BRITISH INSTITUTE OF INTERNATIONAL AND COMPARATIVE LAW

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1 BRITISH INSTITUTE OF INTERNATIONAL AND COMPARATIVE LAW PROJECT REFERENCE: JLS/2006/FPC/21 30-CE THE EFFECT IN THE EUROPEAN COMMUNITY OF JUDGMENTS IN CIVIL AND COMMERCIAL MATTERS: RECOGNITION, RES JUDICATA AND ABUSE OF PROCESS Project Advisory Board: The Rt Hon Sir Francis Jacobs KCMG QC (chair); Lord Mance; Mr David Anderson QC; Dr Peter Barnett; Mr Peter Beaton; Professor Adrian Briggs; Professor Burkhard Hess; Mr Adam Johnson; Mr Alex Layton QC; Professor Paul Oberhammer; Professor Rolf Stürner; Ms Mona Vaswani; Professor Rhonda Wasserman; Professor Mathijs ten Wolde Project National Rapporteurs: Professor Alegría Borrás (Spain); Mr Andrew Dickinson (England and Wales); Ms Esther Rivera (Spain Assistant Rapporteur); Mr Christian Heinze (Germany); Professor Lars Heuman (Sweden); Mr Urs Hoffmann-Nowotny (Switzerland Assistant Rapporteur); Professor Emmanuel Jeuland (France); Professor Paul Oberhammer (Switzerland); Mr Jonas Olsson (Sweden Assistant Rapporteur); Mr Mikael Pauli (Sweden Assistant Rapporteur); Dr Norel Rosner (Romania); Ms Justine Stefanelli (United States); Mr Jacob van de Velden (Netherlands) Project Director: Jacob van de Velden Project Research Fellow: Justine Stefanelli Project Consultant: Andrew Dickinson Project Research Assistants: Edward Ho Aniket Mandevia Floor Rombach Daniel Vasbeck 1

2 GUIDE TO THE QUESTIONNAIRE The Effect in the European Community of Judgments in Civil and Commercial Matters: Recognition, Res Judicata and Abuse of Process (the "Project") Introduction At the first meeting of the project Advisory Board held at the Institute on 19 September the research team at the Institute, Mr Jacob van de Velden, Ms Justine Stefanelli and Mr Andrew Dickinson, presented a first draft of the questionnaire. The meeting, which was attended by Advisory Board members Lord Mance, Mr David Anderson QC, Mr Peter Beaton, Professor Burkhard Hess, Mr Adam Johnson, Professor Paul Oberhammer, Ms Mona Vaswani, and Professor Rhonda Wasserman. In light of discussion at this meeting concerning the scope and objectives of the Project, and with a view to using the available resources in the most effective manner, members of the Advisory Board proposed that: (1) The objectives of this exploratory study be limited to an analysis of the law and legal/judicial practice concerning domestic and foreign judgments in selected legal systems. Accordingly, any findings, conclusions and recommendations of the final study will not be based on an empirical analysis or impact assessment sufficient to establish whether any legislative measures at the EC level facilitate the proper functioning of the internal market; (2) In terms of feasibility, the scope of the study should focus on the procedural effects of judgments (the final questionnaire does not address the dispositive and evidential effects of judgments); (3) The proposed distinction between judgments in personam and in rem and the strict limitation of the scope of the study to in personam judgments would be problematic from the perspective of certain legal systems and was unhelpful (the scope of the study is not limited by reference to this distinction); and (4) The first draft questionnaire be shortened and simplified, with explanatory notes (the questionnaire has been redrafted and is now restricted to a 10-page document accompanied by a separate document containing guidelines to the National Rapporteurs). On 4 and 5 October the Institute hosted a two-day meeting with the National Rapporteurs, which was attended by Mr Peter Beaton (Scotland), Mr Javier Areste Gonzalez (Spain), Mr Andrew Dickinson (England and Wales), Professor Lars Heuman (Sweden), Mr Urs Hoffmann-Nowotny (Switzerland); Professor Emmanuel Jeuland (France), Dr Norel Rosner (Romania), Ms Carolina Saf (Sweden Assistant Rapporteur), Ms Justine Stefanelli (United States), and Mr Jacob van de Velden (Netherlands). At this meeting a revised draft questionnaire was discussed in detail. The current final version of the questionnaire reflects this discussion and takes account of the rapporteurs' comments and suggestions. Scope of the study The Project, being principally concerned with the recognition of judgments under Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the "Brussels Regulation") is limited, even in its study of rules applicable in domestic situations and in cross-border situations to judgments falling within the subject matter scope of the Brussels Regulation, as defined by Article 1. The Project is thus concerned only with judgments in "civil and commercial matters" and does not extend to other matters which are excluded from the scope of the Brussels Regulation. It is not required that the National Rapporteurs analyse closely the case law of the European Court of Justice or of their own legal systems concerning the subject matter scope of the Brussels Regulation and its predecessor conventions. This study is not directly concerned with the delineation between those matters falling within the scope of the Judgments Regulation and matters falling outside. Indeed, those co-coordinating the Project recognise that, in many cases, the dividing line between judgments falling within the scope of the Brussels Regulation, and those falling outside, is a narrow and uncertain one and the Project is not concerned with drawing or re-drawing that line. Thus, although National Rapporteurs should have regard to the scope of the study in choosing examples to support the analysis in their national reports, they should not avoid reference to matters which are arguably or indisputably beyond the scope of the Regulation in order to illustrate particular responses, particularly in part I below. Objectives of the project The principle objectives of the project are (1) to promote a better understanding of the Member State rules concerning the authority and effectiveness of judgments, and their impact on the Brussels/Lugano regimes for recognition and enforcement; (2) to consider whether disparities between the Member State rules create any impediment to the functioning of the principle of mutual recognition; and (3) to consider whether any EC-wide solution to the identified problems is desirable and viable. 2

