Jurisdictional gateway and foreign law issues considered by Supreme Court

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On 20 October 2021, the Supreme Court handed down its most recent judgment in the ongoing litigation in FS Cairo (Nile Plaza) LLC v Lady Brownlie [2021] UKSC 45. The most important point to note is the Supreme Court’s wide interpretation of the term “damage… sustained… within the jurisdiction” in respect of the type and severity of damage required to allow a claim in tort to pass through the relevant jurisdictional gateway within Civil Procedure Rule PD6B 3.1.

Read the full judgement here: FS Cairo (Nile Plaza) LLC v Brownlie

Factual and Procedural History

The litigation arises out of an unfortunate fatal accident during a holiday in Egypt in January 2010. Lady Brownlie had booked a limousine safari excursion via telephone through the Four Seasons Hotel Cairo from the United Kingdom, which subsequently took place on 3 January 2010. Towards the end of the tour, the vehicle crashed, tragically killing Lady Brownlie’s husband and his daughter. Lady Brownlie and her husband’s grandchildren were seriously injured during the accident.

The legal proceedings seeking damages in contract and tort for Lady Brownlie’s own injuries, on behalf of her late husband’s estate, and for bereavement and loss of dependency, were originally issued in England in December 2012. In April 2013 Lady Brownlie was granted permission to serve the proceedings out of jurisdiction. That order was set aside by order in July 2013, but was then restored in February 2014. The restoration was affirmed by the Court of Appeal in July 2015, who also granted the defendant, Four Seasons Holdings Incorporated (“FSHI”), permission to appeal to the Supreme Court.

The Supreme Court allowed FSHI’s appeal in its judgment in December 2017 because it emerged that FSHI was a non-trading holding company which did not own or operate the hotel. Lady Brownlie was granted permission to apply to correct the name of the defendant, and subsequently applied to substitute FS Cairo (Nile Plaza) LLC (“FS Cairo”) for FSHI and to serve the claim out of jurisdiction.

In October 2019, it was ordered that FSHI cease to be a party and FS Cairo be added as defendant. Because FS Cairo is based in Egypt, Lady Brownlie required permission to serve proceedings outside the jurisdiction. In order to do so, it must be shown that:

  1. The claim falls within a jurisdictional gateway under the Civil Procedure Rules
  2. The claim has a reasonable chance of success
  3. England and Wales is the proper place to bring the claim

The High Court decided that Lady Brownlie had met all three elements of the test, and was therefore granted permission to serve proceedings out of jurisdiction. In July 2020, the Court of Appeal affirmed this decision. FS Cairo appealed to the Supreme Court on the first two of these requirements.  

Issues on appeal

There were two issues before the Supreme Court:

  1. Whether Lady Brownlie’s claim in tort was sufficient to establish that the relevant jurisdictional gateway was satisfied (“The Tort Gateway issue”).
  2. Whether Lady Brownlie had established that her claims had a reasonable prospect of success, and specifically whether she must adduce evidence of Egyptian law to do so (“The Foreign Law issue”).

On the Tort Gateway issue, Lady Brownlie was successful with a 4:1 majority (Lord Leggatt dissenting). The court held that in order for a claim to pass through the jurisdictional gateway, it is necessary for some significant damage to have been sustained in England or Wales. Lord Lloyd-Jones saw FS Cairo’s argument that “damage” should be restricted to the direct damage suffered, and not to the “financial or physical consequences of that damage” as unduly restrictive, and further concluded that whilst the direct damage (the injuries/deaths) occurred in Egypt, the indirect damage (pain, suffering and financial implications) were continuously felt first in Egypt, then in England.

Whilst FS Cairo argued, on the Foreign Law issue, that Lady Brownlie must adduce evidence of Egyptian law to show her claims had a reasonable prospect of success, Lady Brownlie submitted that in the absence of evidence of relevant Egyptian law, the court should apply English law. The judges were unanimous in finding in favour of Lady Brownlie, but held that neither party was correct on the facts, and instead applied the “presumption of similarity”, that being: in the absence of evidence as to what the Egyptian law is, it will be assumed to be similar to English law on the relevant issue.

Comment

  • Since Brexit, litigation lawyers have been awaiting guidance concerning claims being issued out of jurisdiction. This decision brings some post-Brexit clarity as to the framework for the tort gateway and what types of damage will satisfy the requirements, but what remains unclear is the level of damage required to allow a claim to pass through the gateway. It is envisaged that this is a point that will prompt further litigation in the future, and foreign defendants or their indemnity insurers may wish to consider challenging jurisdiction on cases where there is any question as to the severity of damage suffered in this jurisdiction.
  • Despite the above, this will be a welcome decision to claimants, enabling them to issue in this jurisdiction against foreign defendants for accidents occurring in foreign jurisdiction with confidence that the tort gateway has been interpreted widely enough to capture the subsequent indirect damage suffered in England and Wales.
  • A claimant may have the ability to bring claims in this jurisdiction against foreign defendants, but where they are successful, enforcement becomes an issue. It is widely recognised that it is challenging to enforce the judgment of an English court in foreign jurisdictions, particularly those that adopt a Civil Law system as opposed to Common Law.
  • The final point to note is Lord Leggatt’s powerful dissent, in which he discusses the “unfair tactical advantage” that the wider interpretation of the phrase “damage sustained… within the jurisdiction” would provide to claimants and argues that it is “tantamount to holding that claimants in tort have the option of suing in … their own country”. A particularly thought provoking and noteworthy point of Lord Leggatt’s dissenting judgment is at para 207, where he contemplates the situation in reverse, where a British citizen who has lived in England her whole life carelessly crashes into a vehicle causing serious injury to a tourist from China. Lord Leggatt puts forward the point that the fact that the claimant has suffered continuing pain and loss of earnings in China would not be a link capable of supporting a case for proceedings being brought in China. Despite this strong dissenting voice, however, claimants and defendants ought to be aware that there is no further appeal on this point and that the wider interpretation of the tort gateway will stand. 
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