PREVIOUS
SPEAKERS:
Christa Christensen
Bevan Ashford, Bristol
Back to list of
speakers
Industrial Law Society, Bristol
27th February 2002
Title:
Res Judicata - Cause
of action and issue estoppel for employment lawyers
Definitions and distinctions
- The legal dictionary defines res judicata thus "...it presupposes that there are two opposing parties, that there is a definite issue between them, that there is a tribunal competent to decided the issue, and that within its competence, the tribunal has done so. Once a matter or issue between parties has been litigated and decided, it cannot be raised again between the same parties..."
- Henderson-v-Henderson 1843 3 Hare 100 is the founding case for the principle.
- Three types of estoppel (or is it four?): cause of action estoppel; strict issue estoppel and a wider form of issue estoppel that will allow the ‘special circumstances’ referred to in Henderson to be taken into account.
- Cause of action estoppel. This can be pleaded by way of defence to an entire cause of action on the ground that the whole of the legal rights and obligations of the parties in relation to that cause of action have already been determined by an earlier judgment of a court or tribunal of competent jurisdiction
- Strict issue estoppel. This form of estoppel will not allow the ‘special circumstances’ in Henderson to be pleaded and is in that sense ‘strict’. It arises where an issue has already been determined in earlier litigation and "where a particular issue forming a necessary ingredient in the cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to reopen that issue" Lord Keith of Kinkel in Arnold-v-National Westminster Bank plc [1991] 2 AC 93
- Wider form of issue estoppel. This ‘wider’ form of estoppel has its origins in the judgment in Henderson…"the court requires that the parties...bring forward the whole case and will not...permit the parties to open the same subject of litigation in respect of matters which might have been brought forward...but which were not...."
- Barber-v-Staffordshire County Council [1996] IRLR 209 (CA)
- Sheriff-v-Klyne Tugs (Lowestoft) Ltd [1999] IRLR 481 (CA)
- Lennon-v-Birmingham City Council [2001] IRLR 826 (CA)
- Friend-v-Civil Aviation Authority [2001] IRLR CA
- Johnson-v-Gore Wood [2001] 2 WLR (HL)
- Sajid-v-Sussex Muslim Society and others (CA) [2002] IRLR 113 (February IRLR)
- The danger areas are contract claims, personal injury claims, work related stress claims and tortious claims for malicious falsehood and defamation.
- Tribunal are creatures of statute yet dealing in increasingly wide jurisdictions; no transferability.
- Practitioners should consider very carefully where to take contract and PI claims in particular; beware a precipitate decision through time limits.
- Sajid confirms that an applicant may reserve his or her position in a contract claim. Will the same be so in a personal injury claim?
- A stay will always be a safer bet than a dismissal, even if the reason behind it is made crystal clear to the Tribunal and the other side.
- Do we know what ‘special circumstances’ are and after Sajid and do they now apply to cause of action estoppel as well as to issue estoppel?
- Have principles from the various types of estoppel been conflated?
- Cases are inconsistent on whether "reasons", "intentions" or background circumstances are relevant in a determination of whether cause of action estoppel should apply.
- Cases are inconsistent on whether the fact that matters have never been litigated on their merits are relevant to cause of action estoppel.
- Significance of the wording in a compromise agreement entered into between the parties in considering the application of principles of res judicata.
The seminal parts of the judgement of Sir James Wigram, the Vice Chancellor of the Court of Chancery are often quoted " 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 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...it is plain that litigation would be interminable if such a rule did not prevail".
"the cause of action in the later proceedings is identical to that in the earlier proceedings, the latter having been between the same parties...and having involved the same subject matter. In such a case the bar is absolute in relation to all points decided unless fraud or collusion is alleged,...the discovery of new factual matter which could not have been found out by reasonable diligence for use in the earlier proceedings does not...permit the latter to be re-opened. " Lord Keith of Kinkel in Arnold-v-National Westminster Bank plc [1991] 2 AC 93
Cause of action estoppel applies not only to a judicial determination after hearing evidence but also to the formal dismissal by a tribunal of a claim on withdrawal by the applicant. See Barber-v-Staffordshire County Council [1996] IRLR 209.
This is distinct from ‘cause of action’ estoppel, and strict issue estoppel, in that these forms of estoppel relate to points which were actually decided by the court; broad issue estoppel applies to points which might have been brought forward at the time but were not, it is concerned with abuse of process rather than a comparison of one order as against the other.
In Talbot-v-Berkshire County Council [1994] QB 290 it states that issue estoppel "is not a true case of res judicata but rather is founded upon the principle of public policy in preventing multiplicity of actions, it being in the public interest that there should be an end to litigation..."
When do ‘special’ or ‘exceptional’ circumstances exist?
Recent case law
This renowned case involved a claim by Mrs Barber, a part time teacher who taught at three schools, for a redundancy payment following the termination of her employment at two of those schools. It deals with both issue and cause of action estoppel.
