The Prevention of Abusive Cross-Border Re-Litigation

Author:Mr Peter Barnett
Profession:Herbert Smith
 
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Introduction

The title for this paper poses a deceptively simple question, and it is this: How do we utilise an earlier obtained judgment from country X to prevent abusive re-litigation in country Y? To this question the answer might appear obvious: one reaches for the doctrine of res judicata, that arcane yet fundamental body of law which provides that an earlier judgment is conclusive in a second suit involving the same subject-matter and same legal bases. However, while the doctrine of res judicata is well understood in the domestic setting, it is not entirely obvious how the doctrine applies to foreign judgments to prevent abusive re-litigation before the English courts. Nor is it obvious how the various judgment recognition regimes - in particular the regime established by the Brussels Regulation1 - pre-ordain the preclusive effects to which a foreign judgment can give rise if relied upon to prevent abusive cross-border re-litigation.

In this context, therefore, the primary purpose of this paper is to consider how foreign judgments can be relied upon to prevent abusive cross-border re-litigation, and this by reference to how the doctrine of res judicata applies to foreign judgments in English private international law. It is proposed, first of all, that we look briefly, and by way of background, at the doctrine of res judicata and the difficulties that arise in the cross-border context. We will then look more closely at two areas: one, the various preclusive pleas that can be used to prevent abusive cross-border re-litigation in England; and two, how to prevent abusive cross-border re-litigation by relying upon judgments recognised under the Brussels Regulation.

The doctrine of res judicata and the difficulties that arise in the cross-border context

A res judicata is a judicial decision of special character because, being pronounced by a court or tribunal having jurisdiction over the subject-matter of the parties, it disposes finally and conclusively of the matters in controversy, such that - other than on appeal - that subject matter cannot be re-litigated between the same parties or their privies. Instead, the subject-matter becomes (as the Latin attests) 'a thing adjudicated', with the res judicata thereafter standing as the final and conclusive resolution of the parties' dispute. The resultant doctrine of res judicata therefore encapsulates a principle inherent in all judicial systems, namely that an earlier adjudication is conclusive in a second suit involving the same subject-matter and same legal bases. As such, the doctrine reflects two fundamental maxims of justice: that no person should be proceeded against twice in respect of the same subject matter,2 and that it is in the interest of the state that repetitious and wasteful re-litigation be avoided.3

In order for a decision to qualify as a res judicata, it must be pronounced by a judicial tribunal4 of competent jurisdiction,5 and the decision itself must be a judicial decision6 that is final and conclusive7 and on the merits.8 Where these constituent elements are satisfied, the res judicata status of the decision can then be pleaded, in various ways, in order to prevent or preclude subsequent proceedings between the same parties (or their privies) involving the same (or similar) subject-matter.9 These preclusive pleas can be classified in three main ways. First, there are the estoppel-based10 pleas which prevent contradiction of previously determined subject matter: cause of action (or claim) estoppel and issue estoppel. Secondly, there is the plea that prevents reassertion by a successful claimant of a claim upon which he has obtained recovery: the plea of former recovery, or merger in judgment.11 And, thirdly, there is the abuse of process plea that prevents a party from litigating subject matter that properly belonged to earlier proceedings, and which could and should have been litigated there and then: the rule in Henderson v Henderson.12

But how do these preclusive pleas prevent cross-border re-litigation? Or, in other words: to what extent do English courts acknowledge foreign judgments as giving rise to these pleas? As with many questions in the conflict of laws, complexity intrudes simply because of the cross-border element. Most obvious is the requirement that a foreign judgment (unlike a local judgment) must be recognised before it can have enforcement and / or preclusive effect in the local forum.13 Recognition of a foreign judgment may be achieved in accordance with either the traditional common law rules, the rules for registration under certain reciprocal statutory regimes,14 or the rules of the Brussels Regulation. However, recognition is only half the battle: the foreign judgment must also qualify as a valid res judicata if it is to have preclusive effect.

