Issue Estoppel and Abuse of Process

Article by Simon Cooper And Laura Bee

The recent case of Kennecott Utah Copper Corporation (and others) -v- Minet Limited (and others) [2002] reminds litigants of the importance of carefully considering all aspects of a dispute and including all relevant issues in a claim at the outset. Once proceedings have been decided, it may be impossible to bring further claims in respect of the same circumstances in a fresh action. In Kennecott -v- Minet the claim against Minet was struck out in the Commercial Court because it was held that, in order for the claimant to succeed, it would have been necessary to reconsider issues which had already been decided in a similar action arising out of the same set of circumstances involving the same parties.

KENNECOTT -V- MINET - THE ORIGINAL ACTION

The issues to be determined in Kennecott -v- Minet arose out of the insurance and reinsurance of Kennecott's copper smelter. Minet were brokers retained by Kennecott's captive insurers to place the reinsurance cover for, inter alia, the smelter. Following damage to the smelter caused by a series of explosions in 1995, Kennecott, along with its captive insurers and parent company ("the Kennecott entities"), sought to recover their losses from reinsurers, who defended the claim on the basis that the damaged property had not attached to the reinsurance at the time of the accident so was not covered.

Proceedings were commenced in the High Court in 1996 on the basis that the Kennecott entities would seek to recover from reinsurers, with co-operation from Minet. During the proceedings, however, there was some discussion as to whether or not Minet should be joined as a party and, if so, in respect of what issues. The Kennecott entities wanted Minet to be joined in to the action for certain limited purposes. Minet sought to obtain the agreement of the Kennecott entities that, if it were to co-operate on the joinder, there would be no further proceedings against Minet in respect of the smelter cover.

Minet were in fact joined in on a limited basis but there was continued discussion throughout the proceedings as to whether or not the Kennecott entities could bring a fresh claim against Minet following determination of the original action. Minet's stance was that the Kennecott entities should plead their entire case against Minet in the original proceedings to give Minet a degree of certainty during the trial. The Kennecott entities argued that as a result of an alleged...