3 I. Judgments...5 A. The concept, form, structure and terminology of judgments... 5 B. The court's determination and findings on issues of fact and law... 5 C. The binding character of a judgment... 6 D. Judgments that are capable of having preclusive effects... 7 II. Preclusive effects of Judgments...9 A. Claim preclusion Existence and nature of claim preclusive effects Policies underlying claim preclusive effects Conditions for claim preclusive effects Invoking claim preclusive effects Exceptions to claim preclusive effects Claimant and Defendant Other participants Represented persons Persons connected to the Claimant, Defendant, and other participants Strangers...16 B. Issue preclusion The existence and nature of issue preclusive effects Policies underlying issue preclusive effects Conditions for issue preclusive effects Invoking issue preclusive effects Exceptions to issue preclusive effects Claimant and Defendant Other participants Represented persons Persons connected to the Claimant, Defendant, and other participants Strangers...20 C. Wider preclusive effects The existence and nature of wider preclusive effects Policies underlying wider preclusive effects Conditions for wider preclusive effects Invoking wider preclusive effects Exceptions to wider preclusive effects Claimant and Defendant Other participants Represented persons Persons connected to the Claimant, Defendant, and other participants Strangers...23 III. Preclusive effects of judgments within the Brussels/Lugano Regime...24 A. Recognition Judgments recognised

4 2. Procedural aspects of recognition Exceptions to the rule (grounds for non-recognition) Effects of recognition...28 B. Claim preclusion within the Brussels/Lugano Regime Existence and nature of claim preclusive effects Policies underlying claim preclusive effects Law applicable to claim preclusive effects Conditions for claim preclusive effects The identity of claims in the Brussels/Lugano Regime The identity of parties in the Brussels/Lugano Regime Invoking claim preclusive effects under the Brussels/Lugano Regime Exceptions to claim preclusive effects under the Brussels/Lugano Regime Persons affected by claim preclusive effects...31 C. Issue preclusion Existence and nature of issue preclusive effects Policies underlying issue preclusive effects Law applicable to issue preclusive effects Conditions for issue preclusive effects Invoking issue preclusive effects under the Brussels/Lugano Regime Exceptions to issue preclusive effects Persons affected by issue preclusive effects...34 D. Wider preclusion (abuse of process/claims and issues that could or should have been raised) The existence and nature of wider preclusive effects Policies underlying wider preclusive effects The law applicable to wider preclusive effects Conditions for wider preclusive effects Invoking wider preclusive effects Exceptions to wider preclusive effects Persons affected by wider preclusive effects...37 E. Authentic instruments/court (approved) settlements IV. Preclusive effects of third state judgments

5 I. Judgments A. The concept, form, structure and terminology of judgments Please describe the typical concept, form, structure and terminology of judgments in your legal system. The form and structure of judgments vary from one jurisdiction to another. This is inherent in the parallel, yet isolated, development of legal systems, including rules of civil procedure that pertain to (the validity of) judgments. For instance, common law judgments usually consist of the following elements: (1) the description of the court hearing the case; (2) the publication reference; (3) the date of judgment; (4) the description of the parties involved in the dispute; (5) the facts and procedural history of the case; (6) the court s discussion, i.e. the recitation of the law and application of the law to the facts; and (7) the court's conclusion and determination of the matter 1. Naturally, despite differences in form and structure, it is expected that judgments from different jurisdictions will share many of these elements. By way of comparison, Dutch judgments usually contain similar elements: (1) the date of the judgment; (2) the publication reference; (3) the description of the court; (4) the description of the parties involved in the dispute; (5) the procedural history of the case ("procesverloop"); (6) the claim ("eis"); (7) the arguments of the parties ("de conclusies van partijen"); (8) the grounds for decision ("gronden van de beslissing"), including facts ("feiten") and reasons ("overwegingen") 2 ; and (9) the decision/dictum ("beslissing") 3. NB. Please describe the concept of a "judgment" in your legal system. In this regard, please consider insofar as relevant the meaning of "court" or "tribunal". In your answer please provide a list of the term or terms which your legal system uses in referring to the judgments in civil and commercial matters, as well as any relevant legal definition. NB2. Please consider in your answer whether the practice of drafting and the provision of reasons for judgments is governed by law in your legal system? In particular, what degree of detail and precision is required? Has the law and practice in your country been influenced by Article 6(1) EHCR? NB3. By way of illustration, please provide a copy of one or more judgments which provide a typical example of the most important types of judgment within your legal system. B. The court's determination and findings on issues of fact and law How does the court's determination of a matter in your legal system relate to the findings on issues of fact and law on which this determination is based? In determining a particular claim or other matter, a court will often rule on various questions of fact and law, some of which may be necessary for its decision and some of which may be subsidiary or collateral. For the purpose of determining the preclusive effects of a judgment, elements of the reasoning of the court and not just the formal determination are relevant in certain legal systems, albeit in different ways and to different extents. For instance, in actions under a patent-licensing agreement, the court might have to rule on whether the patent is valid. Such finding paves the way for the court s final determination, which, in the example, will be that the defendant is, or is not, liable to pay damages to the claimant for breach of the patent licensing agreement. 