Tomlin orders are frequently used to ensure confidentiality of a settlement agreement. However, they won't always achieve the desired result..
In L'Oreal SA & Ors v eBay International AG & Ors, the claimant had settled its claims against all defendants except eBay. The settlement agreement was in the form of a Tomlin order with the terms of settlement set out in the schedules. The claimant refused to disclose the terms of the schedules to eBay who wanted to know whether, by those terms, it too had been released from liability. All defendants had been sued as joint tortfeasors and a reservation of rights to pursue eBay would have been required in the settlement agreement to enable the claim against eBay to continue.
The court decided that the confidentiality of the agreement alone was not a sufficient ground to refuse disclosure. eBay's lawyers should be able to inspect the confidential schedules to determine whether the settlement with the other defendants amounted to a release of liability for eBay.
Things to consider
The court will take account of the parties' confidentiality when deciding whether to grant inspection of the schedule to a Tomlin order but confidentiality alone will not be a sufficient ground for refusing disclosure where it appears to the court that disclosure is necessary. Conditions can however be put in place to ensure, as far as possible, that disclosure of such information is restricted as far as possible.