Abuse of process decision overturned

Aldi Stores v (1) WSP Group plc (2) WSP London (3) Aspinwall and Co (Court of Appeal - 28 November 2007)

The claimant had engaged the defendants - a building company and an engineering and an environmental consultancy - to build retail stores. The store buildings subsequently suffered differential settlement.

The claimant brought an action against the building company and judgment was obtained. The building company joined the engineering and environmental consultants as part 20 defendants. These separate claims, cross claims and cross claims involving the freeholder were then consolidated into one main action. Settlement was reached.

The claimant sought to enforce the liability against the building company, which went into administration, and its insurers. Due to these circumstances, partial settlement was obtained. The claimant then brought a further action against the engineering and environmental consultants for the remainder of its losses.

At first instance, the court ruled that the claimant should have pursued the claims in the original action. It sought to balance that the defendants would face the same allegations again, incur further legal costs and use up the court's resources against the fact the claimant would not recover 50% of its losses. The court ruled that the further claim was an abuse of process and the case was struck out.

An appeal was brought. The Court of Appeal ruled that a broad merits-based approach should be adopted when considering an application to strike out for abuse of process. The appellate court was reluctant to interfere with this discretion. However, in this case, it found that the judge had reached an impermissible decision.

The decision of the judge was the exercise of discretion involving the assessment of a large number of factors. The judge had not adequately taken into account that the claimant had not behaved culpably or improperly. The claimant had not known of the assertion by the insurers of non-disclosure by the building company, and consequences of the same, until discovery in the action against the insurer.

The fact a claim could have been raised in the original action did not mean it was necessarily abusive to raise it in a second action. It might be said that it was harassing for the defendants to have to face a second action but they had not been sued by the claimant directly before. The court found it was not unjust for the defendants to face an action from the claimant for the first time and the appeal against the strike out was allowed.

COMMENT

When considering an action for strike out for abuse of process the court will consider all relevant circumstances and seek to find the correct balance in the interests of justice. Angus Crawford, BLM Manchester.

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