Introduction
Anyone can make a mistake. That applies to those of us involved in bringing and defending civil proceedings, as much as it does to any other field of human endeavour. But the question remains, to what extent should other people be required to put up with our mistakes? And in particular, when the consequence of a claimant’s mistakes is that a second claim is issued in respect of the same cause of action, after the first has been struck out, to what extent should the defendant be required to put up with that? This was the question explored in Haynes v Liverpool Victoria Insurance Company Ltd (no 2) (unreported, 10th February 2023, Birmingham County Court, Deputy District Judge Starks), in which I represented the Defendant.
The factual background and procedural history
Mr Haynes was not a lucky man. Where his run of bad luck came to an end may be a matter of debate, but it definitely began when, “as long ago as” 11th June 2019, his car was struck on a roundabout, by a car insured by Liverpool Victoria. He alleged that he developed whiplash as a result, which his medical expert thought would last for 9 months. Liability was admitted, but causation remained in dispute.
In due course Mr Haynes issued a claim for his personal injuries and some minor special damages. Haynes v Liverpool Victoria Insurance Company Ltd (no 1), the claim he issued against Liverpool Victoria under the European Communities (Rights against Insurers) Regulations 2002, named a “Ms Clerkstone” as the at-fault driver insured by Liverpool Victoria. As an insurer is liable to a claimant under the 2002 Regulations only when the claimant has a claim in tort against someone that insurer insured, and as the insurer is only liable to a claimant to the same extent as it would be to its insured, it is necessary in order to succeed in a claim under the Regulations to prove that the at-fault driver is someone whom the insurer sued did in fact insure.
Un a Defence served in March 2021, Liverpool Victoria denied that they insured Mr Clerkstone, or indeed that they had any knowledge of her at all. The interested observer might have thought that Mr Haynes’ solicitors would have responded to this by taking steps to correctly identify the at-fault driver, and amend proceedings accordingly. The interested observer would, on this occasion, have been disappointed, for Mr Haynes’ solicitors - it would seem - did nothing whatsoever to correct what DDJ Starks later described as “ill-conceived” proceedings.
Strangely, Mr Haynes’ solicitors did not (in response to the application before DDJ Starks) adduce any admissible evidence, or in truth any evidence at all, to explain their actions (or inaction). Mr Haynes’ barrister produced a chronology which sought to suggest that Liverpool Victoria had somehow failed to respond to Mr Haynes’ solicitors enquiries about the identity of the at-fault driver, and suggested that this was the reason for the initial mistake about the identity of the at-fault driver, but the judge accepted that 1) this had to be disregarded in the absence of any supporting evidence 2) even on the basis of this chronology, no enquiries were made about the identity of the at-fault driver with Liverpool Victoria until after the demise of the first set of proceedings (!)
And so, when the case came before HHJ Wall for trial in January 2022, it did not come as any great surprise to anyone (except, perhaps, Mr Haynes’ solicitor) when I, appearing for the Defendant, applied to strike the claim out, on the basis (pursuant to CPR 3.4(2)(a)) that, as the Claimant had clearly identified the wrong at-fault driver, there were no reasonable grounds for him to bring the claim. My task was made rather easier in this respect by Mr Haynes’ witness statement, in which he described the at-fault driver as male. And so it also came as no surprise when HHJ Wall struck the claim out on the grounds I argued.
Mr Haynes may have been unlucky, but he was also persistent. Just 2 days after the first claim was struck out, his solicitors asked Liverpool Victoria (for the first time) for the identity of the at-fault driver. In June 2022, proceedings were issued against Liverpool Victoria once more. These were conspicuously identical to the first set of proceedings, except that Ms Clerkston was no longer named as the at-fault driver, and a Mr Preston was. In its Defence, Liverpool Victoria accepted that it had insured Mr Preston, and that he was at fault for the index accident. However, it sought to have the second set of proceedings struck out as an abuse of process. Of its own motion, the Court listed this issue for consideration, leading to the application before DDJ Starks.
