Second bites at the cherry

Christopher Tromans takes a look at the current state of the rule in Henderson v HendersonYour new client is agitated.

He has recently parted company with his former solicitors who have, in his view, been guilty of professional negligence.

It soon appears that he is well versed in matters of professional negligence since his former solicitors had acted for a company of which he is the principal shareholder in a claim for professional negligence against yet another firm of solicitors who had acted for both the company and himself in various property transactions.

That claim was settled by agreement.The client says he also incurred personal losses but for practical business reasons he did not pursue those losses as a second claimant in the action by the company.

When he subsequently told his solicitors that he was now ready to pursue those personal losses, he was advised that any action by him was bound to fail because of something called the rule in Henderson v Henderson.This had not been mentioned to him when the companys action was commenced, and he hopes that you will give him more palatable advice.The rule itself originates in the judgment of Vice-Chancellor Sir James Wigram at (1843) 3 Hare 114-115: where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest.[it] applies to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.The principle behind the rule is that it is in the public interest that an attempt to litigate issues which could have been resolved in earlier litigation should be treated as an abuse of process.

The rule has been enthusiastically applied over the years and in Talbot v Berkshire CC [1993] 3 WLR 708 the Court of Appeal held that it even applied to a person who had not been a party to the earlier proceedings.

Mr Talbot was sued by a passenger in his car.

The solicitors instructed by his insurers took third party proceedings against the highway authority without telling Mr Talbot what was happening and without enquiring whether he himself wished to make a claim against the highway authority.

After the trial of the first action Mr Talbot commenced proceedings against the highway authority, which were struck out as an abuse of process.

The Court of Appeal held that this was an appropriate application of the rule.

Furthermore, Lord Justice Stuart-Smith effectively limited the special circumstances in which the rule can be disapplied to three: ignorance of the existence of a claim, an agreement to leave a claim in abeyance and a representation relied on by a party which resulted in the claim being deferred.House of Lords to the rescueNow comes Johnson v Gore Wood & Co [2001] 2 WLR 72.

HL.

Their Lordships rejected submissions made on behalf of Mr Johnson that the rule should be disapplied because he had not been a party to the action by the company, and because the companys action had in any event settled and had not resulted in a judgment.

However, they ruled that the question whether a second action amounted to an abuse of process should be judged broadly on the merits and after all the facts and all the interests, both public and private, had been taken into account.

On this basis, the claim by Mr Johnson was not an abuse of process.

Therefore, you will be able to give the client some positive and encouraging advice.However, if the companys action had not settled and had been dismissed with costs, your client could well be required to settle those costs himself before being permitted to proceed with his own action.

In Sinclair v British Telecommunications Plc [2001] 1 WLR 38 a company controlled by the claimant brought proceedings in 1992 in which, after the early stages, no further steps were taken.

Eventually the action was struck out for want of prosecution and the company was ordered to pay the defendants costs.

In 1997 the claimant, having taken formal assignments to himself of the companys rights of action, commenced proceedings against the defendant on broadly the same subject matter.

An order was made at first instance staying the claimants action until he had paid the costs ordered against the company and striking his action out if the costs were not paid in full within three months.

The Court of Appeal dismissed an appeal by the claimant against that order on the basis that the court, under its inherent jurisdiction, could and should intervene to prevent what was clearly an abuse of process even though the claimant in his personal capacity had not been a party to the earlier action.It remains to be seen whether the rule will be held to be incompatible with article 6 of the European Convention on Human Rights.

The point has not yet arisen but watch this space.District Judge Tromans sits at Plymouth Combined Court Centre