cause of action estoppel

The defence of cause of action estoppel applies in situations where previous litigation has taken place in England or elsewhere in respect to the same subject matter and parties, and the dispute in respect to that same subject matter has been the subject of a final and conclusive judgment in that previous litigation. Cause of action estoppel prevents the litigants to the previous litigation from (1) reasserting the same cause of action (i.e. re-litigating the claim) and (2) contradicting the judgment.

Effect of Cause of Action Estoppel

Cause of action estoppel prevents a party to the previous litigation from re-litigating the same claim, and prevents him from obtaining another judgment in respect to the same set of facts (i.e. the cause of action) in subsequent litigation. This is because when final judgment is pronounced by an English court, the cause of action merges with the judgment and extinguishes the cause of action. Thus, at the point of judgment, the facts of the case merge with the judgment and the litigants are no longer entitled to dispute the facts or findings of the court. The decision is res judicata.

The defence operates to enforce the public policy that decisions of courts are final and conclusive, so as to prevent claims that could have been made from being raised later, and to prevent re-assessment of the parties' rights at a later time. The principles apply regardless of the form the litigation takes, for instance a claim for breach of contract re-presented as claim for negligence would be caught by the defence, provided it was based on the same facts and could reasonably have been pleaded in the first set of proceedings.

The Causes of Action

The causes of action which are the subject of the previous decisions rely on the existence of a previous court order. The reasons for judgment (if it exists) should disclose the matters of fact and law which were put in issue in the previous decision; it is these matters which the parties to subsequent litigation are prevented from further contesting or challenging. If the decision merely consists of a court order without reasons for the decision, an English court is at liberty to infer from the court order the issues of fact and law which were determined by the court in the previous litigation.

Same Claim

A subsequent cause of action is considered the same as previous litigation where it is proved that every material fact required to be proved to entitle a claimant to succeed (to obtain relief in law or equity) and every fact which the defendant would be entitled to traverse or raise in its defence. Thus, every act by the defendant that gives the claimant the right to complain to the court is material; a court will not distinguish between particulars giving rise to different claims for relief. Accordingly, if a claim for relief was not made in the first set of proceedings based on the facts giving rise to a claim, a claimant will not be given a second opportunity to rely on those facts in subsequent proceedings for a different claim to relief. A court may consider that the same evidence supporting both claims is indicative of the same claim.

Foreign Judgments

In the case of foreign judgments, this merger of the facts and judgment does not apply in the eyes of an English Court. Litigants are entitled to commence fresh proceedings in England on the same facts. The defendant in English proceedings must first apply to an English Court for recognition of the foreign judgment and plead its defence on the basis of this recognition. it is at this stage that the cause of action estoppel defence becomes available.

So, if the litigant wishes to rely on a foreign judgment to make out a cause of action estoppel, the party seeking to rely on the previous judgment must:

1. obtain recognition of the foreign judgment in an English Court, and establish that the judgment is a res judicata, that is, that the decision of the foreign court was a final and conclusive judgment of the foreign tribunal;
2. establish the parties to the foreign litigation are the same (in the eyes of the law) as those in the present proceedings;
3. prove that disputes heard before the English court are the same cause of action as that previously determined by the by the foreign court, as evinced by the res judicata referred to at (1) above.

In these circumstances, a party to the foreign litigation is prevented from (1) reasserting the same cause of action (i.e. re-litigating the claim before an English Court) and (2) contradicting the foreign judgment.