The law applied
DDJ Starks was at great pains to point out that neither the principle of res judicata, nor the rule in Henderson v Henderson (1843) 3 Hare 100, was applicable in the present case. In respect of the former, he held that there had been no adjudication of the dispute between the parties, as HHJ Wall had not dismissed the claim after hearing the evidence, but had struck the claim out as a preliminary issue on what DDJ Starks described as procedural grounds. (This was in spite of the fact that HHJ Wall’s decision was based upon the fact that the Claimant could not prove, on the evidence available, that the accident was the fault of someone insured by Liverpool Victoria). Although the judge did not state it in these terms, it is unsurprising that he did not find Henderson to apply, as the rule in that case arises when a party raises in subsequent proceedings matters which were not, but could and should have been raised in the earlier ones (see n 3.4.5 in the White Book). In Mr Haynes’ case, his solicitors had raised the relevant issues in the first set of proceedings, but the issues had not been determined due to the claim being struck out.
The judge did however accept the Claimant’s argument that Stuart v Goldberg Linde (a firm) [2008] EWCA Civ 2, a case involving the rule in Henderson, was relevant to the present case. In particular, he accepted that the Defendant bore the onus of persuading the Court that allowing proceedings to continue would be an abuse of process; that the Court should undertake the sort of “broad merits-based” appraisal of the matter required in cases involving the rule in Henderson by Johnson v Gore Wood & Co (no 1) [2002] AC 1, HL; and that he was engaged in what was ultimately a discretionary exercise, to be conducted with the overriding objective in mind.
Instead, the judge accepted that the case fell within what can best be described, in the absence of a snappy leading case, as “the rule in n 3.4.8 of the White Book”. HHJ Starks quoted from that note as follows:
The principles of res judicata, including the rule in Henderson, do not apply where the earlier proceedings terminated prematurely, without any substantive adjudication or settlement. However, there may be other grounds upon which such claims may be struck out as an abuse of process.
Of the authorities discussed in n 3.4.8., the judge considered Cranway Ltd v Playtech Ltd [2008] EWHC 550 (Pat), and Davies v Carillion Energy Services Ltd [2017] EWHC 3205 (QB) to be of particular importance. From the former, he derived a need to perform a “broad analysis” of the case (in line with the guidance he had already taken form Stuart v Goldberg Linde). From the latter, he quoted extensively as follows:
52. First, the line of cases of Arbuthnot, Securum and Collins are authority for the following:
(1) Where a first action has been struck out as itself being an abuse of process, a second action covering the same subject matter will be struck out as an abuse of process, unless there is special reason: Securum §34, citing Arbuthnot, and Aktas §§ 48, 52.
(2) In this context abuse of process in the first action comprises: intentional and contumelious conduct; or want of prosecution; or wholesale disregard of rules of court: Aktas §§72 and 90.
(3) Where the first action has been struck out in circumstances which cannot be characterised as an abuse of process, the second action may be struck out as an abuse of process, absent special reason. However in such a case it is necessary to consider the particular circumstances in which the first action was struck out. At the very least, for the second action to constitute an abuse, the conduct in the first action must have been “inexcusable”. Collins §§24-25 and Cranway §20.
53. Secondly, Johnson v Gore Wood, Aldi and Stuart v Goldberg are all cases of the Henderson v Henderson type of abuse, where the first action has been resolved by way of adjudication or settlement and where it is said that issues which should have been brought in the first action are being sought to be re-litigated. In such cases:
(1) Whether a second action raising matters which could have been, but were not, raised in the first action is an abuse of process is not a matter of discretion, but is a judgment to be made by the first instance judge, assessing and balancing all the relevant factors in the case.
(2) On appeal from a first instance judge's decision, the appeal court will interfere only where the judge has taken into account immaterial factors, omitted to take account of material factors, erred in principle or come to a conclusion that was impermissible or not open to him or was wrong: Stuart
(3) Even if there is a finding of abuse of process, the court still has a remaining discretion not to strike out, but only in very unusual circumstances: Stuart §24 and Aktas §53.
