Supreme Court provides clarification in the Brownlie 2 decision

On 20 October 2021 the Supreme Court handed down its decision in the defendant’s appeal in the case of FS Cairo (Nile) Plaza LLC v Brownlie (as Dependent and Executrix of Professor Sir Ian Brownlie QC).

The decision is an important one in relation to jurisdiction of the Courts of England and Wales in light of the UK’s withdrawal from the EU (Brexit) together with the failure of the UK to accede to the Lugano Convention. The ruling of the Supreme Court, by a majority of 4:1 (Lord Leggett dissenting), provides clarification as to the circumstances in which an English Court will have jurisdiction to hear a claim involving damage relating to an accident which happened abroad. The decision also sets out the position as to the necessity for a claimant to plead and to prove the applicable law of the country where the accident has happened.

The Supreme Court’s decision is that a more general interpretation is given to the definition of the word ‘damage’. Thus, where an individual is injured abroad and the injury sustained is sufficiently serious to result in continuing pain or disability, or financial losses once the injured person has returned home to England or Wales, this would in principle be sufficient for the test in the tort gateway to be met. The Supreme Court also decided that, notwithstanding the broader interpretation of the tort gateway test, in order to satisfy the English Court that it has jurisdiction, the claimant will still need to show that they meet the other elements set out under CPR 6.36 and, in particular, the third limb that England is the appropriate forum for the hearing. Lord Lloyd Jones stated at paragraph 82 of the judgment

“82. The wider reading of damage within the meaning of the tort gateway, which I favour, does not confer on all claimants in personal injury cases a right to bring proceedings in the jurisdiction of their residence. The courts will be astute in ascertaining whether the dispute has its closest connection with this jurisdiction and the principle of forum non conveniens will provide a robust and effective mechanism for ensuring that claims which do not have their closest connection with this jurisdiction will not be accepted here.”

It will remain open to defendants to seek to challenge jurisdiction on the basis of forum non-conveniens.

Background facts

The claim initially arose from a fatal road accident which occurred in Egypt in January 2010. The claimant, Lady Brownlie was on holiday with her husband, Sir Ian Brownlie, together with his daughter Rebecca and her two children. Lady Brownlie had arranged to stay at the Four Seasons Hotel in Cairo, which was operated by FS Cairo (Nile Plaza) LLC, an Egyptian company. She had arranged a limousine safari excursion via the concierge at the hotel. The original vehicle was supplied with a driver but broke down. A replacement vehicle and driver were supplied. Unfortunately, the second vehicle was involved in an accident leaving the road and overturning. Sir Ian Brownlie suffered fatal injuries as did his daughter. Lady Brownlie and the two children suffered injuries. Proceedings were commenced in the High Court in London in December 2012. Permission was given for the Claim Form and Particulars of Claim to be served on the hotel out of the jurisdiction in Egypt. The jurisdiction of the English Courts was challenged by the hotel, and there followed a lengthy series of Applications and Appeals in Brownlie 1 and the current case each going to the Supreme Court.

The Tort Gateway Test

In order for a claimant to serve proceedings on a foreign defendant they must first obtain permission of the English Court to do so. The test is set out in CPR 6.36. To succeed in such an application the claimant must establish that the three tests set out in that particular rule are satisfied. They are:

1. That the claim falls within one of the gateways in paragraph 3.1 of CPR PD 6B.
2. That there is a serious issue to be tried on the merits.
3. That England is the appropriate forum for the trial.

Where the claim is brought in tort, the claimant must satisfy the requirements of paragraph 3.1(9) of CPR PD 6B. The requirement that needs to be satisfied is that:

• Damage was sustained, or will be sustained within the jurisdiction, or

• Damage which has been or will be sustained results from an act committed, or likely to be committed within the jurisdiction.

The defendant submitted that a strict interpretation of ‘damage’ should be applied drawing the analogy with the position under EU law. If this narrow interpretation was accepted by the Court, then damage would be limited to the country where the accident occurred, in this case Egypt, and the claim would not pass the test under the gateway. The submission made on behalf of the claimant was that a broader interpretation of the wording to paragraph 3.1 (9), should be applied. Arguments centred on the particular wording in the various updates of the test set out in the Rules of the Supreme Court and the Civil Procedure Rules, and the use of the definitive article before the word ‘damage’.

