Lish v Northern Block: Court of Appeal draws the line on Henderson abuse in royalty disputes

The Court of Appeal has handed down a significant judgement on the doctrine of abuse of process, clarifying when a claimant who settles one set of proceedings may nonetheless pursue a related but distinct claim in subsequent litigation. Mariya Vasilyevna Lish v The Northern Block Limited & Anor [2026] EWCA Civ 497, decided on 27 April 2026, draws a careful distinction between claims that were silently abandoned at settlement and those that were never part of the settled proceedings in the first place.

Mrs Lish, a typeface designer, worked with The Northern Block Limited (TNB) between 2012 and 2022 under a distribution agreement that entitled her to 60% of sales revenues. Following termination of that agreement, she brought proceedings in Newcastle County Court seeking copyright declarations, injunctions and ancillary financial remedies. That claim — focused on post-termination infringement — was settled in June 2023 after TNB accepted a Part 36 offer.

TNB's proposed amended defence, served shortly before acceptance, was the first document to reveal expressly that it had ceased paying royalties entirely after December 2015. Mrs Lish estimated the shortfall at approximately £300,000. TNB put the figure at no more than £50,000.

Mrs Lish subsequently issued fresh proceedings comprising three claims: unpaid royalties under the 2012 agreement (the Unpaid Royalties Claim); copyright infringement in eight typefaces not pleaded in the Newcastle proceedings (the Infringements Claim); and a claim for non-compliance with the settlement itself. TNB applied to strike out the first two as an abuse of process under Henderson v Henderson principles.

Lord Justice Arnold, with whom Coulson and Moylan LJJ agreed, conducted a careful analysis of the Deputy High Court Judge's reasoning and found it vitiated by several material errors — but reached different conclusions on the two claims.

On the Unpaid Royalties Claim, the Court of Appeal held that the judge had wrongly characterised the claim as involving "the same issues and the same remedies" as the Newcastle proceedings. It was, in fact, a purely contractual claim for pre-termination royalties, raising entirely distinct issues about what was agreed in March 2015 and whether payments had been made in full. The remedies too were wholly different. Crucially, TNB had accepted the Part 36 offer with full knowledge that Mrs Lish had recently asserted this additional claim in correspondence, having been stone-walled when she sought financial information. There was no basis for finding that she had been put on notice of the underpayment before receiving the draft amended defence, nor that pursuing the claim would undermine the finality of the settlement. The Unpaid Royalties Claim was not an abuse of process.

The Infringements Claim fared differently. Mrs Lish accepted she had been aware of those additional typeface claims before settlement but had deliberately excluded them for pragmatic reasons. She had given TNB no indication that further copyright claims might follow. When TNB accepted the Part 36 offer, it had every reason to believe it was settling all outstanding copyright matters. By subsequently asserting ownership of the additional typefaces, Mrs Lish placed TNB at a disadvantage — the copyright admissions made on settlement amounted to a negotiating concession now deployed against it. The Court found this amounted to unjust harassment, and the Infringements Claim was rightly struck out.

The judgement reaffirms that Henderson abuse requires a broad, merits-based analysis rather than a mechanical application of the rule that claims which could have been raised must have been. Defendants bear the onus of establishing abuse, and the mere fact that a later claim arises from the same contractual relationship does not make it abusive. Where a claim was never pleaded, never settled and was actively being asserted in correspondence before settlement was concluded, striking it out would amount to a denial of justice. The position is starkly different where a claimant knowingly holds back related claims without alerting the other side before accepting settlement.