Your Claim's Ticket Out Of The Jurisdiction

Introduction

To serve a claim out of jurisdiction (that is, in the international sense beyond England and Wales) where permission of the court is required, the claim must satisfy a number of conditions (VTB Capital v Nutritek International [2012] EWCA Civ 808):

1. the claimant has a good, arguable case that the claim falls into one of the jurisdictional gateways in PD 6B3.1;
2. there is a serious issue to be tried on the merits of the claim; and
3. England and Wales is the clear appropriate forum for trialling the dispute and the court should exercise its discretion to permit service in all the circumstances.

The standard of proof to meet the above conditions is lower than the usual civil standard of the balance of probabilities. The Claimant must have a "good, arguable case", being a better argument than the Respondent on the material available to the court at the time of the application (Canada Trust Co v Stolzenberg (No 2) [1998] 1 WLR 547). This is known as the "Canada Trust gloss".

In some circumstances, permission may not be required to serve out, for example where the parties have contractually agreed for disputes to be heard by the courts of England and Wales. This article focuses on the procedure where these do not apply and permission of the court is required.

Gateways for contractual & tortious claims

Including the new gateways effective from 1 October 2022, there are 37 possible gateways to service of proceedings outside the jurisdiction. In good news for claimants, the recent expansion captures a wide range of claims.

The focus of this article is contractual and tortious claims, which are covered by Gateways 1, 1A, 6, 7, 8, 8A, 9, and 19.

Gateways 1 & 1A

Prior to 1 October 2022, Gateway 1 allowed claims to be served out of the jurisdiction where the defendant (either an individual or a company) was domiciled within England and Wales (within the meanings of s.41 & 42 Civil Jurisdiction and Judgments Act 1982). This has now been expanded by Gateway 1A, which allows service out of the jurisdiction where the defendant has a branch, agency, or other presence within England and Wales, provided that it is not possible to serve proceedings on the defendant itself.

This is a helpful development for claimants and reflects the operation of a global market, blurring the distinction between each presence of an international entity.

Gateways 6 & 7

Gateways 6 & 7 are not new additions but have been expanded by the recent revisions and are useful to understand as they are specifically for contractual claims.

A contract claim can be served out of the jurisdiction if it is connected with England and Wales, specifically:

1. the contract was made in England and Wales;
2. the offer that was accepted to conclude the contract was received in England and Wales;
3. the contract was made by or through an agent trading or residing in England and Wales; or
4. the contract is governed by the law of England and Wales.

These conditions are set out in Gateway 6. However, even if the contract itself is not sufficiently connected with England and Wales, it may still be possible to serve a contract claim out of the jurisdiction if the breach is connected. Gateway 7 provides for contract claims where the breach was, or is likely to be, committed within England and Wales.

This is helpful for claimants as it provides the English High Court potential jurisdiction throughout the lifecycle of a contract, rather than limiting this to the contract's creation.

Gateways 8 & 8A

Gateway 8 provides potential jurisdiction over claims for declaration of no contract. To serve this type of claim out of the jurisdiction, the claimant must demonstrate that, if the contract did exist, it would comply with one of the connections in Gateway 6.

Gateway 8A is a new addition and expands the potential defendants to a contract claim served out of the jurisdiction. Prior to 1 October 2022, contract claims were limited to the contractual parties. This position has expanded to claims against entities that unlawfully caused or assisted in a breach of contract (similar to the English law concept of an economic tort). Either a connection from Gateway 6 or Gateway 7 is required to serve a claim under Gateway 8A, or:

1. the court has the power to determine the claim under the 2005 Hague Convention and the defendant is a party to an exclusive choice of court agreement conferring the appropriate jurisdiction;
2. the contract states England and Wales as having jurisdiction;
3. the defendant is the business party in a consumer contract; or
4. the defendant is the employer party in an employment contract.

This is helpful for claimants as it expands the range of potential claims (and defendants) that can be served out of the jurisdiction.

Gateway 9

This is the gateway through which tortious claims (such as claims for negligence or for interference with contractual rights) can be served out of the jurisdiction. Similarly to contractual claims, there must be a connection between the claim and England and Wales, specifically:

1. the damage was, or will be, sustained within England and Wales;
2. the damage results from an act committed, or likely to be, within England and Wales; or
3. the claim is governed by the law of England and Wales.

Whilst this is not a new gateway, in 2021 its scope was considered and decided upon by the Supreme Court in FS Cairo (Nile Plaza) LLC v Lady Brownlie [2021] UKSC 45. The point of contention was whether the concept of "damage" should be construed narrowly, being a claimant in England and Wales sustaining harm directly from a defendant's wrongful conduct overseas, or widely, being a claimant in England sustaining harm both directly and indirectly (including ongoing pain and suffering, and loss of earnings).

The Supreme Court held by a 4:1 majority that, in personal injury claims, "damage" should be given its "ordinary and natural meaning" and there was no reason to limit its scope – indirect/ongoing suffering was therefore covered by Gateway 9. By contrast, in pure economic loss claims, only direct damage would satisfy the criteria.

This distinction is important for claimants to note, as the scope of Gateway 9 is dependent on the type of tortious claim.

Gateway 19A

Specifically for the Shipping sector, Gateway 19A allows for admiralty claims to be served out of the jurisdiction. This is not a new gateway, but it may be helpful for claimants to note the requirements:

1. the nature of the claim is that of salvage, with any part of the services taking place within England and Wales; or
2. the purpose is to enforce an oil pollution or pollution damage claim (under ss.153, 154, 175, or 176A Merchant Shipping Act 1995).

The conditions for admiralty claims are succinct and discrete. Most Shipping claims will be contractual, and therefore claimants should review the requirements under Gateways 6 to 8A.

To conclude, PD6B 3.1 contains numerous gateways through which claims may be commenced in the English High Court and served on a defendant out of the jurisdiction.

Each gateway contains its own criteria that must be met, and claimants should take legal advice at the outset to ensure service out of the jurisdiction is valid. Failure to do so is likely to result in increased costs, with the potential for a court hearing on the validity of jurisdiction alone, before the merits of the case are even considered.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.