THE ALDI PRINCIPLE AND SECOND ACTIONS: A STING IN THE TAIL

In Chamonix Private Equity LLP -v- Caledonia Investments plc [2015] EWHC 3290 (Comm) Mr Justice Knowles noted that, in the absence of prior notification, it was going to be difficult for a claimant to bring a second action against different parties.

THE CASE

The parties had settled an action on the morning of the hearing. The judge was asked to deal, in writing, with some relatively minor issues about the terms of the order.

ISSUING SECOND PROCEEDINGS

  1. “On release of claims, the Defendant (through Freshfields) urges as follows:
“… the Claimant has brought very serious allegations of deceit against our client on the basis of statements (allegedly) made by its employees. In these circumstances we have sought confirmation from the Claimant that it will not seek to pursue our client’s employees personally for claims arising out of the same facts as the litigation.”
  1. That position is a reasonable one, but it is not one that I can conclude formed part of the agreement when the counter-offer was accepted. It is not unreasonable for the Claimant (through Quinn Emanuel) to insist that, as it was not agreed, so it should not be recorded in an Order of the Court.
  2. However, it may be that in practice little will turn on this. The Defendant (through Freshfields) has made clear that should further proceedings be commenced it will apply to strike out those proceedings as an abuse of process. In that connection it may be useful to bear in mind the question whether, had proceedings against employees been envisaged, that is a matter that would have required to be raised as a case management issue in the current proceedings, but was not (see Aldi Stores Ltd v WSP Group plc [2007] EWCA Civ 1260; [2008] 1 WLR 748, and Otkritie Capital International Ltd v Threadneedle Asset Management Ltd [2015] EWHC 2329 (Comm)).”

THE ALDI REQUIREMENT:  A REMINDER

In Aldi Stores Ltd v WSP Group plc and others [2007] EWCA Civ 1260; [2008] 1 WLR 748 the Court of Appeal made it clear that any party considering a second action raising similar issues should, expressly, raise that possibility with the court in the first action.
  1. “Parties are sometimes faced with the issue of wishing to pursue other proceedings whilst reserving a right in existing proceedings. Often, no problem arises; in this case, Aldi, WSP and Aspinwall each in truth knew at one time or another between August 2003 and the settlement of the original action in January 2004 that there was a potential problem, but it was never raised with the court. I have already expressed the view that it should have been. The court would, at the very least, have been able to express its view as to the proper use of its resources and on the efficient and economical conduct of the litigation. It may have seen if a way could have been found to determine the issues applicable to Aldi in a manner proportionate to the size of Aldi’s claim and without the very large expenditure that would have been necessary if Aldi had to participate in the trial of the actions. It may be that the court would have said that it was for Aldi to elect whether it wished to pursue its claim in the proceedings, but if it did not, that would be the end of the matter. It might have enquired whether the action against excess underwriters could have been expedited. Whatever might have happened in this case is a matter of speculation.
  2. However, for the future, if a similar issue arises in complex commercial multi-party litigation, it must be referred to the court seized of the proceedings. It is plainly not only in the interest of the parties, but also in the public interest and in the interest of the efficient use of court resources that this is done. There can be no excuse for failure to do so in the future.

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