Johnson v Gore Wood & Co
| Johnson v Gore Wood & Co | |
|---|---|
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| Court | House of Lords |
| Full case name | Johnson v Gore Wood & Co |
| Decided | 14 December 2000 |
| Citation(s) |
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| Case history | |
| Appealed from |
[2004] EWCA Civ 14 [2003] EWCA Civ 1728 |
| Court membership | |
| Judges sitting | |
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Johnson v Gore Wood & Co [2000] UKHL 65 is a leading UK company law decision of the House of Lords concerning (1) abuse of process relating to litigating issues which have already been determined in prior litigation or by way of settlement, (2) estoppel by convention, and (3) reflective loss of a shareholder with respect to damage which was done to the company in which he holds .
Mr Johnson was a director and majority shareholder in a number of companies, including Westway Homes Limited (referred to in the judgment as "WWH"). Gore Wood & Co were a firm of solicitors who acted for the companies and also occasionally for Mr Johnson in his personal capacity. In 1998 Gore Wood were acting for WWH and served notice under an option to acquire land from a third party upon the solicitors for that third party. The third party alleged that this was not proper service, and refused to convey the land. Legal proceedings ensued and ultimately WWH succeeded. However, because the third party was impecunious and funded by legal aid WWH was unable to recoup the full amount of its losses and legal costs. Accordingly, WWH issued proceedings against Gore Wood for professional negligence alleging, broadly, that their losses would have been averted entirely if Gore Wood had properly served the original notice on the third party instead of on the third party's solicitors.
Gore Wood ultimately settled those claims, and the settlement agreement included two provisions which were later to prove important. Firstly, it included a clause stating that any amount which Mr Johnson wished to subsequently claim against Gore Wood in his personal capacity would be limited to £250,000 excluding interest and costs. Secondly, the confidentiality clause contained an except which permitted the settlement agreement to be referred to in any action which Mr Johnson might bring against Gore Wood.
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