CASE MANAGEMENT IN COMPLEX MULTI PARTY DISPUTES
In complex multi-party litigation, it is common for a claimant to have potential claims against several parties. The claimant may want to bring separate proceedings against the various parties for a number of strategic and commercial reasons. In such a scenario, courts are required to strike a balance between the claimant’s right to plan the course of their litigation and the economical use of judicial resources. The decision of the English courts in Henderson v Henderson, (1843) 3 Hare 100 lays down the general rule on striking this balance. In essence, the court held that subsequent claims would be barred not only if they were actually raised and decided in an earlier action (the well-known doctrine of res judicata, contained in Section 11 of the Code of Civil Procedure, 1908, in India), but also if they properly belonged to the subject matter of the litigation and a party could have raised them by exercising reasonable diligence.
A further refinement of the rule in Henderson occurred when the Court of Appeal in Aldi Stores Ltd v WSP Group Plc,  EWCA Civ 1260, held that in matters such as these, courts ought to decide if the claimant’s failure to seek appropriate case management directions in their earlier action renders subsequent proceedings an abuse of process, and therefore provided helpful guidance on striking this balance. Two recent Court of Appeal decisions of the UK Courts have brought focus back on this debate: Clutterbuck v Cleghorn,  EWCA Civ 137 and Otkritie Capital International Ltd v Threadneedle Asset Management Ltd,  EWCA Civ 274. These cases examine the effect of a party’s failure to seek case management directions from the court when there is a possibility that it may bring subsequent proceedings against the same or different parties on a related cause of action. The courts held that failure to seek such directions in accordance with Aldi Stores case would not be conclusive in deciding whether to strike out subsequent claims as an abuse of process, and that a useful approach to deciding such cases would be to ask whether, had case management directions been sought in the earlier action, the judge deciding that case would have ordered the claims to be heard together or separately.
The principles underlying the English decisions discussed above, are embodied in Explanation IV to Section 11 of the Code of Civil Procedure, 1908, in India. However, there has been little in terms of jurisprudence from the Indian courts on effective court management, and even lesser in terms of the consequences for a party who has failed to effectively manage a dispute. The English decisions therefore continue to be relevant in this context.
For a more detailed examination of these issues, please refer to my article is “The Aldi Stores Guidelines: The Relevance of Case Management to Abuse of Process”, Civil Justice Quarterly, Volume 37, Issue 1 (2018), pp. 31-39 or (2018) 37(1) CJQ 31 which can be accessed here.