REUTERS | Denis Balibouse

When it is appropriate to have a second bite at the cherry: Davies v Carillion Energy Services Limited and another

The Civil Procedure Rules (CPR) do not expressly prohibit a second action where a first action based on many of the same facts and claim has not been successful; in fact CPR 3.4(4) seems to envisage that possibility. However, there are established cases which provide guidance on when a second claim will be held as an abuse of process. It will depend on whether the first action was struck out for failure to comply with procedure, decided at court or settled between the parties.

Historically, there were two lines of authority on which the criteria were applied, on the basis that:

“… it is one thing to refuse to allow a party to relitigate a question which has already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which has not previously been adjudicated upon”. (Lord Millet in Johnson v Gore Wood.)

What is known as the Securum approach (Securum Finance Limited v Ashton) is usually applied to the first category and the Aldi approach to the latter (Aldi Stores Limited v WSP Group plc and others).

Under the Securum approach, a second action would be struck out unless there was a special reason why it should not be. In Securum, factors relevant to whether the first action had been struck out for an abuse of process included whether there had been a want of prosecution, contumelious conduct or disregard of the rules.

Under the Aldi approach, the finding of an abuse of process is a balancing act which takes into account all the relevant factors (for example, whether a judge had considered immaterial factors, omitted to take account of material factors, erred in principle and so on). If an abuse of process is found, the second action would only succeed if there were “very unusual circumstances”.

Recently, the two approaches have started to blur. For example in Aktas v Adepta, the judge seemed to justify citing both lines of authority on the basis that the first category was in fact just a sub-set of the second category.

In Davies v Carillion Energy Services Limited and another, the High Court sought to provide some element of clarity to the interaction of the two approaches, especially in the post-Jackson and Mitchell era (before any of the established authorities were decided).

Mr Davies issued a claim against the second defendant in 2010. His claim was subsequently struck out for non-compliance of a second unless order (despite the fact that the matter had been set down for trial and no objections were really raised by the second defendant). In 2015, Mr Davies issued the second action and the defendant applied for strike out on the grounds of abuse of process. At first instance, District Judge Stuart, applying the Aldi approach, concluded that there was no abuse of process and that the second action would not be struck out. The defendant appealed and it was heard by Morris J.

Morris J clearly defined the two lines of authority and the criteria set by them. He also confirmed that there was “tension” between the two which necessitated the distinction and application of the correct criteria.

His view was that the correct approach to be applied was that of Securum, but that the “special reason” exception should now be narrowly applied since Mitchell and Denton.

As such, he did not find that the conduct in the first action amounted to an abuse of process, because there had not been wholesale disregard of the rules and there had not been conduct that was contumelious or inexcusable.

However, I do not think it was helpful for him to use the term “very unusual circumstances” to classify the exception rule, as this is a term coined by the Aldi line of authorities and which is applicable to the second category of cases.

Additionally, he also qualified his comments by saying that, even if the Aldi approach was the correct one (having decided it wasn’t), the judge at first instance was not wrong in finding that that there had been no abuse of process.

This was confounded by the fact that no relief from sanction application was made. Morris J confirmed that this was a question that went to whether there were very unusual circumstances (which he did not need to consider, having decided that there was no abuse of process). But then he went on to address this as part of whether it was an abuse or process or otherwise inexcusable (which it was not).

Much in this case appeared to turn on the claimant having been a litigant in person at all material times. Although the court held in Elliott v Stobart Group that “being a litigant in person with no previous experience of legal proceedings is not a good reason for failing to comply with the Civil Procedure Rules or, I would add, court orders”, District Judge Stuart, at first instance in Davies, did take into account the status of the claimant as a litigant in person in his balancing exercise under Aldi (although the wrong criteria).

Morris J also made allowance for “the likelihood that the claimant would not be fully conversant with the details of pleading rules in the CPR practice directions or with the distinction between pleading facts and law, and what may or may not amount to a ‘cause of action’ or a legal basis of the claim”.

The claimant was clearly distinguished from those in Collins v CPS Fuels Ltd, where the court found that the claimant “would have a cast iron case against his solicitors for their conduct of the first action”.

I think that Davies did not provide the clarity that it could have done and perhaps some blurring of the two lines of authority may yet continue. Nonetheless, in the circumstances the correct decision was made to ensure that the “importance of the efficient use of resources did not trump the overriding need to do justice”.

Obviously, since Jackson and Mitchell, disregard of procedural rules carries much heavier consequences, but you have a better chance of getting a second bite of the cherry. However, a claimant should not be complacent and rely on the chance of a second action being permitted where a first has failed. They should ensure, where possible, that the first action is salvaged or they should at least make certain that attempts to salvage the action have been exhausted.

Hodge Jones & Allen Chun Wong

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