communications amounted to ‘unambiguous impropriety’ and so losing the cloak of privilege.

In coming to the view that the communications were fairly typical of hard-fought commercial litigation there are a number of interesting points to note:

1. The defendants alleged that the claimant was using the committal application to obtain something to which they were not entitled in the overall dispute. On this point the Judge said it is important to understand that in legal settlements, it is common and acceptable for parties to negotiate for outcomes that go beyond what the Court could order if the case went to trial. The Judge gave the example of a public apology as part of a settlement in a defamation case.
2. There was no contemporaneous complaint from the defendants suggesting that the claimant was using the pending contempt application to pressure them into an unfavourable settlement. The Judge held this silence was telling. The defendants were prepared to negotiate with the potential discontinuance of the committal application being one of several bargaining chips on the table.

In coming to this view the Judge relied on the Court of Appeal’s decision, in Navigator Equities[3], that private applicants in civil contempt applications are not required to act “as wholly disinterested parties”[4]. In fact, provided the application is properly made and arguable then the motive of the applicant is not relevant[5].

The case also acts as a reminder that proceedings for contempt of court must be dealt with as soon as fairly possible. Where the contempt application had been outstanding for 15 months it must now be determined without delay.

Article by Emily Betts

[1] Integral Petroleum SA -v- Petrogat FZE (No.2] [2020] EWHC 558 (Comm) [36], Foxton J approving a passage from Gee on Commercial Injunctions (§20-024) (6th edition, Sweet & Maxwell, 2016) (itself derived from the Court of Appeal decision in Knox -v- D’Arcy Ltd (unreported, 19 December 1995)

[2] Integral Petroleum SA at [42]

[3] Navigator Equities Ltd -v- Deripaska [2022] 1 WLR 3656

[4] Navigator at [137]

[5] Navigator at [110]