4 Other such findings may concern relevant factual issues, the determination of jurisdiction to hear the case, admissibility of the claim, the law applicable to the legal relationship, etc. NB. In your answer please consider whether your legal system draws a distinction (whether formal or substantive and whether as a matter of law or practice) between the final determination and the findings of fact and law on which the determination is based, and if so, please describe: (1) the nature and basis of that distinction; (2) how the 1 In England and Wales, the formal order is usually set out in a separate document. 2 Also described as "declaratief". 3 Also described as "dispositief". 4 T Hartley & M Dogauchi, Explanatory Report on the 2005 Hague Convention on Choice of Court Agreements (20 th Session, Hague Conference 2007), para

6 final determination and findings on issues of fact and law relate (e.g. are the findings of law and fact relevant for the interpretation of the final determination and to what extent can the final court review the final determination on the basis of such findings); and (3) how the terminology used in your legal system reflects that distinction. C. The binding character of a judgment Please describe the prerequisites for a judgment to have binding character so as to be capable of having preclusive effects 5 in your legal system. Before a judgment can have binding effect, it may have to satisfy certain prerequisites such as validity and finality. Validity may be considered as the judgment s ability to withstand an attack in the form of a request for relief from judgment. A judgment will generally withstand such an attack provided it satisfies conditions of subject matter jurisdiction, territorial jurisdiction, and adequate notice. A judgment must generally be final in the sense that the rendering court must have spoken its final word on the claim or issue involved. The meaning of finality may differ depending on whether claim or issue preclusion is involved. Regarding claim preclusion, a judgment generally becomes final when the court has concluded all regular proceedings on the claim. For example, in the United States, a judgment is final after the court has entered its judgment, but before it awards costs and/or enforces the judgment. Furthermore, finality in the context of issue preclusion may occur at a much earlier stage than with claim preclusion. Consider again the United States: if the particular issue sought to be precluded in the subsequent action has been actually, fully, fairly, and finally determined in the first action, issue preclusion will likely be appropriate even if there is not yet a final judgment. By way of contrast, in Spain, a judicial decision becomes final (i.e. has the formal status of res judicata) once the period provided by law in order to appeal a judgment has expired and none of the parties has appealed. Only then will the judgment deploy procedural effects known as material res iudicata (cosa juzgada material). There are some potential complications regarding finality, for instance, in the case of reversals or inconsistent judgments. Generally, legal systems provide that if a judgment is attacked and set aside, it will no longer be res judicata and may not have the same preclusive effects. The consequences of a reversed judgment that was previously binding on a subsequent judgment in which the preclusive effects of the former judgment were invoked may differ between jurisdictions. In the United States, motion must be made to set aside the second judgment that was based on the reversed first judgment. Furthermore, if a party fails to invoke a judgment, or a court fails to give it preclusive effect, inconsistent judgments may be rendered. Most jurisdictions have developed rules governing which judgment prevails in terms of preclusive effects; for instance, in the United States, this is the judgment rendered last in time. NB. Please indicate whether judgments (may) have binding effect while an appeal is pending or during any period for the lodging of an appeal. NB2. Please describe the effect of challenges (attacks) to the judgment on its binding effect. In addition, please consider the consequences of the setting aside of a judgment for its binding effect. NB3. Finally, please indicate (1) the consequences of a reversed judgment that previously had binding effect on a subsequent judgment in which the preclusive effects of the former judgment were invoked, and (2) which judgment prevails if a party fails to invoke its binding effect, or a court fails to give a judgment preclusive effect, and as a result, a subsequent inconsistent judgment is rendered. 5 See explanatory note at the beginning of Part II below. 6

