Opening the gateway: Supreme Court favours wide interpretation for service out of the jurisdiction and clarifies rules of pleading foreign law
In order to sue a defendant who is outside the jurisdiction of the English courts, a claimant must show that damage was sustained in England.
The UK Supreme Court has confirmed that the initial or direct damage, which gives rise to the claim, need not have occurred in England for the English courts to have jurisdiction. The Supreme Court also clarified the scope of two distinct rules on applying foreign law: the default rule and the presumption of similarity.
Lady Brownlie had booked a holiday to Cairo for her family, including a luxury safari excursion. During the safari tour, the vehicle in which she and her family were travelling crashed. Lady Brownlie was injured and, sadly, her husband was killed along with his daughter.
Lady Brownlie brought an action in the English courts in 2012 against the operator of the hotel seeking damages for her own injuries, for her husband's wrongful death and for bereavement and loss of dependency. She claimed that the Egyptian hotel operator, FS Cairo (Nile Plaza) LLC, had breached an implied term of the contract to take reasonable steps to ensure their safety and also alleged negligence on the part of the hotel operator and the staff operating the tour.
The High Court found that it had jurisdiction to try Lady Brownlie's claims in contract and tort and granted her permission to serve the claim in Egypt. (1) FS Cairo appealed to the Court of Appeal, which affirmed the High Court's decision.(2) FS Cairo appealed to the Supreme Court.(3)
The relevant jurisdiction issue: where was damage sustained?
FS Cairo challenged the application of the jurisdictional gateway in respect of the claims in tort.
Broadly speaking, where a claimant seeks to bring a claim against a defendant domiciled outside England, the common law rules will apply in the absence of a choice of court agreement.
The claimant must satisfy the court that there is a real issue to be tried, that their claim has reasonable prospects of success and that the claim falls under one of the jurisdictional gateways outlined in Civil Procedure Rule 6.37(3) and Practice Direction 6B. Permission will not be granted unless the court is satisfied that England (or Wales) is the proper place in which to bring the claim.
For a tort claim to be served out of the jurisdiction, the claimant must first show either a) that damage was sustained in England or, b) that damage has resulted from an act committed in England.
While here the "act committed" – the car crash – occurred in Egypt, Lady Brownlie argued that she had suffered damage in England: physical pain resulting from her own injuries, and bereavement and financial loss resulting from her husband's death.
FS Cairo submitted that damage was sustained at the place of the initial or direct damage, i.e. the place where the car crash which caused the harm occurred, and that the jurisdictional gateway did not extend to the place at which any further consequences or indirect damage may have been suffered.
The decision on jurisdiction
By a 4 to 1 majority, the Supreme Court rejected FS Cairo's appeal and held that the English courts had jurisdiction.
The court emphasised that the test was where "damage" was sustained, not where "the damage" was sustained. The court considered that the drafters had deliberately omitted the definite article to reflect a previous decision of the Court of Appeal that it is sufficient that some significant damage was sustained in the jurisdiction. In this case, Lady Brownlie had suffered physical and emotional pain and financial loss in England.
The Court also rejected FS Cairo's submission that the English courts should distinguish between direct and indirect damage. Whilst this distinction was present in the EU system, fundamental differences between that system and the English domestic rules made it inappropriate to import the distinction into English law.
There are additional protections in the tort gateway to protect against inappropriate exercise of jurisdiction. The claimant must satisfy the court that England is the proper place to bring the claim and the court has discretion to refuse jurisdiction if it considers the claim would be better heard in another jurisdiction.
Clarification on pleading foreign law: the default rule and the presumption of similarity
The court also shed light on how a party should plead foreign law. The parties were agreed that Egyptian law was applicable. However, FS Cairo contended that Lady Brownlie had failed to adduce evidence of the relevant Egyptian law for certain aspects of her claim, and for those gaps it was wrong in principle to apply English law or any presumption that the applicable foreign law is similar to English law.
Lady Brownlie argued that as Egyptian law had not been shown to differ materially from English law and it was not disputed that the claims had reasonable prospects of success if English law was applied, the claim was sufficiently pleaded for service out of the jurisdiction.
The Court found for Lady Brownlie and clarified the scope of two distinct rules on applying foreign law:
1. The default rule: Neither party is obliged to plead foreign law. There might be practical and cost reasons for not doing so if it would produce the same result as applying English law. A case should generally be tried on the parties' statements of case. If neither party pleads foreign law, the court will apply its own law.
2. The presumption of similarity: This is a rule of evidence concerned with what the content of foreign law should be taken to be. An English court will presume that foreign law is the same as English law where it is fair and reasonable to do so and only in the absence of better evidence. This presumption is rebuttable by either party.
Here, the parties agreed that Egyptian law was applicable. Therefore, there was no scope for applying English law by default. However, in the absence of any evidence of Egyptian law, Lady Brownlie was entitled to rely on the presumption of similarity to show that her claims had real prospects of success (at this early stage of the proceedings) and therefore the claim could be served out of jurisdiction.
This is an important decision on jurisdiction, particularly since, as a result of Brexit and the fact that the UK has not acceded to the Lugano Convention, these common law rules on jurisdiction apply to a much larger number of claims than before. The court has confirmed the width of the gateway for defendants who are injured abroad but suffer the consequences at home to bring a claim in the English courts. This will not be limited to cases of personal injury, but to all tortious claims. The main brake on the English courts' taking jurisdiction in such cases now appears to be whether they consider that England is the proper place to bring the claim (the "forum conveniens").
In this respect, the common law rules (which, absent a choice of courts agreement, now apply to disputes involving EU member states) are now clearly wider than the Brussels Regulation, which previously governed such disputes, such that the English Court may now take jurisdiction over cases which it might previously have declined under the Brussels Regulation. The Brussels Regulation allows the courts of an EU Member State "where the harmful event occurred or may occur" to take jurisdiction in matters of tort, but the Court of Justice for the EU has held that this extends only to the place where direct, rather than indirect, damage occurs.
In relation to foreign law, the court's distinction between the default rule and the presumption of similarity provides a useful guide for litigants looking to save time and costs when litigating an issue, which may be subject to foreign law, in the English courts. That said, the court did suggest that it may be precarious to rely on the presumption later in the proceedings, particularly at trial.
(1)  EWHC 2533 (QB)
(2)  EWCA Civ 996
(3) FS Cairo (Nile Plaza) LLC v Lady Brownlie (as Dependant and Executrix of Professor Sir Ian Brownlie CBE QC)  UKSC 45