UK Supreme Court takes expansive approach to jurisdiction post-Brexit for tort/delict cases


16th November 2021

The UK Supreme Court has confirmed, in the recent important decision of FS Cairo (Nile Plaza) LLC v Brownlie [2021] EWCA Civ 996 ("Brownlie 2"), that it will take an expansive approach to its jurisdiction over tort/delict claims so long as some damage is suffered in the jurisdiction. It does not matter that the initial damaging event or loss occurred in another jurisdiction and European concepts of "direct" vs "indirect" damage for jurisdiction purposes are gone.

The decision is important because it confirms the wide scope of the English Court for such claims and marks a departure from the (arguably) more restrictive approach of the European regime.

UK rules

The English Court’s jurisdiction is fundamentally established by the service of proceedings (post-Brexit, see further below[1]). For a tort/delict claim where the defendant is outside the jurisdiction, the first step is generally to seek the Court’s permission to serve the proceedings on them outside the jurisdiction. The Court will do so if satisfied (amongst other things) that: “damage was sustained, or will be sustained, within the jurisdiction”.

The case

What damage sustained in the jurisdiction means was explained by the Supreme Court in Brownlie 2. The UK based Claimant brought proceedings against an Egyptian company following a car accident in Egypt. The accident was fatal for her husband and caused her personal injury. The Claimant claimed damage for her own personal injury as well as for wrongful death in her capacity as the executrix of her late husband’s estate.

Clearly, the originating incident and some damage occurred outside the jurisdiction (Egypt) but – as the Claimant argued – some damage was suffered in this jurisdiction, where she lived (and did so with her late husband). Accordingly, she claimed the English Court had jurisdiction.

The UK Supreme Court agreed. It held that some damage being incurred in this jurisdiction was enough to found jurisdiction over the case. It did not matter, for example, that: the cause of action was complete in Egypt; or that the immediate, direct, damage was suffered in Egypt.

UK vs EU rules

The decision marks a clear departure from the EU rules (the Brussels Recast Regulation). The Brussels Recast Regulation determines jurisdiction between EU member state courts[2]. The fundamental assumption of the Regulation is that a member state based defendant should be sued in their home courts. One exception is where, for tort/delict claims, the damage has occurred in another member state, those courts will have jurisdiction.

Where damage occurs, for the purposes of Brussels Recast, has been interpreted narrowly to mean where the initial or “direct” harm was suffered.

Prior to Brexit, the UK Court was bound to comply with the Regulation if defendants of EU member states were concerned and the UK rules (as above) if not. However, a line of argument had developed in English cases to the effect that the English rules should be interpreted similarly narrowly as the Brussels Regulation. Indeed, Lord Sumption took the view in a Supreme Court judgment concerning a separate issue in the same litigation: “in its current form, the jurisdictional gateway in the English rules for claims in tort was deliberately drafted so as to assimilate the tests for asserting jurisdiction over persons domiciled in an EU member state and persons domiciled elsewhere” (but without deciding the point).

The UK Supreme Court in Brownlie 2 has dismissed this line of argument.

The decision in Brownlie 2 will apply to all tort/delict cases, not just personal injury (as that case concerned).

This may be particularly useful in fraud situations where the relevant events arising in a claim are frequently spread across several jurisdictions.

The minimum threshold for what constitutes damage for jurisdiction purposes remains to be seen. It seems unlikely, though, that economic consequences of the tort/delict alone will be enough – i.e., it probably won’t be enough of a connecting factor for the wronged party’s bank account to be located in the jurisdiction alone.

This article has been co-written by Alex Shirtcliff and Alex Lepretre.

[1] Strictly, after the transition period ended on 31 December 2020.
[2] Plus Norway, Switzerland and Iceland.

Speak to one of our Commercial Litigation specialists

Arrange a call

Enjoy That? You Might Like These:


articles

10 December -
Blake Morgan Banking and Finance Partner, Meera Jansen hosted experts Susan Elliott, Senior Manager from the British Business Bank and Deepesh Thakrar, Senior Director at OakNorth Bank, in an insightful... Read More

articles

10 November -
Often, business leaders assume cyber security is the IT department’s sole responsibility. This is a common misconception. Given the valuable data held by finance functions, and the cyber security issues... Read More

events

15 October -
If growth is on the agenda for your business then you may find that a reliance on single-source-finance could slow progress or even stone wall strategic investments. A wide variety... Read More