P was suing D but was told that he had served notice too late. Based on this, he came to a compromise of claims with D, but when the judge’s finding was overruled (so that the notice was held to be served soon enough). P tried to rescind from the compromise agreement on the grounds of mistake of law. D applied to stay the proceedings on the ground that there was a binding contractual compromise. CA ruled in favour of D, that the compromise was valid and NOT voided by the mistake. Compromises or consent orders can be vitiated by common mistake of law but that for a common mistake of fact or law to vitiate a contract of any kind, it must render the performance of the contract impossible
Kay LJ: Where a party wishes to reserve its right to reopen the settlement if there should be a future decision in another case, it is that party who should secure an express term to that effect. It is not the other party that has to stipulate that the agreement would stand in such circumstances. This was partly based on the policy concerns (i.e. that parties should settle). In Kleinwort, the court was concerned with an unequivocal, mistaken view of the law, whereas here the question was regarding merely doubt as to the law. Where the law was in doubt, as here (it was known that an appeal would be made), the parties’ compromise was binding regardless of whether the law or rulings would change.
Sedley LJ: “a shift [in the law] cannot be allowed to undo a compromise of litigation entered into in the knowledge both of how the law now stood and of the fact—for it is always a fact—that it might not remain so.”