Australia: Non-assistance clauses in settlement agreements in light of Commonweath v Sanofi

Last Updated: 2 October 2017
Article by Mathew Deighton, Joey McKenzie and Alice Blackburn


Can a non-assistance clause in a settlement agreement prohibit witnesses from voluntarily assisting other litigants to a proceeding? The recent decision in Commonwealth of Australia v Sanofi (formerly Sanofi-Aventis) [2017] FCA 382 has thrown doubt on to the enforceability of such clauses, particularly in circumstances where the effect of the clause would restrict witnesses from discussing evidentiary matters with the remaining parties to the proceeding.

In multi-party disputes, it is common for a number of parties to settle their dispute prior to trial. Clauses restricting the settling party from assisting other parties to the proceeding are often included in settlement deeds. However, in Commonwealth v Sanofi, the Federal Court of Australia held that a clause contained in a settlement agreement, which prohibited witnesses from assisting another litigant to the proceedings, was unenforceable on the basis that the clause interfered adversely with the administration of justice.


The proceedings concerned the revocation of a patent held by pharmaceutical conglomerate, Sanofi, relating to the anticoagulant drug, clopidogrel.

Apotex commenced proceedings against Sanofi to revoke the patent. Sanofi cross-claimed against Apotex for patent infringement. Sanofi was successful in its cross-claim and obtained interlocutory injunctive relief restraining Apotex from infringing the patent, until the matter was finally determined. In succeeding in the interlocutory relief, Sanofi was required to provide the usual undertakings as to damages.

Upon final determination of the proceedings, Apotex was ultimately successful in obtaining the revocation of the patent.

Apotex and the Commonwealth respectively sought damages against Sanofi, pursuant to the usual undertaking provided in relation to the cross-claim. However, prior to the hearing to determine damages, Apotex and Sanofi entered into a Deed of Settlement (Deed) discontinuing Apotex's claim for damages and leaving the Commonwealth as the sole claimant.

Following the execution of the Deed, the Commonwealth's attempts to interview Apotex witnesses proved futile. The Commonwealth sought declarations rendering a number of clauses within the Deed unenforceable, including Clause 6, which operated to preclude Apotex witnesses from voluntarily assisting the Commonwealth, in respect of the Commonwealth's claim for compensation.


Clause 6 relevantly provided:

Otherwise than by compulsion of law, the Applicants agree not to voluntarily assist in any way or encourage:
a) the Commonwealth in relation to the Commonwealth Compensation Claim by way of waiving any claim for legal professional privilege that any or all of the Applicants may have, or releasing any third person from any obligation of confidence in respect of information relevant to the Commonwealth Compensation Claim or the Apotex Compensation Claim, or by the provision of documents.

In its submissions, the Commonwealth argued that the clause if enforced, would hinder the Commonwealth's preparations for the final hearing by preventing the Commonwealth's legal representatives from interviewing witnesses who it may wish to call.

Nicholas J held that the clause was unenforceable on the basis that it was contrary to public policy and had a tendency to adversely affect the administration of justice.

In considering the purpose, scope and operation of the clause, His Honour observed that:

  1. a witness is not property,
  2. a party cannot prevent a witness from giving evidence in legal proceedings, and
  3. there is a public interest in allowing legal representatives to meet with and interview witnesses of fact before they are required to give evidence at a trial. A party may be held in contempt if it prevents or hinders the opposite party's attempts to identify and interview potential witnesses.

His Honour held (at [82]) that the clause had a "strong prosperity [sic] to prevent or hinder the Commonwealth's legal representatives' efforts to interview the Apotex witnesses and discuss with them matters relevant to the issues in this proceeding prior to them giving their evidence".

Critically, however, whilst His Honour was satisfied that the clause was unenforceable in so far as it related to the Commonwealth's claim, His Honour was not satisfied that it was contrary to public policy in so far as it prevented Apotex from waiving legal professional privilege or providing documents.

His Honour noted (at [83]) that: "Litigation is usually conducted on the assumption that one party will not assist an opposing party by voluntarily waiving legal professional privilege or voluntarily providing documents unless the first party is of the view that it is in its interests to take either of those steps." His Honour also reiterated that it was a matter for each of the Apotex witnesses to decide whether he or she wished to be interviewed by the Commonwealth's lawyers.


This decision highlights the necessary care and consideration that must be taken into account when drafting settlement agreements for proceedings, especially in circumstances where there is more than one claimant.

In multi-party proceedings, where one party wishes to settle prior to the final determination of the proceedings, it is prudent to include a "non-assistance" clause restricting the other side from assisting the remaining litigants. However, the following considerations should be taken into account when drafting:

  1. Will the clause prevent or hinder the remaining litigants' (or their legal representatives) attempts to interview witnesses on evidentiary matters in relation to the issues in dispute?
  2. Are the rights of third parties unnecessarily affected?
  3. Does the clause adversely and unnecessarily interfere with the administration of justice?

Mathew Deighton
Commercial litigation
Colin Biggers & Paisley

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

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

Mathew Deighton
Alice Blackburn
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must 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 (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

To Use 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