Collateral attack, different parties, seldom an abuse - PricewaterhouseCoopers LLP v BTI 2014 LLC [2021] EWCA Civ 9.

Published 6 May 2021

PricewaterhouseCoopers LLP v BTI 2014 LLC [2021] EWCA Civ 9. The judgment considers the law on abuse of process in cases where there is no res judicata or issue estoppel.

When a client is dissatisfied with the outcome of litigation, it is not uncommon for it to bring a claim against its professional advisers following the original judgment. In such claims, where at least one of the parties will be different to those in the original litigation, it can be necessary or desirable to relitigate findings of fact from that earlier litigation. This decision provides a helpful restatement of when that relitigation will represent an abuse of process: in short, only in examples where the litigation is for some collateral (i.e. cynical) purpose. 

In the PwC / BTI case, BTI wished to relitigate against PwC some issues which had already been decided in an earlier claim which BTI had brought against a different defendant. PwC failed at first instance to have the claim struck out, including on the basis that the claim involved a collateral attack on the findings made in the earlier judgment.

The Court of Appeal found:

• “where the parties to the second proceedings are not the same as those to the first proceedings…no question arises as to the applications of the doctrines of issue estoppel or res judicata”, so the parties are not bound in the second proceedings by the findings in the first. The Court may still make a finding of abuse of process depending on the circumstances.
• “the mere fact that the second proceedings involve the relitigation of issues decided in the first proceedings or a challenge to findings made by the judge in the first proceedings… does not without more amount to an abuse of process”;
• A collateral attack on findings of fact will only be an abuse of process where: “(i) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated, or (ii) to permit such relitigation would bring the administration of justice into disrepute”; and
• Where the parties to the first and second sets of proceedings are not the same, it will only be in a “rare or exceptional case” that the Court will find an abuse of process in respect of the second set of proceedings.
• Because PwC was not a party to the original claim, there was no question of the Bairstow^[1] test applying. As such, relitigation of the same issues would not be manifestly unfair to PwC, nor would it vex or harass PwC for the issues to be relitigated.
• Therefore, there would only be an abuse of process in relitigating issues decided in the original claim if to do so would bring the administration of justice into disrepute. That would be where “the purpose of the attempt to have [the issue] retried is not the genuine purpose of obtaining the relief sought in the second action, but some collateral purpose”.

[1] Secretary of State for Trade and Industry v Bairstow [2003] EWCA Civ 321