She withdrew her claim at the hearing without any evidence being heard. The Tribunal’s decision was given in the following terms
"The unanimous decision of the tribunal is that this application is dismissed on withdrawal by the applicant"
The House of Lords subsequently gave their decision in R-v-Secretary of State for Employment ex parte Equal Opportunities Commission. Mrs Barber then presented a further originating application seeking both a redundancy payment and unfair dismissal compensation. It fell to be determined whether the principles of res judicata applied to Mrs Barber and whether any special circumstances might apply that would assist her.
Both claims were estopped. It was held by the Court of Appeal that not only was she caught by a strict application of cause of action estoppel in relation to her redundancy claim but that she was also estopped by way of issue estoppel from now bringing her claim for unfair dismissal. There were no special circumstances that could save her.
The decision of the Tribunal to dismiss her claim was made under what was then rule 12(2)(c) of the 1993 Rule of Procedure
"A tribunal may if it thinks fit-
(c) if the applicant shall at any time give notice of the withdrawal of his originating application, dismiss the proceedings"
There was nothing in the principles of cause of action estoppel which stipulated that they could only apply in cases where a tribunal has given a reasoned decision on the issues of fact and law in the previous litigation: cause of action estoppel. The Court of Appeal held that the discretion given to the Tribunal within Rule 12 was sufficient to create a judicial determination.
In addition, there was no good reason why she could not have included in her original claim a complaint of unfair dismissal as well as a claim for redundancy and in the absence of special circumstances issue estoppel would debar this subsequent claim too.
The Court of Appeal determined that a relaxation of the rule by way of application of special circumstances was not appropriate.
Mr Sherrif, a Muslim of Somali origin was employed as an engineer on a boat operated by the respondent. He brought a claim for race discrimination arising out of harassment, abuse, intimidation and bullying by the ship’s master; resulting in his suffering a nervous breakdown.
His claim for race discrimination was adjourned part heard and was then settled without admission of liability through a compromise agreement.
"The applicant accepts the terms of this agreement in full and final settlement of all claims which he has or may have against the respondent arising out of this employment or the termination thereof being claims in respect of which an industrial tribunal has jurisdiction"
The Tribunal issued a decision dismissing the application on its withdrawal by the applicant.
Two years later Mr Sherrif brought a new claim in the County Court for damages for personal injury caused by the abusive and detrimental treatment he received from the master. The Court of Appeal held that his claim was subject to issue estoppel principles. Mr Sherrif could and should have brought his claim for personal injury to the Employment Tribunal which has jurisdiction to award compensation by way of damages for personal injury including both physical and psychiatric injury caused by the statutory tort of unlawful discrimination. The fact that he didn’t did not allow him to have a second bite at the cherry.
In his decision, upheld by the Court of Appeal, the recorder at Great Yarmouth County Court had said this:
"... in this court the plaintiff brings a case in identical terms to the case which he presented at the industrial tribunal ....and since he compromised that claim....then he has compromised his rights in regard to the damages that flow from his psychiatric condition caused….that matter has been litigated before the industrial tribunal and compromised, it is, in my view, an abuse of process of the county court that the matter should be brought here, and I therefore find that the proper course to follow is to strike it out as such an abuse".
The Court of Appeal also dismissed Mr Sherrif’s representative’s arguments that special circumstances existed arising out of the difference between the Tribunal and County Court on the basis that they were simply features of the inherent different forms of jurisdiction and that as a matter of public policy claims that could have been litigated in one tribunal should not be allowed to be litigated in another.
Another example of a harsh decision arising from a strict application of the cause of action estoppel principle in Barber and one that might lead one to question whether Mrs Lennon’s advisors could and should have taken to steps to avoid what happened in this case.
Mrs Lennon brought
a sex discrimination complaint against Birmingham City Council alleging
that she had been subject to harassment and bullying, which had resulted
in a stress-related illness. She withdrew her complaint before it was
heard by the Employment Tribunal and the Tribunal made an order dismissing
her claim on withdrawal in the following terms
"the application is dismissed on withdrawal by the applicant"
(Same as Barber)
Mrs Lennon later sought to bring an action in the ordinary courts for negligence or breach of contract. Her claim was struck out by the County Court judge on the grounds of cause of action estoppel. It substantially repeated the matters relied upon in proceedings before the Employment Tribunal.
The Court of Appeal upheld the decision of the County Court judge on the basis that the strict estoppel principles established in Barber applied and that although the decision of the Employment Tribunal had not been on the merits it was an "adjudication" by a competent court and it mattered not that there was no trial on the merits of Mrs Lennon’s claim.
Mrs Lennon’s representative sought to present an argument to the Court of Appeal in relation to the relevance of the reason for the withdrawal and whether it was relevant that the Tribunal did not know this.
No way say the Court of Appeal. They found that this case was not distinguishable from Mrs Barber’s case on the basis that the court knew the reason for Mrs Barber’s withdrawal but did not know the reason for Mrs Lennon’s. The reason is not relevant.
The Court of Appeal also examined the case law on issue estoppel and cause of action estoppel in the light of Mrs Lennon’s representative’s unsuccessful submissions that the two were becoming blurred by their application in the courts.
