Insurance & Reinsurance
This content was written by BLM prior to its merger with Clyde & Co.
In the Supreme Court’s decision today in Brownlie v Four Seasons (Cairo), a 4:1 majority of the Justices allowed the underlying tort claim to proceed in England & Wales and rejected the defendant’s argument that there was no jurisdiction here.
The decision turns on the rather rarefied point of the meaning of “damage … sustained within the jurisdiction”, one of the necessary elements in securing the court’s permission to serving proceedings outside England & Wales. What the decision means is that 11 years after the death of her husband in the index accident in Egypt and after two separate visits to the Supreme Court, the claimant should now finally be able to progress this significant fatal accident claim.
The test for serving English proceedings outside the jurisdiction comprises three elements: having a good arguable case on the merits, coming within one of the jurisdictional ‘gateways’ in the Civil Procedure Rules (CPR) and showing that England & Wales is the appropriate forum for the claim. The relevant jurisdictional gateway for tort claims such as this case is that “damage was sustained, or will be sustained, within the jurisdiction.”
Oversimplifying things a little, the live argument in the case was essentially whether “damage” in this context meant the harm inflicted at the time of the accident, in Egypt, or whether that word had a broader meaning and would include losses arising from the accident experienced on an ongoing basis on returning to England? The former can be described as direct damage, the latter as indirect damage.
The majority of the Supreme Court favoured the latter interpretation, holding that some significant damage, either direct or indirect, in England & Wales was required by the test, which would be satisfied by ongoing losses suffered here. Although the distinction between direct and indirect damage existed in the European regime of the Brussels I Regulation, it was not appropriate to adopt that in the different context of jurisdiction under the English CPR. There was “no reason to apply within English domestic rules the distinction between direct and indirect damage which has now developed in the Brussels system …“damage” … simply refers to actionable harm, direct or indirect, caused by the wrongful act alleged … a claimant may suffer damage within the meaning of the domestic tort gateway in more than one place.” Despite Lord Leggatt’s dissenting judgment, the issue is now settled by the majority view.
Looking more broadly, it is worth remembering that the three stage test examined in Brownlie for serving out of the jurisdiction has, as from the end of the UK/EU transition period on 31 December 2020, replaced Brussels I for establishing jurisdiction here in claims connected to EU-27 parties. The wide approach to “damage” confirmed by this decision means that English residents injured in road accidents and/or on holiday in Europe should be able to continue to bring their claims here on that basis, although the loss of the Brussels I Regulation may cause other problems relating to enforcement of judgments in those sorts of cases.