ALDI Stores Ltd v WSP Group Plc & Ors

A later claim may constitute an abuse of process even where it is brought against defendants who were not directly sued in the earlier proceedings. The court must make a broad, merits-based assessment of all the circumstances, weighing public and private interests and asking whether the later claim misuses the court’s process. The fact that the claim could have been raised earlier does not automatically make the later proceedings abusive. Relevant considerations include the parties’ participation in the earlier litigation, the feasibility of joining the later claim, the claimant’s reasons for not doing so, and the burden of duplicated litigation. A settlement or absence of a judgment does not prevent a finding of abuse. Where the later action would repeat substantial allegations already litigated and cause unjust harassment, oppression and major duplicated costs, it may be struck out under the Civil Procedure Rules 1998 and the court’s inherent jurisdiction.

Aldi had previously sued Holmes Building Ltd in respect of defects at a retail development. Holmes brought Part 20 claims against WSP Group plc, WSP London Ltd and Aspinwall & Co Ltd, alleging breaches of warranties and duties of care concerning the same ground-improvement works. Aldi obtained judgment against Holmes, but later withdrew from the wider litigation and did not bring direct claims against those professional firms.

The wider action settled during trial. Aldi subsequently brought the present proceedings against WSP Group, WSP London and Aspinwall to recover losses not obtained from Holmes and its insurers. The defendants applied to strike out the new claim as an abuse of process. The central issue was whether Aldi should have advanced its claims in the earlier litigation and whether the proposed re-litigation was unjust, oppressive or otherwise abusive.

1. Application granted. The particulars of claim were struck out and the action was dismissed under r 3.4 of the Civil Procedure Rules 1998 and the court’s inherent jurisdiction.
2. The governing approach was the broad, merits-based assessment stated by Lord Bingham in Johnson v Gore Wood & Co. [2002] 2 AC 1. The question was whether, in all the circumstances, Aldi was misusing or abusing the process by raising issues which could have been raised in the earlier proceedings. It was not enough that the claims could have been brought earlier; the court had to weigh all relevant public and private interests.
3. The principle could apply although Aldi had not previously sued the present defendants directly. The approach in Bradford & Bingley Building Society v Seddon Hancock [1999] 1 WLR 1482 remained good law, and the guidance in Dexter Ltd v Vlieland-Boddy [2003] EWCA Civ 14 confirmed that a later action against a party involved in the earlier litigation was more readily abusive than one against a wholly new defendant.
4. The material factors were that Aldi and the defendants had all participated in the first action; Aldi knew by May 2003 that it could join the main action; it could feasibly have rejoined, even at a late stage; and its decision not to do so was a deliberate commercial choice made with legal advice rather than a consequence of impecuniosity or other disabling circumstances.
5. If the new claim proceeded, the defendants would face precisely the same allegations, the same serious allegations against relevant individuals might be repeated, substantial additional costs would be incurred, and the court’s resources would be used for a second trial of the same issues. Those consequences amounted to unjust harassment, oppression and misuse of the court’s process.
6. The fact that the earlier action settled rather than ended in judgment did not make the later proceedings less abusive. Nor did the possibility that Aldi might have succeeded against its insurers justify transferring the risks of its chosen strategy to the defendants.

First-instance decision. The judgment does not state any appeal from the present proceedings.