The English courts have a long-standing and well-deserved reputation for determining a wide range of international disputes. Indeed, up to 75% of the Commercial Court's business involves one or more international parties, while 40% of that work involves no domestic parties at all. However, while parties may be familiar with the reach of the English courts in circumstances where those courts have been designated to determine disputes under a jurisdiction agreement, the process by which the English courts can come to assert jurisdiction in respect of non-contractual claims governed by foreign laws is less well known.
In this article we examine the process by which the English courts may accept jurisdiction in relation to overseas tort claims, and why parties may wish to bring those claims here.
Private international law
The rules of private international law, sometimes also known as conflict of laws, are applied by the English courts to determine (among other things):
- What law applies to claims with a foreign element; and
- Whether to accept jurisdiction over such a claim.
Where there is a direct contractual relationship between the parties to a dispute, the answers to these questions are often found in the terms of the relevant contract. However, in tort cases where there is no applicable contractual provision, the position can be complex.
Applicable law
In order to determine the law applicable to non-contractual obligations in civil and commercial matters, the English courts will apply the rules that were originally set out in Rome II (Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations ), and which have been retained in UK law following Brexit in UK Rome II.
The general rule is that the applicable law is the law of the country in which the damage has occurred. That law will govern the question of liability, as well as limitation and the assessment of damages. This means that, where a negligent act results in damage, such as an oil spill or the collapse of a dam, any resulting claim is likely to be governed by the law of the country where the damage occurred. The question of who is entitled to bring a claim, and whether a foreign parent company may be held liable for the wrongful acts of its subsidiaries, will also be governed by that law.
The general rule may, however, be displaced where the parties are all habitually resident in the same country when the damage occurs, or where it is clear from all the circumstances of the case that the tort is manifestly more closely connected with another country.
Jurisdiction
The fact that a claim is governed by a foreign law does not, however, mean that the English courts will refuse to hear it. The English courts are well equipped to deal with foreign law claims, and deploy a number of tools to determine the content of that law, from the admission of expert evidence to the use of presumptions of similarity.
Instead, and following Brexit, the English court's jurisdiction is based on service of proceedings. The court will generally take jurisdiction where a defendant has been served here (even if they are only here fleetingly) and a company may be served at any place of business within the jurisdiction.
Where a defendant cannot be served in England or Wales, then, provided the claim has reasonable prospects of success and this is the proper place in which to bring it, the claimant may seek permission from the court to serve them in another jurisdiction, utilising one of the applicable jurisdictional "gateways". These gateways offer a wide range of situations where the English court may accept jurisdiction over a claim, including where the defendant is a necessary or proper party to a claim against another defendant who is being sued here. Thus, where a claim is brought against an English parent company in relation to the activities of a foreign subsidiary, it may well be possible to obtain permission to serve proceedings on the subsidiary as well.
Whether permission to serve out is required or not, the defendant may be able to dispute the English court's jurisdiction, including by arguing that there is another more appropriate place than England and Wales to hear the claim, or by contending that the claim is an abuse of process. The existence of concurrent foreign proceedings, together with the location of parties, witnesses and documents, and the ability to obtain justice in the foreign forum will all be key considerations.
Nevertheless, the potentially long reach of the English court's jurisdiction means that it may well be both appropriate and convenient to bring proceedings here and, as the High Court confirmed in Lungowe v Vedanta & Ors [2020] EWHC 749 (TCC), it is entirely within the rules and expressly permissible for overseas claims to be brought here in this way.
The effect of Brexit
Prior to the UK's withdrawal from the European Union, the English court's jurisdiction over defendants domiciled in a Member State (including the UK) was governed by the Recast Brussels Regulation. This essentially provides that defendants should be sued in their country of domicile, and meant that where a claim was brought against a UK company, it was not possible for the English court to refuse to hear it on the basis that there was another, more appropriate forum. That meant, in turn, that the English court was arguably more willing to hear claims against co-defendants based in non-EU jurisdictions, to avoid a multiplicity of proceedings and a risk of inconsistent judgments.
Brexit has meant that this landscape has changed, and opened up avenues for UK-domiciled defendants to contend that claims against them should be heard elsewhere. However, where it is appropriate for the English court to accept jurisdiction, or where there is a real risk that substantial justice cannot be obtained in the alternative location, the fact that a claim appears unwieldy, involving issues of foreign law and consideration of distant events, will not discourage it from hearing the case.
Why England?
That the English courts remain the venue of choice for many contracting parties is no accident. The independence of the judiciary, combined with a sophisticated legal sector and a procedural framework which is adept at dealing with the full range of civil and commercial matters, from low level personal injury claims through to multi-billion pound disputes involving multiple parties, all contribute to making it one of the leading forums for the determination of international disputes.
Legal frameworks in jurisdictions around the world are offering increasingly sophisticated protections to individuals and businesses, whether as consumers or victims of environmental catastrophes. However, where those jurisdictions are currently unable to offer such claimants practical access to justice, whether that is the result of an underdeveloped and inefficient court system, an inexperienced judiciary or limited funding opportunities, the English courts may be able to step in.