STRIKING OUT FOR LACK OF JURISDICTION (OR HADRIAN'S WALL IS THERE FOR A PURPOSE YOU KNOW)
The Court of Appeal decision in Cook -v- Virgin Media Limited  EWCA Civ 1287 is one that needs to be read very carefully. It is one of those cases that could lead to a whole new branch of satellite litigation. However it is a decision of relatively minor impact. It deals with issues relating to those of Scottish domicile bringing actions in the courts of England & Wales (although mostly, it seems, Carlisle). Further the Court of Appeal did not endorse the striking out of the actions, this was not an issue it was asked to consider.
“There is no distinct ground of appeal that the court was wrong to exercise its power to strike out the claim where (as occurred in the case of Cook) the defendant had admitted liability. I accept that the court had the power to make such an order. But in my judgment, to strike out a claim on jurisdictional grounds after a defendant has admitted liability is undesirable.”
- It is possible for a court to strike out an action on jurisdictional grounds even if the defendant has failed to make an application under Part 11.
- It may not be desirable for a court to strike out an action in these circumstances in cases where liability is admitted.
- This case highlights the dangers of those domiciled in Scotland, who suffer accidents in Scotland, attempting to litigate in England because there is an English defendant.
In each case the claimants were domiciled in Scotland and injured in Scotland. The defendant companies were registered in England.
- The claims were issued in Northampton County Court.
- They were then transferred to Carlisle County Court.
- The Defendants did not make an application under Part 11 (disputing jurisdiction) but the defences stated that the Scottish courts were the appropriate venue.
- The District Judge (of his motion) stayed both actions and issued an order that the claimants to file evidence to show why the claims should proceed in England.
- He then make without notice orders striking out both claims on the ground they should be be brought in Scotland.
- The claimants applied to set aside the order but were not successful.
- The claimants’ appeal to the Circuit Judge was also unsuccessful.
THE DECISION OF THE CIRCUIT JUDGE
The Circuit Judge held that the defendants’ failure to make a jurisdictional challenge under Part 11 did not prevent the court, exercising its case management powers, from striking out the claims on the basis that Scotland was the appropriate forum to deal with the cases.
THE DECISION OF THE COURT OF APPEAL
The Master of the Rolls set out the issues.
The most important issue that arises on these appeals (and the reason why Tomlinson LJ gave permission for a second appeal) is whether the doctrine of forum non conveniens can apply in a purely domestic context where the competing jurisdictions are England and Scotland. Put simply, the question is: does the English court have the power in such a case to stay or strike out a claim on the ground that the natural and more appropriate forum is Scotland? It is perhaps surprising that there appears to be no authority directly on the point.
There are two distinct sets of rules governing the question of jurisdiction in civil and commercial cases in this context. The first set of rules derived from various European instruments, culminating in the Brussels I Regulation (EC) 44/2001 (“the Regulation”). Since 10 January 2015, the recast form of the Brussels Regulation, Regulation 1215/2012, has applied. The predecessor of the Regulation was the Brussels Convention of 27 September 1968. The Regulation contains rules which directly determine whether the courts of a particular member state of the EU have international jurisdiction in a particular case.
” (1) The provisions set out in Schedule 4 (which contains a modified version of Chapter II of the Regulation) shall have effect for determining, for each part of the United Kingdom, whether the courts of law of that part, or any particular court of law in that part, have or has jurisdiction in proceedings where—
(a) the subject-matter of the proceedings is within the scope of the Regulation as determined by Article 1 of the Regulation (whether or not the Regulation has effect in relation to the proceedings); and
(3) In determining any question as to the meaning or effect of any provision contained in Schedule 4—
(a) regard shall be had to any relevant principles laid down by the European Court in connection with Title II of the 1968 Convention or Chapter II of the Regulation and to any relevant decision of that court as to the meaning or effect of any provision of that Title or that Chapter; and
………(4) The provisions of this section and Schedule 4 shall have effect subject to the Regulation, Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011 the 1968 Convention and the Lugano Convention and to the provisions of section 17.”
Section 49 provides:
“Nothing in this Act shall prevent any court in the United Kingdom from staying, sisting, striking out or dismissing any proceedings before it, on the ground of forum non conveniens or otherwise, where to do so is not inconsistent with the 1968 Convention or, as the case may be, the Lugano Convention.”
” 1. Subject to the rules of this Schedule, persons domiciled in a part of the United Kingdom shall be sued in the courts of that part.
2. Persons domiciled in a part of the United Kingdom may be sued in the courts of another part of the United Kingdom only by virtue of rules 3 to 13 of this Schedule.”
“1. This Regulation shall apply in civil and commercial
matters whatever the nature of the court or tribunal. It shall
not extend, in particular, to revenue, customs or administrative
“1. Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.”
“Apart from jurisdiction derived from other provisions of this
Regulation, a court of a Member State before which a
defendant enters an appearance shall have jurisdiction. This
rule shall not apply where appearance was entered to contest
the jurisdiction, or where another court has exclusive
jurisdiction by virtue of Article 22.”