The decision of the Supreme Court was that, based upon earlier English first instant decisions, the wider interpretation of ‘damage’ should be applied in relation to the tort gateway test. Thus, any indirect or consequent damage suffered in England or Wales by the claimant would be sufficient to establish jurisdiction subject to the forum conveniens test.

Foreign Law Presumption of Similarity

At the Supreme Court hearing in Brownlie 1 it was established that the incorrect defendant had been brought into the original action. Permission was given by the Court to the claimant to amend her proceedings and to substitute the correct defendant. Prior to that hearing the parties had agreed that the applicable law relating to this claim was the law of Egypt. In the amended pleadings damage was claimed in accordance with Egyptian law but there was no specific rule or provision of Egyptian law pleaded. This omission was relied upon by the defendant in seeking to argue limb 2 of the tort gateway test, namely that there was no serious issue to be tried on the merits. The argument was that, in the absence of specific pleadings or evidence as to the applicable Egyptian law, the claim had no prospect of success.

The Supreme Court decided unanimously that there was no requirement for a specific and detailed pleading of the applicable law of the country in which the accident occurred. The Supreme Court reinstated the previous position under English law, namely that in the absence of evidence to the contrary, foreign law would be presumed to be the same as English law. Thus, for the Application to establish jurisdiction, it was not necessary or proportionate to provide detailed pleadings or evidence as to the terms of the appliable foreign law.

Comment

This is an important decision, particularly on jurisdiction in the post-Brexit world.

In the context of claims, the provisions of the Brussels recast regulation as interpreted by the CJEU in FBTO Schadeverzekeringen NV v Jack Odenbreit (Case C-463/06) fell away at the expiry of the Brexit transition period on 31 December 2020, save in respect of ongoing cases issued at court prior that date. This decision allowed an injured person to bring a claim for damages directly against the third part insurer provided that the law of the country of the insurance contract allowed such direct right. Thus the UK victim of an accident injured abroad in an EU Member State could bring his or her claim in the UK against the foreign insurer, and in the case of a road traffic accident directed through that insurer’s UK correspondent, or against the MIB in an uninsured (or dilatory response by the insurer) case. There was no need to worry about the enforcement of judgments. There was mutual recognition of judgments built into the system and more widely through the Brussels Recast Regulation.

However, the Brownlie decision now opens up the real possibility that, in cases where the effects of injuries or the financial consequences of a death caused in an accident abroad continue on the claimant’s return to the UK, can still be determined by the English courts. The court will still have to be satisfied that it should deal with the case on the basis that it is most closely connected with England, but previous old decisions relating to the exercise of discretion in considering forum non-conveniens rules were focussed on what jurisdiction would be the most convenient for a trial including looking at evidence gathering and the attendance of witnesses etc. If this was still the main emphasis post Brownlie, then one can well see the UK court accepting jurisdiction in a number of cases. One cannot help but see the Supreme Court decision as trying to assist the victim to be able to bring a claim where it is most convenient to him or her and that courts in exercising discretion will be heavily influenced by this.

The foreign insurer could decide not to enter an appearance in any such proceedings so as not to be taken to accept jurisdiction and indeed take no part in the action on the basis that, as it stands, there is no judgment recognition system in place across the EU in respect of UK court judgments. The UK has thus far not been allowed to accede to the Lugano convention. However, it would be a brave stance for an insurer to take to simply take no action to defend a claim on the basis that any resultant judgment cannot be enforced. It would have to ensure that national law of the country of the accident did not operate any process of recognition of foreign judgments wide of the Brussels Recast Regulation. It would also, in particular, need to be certain that it had no assets within the UK which might be capable of being seized so as to satisfy the judgment. Moreover, it remains unclear as how the enforcement and recognition of judgments across the EU involving the UK will be resolved going forward. There remains an understandable clamour for the UK to be allowed to accede to the Lugano convention or for some similar mechanism to be negotiated for the reciprocal benefit of both sides.

In short, there is much remaining uncertainty as a result of the Brownlie judgment.