Mistake and estoppel: does a previous judgment deciding the construction of an employment terms prevent an employer bringing proceedings to rectify a mistake in that agreement?

Two unions recently made applications in the High Court to attempt to stop Nexus, which operates the Tyne and Wear Metro, from bringing its claim against them, in Tyne and Wear Passenger Transport Executive t/a Nexus v National Union of Rail, Maritime and Transport Workers [2021] EWHC 1388 (Ch)

Factual background

The dispute related to an agreement made between the Claimant (Nexus) and the Defendants (the trade unions) regarding pay structure (the Letter Agreement). The Letter Agreement had been put under the microscope in previous proceedings (the Anderson proceedings), in which a group of employees to Nexus to the ET claiming underpayment. Their argument was that, according to the correct construction of the Letter Agreement, they were entitled to have their shift allowance calculated in reference to the pay as affected by the Letter Agreement. The ET agreed, as did the EAT, and the decision was finally upheld in the Court of Appeal.

The new proceedings

The Claimants brought a claim to rectify the Letter Agreement, which would essentially result in the shift allowance being calculated from the basic pay amount, rather than the adjusted Letter Agreement amount. The Defendants submitted that the Claimant should be estopped from doing so, and also applied for summary judgment.


The legal principles relevant to cause of action estoppel were laid out in Lord Sumption’s judgment in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46:

“Once a cause of action has been held to exist or not to exist, that outcome may not be challenged by either party in subsequent proceedings. This is “cause of action estoppel”.”

The Defendants argued that the Claimant was trying to challenge the outcome of the Anderson proceedings, and also that the Claimant should have raised the issue of mistake in those proceedings. The High Court disagreed with the Defendants, saying that the Anderson proceedings were concerned with the defendants’ members’ claims under their individual employment contracts as a matter of the construction of those contracts. The rectification claim was not concerned to challenge the Court of Appeal’s determination of the proper construction of those contracts, but that the contracts should be rectified because of common or unilateral mistake.

Summary judgment

The Defendants claimed that the new proceedings were an abuse of process, a legal principle which “precludes a party from raising in subsequent proceedings matters which were not, but could and should have been raised in the earlier ones”.

The defendants submitted that the rectification claim is an abuse of process on the ground that it amounts to a collateral attack on the Anderson judgment. The High Court, however, ruled that the rectification claim was not and could not have been made in the Anderson proceedings. The rectification claim did not involve a re-litigation of the construction of the Letter Agreement and did not constitute a collateral attack on the Anderson judgment.

The Defendants also made submissions that the Letter Agreement was not a legally binding contract, and therefore could not be rectified by the court. The High Court rejected this argument, too. Finally, the Defendants argued that the claim was unsustainable by reason of laches, which involves delay coupled with some form of relevant prejudice to the defendant. The Court ruled this argument was without merit.

Link to judgment: https://www.bailii.org/ew/cases/EWHC/Ch/2021/1388.html