7 D. Judgments that are capable of having preclusive effects Please identify and describe (1) the types and characteristics of judgments in your legal system that are capable of having preclusive effect and (2) any types of judgments that are not capable of having preclusive effects. This question aims at identifying the types and characteristics of judgment in your legal system that may or may not have a preclusive effect. Judgments may be distinguished, for instance, depending on (1) whether they are condemnatory (judgments that order the Defendant to do or refrain from doing something), declaratory (judgments that confirm or deny a certain legal status) or constitutive (judgments that create, change, or end a certain legal status); (2) whether they are affirmative or deny the claim; (3) whether they are final (put an end to the case) or interlocutory (before the final order of the court); (4) whether they concern the whole or part of the claim (e.g. an early determination of a particular issue of law or fact); (5) whether they concern the subject matter of the claim or decisions concerning procedural aspects of the claim; (6) whether they are given on the merits of the case or without consideration of the merits; (7) whether they are based on contentious proceedings or result from consent between the parties or unilateral action (e.g. in withdrawing a claim); or (8) whether they are definitive or consist of provisional, including protective, measures (generally binding on the parties and may have preclusive effect, but do not generally prejudice upon a decision on the merits). 6 For example, Swedish procedural law distinguishes between "performance judgments" (fullgörelsedom), which are exigible/executionable and requires the defendant to perform, or refrain from, an act, and declaratory judgments (fastställelsedom), which establish whether or not a certain legal relationship exists. 7 In the United States, determinations by the court as to its own competence (called jurisdiction to determine jurisdiction) are accorded preclusive effect despite the fact that such determinations may be invalid. For instance, the court may not have had subject matter jurisdiction over the case or personal jurisdiction over the defendant (which would normally render any finding by the court invalid and therefore incapable of having preclusive effect) but its own determinations as to its competence will have preclusive effect despite such invalidity. Under Swiss civil procedure law, a distinction with regard to final judgments (i.e., judgments that put an end to the proceedings) is primarily drawn as to whether they are substantive (Sachurteil) or procedural (Prozessurteil). Sachurteile are given on the merits of the case and are further distinguished from judgments based on the parties consent. The latter category (Sachurteilssurrogate) consists of judgments recording a court settlement (gerichtlicher Vergleich), claimant s withdrawal or defendant s acceptance of the claim (Klagerückzug or Klageanerkennung). These judgments, however, are deemed to deploy the same preclusive effects as a Sachurteil. 8 On the other hand, the majority of Cantonal Civil Procedure Codes draws no distinction between judgments given in default of a party s appearance (Abwesenheitsurteil) or on the merits of the case. Under Swiss law, the consequences of a defendant s default to appear are generally either that he is deemed to accept the factual basis of the claim, or that the court takes into account other facts than alleged by claimant only insofar as they can be drawn from the files. Thereupon, the court will always apply the law on the facts of the case as established in the aforementioned way. Hence, a default judgment under Swiss law, would be regarded as a Sachurteil and the distinction is irrelevant with regard to preclusive effects. The relevance for some jurisdictions - of a distinction between condemnatory or declaratory judgments on the one hand and constitutive judgments on the other may be clarified by way of an example relating to the problems caused in the field of cross-border patent litigation by the GAT v LKB 9 decision of the European Court of Justice. The Court s judgment gives rise to so-called "super torpedo" actions. In most patent infringement proceedings the defendant makes the point that the patent is invalid. According to one of the judgments of the Court of Justice this defence is for the exclusive jurisdiction of the State to which the patent is attributed, which affects pending infringement proceedings. One reason for the judgment of the court has been that the effect of a judgment in an intellectual property infringement action on the validity of the IP right seems to differ between the laws of the Member States if the invalidity of the right is raised as a defence in the infringement action. In particular English law seems to regard infringement and validity as so closely connected that it is not possible to distinguish between the preclusive effect of the infringement action and the validity of the right as a separate cause of legal action. 6 Accelerated proceedings are, for example, "référé" (France), "kort geding" (Netherlands), "Verfahren nach billigem Ermessen" (Germany), summary proceedings (common law), "procedimenti somari" (Italy); see HJ Snijders, Access to Civil Justice Abroad p Swedish Code of Judicial Procedure, Chapter 13, Sections 1 and 2. 8 Vogel/Spühler Case C-4/03 Gesellschaft für Antriebstechnik mbh & Co. KG v Lamellen und Kupplungsbau Beteiligungs KG [2006] ECR I

8 One of the solutions to address this problem suggested by Professor Schlosser is to take a patent as valid as long as it has not been annulled by the (exclusively) competent court. This solution could be easily adopted in Germany, because a judgment invalidating a patent is a so-called "constitutive" judgment. It does not clear the preexisting legal relationship; rather, it modifies it to the result that the patent retroactively becomes invalid. On that basis, damages could be awarded or at least declaratory relief as to damages could be given, as long as a patent is not invalidated. In that case, however, repayment of the damages must be safeguarded, should invalidation proceedings subsequently be successful. This solution may not, however, be suitable for the legal systems of all Contracting States, which may attribute a farther-reaching effect to such decision due to differences in the (preclusive) effects of the different types of judgment. The effects flowing from such a decision are in fact determined by national law. In several Contracting States, however, a decision to annul a patent has erga omnes effect. In order to avoid the risk of contradictory decisions, it may therefore be necessary to limit the jurisdiction of the courts of a State other than that in which the patent is issued to rule indirectly on the validity of a foreign patent to only those cases in which, under the applicable national law, the effects of the decision to be given are limited to the parties to the proceedings. Such a limitation would, however, lead to distortions, thereby undermining the equality and uniformity of rights and obligations arising from the Convention for the Contracting States and the persons concerned. 