SECOND ACTION AFTER SETTLEMENT NOT AN ABUSE OF PROCESS: SECTION 33 APPLICATION ALLOWED: DOWDALL CONSIDERED IN DETAIL

The case of Dowdall -v- William Kenyon & Sons Ltd [2014] EWHC 2822 (QB) decided yesterday contains some important observations in relation to allegations of abuse of process; estoppel and section 33.

THE FACTS

Mr Dowdall has pleural mesotheliomia. In 2003 he settled an action against 8 employers. He brought a second action against three other employers. There were issues relating to estoppel, abuse of process and limitation.

One of the three defendants could not be found at the time of the first action the other two were not joined into the action because their insurers could not be traced. 

THE ARGUMENT IN RELATION TO ABUSE OF PROCESS

The judge rejected an argument that the issue of this set of proceedings amounted to opression because the defendants had lost the opportunity of being involved in the compromise of the first action and paid a much lower sum in damages.

  1. CONCLUSION ON ABUSE. I consider that it would be wrong to hold that these proceedings are an abuse of the process of the court. This is because

a. These Defendants were not parties to the First Action. This means that they were not “vexed” in it. This is not decisive as a matter of law, but is a factor of considerable weight. This is highly relevant to the Jameson issue, and to the limitation defence, but seems to me to weaken greatly the abuse argument. In short, the failure to sue these Defendants in the First Action is better evaluated in those contexts.

b. I do not think that there is any evidence at all that the Claimant has manipulated the process of the Court with the intention of “having his cake and eating it”. He has not deliberately secured a lump sum for the risk of mesothelioma deliberately omitting these Defendants from those proceedings so that he could sue them later if the risk came to pass. That conduct may well be capable of amounting to an abuse.

c. The reason for my conclusion at (b) above, and a separate factor supporting my conclusion, is that I have accepted that the decision not to sue these Defendants was honestly made and was made because in each case the Claimant and his solicitors had been unable to discover an insurer liable to meet the claim against them. This is a reasonable and not an abusive decision making process. I have been unable to hold that they had done all that was possible to discover this information for the reasons given above, but this is not a matter relevant to abuse, although it will be to limitation.

CAUSE OF ACTION ESTOPPEL

The judge also rejected an argument that there was cause of action estoppel. The judge reviewed the case law in detail and stated:

  1. If I ask myself Lord Bingham’s question: has the Claimant accepted a sum which was intended to represent the full measure of his estimated loss? The answer is clearly not. The Claimant elected to accept a sum for the risk of mesothelioma and in return decided not to seek an order permitting him to return to court in the event that mesothelioma actually developed. The settlement deliberately excluded any sum which would follow from the development of the condition. It cannot therefore be said that it included such a sum. To adopt the other way that Lord Bingham framed the issue: can the Claimant prove that he has suffered loss as a result of the allegedly tortious conduct of these Defendants? The answer is yes. He has suffered a condition which developed after the First Action settled and for which he has not been compensated.
  2. This does mean that the Defendants to these proceedings will no doubt attempt to secure a contribution from the original seven Defendants who thought that they had settled their liability in relation to this claim. This raises obvious issues which will be best resolved in those proceedings if they are brought.

SECTION 33

It was common ground that the claimant had knowledge in 1998. The judge reviewed the law, and the factors relevant to the section 33 discretion, in some detail.

  1. I have balanced the factors which I have listed above. There are significant arguments in both directions. In the end, it seems to me that the principal consideration must be the fact that the Claimant has a substantial claim for a very serious injury. He has very good prospects of establishing that the Defendants contributed to the causation of the risk of that condition, and are liable for it by reason of the principle inFairchild. I accept that witnesses will have died or become unavailable since 1998, in particular Mr. Bottome’s father who was at some stage the Managing Director of the Second Defendant, has certainly died during that period. I am however unpersuaded that these witnesses would have afforded any viable defence to this claim. There is therefore no evidential prejudice sufficient to outweigh the undoubted prejudice to the Claimant should he lose his claim. The real argument is the financial one. I have taken this into account, and not declined to do so applying Cain v. Francis. However, I have concluded that the increased liability really follows from the development of mesothelioma. The fact that the Defendants might have had a chance to avoid paying for that by being joined in an action which settled before it developed really means that they have lost a chance of escaping without paying the Claimant the damages to which he is otherwise presumed to be entitled. Viewed this way, the financial consequences of what has occurred do not, in my judgment, justify preventing the Claimant from seeking the compensation for the harm which this very serious condition involves.
  2. I therefore grant his application for relied under section 33 in respect of all three Defendants.