“1. For the purposes of this Regulation, a company or other
legal person or association of natural or legal persons is
domiciled at the place where it has its:
(a) statutory seat, or
(b) central administration, or
(c) principal place of business.
2. For the purposes of the United Kingdom and Ireland
‘statutory seat’ means the registered office or, where there is no such office anywhere, the place of incorporation or, where there is no such place anywhere, the place under the law of which the formation took place.”
In my view, cases such as Color Drack shed no light on the question whether the Regulation applies in a case which is solely internal to a member state. That is because it concerned a claim by a person domiciled in one member state against a person domiciled in a different member state. In other words, the requisite international element was present so as to engage the Regulation.
Owusu does not assist either. It is not in dispute that the provisions of article 2 are mandatory and promote the principle of certainty which lies at the heart of the Regulation. But none of this sheds any light on whether the Regulation applies to intra-member state claims. In so far as Owusu sheds light on the question which arises on these appeals, it supports the position of the defendants rather than that of the claimants. The claimant in that case was domiciled in the UK. He had hired from the first defendant (who was also domiciled in the UK) a holiday villa in Jamaica. He suffered injuries on diving from the beach onto a submerged sandbank and brought an action against the first defendant in England and other defendants (Jamaican companies) one of which owned and occupied the beach. The defendants sought a declaration that the court should not exercise its jurisdiction on the grounds that the Jamaican courts were a forum in which the case might be tried more suitably. The CJEU held that, since article 2 of the Brussels Convention was mandatory and contained no express exception relating to forum non conveniens, it was not open to a court of a member state to decline the jurisdiction conferred on it by article 2 on the grounds that a non-member state would be a more appropriate forum, even if the jurisdiction of no other member state was in issue or the proceedings had no connection with any other member state.
At para 25, the court said that it was clear from the Jenard report on the Brussels Convention (OJ 1979 C59, p1 at p8) that “for the jurisdiction rules of the Brussels Convention to apply at all the existence of an international element is required”. At para 26, it said that the international nature of the legal relationship at issue need not necessarily derive from the involvement of a number of contracting states. Thus the involvement of a contracting state and a non-contracting state would also make the legal relationship at issue international in nature. It concluded at para 35:
“It follows from the foregoing that article 2 of the Brussels Convention applies to circumstances such as those in the main proceedings, involving relationships between the courts of a single contracting state and those of a non-contracting state rather than relationships between the courts of a number of contracting states.”
Owusu was a Brussels Convention case. The same approach was applied by the CJEU to a Regulation case in Maletic v lastminute.com GmbH ) Case C-478/12)  QB 424. The question there was whether, in the particular circumstances of that case, there was an international element capable of justifying the application of the Regulation (para 25). In so far as the Regulation replaced the Brussels Convention, the court said: “the interpretation provided by the courts in respect of the Convention is also valid for the Regulation whenever the provisions of those instruments may be regarded as equivalent” (para 27). The second contractual relationship could not be classified as “purely” domestic, since it was inseparably linked to the first contractual relationship which was made through the travel agency situated in another member state (para 29). In other words, if the second contractual relationship had not been made or linked with a person domiciled in another member state, it would have been purely domestic and the Regulation would not have applied.
The legal position has been well summarised in Civil Jurisdiction and Judgments by Professor Adrian Briggs (2015) 6th ed at para 2.28 which is headed “International Scope”. The whole section is relevant. But it is sufficient to refer to the last paragraph:
“The result is that if a matter is demonstrably wholly internal to the United Kingdom, so that the only jurisdictional question which may arise is as to the part of or a place within the United Kingdom which has jurisdiction, it is not one in which the Regulation is designed to have any role. The point may be illustrated this way. Suppose a defamatory statement is made by a person domiciled in the United Kingdom about another such person, and is published in newspapers in England and Scotland. If the question is whether the claimant may or must sue in England or Scotland, or whether the courts of England and Scotland may stay proceedings on grounds of forum non conveniens in favour of the other jurisdiction, the Regulation has no role in answering the question, for the matter before the court is wholly internal to a single Member State. But as soon as the claim is broadened to include complaint of publication by a person outside the United Kingdom, whether the defendant or another, it appears that the Regulation would then apply to all aspects of the jurisdiction of the court.”
For all these reasons, I accept the submissions of Ms Wyles and Mr Sweeting that the Regulation does not apply to these proceedings which were issued in England against companies domiciled in the UK arising from accidents that took place in a different part of the UK, namely Scotland. These proceedings are “purely” domestic. I can now deal with the first two issues quite shortly.