10 NB. Please consider whether your legal system makes (similar) distinctions between judgments as described in the explanatory note, what is the nature and basic rationale for that distinction, and whether those different types of judgments may have preclusive effects. Please include in your answer in Italics the original terminology used in your legal system to describe each category of judgment. For example, under Swiss law, one of the distinctions that is drawn is between judgments granting affirmative relief (Leistungsurteile), declaratory judgments (Feststellungsurteile) and judgments establishing or altering a legal relationship (Gestaltungsurteile). Typical examples for Gestaltungsurteile would be a divorce decree or a judgment annulling a resolution of an organ of a corporation. NB2. In general terms and without duplicating material in the following sections, please describe the principal differences between the preclusive effects of the different types of judgments you have identified for your legal system. 10 Case 288/82 Ferdinand M.J.J. Duijnstee v Lodewijk Goderbauer [1983] Page 3663, para 13. 8

9 II. Preclusive effects of Judgments This part of the questionnaire is concerned with the effects of a judgment (including, for this purpose, any statement of the reasons given for a judgment) insofar as it restricts the ability of the participants in the proceedings in which it was given, or related or non-related persons, to bring or conduct later proceedings (whether or not forming part of the same action) as they would wish. In particular, this section is concerned with so-called rules of "res judicata" or their equivalent. References to "Claimant" are to the person seeking a remedy from the court, and references to "Defendant" are to the person against whom a remedy is sought. 11 The terminology used in this intended for guidance only and is not intended to exclude or restrict discussion of the legal concepts and terms which are relevant to your legal system. This section is not concerned with the evidential status of the record of judgment, nor with the value of judgments as a legal precedent for future cases (stare decisis), both of which fall outside the scope of this Project. For the purpose of drafting the questionnaire, a distinction has been drawn between "claim preclusive effects" (see Part II.A) and "issue preclusive effects" (see Part II.B). These are intended to be descriptive categories, the former (which might also be described as "same claim preclusion") embracing rules of preclusion affecting the raising of claims which a legal system considers to have been determined in earlier proceedings and the latter embracing rules of preclusion affecting attempts to re-open issues of law or fact which a legal system regards as having already been determined in earlier proceedings. A third category of "wider preclusive effects" has been used (see Part II.C) to accommodate rules of preclusion which are considered to fall into neither of these categories. Those co-ordinating the Project recognise, however, that different legal systems will approach the categorisation differently depending on how they define the concepts of claim and issue, and that terminology will vary (e.g. in England, reference is made to "cause of action estoppel", "issue estoppel" and to various other rules, including "abuse of process"). Rapporteurs are thus encouraged to be flexible and to fit their description of the law and practice of their legal system into the framework established below as they think most appropriate. A. Claim preclusion 1. Existence and nature of claim preclusive effects Are judgments in your legal system capable of having claim preclusive effects? This and the following questions are concerned with claim preclusive effects (see introductory note above), focusing on rules which have as the basis the identity of the claim/cause of action raised in pending proceedings with that determined in earlier proceedings. NB. In your answer, please identify what is the nature of each claim preclusive effect (e.g. substantive, i.e. affecting the obligation on which the Claimant relied in the proceedings leading to judgment or merely procedural). Does this categorization have any legal relevance in practice? NB2. What is the relevant point in time the preclusive effect of a judgment is based on (e.g. in Germany: last oral hearing before the court)? 2. Policies underlying claim preclusive effects What are the policy considerations for the claim preclusive effect of judgments in your legal system? This question aims to establish the rationale underlying the preclusive effect of judgments in your legal system. The procedure for the rendering of civil justice is sometimes described as a process in pursuit of the truth as between the parties involved in a dispute. The "truth" which is contentious and often relative to the parties perspective may, however, never be satisfactorily established. For the following reasons, it appears to be widely accepted that the 11 Thus, for example, a person named as Defendant in legal proceedings who advances a counterclaim should be treated as "Defendant" for the purposes of the main claim against him (including, for example, any true defence of set-off) and "Claimant" for the purposes of the counterclaim. 9

