B e f o r e :
|LEEDS UNITED ASSOCIATION FOOTBALL (in liquidation)||Defendant|
Crown Copyright ©
3 The Facts
The particular type of estoppel relied on by the husband is estoppel per rem judicatam. This is a generic term which in modern law includes two species. The first species, which I will call "cause of action estoppel", is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. If the cause of action was determined to exist, ie, judgment was given on it, it is said to be merged in the judgment, or, for those who prefer Latin, transit in rem judicatam. If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does; he is estopped per rem judicatam. This is simply an application of the rule of public policy expressed in the Latin maxim, "nemo debet bis vexari pro una et eadem causa". In this application of the maxim, causa bears its literal Latin meaning. The second species, which I will call "issue estoppel", is an extension of the same rule of public policy. There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action. If in litigation on one such cause of action any of such separate issues whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either on evidence or on admission by a party to the litigation, neither party can, in subsequent litigation between them on any cause of action which depends on the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was.
The circumstances in which Mr Fraser was dismissed from his position as Chief Executive by the Administrative Receivers of HLM Design International (Holdings) Limited on 17 March 2004 led him to present an application to the employment tribunal on 28 May 2004. He claimed unfair dismissal, a statutory cause of action which an employment tribunal has exclusive jurisdiction to consider and determine (sections 94 and 111(1) Employment Rights Act 1996), and wrongful dismissal, an action for breach of a contract of employment, which can be brought concurrently in the ordinary civil courts and in the employment tribunal, subject, however, in the latter case to a statutory limit of £25,000 on the amount of the payment to be ordered: article 10 of the Employment Tribunals Extension of Jurisdiction (England and Wales) Order 1994, SI 1994/1623 (the 1994 Order) and sections 3 and 44 of the Employment Tribunals Act 1996.
In paragraph 11 of Section 11 of his ET1 Mr Fraser left HLMAD in no doubt that, although he was pursuing his claims in the employment tribunal, he also intended to keep open the possibility of bringing proceedings in the High Court in order to recover damages for wrongful dismissal in excess of £25,000-
" 11. I claim damages for wrongful dismissal and compensation for unfair dismissal. Insofar as my claim for damages for wrongful dismissal exceeds the Tribunal's jurisdiction of £25,000, I expressly reserve the right to pursue an action in the High Court."
his advisers took the precaution of starting an action for wrongful dismissal in the High Court on 23 December 2004 with a view to recovering the excess of any award that he received in the employment tribunal. The amount claimed was £261,146 together with interest. They did not, however, take the additional precaution of withdrawing his wrongful dismissal claim from the employment tribunal proceedings. Instead, they pressed on with the proceedings in the employment tribunal for both unfair dismissal and wrongful dismissal.
In its judgment registered on 31 March 2005 the employment tribunal found that Mr Fraser had been unfairly and wrongfully dismissed. In an amended remedies decision registered on 16 June 2005 the tribunal determined his damages for breach of contract in the sum of £80,090.62, but limited its award to the capped amount of £25,000 damages in addition to the compensatory award of £16,034.88 for unfair dismissal, making a total of £41,034.88. On these figures Mr Fraser's net shortfall is £55,090.62.
29 In my judgment, this was clearly a case of merger of Mr Fraser's cause of action for wrongful dismissal in the final judgment of the tribunal on the claim for wrongful dismissal as between the same parties as in the High Court proceedings. Merger was not prevented from taking place by the express statement in the ET1 that Mr Fraser expressly reserved his rights to bring High Court proceedings for the excess. The merger arose from the fact that the cause of action had been the subject of a final judgment of the tribunal. Once it had merged Mr Fraser no longer had any cause of action which he could pursue in the High Court, even for the excess over £25,000. The claim for the excess is not a separate cause of action. The cause of action for wrongful dismissal could not be split into two causes of action, one for damages up to £25,000 and another for the balance. A claim in the High Court for the balance of the loss determined in the tribunal would have to be based on a single indivisible cause of action for wrongful dismissal.
55 The Employment Tribunal has a statutory jurisdiction to determine claims for wrongful dismissal and, although its jurisdiction to grant relief is subject to a financial limit, its judgment may be enforced in accordance with its terms through the County Court procedure. The judgment creates a new and independent obligation which is in substance of the same character as a judgment of the court. Since, as the authorities show, a judgment of the Employment Tribunal gives rise to cause of action estoppel, I think it must follow that the doctrine of merger as described by Diplock L.J. in Thoday v Thoday and Lord Goff in The 'Indian Grace' also applies in cases where the claimant is successful and obtains judgment on his claim. Accordingly, I can see no escape from the conclusion that when judgment has been entered in favour of the claimant the cause of action merges in the judgment and is extinguished. The result in this case is that once the tribunal's judgment had been entered on the register Mr. Fraser no longer had any cause of action for wrongful dismissal and his reservation of the right to pursue an action in the High Court was wholly ineffective.
5 Henderson v Henderson
"In trying this question I believe I state the rule of the Court correctly when I say that, 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, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but 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."
"This is the true basis of the doctrine and it ought only to be applied when the facts are such as to amount to an abuse: otherwise there is a danger of a party being shut out from bringing forward a genuine subject of litigation."
"In my opinion your Lordships should affirm it to be the law that there may an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result, as was observed by Lord Upjohn in the passage which I have quoted above from his speech in the Carl Zeiss case  1 A.C. 853, 947."
Henderson v. Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in early proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice.
1. Mrs Campbell chose to bring proceedings for racial and sexual abuse. Those proceedings had to be brought in the Tribunal.
2. The compensation payable for such abuse includes damages for psychiatric injury such as Mrs Campbell alleges she suffered from in February 2006.
3. There has been a determination on the question of liability in respect of the February 2006 discrimination. Mrs Campbell was wholly successful.
4. There has been no determination of the assessment of Mrs Campbell's compensation. Indeed the insolvency of Leeds United took place shortly after judgment on liability was handed down in March 2007 and very shortly after the Schedule of Loss was served. There is no evidence before me that the Schedule of loss was even considered by Leeds United. In those circumstances it is difficult to see that Leeds United are in fact being harassed at all by now being faced with a County Court Claim involving the assessment of damages for the psychiatric injury.
5. The insolvency of Leeds United means that there are sound commercial reasons for Mrs Campbell pursuing the claim in the County Court. Leeds United is insured against employer's liability claims but not against racial and sexual discrimination claims. If therefore Mrs Campbell is compelled to pursue her claim in the Tribunal she will receive nothing for the serious discrimination she has suffered. On the other hand if she can establish a valid employer's liability claim (and she will be able to rely on issue estoppel for many of the issues that arise) she will be fully compensated for her loss.
6. It was not possible for Mrs Campbell to bring the negligence claim before the Tribunal. It had no jurisdiction to determine such a claim. Thus if Leeds United are right once Mrs Campbell had commenced her complaint to the Tribunal it was not and is not possible for her to bring a claim before any Tribunal or Court for employer's liability in respect of which Leeds United were insured.
Friday 3 April 2009