The Supreme Court clarifies the tort gateway for service out

In FS Cairo (Nile Plaza) LLC v Brownlie [2021] UKSC 45, the Supreme Court clarified the law in two separate areas, both of which are a frequent consideration for complex, multi-jurisdictional litigation: (i) the scope of the first limb of the tort gateway for permission to serve out under Practice Direction 6B (Service out of the jurisdiction) (PD6B) and (ii) the default application of English law to claims and the presumption that foreign law is similar to English law.

Background

The case arose from a car accident during an English family’s holiday in Egypt. The claimant, Lady Brownlie, suffered serious injury and members of her family died or were also injured. The car journey had been arranged by the defendant, an Egyptian company. The claimant argued that the English Courts had jurisdiction on the basis that the damage for her personal injury, damage in her capacity as her husband’s executrix and damage for bereavement and loss of dependency were sustained in England following her return from Egypt and therefore “damage was sustained… within the jurisdiction” for the purpose of PD6B para 3.1(9)(a). This was the major issue of the case.

The claimant pleaded that Egyptian law applied to her claims but did not plead the content of the relevant Egyptian law, which raised a separate issue relating to the required level of detail in the pleading of foreign law to demonstrate the claim had a reasonable prospect of success for the purpose of CPR 6.37(1)(b) (Application for permission to serve the claim form out of the jurisdiction).

Scope of the tort gateway

Lord Lloyd-Jones gave the majority judgment on the scope of PD6B para 3.1(9)(a). He found that damage from the car accident was sustained in England on the basis that “actionable harm, direct or indirect, caused by the wrongful act alleged” had taken place in England in the form of pain and suffering, loss of amenity and the financial consequences of the death of the claimant’s husband. He drew on a line of English cases dealing with situations where injuries occurred overseas and which found that it was sufficient for the tort gateway that some significant damage was later sustained in England.

Lord Lloyd-Jones rejected an argument that a distinction should be drawn between direct or immediate damage (the injury sustained in Egypt at the time of the car accident) and later or indirect damage. This involved rejecting a parallel with article 7(2) of the Recast Brussels Regulation where courts have drawn a distinction between direct and indirect damage when locating “the place where the harmful event occurred”. The context of a personal injury case was significant here and Lord Lloyd-Jones’ judgment indicates that courts may apply more scrutiny to pure economic loss cases so “remote effects” do not become sufficient to establish jurisdiction.

The majority’s ruling raises the obvious risk of making it too easy to bring claims in England when the underlying acts took place overseas. Lord Lloyd-Jones stressed the requirement under CPR 6.37(3) that England is the proper place (or forum conveniens) to bring a claim as a safety valve allowing the courts to refuse jurisdiction where claims only have a casual or adventitious connection with England.

Lord Leggatt gave a dissenting judgment on the tort gateway, in favour of confining the gateway to direct damage. He found there should be a distinction between the jurisdiction gateways, which should look backwards at the connection between the jurisdiction and the underlying facts of the claim, and consideration of the proper place to bring a claim, which should look forward to appropriate place to conduct the trial. Lord Leggatt gave the potentially controversial view that English judges tend to overestimate the appropriateness of conducting litigation in England with the result that the proper place test is not a sufficient safety valve for an overly wide tort gateway test.

Pleading foreign law

Lord Leggatt gave the Court’s decision on whether the claimant had pleaded the content of Egyptian law in sufficient detail to demonstrate a reasonable prospect of success. His judgment is a helpful explanation of the relevant law. He distinguished between the “default rule”, which provides that English law is taken to apply to all claims, wherever arising, unless foreign governing law is pleaded, and the “presumption of similarity”, which is an evidentiary presumption that the content of foreign law is presumed to be similar to the relevant English law. The presumption of similarity only arises where the court feels safe to assume that general legal principles will align across jurisdictions. As such, the presumption will be more likely to apply in areas of common law and basic principle (such as contract and tort) and less likely to apply in specialist areas (such as tax or financial regulation).

While relying on the presumption of similarity may be convenient for claimants seeking to file claims in a hurry, Lord Leggatt identified an important risk in this approach: the normal rules of pleading apply and claimants may not receive permission to change their case if it later becomes expedient.

In this case, the default rule did not apply because the claimant had pleaded Egyptian governing law. For the purpose of deciding whether there was a reasonable prospect of success, Lord Leggatt was comfortable to assume that a hotel operator who entered a contract to arrange an excursion for guests would have obligations in contract and tort under Egyptian law. Nonetheless, the Court upheld an order that the claimant should fully plead her case on Egyptian law as a case management matter.