10 quest for the truth must eventually cease in the interests of the parties themselves and the interest of society at large. First, it is uncertain whether the continuation or repetition of litigation will ever satisfactorily establish the truth from the perspective of both parties and, second, it is extremely doubtful whether any benefit of continuous or repetitive litigation can outweigh the financial and social costs of litigation. Both the public and private interests are reflected in maxims that have historically been advanced to justify the preclusive effect of judgments: 12 (1) [i]nterest reipublicae ut sit finis litium ( it is in the public interest that there should be an end of litigation"); and (2) Nemo debet bis vexari pro una et eadem causa ("no one should be proceeded against twice for the same cause"). NB. Please refer to, cite, summarise and translate, as appropriate, legislation, travaux préparatoires, case law and doctrine. 3. Conditions for claim preclusive effects What are the conditions for the claim preclusive effects of a judgment? In general, it may be suggested that there are two main conditions that must be satisfied before a judgment has claim preclusive effects in subsequent proceedings: the subsequent proceedings must (a) concern the same claim and (b) involve the same parties as covered by the earlier judgment. The question aims at clarifying whether, and to what extent, these and/or other conditions apply in your legal system. NB. Please describe how your legal system defines the concept of "claim" and include the relevant terminology. NB2. Please further describe in detail how a court determines whether subsequent proceedings concern the same claim as determined in the earlier judgment. In certain civil law systems (e.g. Belgium, France 13 and Netherlands) it seems that the identity of the "thing claimed" is interpreted and applied narrowly in that claim preclusive effect will only vest in judgments provided the relief sought ("petitum") is identical. In addition, as a part of the so-called "triple identity test", it is further required that claim is based on the same legal grounds ("causa petendi"). Later proceedings may be brought and the case can be re-litigated if a party chooses to take a second shot and attempts to bring its case based on a different cause of action. 14 By contrast, at common law, a claim or "cause of action" is said to comprise all the facts and circumstances necessary to give rise to a right to relief. Generally, all claims arising from a single event and relying on the same factual basis will be treated as the same cause of action. The cause of action must be identical to that in the earlier proceedings. A plea of cause of action estoppel will often necessitate a review of the reasoning of the earlier judgment, and not just of the formal order granting or denying relief. 15 In US common law, a "claim" comprises all rights of the Claimant to remedies against the respondent with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose. What constitutes a "connected transaction", and what constitutes a "series", is determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage. 16 NB3. If appropriate, please further describe in detail how a court determines whether subsequent proceedings concern the same parties as involved in the earlier judgment. As far as the requirement of same parties applies in your legal system, you do not have to describe this concept in detail as a part of this question because its meaning is examined in the specific questions below (questions 8 through 14). NB4. Please indicate whether the application of preclusive effects to a judgment that is on appeal depends on the grounds for appeal. 12 See The Digest, Book 50, ch 17; and Justinian, Institutes, IV See French Civil Code, Article ILA, Interim Report on Res judicata and Arbitration (2004) 16, available at: 15 ILA, Interim Report on Res judicata and Arbitration (n 5) ILA, Interim Report on Res judicata and Arbitration (n 5)

11 4. Invoking claim preclusive effects Please describe how the claim preclusive effects of a judgment are invoked in your legal system. This question aims at identifying the procedural aspects of how a party or the court can invoke the claim preclusive effects of a prior judgment in order to preclude adjudication upon the same claim. For instance, in the United States, the party wishing to rely on the preclusive effects of a judgment must raise the issue or else the party waives his or her ability to do so later. Furthermore, a court has the power to raise preclusion of its own motion, although this is rare and will only occur if the court feels a danger of repetitive litigation. Timing may also play a role in the invocation of preclusive effects. For example, a Claimant may invoke a judgment s preclusive effects to preclude the Defendant from defending on the underlying merits in an action upon the judgment first rendered. Likewise, a Defendant may wish to raise preclusion as part of his or her defence. For instance, in the United States, claim preclusion is most often raised by the Defendant as an affirmative defence and not a mere denial of the allegations set forth. Furthermore, a Defendant may be permitted to raise the defence earlier in the proceedings through a pre-answer motion to dismiss. Invocation of claim preclusion also involves issues of proof which include matters pertaining to burden of proof and evidence. For example, in the United States, the burden of proof that preclusive effects apply lies on the party raising the allegedly preclusive judgment. However, the burden that an exception to its application applies will lie with the other party. Regarding evidence, certain documents may be required in order to demonstrate the prior judgment. In the United States, the party raising preclusion must provide a formal record of the judgment, although a court may sometimes take judicial notice of the judgment s existence. It may be additionally necessary to provide evidence of the matters actually litigated in the first set of proceedings. Such items may include transcripts, evidence of party stipulations regarding certain issues, or testimony of jurors who tried facts in the first suit. It is also relevant to consider how the judge will make the determination of whether to give the judgment preclusive effects. For example, in the United States, in most cases, the judge before trial will determine, after a consideration of all the evidence presented, whether preclusive effects apply to the judgment. However, if there is a genuine dispute