Court of Appeal

Published December 4, 2007

Aldi Stores Ltd v WSP Group plc and Others

Before Lord Justice Longmore, Lord Justice Thomas and Lord Justice Wall

Judgment November 28, 2007

In complex commercial multiparty litigation, a party wanting to pursue other proceedings but to preserve a right in existing proceedings, had to raise that issue with the court to enable it to express its view on the proper use of resources and the economic and efficient conduct of the litigation.

The Court of Appeal so held, allowing the appeal of the claimant, Aldi Stores Ltd, against the order of Mr Justice Jackson ([2007] EWHC 55 (TCC)) striking out as an abuse of process its claims against the defendants, WSP Group Plc, WSP London Ltd and Aspinwall and Co Ltd, for damages for breach of warranties in relation to building works.

Mr David Thomas, QC, for Aldi; Mr Michael Soole, QC, for WSP; Mr Michael Douglas, QC, for Aspinwall.

LORD JUSTICE THOMAS said that the appeal concerned an attempt to strike out a claim for abuse of process on the ground that the claims could and should have been brought in previous litigation, and the application of the principles in Johnson v Gore-Wood ([2002] 2 AC 1) to that attempt. It arose in complex commercial litigation about damage sustained to a retail store site.

The decision was not the exercise of a discretion. It involved the assessment of a large number of factors to which there could be only one correct answer as to whether there was an abuse of process or not.

An appellate court would only interfere with the judge’s decision on abuse of process where he had taken into account immaterial factors, omitted to take account of material factors, erred in principle or come to a conclusion that was impermissible or not open to him.

In this case, the judge had reached an impermissible decision by taking into account factors which he should not have done and omitting factors which he should have taken into account.

The fact that a claim could have been raised in the original action did not mean it was necessarily abusive to raise it in a second action. It required consideration of whether in all the circumstances the claimant was abusing the process of the court by seeking to raise issues it could have raised before.

The claimant had decided to try to recover against excess layer underwriters on its judgment against the building company rather than to continue to participate in the main action. That was a decision open to the claimant as a sensible and cost-effective way of proceeding. The judge had not taken that into account.

His Lordship considered further private interest factors, reached conclusions in favour of the claimant, then stated that the public interest extended not only to finality and preventing a party being vexed twice, but also to efficiency and economy in litigation.

The judge regarded the claimant’s decision not to bring its claims against the present defendants in the main action as an abuse of the process of the Technology and Construction Court. His Lordship considered that the mere fact that this action might require a trial and take up judicial time could not make the action impermissible.

If an action could be properly brought, it was the duty of the state to provide the necessary resources; the litigant could not be denied the right to bring a claim on the ground that he could have acted differently and so made more efficient use of the court's resources.

There was a real public interest in allowing parties a measure of freedom to choose whom to sue in a complex commercial matter and not encouraging the bringing of a single set of proceedings against a wide range of defendants or complicating proceedings by cross-claims against parties to the proceedings. That freedom could and should be restricted by appropriate case management.

It was not a rule of law that there could only be abuse of process where the defendants sued in the later action had a sufficient identity with the defendants in the original action. Nevertheless, it was a factor that the claimant had brought the original action against one party and the second against completely different parties.

The burden was on the defendants to prove that this action was an abuse of process and they had failed to do so.

Parties sometimes wished to pursue other proceedings but to reserve a right in existing proceedings. Each of the present parties knew before the main action settled that there was a potential problem, but the issue was never raised with the court.

It should have been. The court could at the very least have expressed its view as to the proper use of its resources and on the efficient and economical conduct of the litigation. A way might have been found to determine this claimant’s issues in a manner proportionate to the size of its claim.

For the future, where similar issues arose in complex commercial multiparty litigation, they had to be referred to the court seised of the proceedings. It was plainly in the interests of the parties, the public interest and in the interest of the efficient use of court resources for that to be done. There could be no excuse for failure to do so in the future.

Lord Justice Wall and Lord Justice Longmore delivered concurring judgments.

Solicitors: Cobbetts, Birmingham; Reynolds Porter Chamberlain; Simmons & Simmons.

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