AXA Insurance UK PLC and another v Commissioners of Inland Revenue and another

A judgment or order on a group-litigation issue binds claims already on the register unless the court orders otherwise under rule 19.23(1)(a) of the Civil Procedure Rules 1998. The court may make such an order after the test case has ended, but the power is exceptional. Where the challenge rests on a legal development, the test-case decision must be clearly established as wrong. Better arguments or later dicta are insufficient.

The court must balance the integrity and efficiency of group litigation against the application of the correct law. Relevant considerations include further litigation, prejudice to follower claimants and the parties’ conduct. An assumption or unargued point is not a binding determination merely because it falls within a broadly formulated group-litigation issue.

The appellants’ tax claims formed part of the CFC and Dividend Group Litigation but were stayed while a Prudential claim proceeded as a test case. The appellants contended that the test-case judgment bound the Revenue on two matters: the existence of a common-law claim for interest on advance corporation tax paid prematurely but utilised before proceedings, and the date on which limitation began under section 32(1)(c) of the Limitation Act 1980.

Richards J, in AXA Sun Life plc v Inland Revenue Comrs [2023] EWHC 944 (Ch), held that neither matter had been determined as a group-litigation issue. The Court of Appeal, [2024] EWCA Civ 1430; [2025] 1 WLR 2179, held that the interest issue had been determined but ordered under CPR rule 19.23(1)(a) that the determination should not bind the follower claim. It agreed that the limitation start date had not been determined.

The central questions were when the court may order otherwise under rule 19.23(1)(a), whether it should do so on the interest issue, and whether the limitation start date had been decided in the test case.

Appeals dismissed unanimously. Lady Rose and Lord Richards delivered the joint judgment, with which Lord Hodge and Lord Hamblen agreed. Lord Leggatt concurred in the result.

1. Rule 19.23(1)(a) of the Civil Procedure Rules 1998 permits the court to order, after a test case has been disposed of, that its judgment is not binding on one or more follower claims. The power is not confined to cases in which the chosen test case proved unsuitable. Its exercise must nevertheless be exceptional because finality, consistency and efficiency are central to the group-litigation regime.

2. Where a party relies on a subsequent legal development, it must be clearly established that the legal basis of the test-case judgment was wrong. A desire to advance better arguments, or later dicta casting doubt on the judgment, is insufficient. A determination may bind follower claims even if it resulted from a concession or admission. Once clear error is established, the court must consider whether ordering otherwise would itself cause injustice, including through substantial relitigation, prejudice caused by delay or the parties’ tactical conduct.

3. The Prudential test-case determination on the Set Off Issue should not bind GREA. The common-law and EU-law foundations of that determination had been definitively shown to be wrong by subsequent Supreme Court authority. There is no common-law restitutionary claim for interest representing the use of money where the tax was set off before proceedings. The applicable remedy is under section 85 of the Finance Act 2019. Ordering otherwise required no renewed argument or additional trial and avoided imposing a substantial liability without a legal basis.

4. The limitation start date was not decided in the Prudential test case. Although limitation appeared among the original group-litigation issues, the later agreed issues, pleadings and argument did not raise the date of discoverability under section 32(1)(c) of the Limitation Act 1980. Henderson J’s reference to the date of the relevant CJEU decision was an assumption in a passage describing the question as probably academic. The order declaring the claims to be in time had to be read with the judgment and did not decide a generally binding start date.

5. AXAIUK’s limitation position is therefore governed by Test Claimants in the FII Group Litigation v Revenue and Customs Comrs [2020] UKSC 47. Time begins when the claimant knew, or could with reasonable diligence have known, that it had made a mistake with sufficient confidence to recognise a worthwhile claim. The parties might be able to agree the relevant date.

Lord Leggatt agreed that a later change in law would not ordinarily justify an order otherwise once appeal rights were exhausted. He regarded this case as exceptional because no issue required relitigation and applying the obsolete basis to only one category of interest would produce an irrational and incoherent result.

1. United Kingdom Supreme Court: The court dismissed both appeals. It upheld the order disapplying the Prudential test-case determination on the Set Off Issue and held that the limitation start date had not been determined as a group-litigation issue: [2026] UKSC 24 .
2. Court of Appeal: In AXA Sun Life plc v Revenue and Customs Comrs [2024] EWCA Civ 1430 ; [2025] 1 WLR 2179 , the court held that the Set Off Issue had been determined in the test case but ordered under rule 19.23(1)(a) of the Civil Procedure Rules 1998 that the determination should not bind the follower claim. It held that the limitation start date had not been determined.
3. High Court: Richards J held in AXA Sun Life plc v Inland Revenue Comrs [2023] EWHC 944 (Ch) ; [2023] STC 1167 that neither the Set Off Issue nor the Limitation Issue had been determined as a group-litigation issue and applied the current law.