Using Judicial Estoppel To Prevent Employees From Pursuing Fraudulent Claims

• Published date: 25 November 2021
• Subject Matter: Insolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy
• Law Firm: Burns White
• Author: Ms Nicole E. Bazzy

Judicial estoppel is an equitable doctrine that allows the courts to use their inherent discretion to prohibit litigants from engaging in fraudulent activities. While the doctrine is fundamentally intended to protect the integrity of the courts, it serves as an important shield for defendants that may otherwise be forced to defend against fraudulent claims.

In New Hampshire v. Maine, 532 U.S. 742 (2001), the U.S. Supreme Court identified three factors that will typically determine whether judicial estoppel applies:

• Whether a litigant's position is clearly inconsistent with an earlier position;
• Whether successfully persuading the court to accept the litigant's current position would create the perception that either the court in the instant case or the litigant's prior case was misled; and,
• Whether the litigant would derive an unfair advantage or impose an unfair detriment on the opposing party if not judicially estopped.

These are discretionary factors, not required elements. The Supreme Court also recognized that additional considerations "may inform" state and federal court's...