Aldi Stores Ltd v WSP Group Plc & Ors

A later claim is not automatically an abuse of process merely because it could have been raised in earlier proceedings. The court must make a broad, merits-based assessment of all the public and private interests. The party alleging abuse bears the burden, and abuse will rarely be established without unjust harassment or oppression.

Where the later defendants are entirely different, that is a powerful factor against abuse, although identity of parties is not a threshold requirement. No legal distinction exists between earlier proceedings concluded by judgment and those concluded by settlement. In complex multi-party litigation, a known possibility of later proceedings should be referred to the court through case management.

Aldi Stores Ltd v WSP Group Plc & Ors concerned damage caused by differential settlement at a retail development. Aldi initially obtained judgment against its building contractor, Holmes, while WSP and Aspinwall participated in related multi-party proceedings as consultants and Part 20 defendants. Aldi did not sue them directly because it first sought recovery from Holmes's excess-layer insurers.

The related multi-party litigation settled while WSP and Aspinwall knew that Aldi might later pursue them. After its insurance proceedings failed, Aldi commenced claims alleging breach of professional warranties. Jackson J struck out those claims as an abuse of process because they could and should have been brought in the earlier litigation: [2007] EWHC 55 (TCC).

The central issue on appeal was whether, applying the broad merits-based approach to abuse of process, Aldi's later claims constituted a misuse of the court's process.

1. Appeal allowed unanimously; strike-out application dismissed. Thomas LJ delivered the leading judgment. Wall and Longmore LJJ agreed. Applying Johnson v Gore-Wood [2000] UKHL 65, the fact that a claim could have been raised in earlier proceedings did not make a later claim necessarily abusive. The court had to make a broad, merits-based judgment addressing whether, in all the circumstances, the later proceedings misused the court's process. The burden rested on WSP and Aspinwall, and they had not established unjust harassment or oppression.
2. There was no threshold requirement that the defendants in the two actions possess a sufficient degree of identity. The fact that Aldi's original claim was against Holmes and its later claim was against entirely different companies was nevertheless a powerful factor. Aldi was not vexing these defendants for a second time.
3. No legal distinction arose according to whether the earlier litigation ended in judgment or settlement. Its course and manner of conclusion were facts within the overall assessment. Here, WSP and Aspinwall settled the earlier proceedings knowing that Aldi might bring a later claim, although they could have warned Aldi of their position or raised the matter with the managing court.
4. The determination of abuse was not an exercise of discretion: on the relevant facts there was one correct answer. An appellate court should nonetheless be reluctant to disturb a judgment involving the balance of numerous factors. Intervention was justified where the judge considered immaterial matters, omitted material considerations, erred in principle, or reached a conclusion that was impermissible or unavailable.
5. Aldi's decision to pursue the excess-layer insurers before suing the consultants was commercially sensible, cost-effective and non-culpable. It could not reasonably assess the insurers' non-disclosure defence before discovery. The judge had failed to give adequate weight to those matters, the transparency of Aldi's position, the defendants' knowledge and silence, and the fact that the later defendants had never previously been sued by Aldi.
6. Judicial time and litigation costs were relevant public interests, but a properly brought claim could not be denied merely because an alternative litigation strategy would have used court resources more efficiently. There was also a public interest in permitting parties in complex commercial disputes a measure of freedom to choose whom they sued, controlled by proportionate case management.
7. Thomas LJ added prospective guidance that, where parties in complex multi-party litigation know of a possible later claim while other proceedings continue, the issue must be referred to the court seized of those proceedings. The court can then consider election, expedition, proportionality and the efficient use of resources.

1. Court of Appeal (Civil Division): In Aldi Stores Ltd v WSP Group Plc & Ors [2007] EWCA Civ 1260, the court unanimously allowed Aldi's appeal, set aside the strike-out and dismissed WSP and Aspinwall's application.
2. Technology and Construction Court: Jackson J, in [2007] EWHC 55 (TCC), had struck out Aldi's claims as an abuse of process because they could and should have been pursued in the earlier multi-party litigation.