regarding the truth of the evidence offered, the judge may submit the matter to the jury along with other issues to be determined in connection with the second set of proceedings. If that occurs, and the jury decides that preclusive affects should apply, the jury will not go on to consider the precluded part of the merits of the case. Finally, an appellate court s power to review a lower court s decision as to the preclusive effects of a judgment may be limited by principles of deference, especially in situations where the court raised the issue of preclusion ex officio. However, in the United States, appellate courts are less likely to give deference to a lower court s decision regarding preclusion in view of their interest in close supervision of preclusion and strict application of res judicata principles. NB. Please consider in particular: (1) if and when the claim preclusive effect of a judgment must be raised by the party seeking to rely on it, or whether it is subject to the discretion of the court; if so, (2) how it is proved; and (3) whether and how it may be defeated. The issue of raising the claim preclusive effect involves questions of: (a) timing; and (b) method. The issue of proof potentially involves questions concerning: (a) the burden of proof; (b) evidence; (c) the decision; and (d) review of the decision. The issue of defeating the claim preclusive effect of a judgment may involve questions of: (a) methods for attack (e.g. interlocutory motion for relief or independent case); and (b) grounds for attack (e.g. issues of jurisdiction and notice or other grounds, such as fraud). NB2. As regards the issue of proof, please consider in your answer what documents may be produced to establish a judgment s claim preclusive effect. In particular, consider whether in order to establish the claim preclusive effect of a judgment an applicant is entitled to rely on the final order, the reasons, the parties pleadings, and on evidence submitted to the court. NB3. Please describe in your answer the nature of the decision taken by the court when it decides that indeed a claim is barred due to the claim preclusive effects of an earlier judgment. 11

12 5. Exceptions to claim preclusive effects Please verify whether the claim preclusive effect of judgments in your legal system is subject to generally accepted exceptions. It is expected that the rule on the claim preclusive effect of judgments, if any, might be subject to important recognised exceptions in your legal system. This may have as a consequence that a valid and final judgment will not preclude a later action on the original claim, so that the Claimant may bring a second action on all or part of the same claim. This question aims at identifying such exceptions. NB. Please consider in particular whether the following exceptions apply to the rule providing for the claim preclusive effects of a judgment: (1) the judgment was not on the merits; (2) jurisdictional or procedural limitation; (3) judicial permission; (4) party agreement; (5) the preclusive effect would be contrary to public policy (consider Article 6(1) ECHR in relation to lack of reasons for judgment or lack of adequate notice); (6) additional evidence, whether or not available before judgment and whether or not known to the parties or the court, or a change in circumstances; and/or (7) due to the fact that invoking the preclusive effect of the judgment would be contrary to procedural reasonableness or would constitute an abuse of process. The exception that the judgment which is relied of for purposes of preclusion was not on the merits might occur, for instance, when the judgment involved: (a) the dismissal of the case due to lack of jurisdiction; (b) the dismissal of the case due to prematurity of action (e.g. a fact essential for recovery had not yet occurred); (c) the dismissal of the case due to the statute of frauds; (d) the dismissal of the case due to the statute of limitations; (e) summary proceedings; (f) the dismissal of the case due to voluntary withdrawal; (4) the dismissal of the case due to involuntary dismissal; or (g) the dismissal of the case due to insufficient evidence. NB2. Please consider, where appropriate, the policies underlying the exceptions that exist to the rule on the claim preclusive effects of judgments in your legal system. NB3. Please also indicate under what circumstances, if any, the party may lose the ability to rely on the preclusive effects of the judgment. In the previous section, the Questionnaire addressed general aspects of claim preclusive effects of judgments. The following numbered points address particular questions that may arise in relation to the operation of the claim preclusive effects of judgments in particular circumstances which may be subject to specific rules and conditions. It is appreciated that some of the issues you have addressed in the more general answers in the previous section will be involved when you consider these specific situations. Therefore, it is important that you provide an insight in this section into the particularities, if any, of the application of claim preclusion in the circumstances as described. 6. Claimant and Defendant May a Claimant or Defendant in your legal system be prevented by judgment on a particular claim from bringing or defending fresh proceedings against the Defendant or Claimant based on what is considered in your legal system to be the same claim? NB. Please consider: (1) what is the nature of that preclusive effect and the conditions for its application; (2) how the preclusion is invoked; and (3) any exceptions to its application. As regards the nature of the preclusive effect, please clarify whether the preclusion is substantive (i.e. affecting the obligation on which the Claimant relied in the proceedings leading to judgment) or merely procedural? NB2. Please indicate the legal terminology used to describe the preclusive effects and any relevant legal basis. NB3. Insofar as relevant, please distinguish in your answer between the positions of (1) a successful Claimant; (2) an unsuccessful Claimant; and (3) an unsuccessful Defendant. Thus, for example, there are theoretical and practical differences under English law between the claim preclusive effects of a judgment vis-à-vis a successful Claimant (merger in judgment) and vis-à-vis an unsuccessful party (cause of action estoppel). NB4. By way of practical example, please describe how the following situation would be handled in your legal system: a Claimant brings the same claim against the same party a second time while the decision on the claim in the first set of proceedings is under appeal? 12