At about the same time that the Court of Appeal gave its judgement in the Lennon case, a different division gave a decision with a slightly more liberal approach to the doctrine of issue estoppel on a very different set of facts.
Captain Friend was a fixed wing pilot employed by the Civil Aviation Authority (CAA) as a flight operations inspector. He objected to taking part in helicopter inspections on the ground that the inspection team did not include a helicopter pilot. His views were so strongly expressed that he became the subject of a disciplinary hearing, charged with disrupting working relationships. He was eventually dismissed.
He brought proceedings for unfair dismissal and was successful, the Tribunal found that his dismissal was procedurally flawed but that the manner in which he pursued his grievance about safety inspections led to a finding that he had contributed 100% to his dismissal.
Captain Friend appealed. On appeal to the EAT Captain Friend attempted to present a ‘safety case’ contending, in a way that he had not at the Tribunal, that the CAA had embarked on a deliberate campaign of harassment and victimisation against him. The EAT refused to let him present this case and this was upheld by the Court of Appeal.
He then brought fresh proceedings against not only the CAA but individuals within it alleging malicious falsehood, conspiracy, breach of contract and defamation.
These were struck out by the deputy High Court Judge under the issue estoppel principles as an abuse of process and nothing more than a collateral attack on the Tribunal’s decision.
Very wrong says the Court of Appeal. Issue estoppel arises to prevent an issue from being heard in proceedings "where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings….the same issue is relevant". (Arnold-v-Westminster Bank; above).
As Captain Friend’s legal advisors had not brought the safety case to the Tribunal (and had been refused leave to introduce it to the EAT), "the highest the case could be put was that the safety issue should have been pursued before the employment tribunal but had not been and that, therefore, the Henderson-v-Henderson form of estoppel applied. The recent decision of the House of lords in Johnson-v-Gore Wood cautioned against too ready an application of Henderson to stifle legitimate claims on abuse of process grounds."
Not an employment case, involving a decision of the House of Lords involving a complex set of claims arising out of the rights of shareholders to bring proceedings as against claims by the company in its own right. Res judicata was pleaded by way of a Henderson issue estoppel and rejected by the House of Lords.
Interestingly the House of Lords did appear to accept that there may be a legitimate argument that the Henderson rule has developed or diverged from the original decision of Wigram V-C which was addressed to res judicata (and not abuse of process on policy grounds). Their Lordships refer to "Henderson-v-Henderson as now understood" as being distinct from cause of action and narrow issue estoppel but yet having much in common with them.
Referring to all types of estoppel Lord Bingham of Cornhill says: "the underlying public interest is the same: that there be finality in litigation and that a party should not be twice vexed in the same matter....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 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 earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is, in my opinion, to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgement which takes account of the public and private interests involved and also takes account of the facts of the case...."
A decision by Lord Justice Mummery in the Court of Appeal in October 2001 in which cause of action estoppel is pleaded in a defence to later proceedings and in which the CA rely heavily upon the parties intentions and the knowledge of the Tribunal when it dismissed the claim, in reaching a determination that it did not apply.
Dr Sajid was employed by the Sussex Muslim Society as a director and imam of the mosque. The Society dismissed Dr Sajid following a dispute between the parties. Dr Sajid made claims to the then Industrial Tribunal for breach of contract, redundancy payments and unfair dismissal.
In box 10 of his IT1, apart from setting out the grounds for his claim for unfair dismissal, Dr Sajid also set out the relevant provisions of his contract by which he alleged that he was entitled to damages for breach in the sum of £72 053 together with these words:
"this claim is made recognising that the Industrial Tribunal has jurisdiction up to a claim of £25 000, in relation to breach of contract claims and I, therefore, reserve the right to rely upon the findings of the Tribunal as res judicata in proceedings in another Court to recover the balance".
Dr Sajid then issued a writ for breach of contract and his solicitor wrote to the Tribunal requesting that the claim for breach of contract be withdrawn and the Chairman issued an order in exactly the same language as that used in Barber and Lennon.
"The breach of contract claim has been dismissed on withdrawal by the applicant".
The Society pleaded cause of action estoppel by virtue of the prior order of the Tribunal and the County Court accepted that argument: "the claimant cannot now seek to litigate the matters which have been concluded before the Employment Tribunal as the facts and matters that would have to have been decided by the Tribunal are substantially the same as those...before this court"
Notwithstanding the similarity between this case and Barber, in the Court of Appeal Lord Justice Mummery finds that res judicata does not apply and that Dr Sajid should be permitted to bring his contract claim in the normal courts. His decision is very difficult to reconcile with Barber and Lennon.
From a practitioners point of view Lord Justice Mummery does however put his finger on what leads to many of these problems for employment practitioners and parties; there is no procedure in the Civil Procedure Rules or in the Employment Tribunal Rules of Procedure for the transfer of claims from the Tribunal to the ordinary courts or vica versa. Parties and their advisors are stuck with having to start a fresh case when trying to find the correct forum for claims that might, for a number of very good reasons, have their proper home in different forums.
What are the current issues for employment lawyers?
© Christa Christensen 2002. All rights reserved.