27th July 2017
Lynsey Oakdene provides an update on the ‘Aldi requirement’/Otkritie Capital v Threadneedle litigation and highlights the practical importance of the rules against re-litigation and abuse of process.
Res judicata is the fundamental legal and public interest principle which states that there should be finality to litigation and that defendants should not face repeated litigation in respect of the same set of circumstances. This can be particularly relevant in complex commercial litigation and in cases involving multiple and/or related parties or group companies. The courts also have the power, under rule 3.4 (2) (b) of the Civil Procedure Rules (CPR) to strike out claims which amount to an abuse of process. Although there is no specific definition of ‘abuse of process’ in this context, it is clear that this covers (non-exhaustively) re-litigation situations, advancing a case or issue that is inconsistent with an earlier judgment , and advancing claims or arguments that could and should have been made in earlier proceedings .
In the 2007 Aldi  case, the Court of Appeal ruled that, for reasons of public interest and the efficient use of court resources, parties should inform the court in ongoing proceedings of any possibility of bringing a related claim in subsequent proceedings. That has become known as the ‘Aldi requirement’. Whilst the court acknowledged that parties must be allowed some measure of freedom to choose whom they sue in a complex commercial dispute and must not be forced into bringing a single set of proceedings against a wide range of defendants or to complicate existing proceedings by bringing [multiple] cross-claims, nevertheless that freedom should be restricted by appropriate case management, which can include the striking out of a claim for abuse of process.
In the 2015 case of Otkritie v Threadneedle , however, the High Court refused to strike out a claim where the claimant, in clear breach of the Aldi requirement, failed to inform the court in earlier related proceedings of its potential claim against the defendant. In that judgment the court confirmed:
Earlier in 2017, this decision was appealed to the Court of Appeal …
In a unanimous decision, the Court of Appeal upheld the High Court’s decision not to strike Otkritie’s claim, such that the principles set out above still stand.
However, the Court of Appeal took the opportunity to proffer a strongly worded warning to commercial parties and practitioners that this case is not to be seen as, or as permitting, an ‘exception’ to the Aldi requirement. In fact, the court stressed that:
The ‘Aldi requirement’ (Otkritie Capital v Threadneedle) litigation is a clear reminder of the need for commercial claimants to very carefully consider their approach when it comes to the bringing of claims involving multiple and/or related parties, group companies and/or complex issues, and the need for them not to skip the vital procedural step of seeking case management assistance from the court where there is any possibility of bringing a related claim in subsequent proceedings or raising issues that could have been raised before.
The case also reminds defendants, however, that whilst there can be significant time, cost and reputational savings for those who can successfully counter or strike out unmeritorious claims with res judicata and abuse of process arguments, a claimant’s failure to comply with the Aldi requirement will not, of itself, mandate strike out.
Whether you are a claimant facing strike-out or concerned not to prejudice your ability to bring future or additional claims, or whether you are a defendant seeking to avoid vexatious or repeated litigation, please contact Lynsey Oakdene or any member of the Commercial Dispute Resolution team for further advice and assistance.
 This abuse of process is known as ‘collateral attack’
 This is known as the rule in Henderson v Henderson (1843) 3 Hare 100
 Aldi Stores Ltd v WSP Groups & Ors  EWCA Civ 1260
 Otkritie Capital International Ltd & Anor v Threadneedle Asset Management Ltd & Anor  EWHC 2329 (Comm)
 CPR 1.1 – the Overriding Objective
  EWCA Civ 27