54. Thirdly, there is a tension between these two lines of authority, which Rix LJ sought to address in Aktas at §53. Even if, as there suggested, the first category of case is to be regarded as an example of the general principles established in Johnson and Aldi, it is difficult to see how, in a “procedural” case, the two approaches can be applied in tandem. If both approaches are to be applied, it is not clear at what point in the analysis the “special reason” identified in Securum/Collins comes into consideration: in the first stage of the assessment of all relevant factors or at the second stage of residual discretion, if abuse is found; nor is it clear what factors come into play in the second stage, if all relevant factors have been considered in the first stage.
55. Against this background, I conclude as follows:
(1) Where a first action has been struck out for procedural failure, the Court should apply the Securum/Collins approach I set out in paragraph 52 above. Even if Aldi and Stuart state general principles which are now applicable to all categories of abuse of process, I am not satisfied that there is any case authority which has specifically disapproved of the detailed analysis in Securum, Collins and Aktas of cases of procedural failure. Indeed Securum and Collins were not considered in either Johnson or Aldi. In Aktas, Rix LJ did not indicate disapproval of Securum.
DJ Starks placed particular emphasis on the following parts of paragraph 55 of the decision in Davies:
(2) However given the introduction, since those cases, of amendments to CPR 1.1 and given developments in Mitchell and Denton, the “special reason” exception identified in Securum and Collins falls to be more narrowly circumscribed. Where the conduct of the first action has been found to have been an abuse of process or otherwise inexcusable, then the second action will be struck out as an abuse of process, save in “very unusual circumstances”. (Other terminology might equally be used to indicate this strict approach). In addition, in a case where the first action was not itself an abuse of process, whether the conduct in that action was “inexcusable” might fall to be assessed more rigorously and in the defendant's favour. However, even post-Jackson, ultimately, the importance of the efficient use of resources does not, in my judgment, trump the overriding need to do justice: see Aktas §92.
From this, DDJ Starks suggested that, in the wake of Mitchell, a stricter test may apply in terms of what was excusable and inexcusable (in the sense discussed in Davies), and that the claimant’s conduct might be assessed more rigorously when deciding if the second set of proceedings was an abuse of process. However, he did also acknowledge that paragraph 55(3) of Davies provided that “A single failure to comply with an unless order is not, of itself, sufficient to conclude that the second action is an abuse of process” [italics in original].
On the basis of these authorities, DDJ Starks concluded that there was a distinction between cases where has been contumelious behaviour, want of prosecution, wholesale disregard for rules, or repeated failure to comply with a court order in the first set of proceedings, and cases which were struck out because of a “procedural irregularity”. He stated that, with cases falling within the first category, there were powerful public policy reasons why the second set of proceedings should not be permitted to proceed. Where cases fell within the second category, he felt that whether the second set of proceedings should be declared an abuse of process would depend on the results of the broad analysis set out in Cranway.
As the judge noted, the first set of proceedings in Mr Haynes’ case had not been struck out as an abuse of process, but because the pleadings did not disclose reasonable grounds for bringing the claim. Accordingly, DDJ Starks decided to undertake a broad view of the reasons why the claim was struck out. Suggesting that he felt the case came within paragraph 52(3) of Davies. This was not, therefore, a case where there was any assumption that the second set of proceedings was abusive, in which the Court would have to find that there was a special reason to allow them to proceed.
Conscious of the fact that Mr Haynes’ first claim had not been struck out as an abuse of process, and that it would therefore be more difficult to bring the second set of proceedings within the categories of case meriting strike out as set out in n 3.4.8, I sought to persuade the judge that the reasons why the claim had been struck out had been of equal seriousness to an abuse of process. In particular, I argued that the persistent failure to correct the Claimant’s position in respect of the identity of the at-fault driver in a claim which was obviously doomed to failure, despite Liverpool Victoria’s Defence having made the position clear, and despite it being obvious from Mr Haynes’ own witness evidence that his pleaded case was wrong, amounted to, or was equivalent to, wholesale disregard of the rules of court.
