Warburton v CC Avon and Somerset: Henderson abuse principle prevents claimant from bringing new proceedings raising additional claims

The District Court refused the defendant's strike out application, but the High Court allowed the defendant's appeal, holding that the new proceedings were an abuse of process.  Mr Warburton had been compensated for the data protection claim, which was integral to the defamation claim, and the issue before the court would not have arisen, had he brought all of his claims to court in the first instance.  Mr Warburton subsequently appealed to the Court of Appeal.

The Court of Appeal dismissed the appeal. 

The starting point, as noted by Philips LJ, is the statement of principle set out in Henderson v Henderson (1843) 3 Hare 100, that where a matter is the subject of litigation:

“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 a matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. …”

The Henderson principle serves the public interest of ensuring that there is finality in litigation and a party is not twice vexed in the same matter.  At paragraphs [34] – [38], the Court of Appeal considered the interplay between res judicata and abuse of process, referring to Virgin Atlantic Airways Ltd v Zodiac Seat UK Ltd [2013] UKSC 46, [2014] AC 160 where Lord Sumption JSC summarised the general principles relating to res judicata.  Lord Sumption rejected the contention that recent case law had recategorized the Henderson abuse principle so as to treat it as being concerned with abuse of process and to take it out of the domain of res judicata altogether, explaining at [25] as follows:

"…Res judicata and abuse of process are juridically very different.  Res judicata is a rule of substantive law, while abuse of process is a concept which informs the exercise of the court's procedural powers.  In my view, they are distinct although overlapping legal principles with the common underlying purpose of limiting abusive and duplicative litigation…"

Mr Warburton argued that the data protection claim fell outside the Henderson abuse principle, as the claim was “raised” in the earlier proceedings, by being referred to in those proceedings and/or expressly set out in the draft amended particulars, even though it was not formally pleaded.  He contended that, as a matter of principle, it was not abusive to pursue claims which had fairly been flagged so that the other party was aware of them.  Mr Warburton further contended that it was not an abuse for him to take advantage of the defendant's "litigation mistake".

The Court of Appeal dismissed Mr Warburton's argument, affirming that the Henderson abuse principle applies to matters not formally brought before the court: "Excluding a ‘raised but not brought’ claim from the scope of the Henderson principle altogether would create an unnecessary and unprincipled exception which would enable parties to bring second claims with impunity, no matter how obviously abusive and contrary to the clear public interest they might be.” 

Once it is accepted that the Henderson abuse principle is engaged, there is a further merits-based question as to whether the second claim is in fact an abuse, considering the overall balance of justice.  It was in the context of this further question that the District Court Judge considered the negotiations leading up to the Part 36 settlement. 

Mr Warburton argued that it was wrong in principle for the Judge to have examined the without prejudice correspondence passing between the parties before the settlement, and that the Judge should have proceeded solely on the basis that the defendant had made an offer to settle the pleaded claims.

The Court of Appeal rejected Mr Warburton's argument and commented that communications between parties leading up to settlement, particularly as to the possibility of a subsequent claim, had often been regarded as important in determining whether that subsequent claim was an abuse of process.  Indeed, the court was obliged to consider the pre-settlement correspondence, including the fact that the parties had been negotiating on the basis that they would settle all claims (including data protection).

The Court of Appeal's decision in Warburton suggests that claims put forward in a draft amended pleading will not be encompassed in a settlement resulting from the acceptance of a Part 36 offer to settle the whole of the claim.  The judgment applies the reasoning set out in Hertel v Saunders [2018] EWCA Civ 1831 in which the Court of Appeal held that an offer relating to a proposed claim by amendment was not a valid Part 36 offer.  It is unclear, however, whether the Court of Appeal was referred to the later decision in Calonne Construction Ltd v Dawnus Southern Ltd [2019] EWCA Civ 754 which confirmed that a defendant can be treated as having made a claimant's Part 36 offer in respect of its counterclaim, even though the counterclaim has not yet been pleaded. 

It is suggested that, in light of the potential uncertainties, parties making or accepting Part 36 offers should ensure it is clear whether any claims which have been referred to but not yet pleaded are covered by the Part 36 offer.  Where a Part 36 Offer is accepted with the knowledge that it is intended to settle the whole of a claim, the Henderson principle suggests that it will be considered unconscionable for a party to bring new proceedings seeking further damages, particularly in a situation where that party has already been fairly compensated.