UK: Strike Out: Abuse Of Process

Last Updated: 4 January 2008

Article by Peter Mansfield and Giles Tagg

The Court of Appeal has recently considered the issue of strike out for abuse of process. At first instance WSP and Aspinwall succeeded in striking out a claim by Aldi on the grounds that the claim should have been brought in previous litigation. However, Aldi successfully appealed the decision. The Court of Appeal also provided guidance for the future, indicating its preference for a pragmatic rather than strict approach.

  • There is a real public interest in allowing parties a measure of freedom to choose whom they sue, and when, in a complex commercial matter. Encouragement should not be given to bringing a single set of proceedings against a wide range of defendants or to over-complicate proceedings by cross-claims.
  • In future, the proper course is for the claimant or defendant to raise the issue of prospective future claims with the court, to enable the court to express an opinion. Indeed, there can now be no excuse for failure to do so.

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Full Article

The Court of Appeal has recently considered the issue of strike out for abuse of process. At first instance WSP and Aspinwall succeeded in striking out a claim by Aldi on the grounds that the claim should have been brought in previous litigation. However, Aldi successfully appealed the decision. The Court of Appeal also provided guidance for the future, indicating its preference for a pragmatic rather than strict approach.

  • There is a real public interest in allowing parties a measure of freedom to choose whom they sue, and when, in a complex commercial matter. Encouragement should not be given to bringing a single set of proceedings against a wide range of defendants or to over-complicate proceedings by cross-claims.
  • In future, the proper course is for the claimant or defendant to raise the issue of prospective future claims with the court, to enable the court to express an opinion. Indeed, there can now be no excuse for failure to do so.

Background

The appeal concerned an attempt by WSP and Aspinwall to strike out a claim by Aldi for abuse of process, on the basis that the claim could and should have been brought in previous litigation. It arose in complex commercial litigation that concerned damage to a retail store site. At first instance, WSP and Aspinwall succeeded in striking out Aldi's claim on grounds of abuse of process. Jackson J handed down this first instance decision, employing the following key reasons:

  • The approach to be adopted on the question of abuse of process was set out in Johnson v Gore-Wood: "...there should be finality in litigation... a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation...". The essential question to be answered is "whether in all the circumstances a party's conduct is an abuse". The burden of proof rests with the party alleging abuse.
  • Applying the above principle, it would be unjust and oppressive for WSP and Aspinwall to be subjected for a second time to a very expensive and time consuming action. It would also be an abuse and misuse of the Technology & Construction Court (TCC) to bring a second and substantial action which alleged the same breaches of professional duty by the same firms. By implication, Aldi should have brought its claim against WSP and Aspinwall in the earlier litigation.

Therefore, Aldi's claim was struck out for abuse of process at first instance. Aldi appealed this ruling.

Court of Appeal Decision

The Court of Appeal overturned the first instance decision, finding in favour of Aldi and allowing its claim to proceed. The following main points were made:

  • The question of whether or not an abuse of process had occurred was not one to be resolved simply by the application of the court's discretion. Rather, the decision involved assessing a large number of factors to which there can only be one correct answer as to whether or not there has been an abuse of process.
  • An appellate court will generally be reluctant to interfere with the decision of the judge. However, where the judge has taken into account immaterial factors, omitted to take account of material factors, erred in principle or come to an impermissible conclusion, then the appellate court may intervene.
  • In this case, the judge had reached an impermissible decision by taking into account factors which he should not have done:

- The judge considered that the resources of the TCC were being abused or misused. However, the mere fact that Aldi's action against WSP and Aspinwall may require a trial and hence take up judicial time (which could have been saved if Aldi had exercised its right to bring an action in a different way) does not make Aldi's action impermissible. If an action can be brought, it is the duty of the state to provide the necessary resources.

- There is a real public interest in allowing parties a measure of freedom to choose whom they sue in a complex commercial matter. Encouragement should not be given to bringing a single set of proceedings against a wide range of defendants or to complicate proceedings by cross-claims against parties to the proceedings.

  • The judge also omitted to consider factors that he should have done, as follows:

- Aldi had not behaved in any way that was culpable, let alone improper. The original action was brought against one party and the second action against different parties. Therefore, Aldi was not vexing WSP and Aspinwall a second time.

- Aldi had made a judgement that it was in its interests to seek to recover against WSP and Aspinwall (or, more accurately, their insurers), once it had obtained judgement in another action, rather than bringing claims against WSP and Aspinwall in that other action. This was Aldi's decision to make and it was sensible and cost-effective.

- WSP and Aspinwall were made aware by Aldi that it had a claim against them that might be pursued. The fact that a claim against WSP and Aspinwall could have been raised in the original action, does not mean it is necessarily abusive to raise it in a second action.

Finally, the Court of Appeal gave guidance for dealing with similar problems in the future. The proper course is for the prospective claimant or defendant to raise the issue with the court, if they are aware of it. Indeed, there can be no excuse for failure to do so in the future. The court would then be able to express its view as to the proper use of its resources and on the efficient and economical conduct of the litigation.

Analysis

The Court of Appeal's decision reinstates the principle that a claimant should be relatively free to conduct complex multi-party litigation as it sees fit, in terms of who it sues and when. The fact that a claimant did not necessarily run this type of litigation in absolutely the most efficient way possible did not mean that it was abusing due process. In any case, the agglomeration of numerous parties and allegations in a single action would produce undesirably complex and unwieldy litigation, which was not to be encouraged. In view of this decision, defendants should think carefully and examine this judgement before instigating a strike out application for abuse of process.

Further reading: Aldi Stores Limited v WSP Group plc, WSP London Limited and Aspinwall & Company Limited [2007] EWCA Civ 1260; Johnson v Gore Wood [2000] UKHL [2002] 2 AC 1

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 21/12/2007.

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