Res judicata: preventing the re-litigation of decided claims

In basic terms, the principle of res judicata means that once a matter has already been litigated, it cannot be brought again.

The key principles of res judicata are:

1. Cause of Action Estoppel – once a cause of action has been held to exist (or not exist) the outcome cannot be challenged in subsequent proceedings.
2. Issue Estoppel/Collateral Estoppel – where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided, a party cannot re-open that issue in another cause of action.
3. Henderson v Henderson: A party cannot raise an issue that could and should have been raised in earlier proceedings (derived from the longstanding case of Henderson v Henderson (1843) 3 Hare 100, 67 ER 313)
4. Abuse of process: The court will prevent misuse of its procedure in circumstances where the process would be manifestly unfair in relation to the administration of justice. 

Res judicata applies to arbitration in the same way that it applies to court procedure. A final arbitral award is binding and cannot be considered in a subsequent arbitration or court proceedings involving the same parties and the same claim.

Exceptions

In limited circumstances, parties may be able to resurrect some matters of a previous case, but there must be an applicable exemption. There are three exceptions to res judicata:

1. Fraud
2. Materially altered circumstances
3. New evidence not available at the time of first judgment

The leading case on this is the Supreme Court decision in Takhar v Gracefield Developments (2020) AC 450. This held that the law does not expect people to arrange their affairs on the basis that others might omit fraud. A fraudulent individual should not be able to profit from a trusting relationship resulting in lack of reasonable diligence on the part of their opponent. It would be inherently against public policy to allow judgments later discovered to have been obtained by fraud purely because the claimant did not exhaust themselves seeking fraud in the first instance.^[1]

Competing jurisdictions

The issue of res judicata may arise when the UK courts are asked to consider whether a foreign judgment has the same binding effect on proceedings in the UK, as those initiated in a different jurisdiction.

The general rule is that a foreign judgment has res judicata effect on English proceedings if it is:

1. Given by a court of competent jurisdiction
2. Final and conclusive on the merits and clearly determines the issue.
3. Concerning the same issue which is sought to be raised in England.
4. Made in proceedings between the same parties or their privies.

In a recent decision, the High Court ruled that foreign judgments can be enforced in England notwithstanding that they were now unenforceable in their home country (Invest Bank PSC v Ahmad Mohammed El-Husseini and others [2023] EWHC 2302 (Comm)).

In that case, the UAE judgment was held to be unenforceable in the UAE. But the English courts held that it was final and conclusive in the eyes of common law.

The judge explained: "[t]here is no rule of common law that a foreign judgment with res judicata effect in its jurisdiction of origin cannot or should not be enforced here just because it is not presently or fully enforceable in the foreign jurisdiction itself." 

Key takeaways

Res judicata is used in litigation as a ground to strike out a claim. As such, it is a draconian measure that the courts apply with care. The courts have to balance one party’s right to a fair trial, with the public interest that defendants should not face litigation twice in respect of the same set of circumstances.

Res judicata stands as a principle in English law to prevent losing parties from re-litigating claims just because they were not satisfied with the outcome.

Source

1. Res Judicata – a 2022 update