Gate wide open but play by the rules: Supreme Court provides definitive guidance on jurisdiction and applicable law in foreign accident cases

England and Wales

The Supreme Court has delivered clear guidance on the tort gateway and the treatment of foreign law cases. The interpretation of damage is given a broad meaning and how the presumption of similarity operates is clarified. FS Cairo (Nile Plaza) LLC v Brownlie [2021] UKSC 45 will be a welcomed  ruling for claimants who have suffered injury abroad but continue to suffer the consequences of those injuries when they return to England. It may also be welcomed by travel insurers who may now be able to take recovery actions for travel claims in the UK.

The facts of the case are relatively straightforward, but the procedural twists and turns have been far from that.

Background

In January 2010, Lady Brownlie was staying at the Four Seasons Hotel in Cairo with her husband, stepdaughter, son-in-law and grandchildren. In advance of her trip, Lady Brownlie booked a chauffeur driven excursion, via the telephone, with the hotel concierge. Whilst on the trip, the vehicle left the road and crashed, sadly killing Sir Brownlie and his daughter, and the remaining passengers were seriously injured.

In 2012, Lady Brownlie pursued a claim in tort and contract against Four Seasons Holdings Incorporated, a Canadian company. However, in 2018, the Supreme Court determined that the Four Seasons Holdings Incorporated was a non-trading holding company who did not own or operate the hotel in Cairo, meaning that the courts of England and Wales had no jurisdiction to try the claims against it. The Supreme Court granted Lady Brownlie permission to amend the name of the defendant so that she could pursue a claim against FS Cairo. The case was passed back to the High Court.

Lady Brownlie required permission to serve the fresh proceedings against FS Cairo outside of the jurisdiction and was required to show that in respect of each claim in contract and tort:

  • It fell within a jurisdictional gateway under CPR Practice Direction 6B;

  • The claim had reasonable prospects of success; and

  • England and Wales was the proper place to bring the claim.

The High Court and a majority of the Court of Appeal considered that Lady Brownlie met the elements of the test in relation to the claims she pursued, and permission was granted for her to serve her claims on FS Cairo.

FS Cairo appealed to the Supreme Court.

The issues before the Supreme Court

The Supreme Court had considered the issues before it previously when considering the claims against Four Seasons Holdings and had found in favour of Lady Brownlie. It was asked to reconsider the issues again, as follows:

Issue One

The Supreme Court was asked to consider the definition of the procedural gateway through which claimants can gain the jurisdiction of the English courts, and in particular the meaning of damage under CPR6.36 and Practice Direction 6B.

Issue Two

The Supreme Court had to consider the proper approach to the applicable law: could Lady Brownlie rely on a presumption that Egyptian law is the same as English law in order to establish that each of her claims had reasonable prospects of success?

The decision

The Supreme Court dismissed the appeal on both issues.

Issue One

By a majority, the Supreme Court held that the word “damage” in paragraph 3.1 (9)(a) of PD 6B refers to actionable harm, caused by the wrongful act. Therefore, it is only necessary that some of the actionable damage, whether direct or indirect, has been sustained in the jurisdiction of England and Wales, meaning that even where the tortious act has occurred abroad, the claim will pass through the tort gateway.

Leggett LJ dissented, preferring a narrow interpretation of paragraph 3.1 (9)(a) of PD 6B under which Lady Brownlie’s claims would not pass through the gateway as all of the damage was sustained in Egypt.

Issue Two

In this case Egyptian law was the agreed applicable law under Rome II principles. The Supreme Court held that once the applicable law is determined, absent evidence to the contrary, it is permissible to rely on a presumption that foreign law is similar to English law. This was sufficient for Lady Brownlie to get over the initial hurdle of demonstrating a reasonable prospect of success.

However, the court observed that “reliance on the presumption does not alter the ordinary rules of pleading. If a claimant chooses not to plead a case based on any specific rules of the foreign law, hoping to be allowed to do so later if it becomes expedient, the claimant takes the risk of needing to persuade the court at a future date to grant permission to amend - just as in any other situation where a party seeks to change its case. There is no special dispensation for a party who has previously chosen to rely solely on an evidential presumption.”

The Court directed that Lady Brownlie should plead out her case properly under Egyptian law and state clearly what principles of that law she was relying on.

Conclusions

The Supreme Court has provided definitive guidance on the tort gateway in foreign personal injury cases. “Damage” is not limited to the immediate damage caused in any accident or incident, but stretches to the continuing consequences of those injuries. Where the consequences of that injury continue in the English jurisdiction, the English courts will take jurisdiction. Insurers and corporate defendants take heed: a claimant’s pathway to the English courts is now much simpler.

Everyone involved in such cases should bear in mind the consequences of the ruling on how to deal with applicable law issues. Where it is agreed or ruled that a foreign law is the applicable law, do not leave lacunas in either the pleaded case or the evidence on that law. Reliance on the presumption that, absent evidence to the contrary, foreign law is similar to the English law might not be enough.

Whilst the gateway might now be “an open territory with no fence,” remember that if you choose to play in an English field, you have to play by English rules, and you should come armed to prosecute your case or defend yourself and not expect the English courts to simply fill in any gaps in the case.