Blog - 12/04/2021
Litigation & Dispute Resolution
Who’s guarding the gate?
Post Brexit, the gateways to the jurisdiction of the English court provided by CPR Part 6 and its accompanying Practice Direction are of increasing importance. In short, the gateways determine whether you can launch a claim in England & Wales. Whilst we remained a member of the European Union and during the transition period, the UK were bound and could rely upon the Brussels Regulation (recast) to determine issues of jurisdiction for dispute resolution within the EU. This is to be differentiated from the law that applies either to contract or tort which is determined within the EU by the Rome Regulations, Rome I applying to contract and Rome II to tort. Those continue to apply in the UK after our departure as they have been retained into domestic law.
The Brussels Regulation, however, went with our departure from the EU; the Regulation is a single market instrument. There is a replacement that applies to both the EU and the EEA, the Lugano Convention. The Convention provides very similarly to the Brussels Regulation but in a more dated version. It achieves what is needed. The UK applied to accede to Lugano in April 2020. The EU has a veto but in accordance with the Convention should provide an answer on 14 April 2021. All the signs are that that decision will be kicked into the long grass for a few months.
In its absence the determination of jurisdiction for claims against parties in the EU relies on the 2005 Hague Convention on Choice of Court Agreements and the common law often litigated through the machinery of permission to serve out of the jurisdiction under Part 6 of the Civil Procedure Rules. Part 6 covers both the contract and tort gateways. It was amended with effect from 5 April.
In contract, no permission to serve out of the jurisdiction is needed if there is an exclusive choice of court agreement or the contract contains a term to the effect that the court shall have jurisdiction to determine that claim. This covers exclusive, non-exclusive and asymmetric jurisdiction clauses.
Permission may otherwise be needed and should be available when the contract:
- was made within the jurisdiction;
- was made by or through an agent trading or residing within the jurisdiction;
- is governed by English law;
- the breach of contract committed was within the jurisdiction.
For tort, e.g. negligence, jurisdiction will apply to a defendant physically within the jurisdiction. For a defendant outside the jurisdiction, the gateway applies when:
- damage was sustained, or will be sustained, within the jurisdiction; or
- damage has been or will be sustained resulting from an act committed, or likely to be committed, within the jurisdiction.
The tort gateway has been the subject of two prominent Court of Appeal decisions recently. In both FS Cairo (Nile Plaza) LLC v Christine Brownlie  EWCA Civ 996 and Manek & Ors v IIFL Wealth (UK) Ltd & Ors  EWCA Civ 264 the court took an expansive view of the English court’s jurisdiction over defendants in tort. The former case has been long litigated after the death of the claimant’s husband in an accident in Egypt. The Brussels regime requires direct damage to be suffered in the jurisdiction in order to establish the relevant jurisdiction. In contradistinction from the Brussels regime, in Brownlie the court, in an expansive mood, considered that indirect damage suffered within the jurisdiction founded jurisdiction for the English court at common law. In Manek, to found jurisdiction the court again took a wider approach to interpreting a course of events, some of which occurred within the jurisdiction.
As a result of the UK’s departure from the EU, changes to the civil procedure rules have also altered one of the grounds of when security for costs may be ordered against a claimant resident outside the jurisdiction. For claims issued before 1 January, the tests included whether the claimant resided in a state subject to the Brussels Regulation or Lugano Convention. That has changed simply to whether the claimant resides in a state which is party to the 2005 Hague Choice of Court Convention. The EU is a signatory to the 2005 Convention and thus continues to meet the test.
If you have any queries about this topic please contact David Greene or any member of the Litigation team.
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