13 NB5. Please also indicate what would happen under the following circumstances: a judgment on a suit to recover lost wages is under appeal; pending the appeal, the same Claimant brings a new claim for recovery of wages from a later time period against the same Defendant. 7. Other participants To what extent, if at all, do the claim preclusive effects of judgments extend to other participants in the litigation? This question seeks to assess the position with regard to preclusive effects on other participants in the litigation, including co-claimants, co-defendants, notified or impleaded third parties, interveners, or otherwise. To clarify the relevance of this question, we may use the example of third party proceedings. In all European legal systems not only the Claimant, but also the Defendant may add a third party to a pending litigation and extend the effects of the judgment to that party. 17 The case law of the European Court of Justice and the Member States suggests that such cases arise regularly. The most common examples are actions on a warranty or guarantee or cases where relief is sought from a third party by way of indemnity or by way of contribution to the judgment in the main proceedings. Generally speaking, two different types of third party proceedings can be distinguished in the Member States, which accordingly are coordinated by two different provisions on third party proceedings in the Brussels Regulation: Articles 6(2) and 65. The first, associated with Article 6(2) of the Regulation, applies in a large majority of the Member States and provides that a third party may be included into pending proceedings, for example, if the Defendant of these proceedings asserts a warranty or a guarantee against the third party. 18 In the main proceedings, the second action is joined to the pending one and the third party is treated as a full party. The third party acts independently from the parties in the parallel litigation. Finally, the court pronounces a judgment in favour of or against the (third) party which is subject to enforcement under Articles 32 and 38 Brussels Regulation. In addition, English law allows a court to add or substitute parties and consolidate the proceedings. 19 These provisions are based on considerations of procedural efficiency. Articles 6(2) and 11(2) of the Regulation directly reflect this approach. Conversely, the second system, covered by Article 65 of the Regulation, operates in Austria, Germany, Hungary, Estonia, Latvia, Poland and Slovenia and is based on a notice of pending suit served on third parties. This system separates the main proceedings from the intervention of the third party and strongly adheres to the model of "two parties proceedings" and of a limited directly preclusive effect of a judgment in the main proceedings. It functions as follows: the Defendant in the main proceedings may serve a notice of pending suit on the third party. The third party is invited to join the pending proceedings, not as a party, but as an auxiliary intervenor and to assist the main party. If the party notified does not appear in the hearing, the main proceedings are continued regardless of this fact. If the suit is lost, the third party is bound by the findings of the judgment. Consequently, the third party will be (indirectly) precluded from questioning the factual or legal basis of the court s decision in a second lawsuit between the Defendant in the main proceedings and the third party, although in the main proceedings, no judgment against or in favour of the third party is given and the third party is only in the position of an intervenor. 20 Several safeguards protect the position of the third party in the second system. Firstly, the notice on the third party about the pending proceedings must be served properly. Secondly, the preclusive effect of the judgment of the main proceedings only occurs after the moment of the service of the notice. Thirdly, the intervenor may oppose the procedural conduct of the assisted party. In the main proceedings, the intervenor cannot "block" the procedural conduct of the assisted party. However, in this constellation, the third party is not bound by the judgment in the main proceedings. The preclusive effects of the third party notice operate in the proceedings between the Defendant of the main proceedings and the third party. If the Defendant loses the main proceedings he may file a lawsuit against the third party. In these proceedings, the legal and factual findings of the judgment in the main proceedings are directly binding for the court. 21 Accordingly, the court of the second proceedings verifies whether the applicable procedural conditions were complied with, although it does not decide on the issue whether the third party notice was effective 17 The issue of third party proceedings is discussed by Professor Hess in the Heidelberg Report on the Application of Regulation Brussels I in the Member States, para 228ff, available at: 18 See, for example, Articles and Articles NCPC and Part 20 of the English Civil Procedure Rules ("CPR"). 19 See English CPR, Part In Austria, Section 21 Austrian Code of Civil Procedure (Zivilprozessordnung) does not explicitly provide for a preclusive effect. However, the Austrian Oberste Gerichtshof held that Austrian law provides for a preclusive effect similar to the German solution; See the Heidelberg Report on the Application of Regulation Brussels I in the Member States, para 231, available at: 21 See Sections 74 and 68 Code of Civil Procedure (Zivilprozessordnung). 13