Otkritie Capital International Ltd & Anor v Threadneedle Asset Management Ltd & Anor

A breach of the requirement in Aldi Stores Ltd v WSP Group plc to refer possible related claims to the court for case management does not automatically constitute abuse of process. The court must make a broad, merits-based assessment of all the circumstances. It should consider whether the later claim ought to have been brought earlier, the effect of the breach on case management, prejudice to parties and other court users, and the likelihood that earlier case management would have produced a different course. A mere possibility of different case management is insufficient. The later claim should be struck out only where the conduct amounts to abuse of process.

The claimants had brought extensive fraud proceedings against numerous defendants, including a former Threadneedle employee. After obtaining judgment against that employee, they commenced separate proceedings against his alleged employers for vicarious liability and related causes of action. They had not referred the possibility of claims against Threadneedle to the Commercial Court during the earlier proceedings, as required by Aldi Stores Ltd v WSP Group plc.

Threadneedle applied to strike out the later claim as an abuse of process. The central issues were whether breach of the Aldi requirement was itself sufficient, whether the claimants should have joined Threadneedle to the earlier proceedings, and whether the later proceedings were abusive in all the circumstances.

1. Application dismissed. The failure to refer the possible claim to the court breached the requirement stated in Aldi Stores Ltd v WSP Group plc, but did not itself establish abuse of process.
2. The principles in Johnson v Gore Wood & Co required a broad, merits-based judgment. The question was whether, in all the circumstances, the claimants were misusing the court process by bringing an issue later that could have been raised earlier. The burden remained on Threadneedle to establish abuse.
3. Breach of the Aldi requirement was relevant and could contribute to a finding of abuse. The court should assess, as best it could, what case management would probably have occurred had the matter been referred. A mere possibility that the court might have adopted different case management was insufficient to create a low threshold for strike-out.
4. The claimants knew, at least by 1 March 2012, that they might have a claim against Threadneedle and had the evidence needed to sue. Their reasons for proceeding separately were principally connected with legal representation, the desire to pursue the primary wrongdoers first, and the potential complexity of adding substantial parties and contribution claims. Those reasons were legitimate and made it likely, although not certain, that the earlier court would have permitted separate proceedings.
5. The absence of dishonesty, collateral attack, unjust harassment or oppression did not prevent abuse being found, but the absence of those matters was material. The risk of duplicated or inconsistent findings and the public interest in efficient litigation were also relevant. On the facts, the later proceedings did not amount to abuse.
6. The court criticised the claimants’ failure to comply with the requirement and indicated that costs consequences could follow. The requirement applied to defendants and prospective defendants as well as claimants. Under Civil Procedure Rules 1998, r 1.3, all parties had to help the court further the overriding objective.