DDJ Starks’ approach was different. He noted that there were “parallels” between Mr Haynes’ case and Cranway, where the claim had been struck out because of the pleadings’ failure to comply with a relevant practice direction (albeit in that case, the application to dismiss the second set of proceedings as an abuse of process was unsuccessful). Instead, he said that, while this was not a case of “contumelious conduct” (a phrase the judge clearly enjoyed - and who wouldn’t ?), the failure of Mr Haynes’ side to get its house in order, after the Defence raised the issue about the identity of the at-fault driver “might be described as akin to want of prosecution”.
The judge went on to identify several features of the case, which led him to the view that the second set of proceedings was an abuse of process. He felt it was significant that there was no evidence before the Court to explain the mistake made in the first proceedings about the identity of the at-fault driver, to show that any attempt was made to correct it before the first set of proceedings was struck out, or to explain why no such steps were taken. He emphasised the fact that the first set of proceedings had been allowed to run to trial in this state, with the attendant costs and use of court resources, and said that his view of the second set proceedings might have been different had the first set been struck out at about the time the Defence was filed. He said that the Defendant made “powerful points” about the need for promote finality of litigation, the passage of almost 4 years since the index accident, the modest value of Mr Haynes’ claim, and the alternative remedy open to the Claimant of a claim in negligence against the solicitors who had, in DDJ Starks’ view, allowed this situation to arise. In all these circumstances, the judge felt that Mr Haynes should not be entitled to a second bite of the cherry.
DDJ Starks went on to consider his decision in light of the overriding objective. Amongst other matters, he noted that Mr Haynes had had every opportunity to participate in the case, having brought the first set of proceedings, which were only struck out because of the way they had been conducted. Saving expense was a factor telling, in his view, against the Claimant’s position, as were proportionality (in a modest, low value, straightforward claim), the need to deal with cases expeditiously, and the need to allocate to the case an appropriate share of court resources (in light of the first set of proceedings having run on to trial).
Conclusions - “oh no not you again”
During the course of argument, DDJ Starks established that neither counsel was aware of any reported case on all fours with the present case. While not binding, Haynes may prove persuasive when dealing with an issue which has in my experience become particularly common in the wake of the upheavals which accompanied the pandemic, particularly for defendants faced with the frustrating task of defending claims which they thought they had seen the back of, but which insist on rising, Dracula-like, from their legal graves.
It must be taken into account that DDJ Starks’ decision clearly turned on the particular facts of the case before him, but this does not preclude a defendant from urging a similar approach on the court in comparable situations (at least, comparable in the sense of the seriousness of the claimant’s conduct in respect of the first action). Given the often limited value of Henderson-based arguments in similar cases, given the difficulty in particular of satisfying the general requirement, set out in Johnson v Gore Wood, that the second action must amount to unjust harassment or oppression of the defendant, Haynes at least suggests that “the rule in n 3.4.8” can be a useful addition to a defendant’s procedural arsenal in an appropriate case.
Early in this article, I observed that Mr Haynes was not a lucky man. Perhaps he was luckier than the solicitors he instructed, against whom he would appear to have a strong case in negligence, and against whom DDJ Starks made a show cause order in relation to the costs of the second set of proceedings. This was in addition to the costs of the first proceedings, which they had paid after HHJ Wall had made a similar show cause order in relation to those. (The fact that they paid those costs without contesting that order, while deployed by Mr Haynes’ barrister as a reason why the second set of proceedings should not be struck out, cut little to no ice with DDJ Starks.) Or perhaps “unlucky” is the wrong word for it. For Mr Haynes’ solicitors, and for claimants’ representatives more generally, Haynes is an object lesson in how not to conduct civil proceedings, as well as a reminder that bringing a second set of proceedings in relation to the same cause of action may wipe the slate less clenan than is often thought.