At this point an anomaly emerges as a consequence of the different regimes for recognising foreign judgments. The criteria for recognising foreign judgments under the common law (and related statutory) rules are co-extensive with the criteria by which an English court assesses whether a judgment qualifies as a res judicata.15 This ostensibly means the common law rules automatically recognise those foreign judgments that satisfy the in-built English law conception of a res judicata. By contrast, judgments recognised under the Brussels Regulation do not have to satisfy any criteria that verifies their res judicata status.16 Indeed, it is immaterial whether the judgment is final and conclusive, let alone a res judicata, for the purposes of recognition. This means recognising courts applying the Brussels Regulation need have no res judicata conception in mind at the recognition stage, and so the res judicata status of the foreign judgment must fall to be determined at a later stage, leaving open the possibility of deferring to the law of (perhaps) the judgment-rendering court to supply the criteria by which the res judicata status can be ascertained.

Inevitably, this anomaly underscores a further set of complex (and more fundamental, because normative) questions. Which law ought to supply the criteria by which the res judicata of a foreign judgment is verified? Must the judgment be acknowledged as a res judicata if the preclusive doctrines of the foreign law would say as much, or is this a question to be determined by the law of the recognising court? Given that res judicata criteria (albeit criteria developed according to English law) are intrinsic to the traditional common law rules for foreign judgment recognition, how is the res judicata status of a judgment to be determined when it falls to be recognised under the Brussels Regulation, where the res judicata status of the judgment is not relevant at the recognition stage? And, even supposing a foreign judgment qualifies in England as a valid res judicata (regardless the recognition regime), how do we assess whether the subject-matter is the same, or determine whether the parties, or their privies, before the subsequent proceedings should be bound by the foreign judgment? Indeed, are the preclusive pleas that prevent abusive cross-border re-litigation to be supplied by the law of the original judgment-rendering court, as "effects" which are attached to the judgment, or is it for the recognising court to decide, according to its own law, how the foreign judgment will operate to prevent the abusive cross-border re-litigation?

These complex questions have not been answered in the English case law because they have rarely, if at all, been addressed. Rather, the cases involving the preclusive effects of foreign judgments have proceeded on the (deceptively simple) assumption that the English doctrine of res judicata applies, and hence English law supplies both the criteria by which to verify the res judicata status of the judgment and the preclusive pleas to which such judgments give rise. For this reason, it is helpful to examine how the English courts have traditionally viewed the operation of the various preclusive pleas by foreign judgments in cases of abusive cross-border re-litigation.

The traditional application of the preclusive pleas by foreign judgments in cases of abusive cross-border re-litigation

Cause of action estoppel

Cause of action estoppel is the simplest preclusive plea. Whereas issue estoppel precludes the contradiction of issues that might arise in separate claims (or independently of a claim17), cause of action estoppel is 'confined to cases where the cause of action and the parties are the same in the second suit as they are in the first'.18 It is a plea that prevents a party in subsequent litigation from asserting or denying the existence of a particular cause of action (or claim) in circumstances where the non-existence or existence has been determined by a court of competent jurisdiction in previous litigation between the same parties or their privies.19

It is not disputed that the plea can be maintained in reliance upon a foreign res judicata, provided the foreign judgment is capable of recognition in England.20 Certainly an action on the judgment will enliven such an estoppel.21 But the judgment can also be pleaded as a defence (or counterclaim) to any claim (or defence) that challenges the existence or non-existence of the claim.22 In this way the estoppel is used defensively - that is, in response to the contradiction. Thus, where a claimant, having litigated a claim abroad and lost, attempts to litigate afresh the same claim in England, the defendant may rely on the foreign judgment in its favour to estop the claimant from again litigating that which has been disposed. In such circumstances, the defendant pleads the foreign judgment as a defence to any claim that challenges the correctness of the earlier decision. As such, the important thing to note about cause of action estoppel is that it responds to that type of abusive re-litigation in which contradiction of the earlier...

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