Issue Estoppel (Collatory Case)

In Test Claimants in the FII Group Litigation v Revenue and Customs Commissioners [2020] UKSC 47, [2022] AC 1 (“FII”), Lord Reed and Lord Hodge (with whom Lord Lloyd-Jones and Lord Hamblen agreed), in their judgment, set out the law relating to issue estoppel, at paragraphs 64 to 68:

'The second estoppel which we must consider is issue estoppel. This expression, which appears to have been coined by Higgins J in the Australian case of Hoystead v Federal Taxation Comr (1921) 29 CLR 537, 561 and adopted by Diplock LJ in Thoday v Thoday [1964] P 181, 197—198, concerns the principle which Lord Sumption JSC in Virgin Atlantic Airways Ltd, para 17 described as: “the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties.”

In Thoday v Thoday [1964] P 181, 198, Diplock LJ observed that issue estoppel was an extension of the public policy underlying cause of action estoppel and described it in these terms:

“There are many causes of action which can only be established by proving that two or more conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action. If in litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was.”

In Fidelitas Shipping Co Ltd v V/O Exportchleb [1966] 1 QB 630, 642 Diplock LJ expressed the view that in an action in which certain questions of fact or law are tried and determined before others and an interlocutory judgment is given, the parties are bound by the determination of that issue in subsequent proceedings in the same action and their only remedy is to appeal the interlocutory judgment. He saw this as an example of issue estoppel.

In Arnold [1991] 2 AC 93, 105 Lord Keith said that issue estoppel:

“may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties involving a different cause of action to which the same issue is relevant one of the parties seeks to re-open that issue.”

He referred to the passage in Diplock LJ's judgment in Thoday v Thoday which we have quoted above and, by reference to Diplock LJ's judgment in Fidelitas Shipping, observed that issue estoppel had been extended to cover the case where in subsequent proceedings it is sought to raise a point which might have been but was not raised in the earlier proceedings (p 106).

Lord Sumption JSC in Virgin Atlantic Airways, para 21, explained Lord Keith's judgment in Arnold in relation to issue estoppel. In the case of that estoppel it was in principle possible to challenge a previous decision on an issue not only by taking a new point which could not reasonably have been taken in the earlier proceedings but also (in contrast to cause of action estoppel) “to reargue in materially altered circumstances an old point which had previously been rejected”. In para 22 he stated that Arnold was authority for the following proposition:

“(3) Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.”'

In Musst Holdings Ltd v Astra Asset Management UK Ltd [2026] EWHC 357 (Ch), Leech J, at paragraph 307, under the heading '[Claimant's] Primary Case: Issue Estoppel' and subheading 'The Law', quoted paragraphs 64 to 67 from FII[1]

Collatory Case Series

The Collatory Case Series, is an series of bulletins, designed to report that one case which collates the essential principles/propositions of law, for a particular doctrine/area of law (and perhaps, as here, provide a few extra citations/quotations etc.). It is not designed as a deep and comprehensive review of an area of law, but to provide that quick 'go to' case.

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