Clifford Stewart Lay & Anor v Independent Vetcare Limited

Estoppel by conduct may prevent a litigant from advancing a position which is clearly inconsistent with one successfully advanced in earlier proceedings. The inquiry is a broad, merits-based assessment. It includes whether the earlier tribunal acted on the earlier stance and whether the reversal would create unfairness or undermine confidence in the administration of justice.

A bare assertion that legal advice or factual understanding changed will ordinarily carry little weight where privilege is maintained. A change of advice alone does not justify a volte-face. There must be a properly evidenced material change of circumstances, such as new information which could not reasonably have been obtained earlier.

The earlier stance need only have been a material factor in an evaluative decision. It need not have been the but-for cause.

IVL purchased the shares in Easy Direct Debits Ltd from Mr and Mrs Lay under a share purchase agreement containing warranties that the business had been conducted lawfully. In Employment Tribunal proceedings following Mr Lay’s dismissal, IVL and EDD maintained that the business did not require FCA authorisation and was compliant with the regulatory regime.

In the High Court proceedings, IVL counterclaimed for breach of warranty. It alleged that the business had operated unlawfully before completion because it required FCA authorisation. Mr and Mrs Lay applied to strike out that counterclaim as an abuse of process founded on estoppel by conduct. Judge Bird dismissed the application: [2026] EWHC 876 (Comm).

The appeal concerned whether IVL could adopt the contradictory position and, if not, whether its earlier position had materially affected the refusal of Mr Lay’s application for interim relief in the Employment Tribunal.

1. Appeal allowed; cross-appeal dismissed. IVL’s counterclaim was struck out as an abuse of process. Its position in the Employment Tribunal, that EDD’s indirect payment model was lawful and did not require FCA authorisation, was clearly inconsistent with its counterclaim that the same pre-completion model breached the regulatory regime.

2. The applicable doctrine was estoppel by conduct, also described as the rule against approbation and reprobation. Following LA Micro Group (UK) Ltd v LA Micro Group Inc and others [2021] EWCA Civ 1429 and Malik v Malik [2024] EWCA Civ 1323, its application requires a broad merits-based assessment rather than a rigid issue-estoppel analysis. Relevant considerations include clear inconsistency, judicial acceptance of the earlier position, and resulting unfairness or prejudice. They are not inflexible conditions.

3. IVL could not justify its reversal by asserting, without waiving privilege, that its legal advice and factual understanding had changed. Such assertions could not properly be tested by either the court or the opposing parties. A mere change in legal advice would not ordinarily suffice. IVL needed to identify a material change of circumstances, such as genuinely new information not reasonably obtainable when it adopted its earlier stance. The evidence did not establish such a change.

4. The Employment Judge’s refusal of interim relief was materially influenced by IVL’s case that EDD’s model was lawful. Under Employment Rights Act 1996, interim relief required Mr Lay to show that he was likely to establish both protected disclosures and dismissal for that reason. IVL’s stance went to the first question and was closely connected with the second. The materiality test was not a but-for test. It was not inevitable that the Employment Judge would have reached the same evaluative conclusion had IVL advanced its later position.

5. Permitting IVL to retain the advantage obtained from its earlier stance while advancing the opposite case to resist payment under the share purchase agreement would be unfair and damage the integrity of the judicial process.

• Court of Appeal (Civil Division): Allowed the Lays’ appeal, dismissed IVL’s cross-appeal, and held that IVL’s counterclaim should be struck out as an abuse of process: [2026] EWCA Civ 1027 .
• High Court, London Circuit Commercial Court: Judge Bird refused to strike out IVL’s counterclaim, accepting that its changed position resulted from changed advice and factual understanding: [2026] EWHC 876 (Comm).
• Employment Tribunal: Refused Mr Lay’s application for interim relief in his protected-disclosure unfair-dismissal proceedings. That decision formed the earlier proceeding in which IVL had adopted the inconsistent stance.