United States: High Court Declines To Vary Embargo On Draft Judgment To Allow It To Be Shared With A Third Party

Last Updated: December 2 2019
Article by Ramyaa Veerabathran

In a recent decision, the High Court took a dim view of the claimant’s application to widen the embargo on a draft judgment awarding it substantial damages, where the claimant’s aim was to seek to recover sums from a third party which was likely to be embarrassed by certain findings in the judgment: New York Laser Clinic Ltd v Naturastudios Ltd [2019] EWHC 2892 (QB).

The issue arose in the context of a claim for breach of collateral warranty relating to the supply of laser hair removal devices to be used in the claimant’s business (see our blog post on the substantive aspects of the decision here). The claimant alleged that there were serious defects in the devices supplied by the defendant, which were manufactured by a third party called Formatk. The claimant asked the court to vary the usual embargo so that it could provide a copy of the draft judgment to Formatk, in the hope that Formatk might wish to provide money to settle the proceedings and avoid the embarrassment of the judgment being released.

The court’s decision suggests that, although the court has a discretion to widen the terms of embargo relating to a draft judgment, it is unlikely to do so where the purpose of the request is to enable a party to put pressure on a third party to settle the dispute and avoid judgment being handed down. That will apply with even more force where the judgment addresses issues that may be of general importance, such as the court’s conclusions in the present case on the requirements for a claim for breach of collateral warranty.

Ramyaa Veerabathran, an associate in our disputes team, considers the decision further below.


Where the court reserves its judgment, the draft judgment will normally be circulated to the parties under “embargo”, ie on the basis that it is to remain confidential to the parties and their legal representatives. The purpose is so that they can review the draft for minor errors such as typos or obvious factual mistakes, and to allow them time to consider whether any consequential orders will need to be sought.

Practice Direction 40E of the Civil Procedure Rules (PD 40E) sets out the restrictions that apply where a draft judgment is provided under embargo. In summary, it forbids the parties and their legal representatives from: (a) disclosing the draft judgment or its substance, or using it in the public domain; or (b) taking any action in response to the judgment, other than internally, before it is handed down. Where a party is a company, government department, partnership or other organisation of a similar nature, the draft judgment may be circulated internally in confidence, provided that “all reasonable steps” are taken to preserve confidentiality and the restrictions set out above are adhered to. Any breach of the embargo may be treated as contempt of court.

In the present case, the claimant brought a claim against the defendant for breach of collateral warranty relating to the supply of laser hair removal devices which had been manufactured by a third party, Formatk. The defendant was not represented and did not attend trial. At the conclusion of the claimant’s closing submissions, the claimant’s counsel requested the court to vary the usual embargo, so as to enable the claimant to show the draft judgment to Formatk.


The judge refused the request to vary the terms of embargo.

The judge noted that the court has a discretion to vary the scope of the embargo, and this is sometimes done where there is a third party to the proceedings which has a direct interest in the outcome. In his experience this included, for example, cases where a public authority was the nominal defendant to a test case, but was really acting on behalf of a government department, or where a trade union brought a claim through a test case claimant. In such cases, permission might be given to show the draft judgment in advance to the government department or trade union because they are, in substance, parties to the litigation, or there is a public interest in the third party being able to respond as soon as the judgment is handed down.

The claimant’s request to be allowed to share the draft judgment with Formatk in this case was, the judge said, of an “entirely different character”. The only reason for the claimant’s request was the hope that Formatk might agree a payout to the claimant to settle the proceedings, to avoid the embarrassment and commercial implications of having a judgment out in public domain which contained negative findings about the performance of one of Formatk’s products. This was against a background where the claimant had concerns about whether the defendant would be willing and able to pay the damages awarded by the court.

The judge refused to exercise his discretion to widen the embargo for a number of reasons:

  • It would offend against the principle of open justice. It was “wrong in principle” that a party which has been successful in obtaining a favourable ruling should be enabled to make use of the draft judgment to seek to persuade a third party, which is likely to be unhappy with the judgment, to agree a payout in return for the successful party’s co-operation in seeking to ensure that the judgment never sees the light of day. In the judge’s view, it would be wrong for the court to be complicit with a party to put pressure on a third party in this way.
  • It would be wholly inconsistent with the spirit and purpose of PD 40E and with the purposes for which a draft judgment is supplied to the parties and their legal advisers. In Prudential Assurance Company Limited v McBains Cooper [2000] 1 WLR 2000, the Court of Appeal observed that there was no indication in the provisions that were the predecessor to PD 40E that it was aimed at allowing the parties to have more material available to them to help settle their dispute. Rather, its purpose was to introduce an orderly procedure for the delivery of reserved judgments.
  • Even where a dispute is settled after a draft judgment has been circulated, the judge has discretion as to whether to publish the draft judgment. In Prudential the Court of Appeal noted that this discretion arose as a matter of public policy as, otherwise, powerful defendants could pick and choose which judgments they were happy to see published and which judgments they were willing to pay money to suppress. The same public policy consideration applied to the claimant’s application in this case, where it was a third party that would be given the opportunity to pay money to suppress the judgment.
  • The Court of Appeal in Prudential recognised that it may be appropriate to hand down the judgment in the public interest, even if the case has been settled, where the judgment deals with a point of general importance. The judge noted that, in the present case, his consideration of the requirements for collateral warranties, and the question as to whether loss of profits damages are available for breach in such cases, may be of general interest.
  • This was not a case where the dispute had been compromised after the trial hearing but before the draft judgment was circulated: the court recognised that, in such a scenario, it would generally be inappropriate for the judge to hand down judgment.
  • Even if the claimant could reach a settlement with Formatk, the judge said he thought there would need to be a settlement with the defendant before the possibility of avoiding a formal hand-down of the judgment would arise.

Finally, the judge commented that the position taken by the claimant in its closing submissions was "in stark contrast" to what was said in its opening, when its counsel had said the claimant wanted a judgment on the merits rather than a strike-out, because it wanted other people to know the dangers that the laser devices posed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions