The court has and will act to prevent claims being re-litigated by parties not content with earlier outcomes; Elite Property Holdings Limited v Barclays Bank1
Facts
This claim is the latest instalment in a series of claims between Elite Property Holdings Limited (Elite) and Barclays Bank plc (Barclays) relating to several interest rate hedging products (IRHPs) that Elite entered into with Barclays that were ultimately subject to investigation as part of a review mandated by the FCA (then FSA) into the alleged mis-selling of IRHPs. In response to the review, Barclays made various basic redress offers to Elite that Elite rejected.
Eventually, in 2014, Elite accepted revised redress offers from Barclays that recognised that the basic redress payments were in full and final settlement of all claims connected to the IRHPs, excluding any consequential loss claims (the Agreements). Separately, Elite submitted its consequential loss claim to Barclays. This was rejected and Elite issued court proceedings against Barclays in respect of its consequential losses (the Original Action). Much of Elite's claim was struck-out and summary judgment was given in favour of Barclays.
In this claim, Elite alleged that Barclays were in breach of:
- the Agreements relating to the alleged consequential loss suffered; and
- an oral agreement allegedly made between it and Barclays, in which Barclays promised not to take any enforcement action against Elite.
Barclays applied to strike out the claims on the grounds of res judicata and abuse of process, arguing that the claims were an attempt to re-hear matters that should have been raised in the Original Action and were therefore barred by cause of action estoppel and / or issue estoppel. In the alternative, it argued that the claims fell within the Henderson v Henderson principle as the issues raised were directly relevant to the Original Action.
High Court decision
The Court struck out Elite's claim on the grounds of res judicata and / or abuse of process stating that it was "at most, a different way of putting the same claim as was brought in the Original Action. The same essential factual basis applies as in the Original Action." With regards to res judicata and abuse of process, the judgment lists the key principles.
- Cause of action estoppel: the principle that once a cause of action has been held to exist or not to exist, that outcome may not be challenged by either party in subsequent proceedings.
- Issue estoppel: where an issue is necessarily common to both the earlier and later proceedings and was decided in the prior proceedings, this will remain binding on the parties. Issue estoppel extends to cover not only the case where a particular point has been raised and specifically determined in the earlier proceedings, but also where in the subsequent proceedings it is sought to raise a point which might have been but was not raised earlier in relation to an issue that has already been finally determined.
- Henderson v Henderson: This principle precludes a party from raising in subsequent proceedings matters which could and should have been raised in earlier proceedings.
- Abuse of process: The court has an inherent power to prevent misuse of its procedure where the process would be manifestly unfair to a party or would otherwise bring the administration of justice into disrepute among right-thinking people.
Comment
This judgment is reassuring for companies faced with duplicative claims involving the same cause of action, or matter determined in previous proceedings. It provides comfort that the Court will use its powers to strike out such claims. The decision is also a clear warning to claimants who try to bring duplicative claims or claims based on issues not raised or determined in previous proceedings which, in the court's view, could and should have been raised then.
Footnote
1 [2021] EWHC 772 (Comm)
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