When Power Goes Wrong · Who Pays? · Part 24

Does a government payment or settlement mean the Crown admitted legal liability?

Not necessarily. The legal effect depends on the instrument. An ex gratia payment expressly does not recognise liability; a negotiated settlement may resolve a claim on agreed terms without a judicial finding; a judgment is different again.

Payment amount alone does not tell you what the Government legally conceded.

CO (18) 2 expressly defines ex gratia payment as one made without recognising any liability or legal obligation. A negotiated settlement is governed by its terms: parties can compromise disputed claims without asking the court to determine who was legally right on every issue.

Do not infer admission from payment alone.To know whether liability was admitted, read the judgment, deed or settlement agreement. Look for admissions, denials, releases, confidentiality clauses, non-disparagement provisions and whether liability was expressly left unresolved.

Court judgmentJudicial determination of liability/remedy to the extent stated.

SettlementContractual compromise; effect depends on terms.

Ex gratiaPayment made without recognition of liability or legal obligation.

ApologyMay accompany payment but its legal meaning depends on wording and context.

A cheque proves payment. It does not, without the governing instrument, prove what was admitted.

Cabinet definitionCO (18) 2 — ex gratia definition and settlement authority.

Contract frameworkContract and Commercial Law Act 2017.

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