Laing v Taylor Walton (a firm)

A collateral attack on factual findings in earlier civil proceedings is not automatically an abuse of process where the parties to the later proceedings were not parties or privies to the earlier action. The question is whether relitigation would be manifestly unfair or would bring the administration of justice into disrepute. The court must balance all relevant circumstances and apply no absolute or prescriptive rule. The existence of a real prospect of success, the availability of ordinary defences, and the interests of both parties may justify allowing the claim to continue.

The claimant sued his former solicitors for professional negligence concerning agreements governing a development investment. In earlier Technology and Construction Court proceedings, a judge had found that the claimant’s agreement with the investor provided for a 25 per cent interest rather than the single 12.5 per cent interest asserted by the claimant, and another judge had found that the solicitors were not retained by the claimant. No appeal was brought.

The claimant’s new claim alleged that negligent drafting had enabled the investor to pursue the successful claim. The solicitors applied to strike out the claim for issue estoppel, abuse of process or an analogous principle, and sought summary judgment. The central issue was whether the claimant should be permitted to challenge the earlier factual findings.

1. The applications were dismissed. The strict doctrine of issue estoppel did not apply because the solicitors were neither parties nor privies to the earlier Technology and Construction Court proceedings. The application therefore had to be considered on the basis of abuse of process analogous to issue estoppel.
2. A collateral attack on an earlier decision may constitute an abuse of process, but it does not do so automatically. Where the parties to the later civil proceedings were not parties or privies to the earlier proceedings, the relevant questions are whether relitigation would be manifestly unfair to a party or would bring the administration of justice into disrepute. This guidance was derived from Secretary of State for Trade and Industry v Bairstow [2004] Ch 1.
3. There are no absolute or prescriptive rules governing the assessment. Relevant considerations included that the claimant had instigated the new proceedings, had been represented and had not appealed; that no new evidence or argument was advanced; the potential unfairness caused by unavailable privileged documents and evidential difficulties; the solicitors’ ability to defend the negligence and causation allegations; the supporting evidence of the former solicitor; and the claimant’s real prospect of establishing that the earlier factual decision was wrong.
4. The claim was unusual and involved a direct challenge to findings made after a full trial. Nevertheless, the balance did not show such manifest unfairness to the solicitors that the claim should be struck out. Nor would permitting it to continue bring the administration of justice into disrepute. The claim therefore remained capable of proceeding, and summary judgment was also inappropriate.