Articles 2 and 60
Since the Regulation does not apply, articles 2 and 60 cannot apply. I accept that, if the Regulation did apply, articles 2 and 60 would preclude the operation of the doctrine of forum non conveniens. That is clear from Owusu and, as I understand it, is common ground. I should mention for completeness that Mr Mead contended that he could rely on article 60 because of its reference to the “place” of domicile. But even if the Regulation applied, this would not avail him. Article 60 is no more than a definitional provision which provides the means by which to identify the member state in which “a company or other legal person or association of natural or legal persons” is domiciled.
Mr Mead submits that this provision has the mandatory effect of obliging the court of a member state before which a defendant enters an appearance to assume jurisdiction unless the appearance was entered to contest the jurisdiction or another court has exclusive jurisdiction by virtue of article 22. But if the Regulation does not apply, article 24 cannot apply.
The 1982 Act
Mr Mead points to the provisions of schedule 4 of the 1982 Act “which contains a modified version of Chapter II of the Regulation”: see section 16(1) and the heading to schedule 4 “Chapter II of the regulation as modified: rules for allocation of jurisdiction within UK”. He therefore submits that, where the Regulation has no application, a regime parallel to the Regulation is imported by schedule 4 into UK domestic law for the purposes of jurisdiction within the UK. He also relies on the fact that section 16(3) provides that, in determining any question as to the meaning or effect of any provision contained in schedule 4, “regard shall be had to any relevant principles laid down by the European Court in connection with….Chapter II of the Regulation”. It follows that, if the doctrine of forum non conveniens would have no application in an international case, the effect of section 16 and schedule 4 is that the doctrine has no application in a purely domestic case. Mr Mead submits that section 49 presents no obstacle to his argument because to stay, strike out or dismiss proceedings on the ground of forum non conveniens would be “inconsistent with the 1968 Convention”, and therefore inconsistent with the Regulation.
I cannot accept these submissions for the reasons advanced by Ms Wyles and Mr Sweeting. Schedule 4 rules are not a mirror of Chapter II of the Regulation. They reproduce the provisions of the Regulation with modifications. The provisions have been tailored to make them appropriate to UK domestic law. The domestic nature of the schedule 4 rules was emphasised by the ECJ in Kleinwort Benson v City of Glasgow DC (Case C-346/93) ECR I-615. In that case, the court said that the principal purpose of the 1982 Act was “to render the Convention applicable in the United Kingdom”; but “it also provides for the allocation of civil jurisdiction as between the separate jurisdictions within the United Kingdom (England and Wales, Scotland, Northern Ireland)”. As Professor Briggs said at para 2.312 (loc cit), the rules set out in schedule 4 apply in relation to the international jurisdiction of the UK courts as well as where there is no international question of jurisdiction, but simply a question as between the national jurisdictions of England, Scotland and Northern Ireland.
In Kleinwort Benson, the court said that it did not have jurisdiction to give a preliminary ruling on the interpretation of articles 5(1) and (3) of the Brussels Convention where the issue was the true interpretation of the 1982 Act in an intra-UK jurisdiction case to which the Convention did not apply. The 1982 Act did not require the UK courts to decide disputes before them “by applying absolutely and unconditionally the interpretation of the Convention provided to them by the [ECJ]” (para 20). In a case where the Convention did not apply, the court of the member state in question was “free to decide whether the interpretation given by the ECJ was equally valid for the purposes of the application of the national law based on the Convention” (para 22).
The insuperable stumbling block for the argument advanced by Mr Mead is the express statutory preservation of the forum non conveniens doctrine in domestic cases by section 49 of the 1982 Act. He seeks to escape from section 49 by saying that it is subject to the requirement that section 49 permits the doctrine to be applied where to do so is not inconsistent with the Regulation. But the application of the doctrine cannot be inconsistent with the Regulation in a purely domestic case to which the Regulation does not apply. The qualifying words “where to do so is not inconsistent with the 1968 Convention or, as the case may be, the Lugano Convention or the 2005 Hague Convention” have no application in a purely domestic case.
It follows that section 49 provides a complete answer to the claimant’s case in relation to the 1982 Act. If the position were otherwise and, as Mr Mead contends, the Owusu jurisprudence were imported into the 1982 Act by section 16 and schedule 4 for the purposes of both international and domestic jurisdiction, it is difficult to see what scope there would be for the application of the doctrine at all. But by making express provision in section 49 for the preservation of the power to stay, strike out and dismiss proceedings on the ground of forum non conveniens, Parliament plainly intended that this important power should remain in being. If it had intended to exclude the power from both international and domestic jurisdiction, Parliament would surely have so provided expressly. It would not have sought to achieve this by expressly preserving the power, but then, in effect, removing it by providing that it can only be exercised where to do so is not inconsistent with the relevant international instruments.
THE CPR ISSUE
Of course the matter of interest to most readers of this blog is the CPR issue. The defendants had failed to make an application under CPR 11. They were deemed to have accepted the jurisdiction. Given this deeming provision how could the court then later strike out the actions for want of jurisdiction.
The CPR issue
CPR 11 makes provision for the procedure for a defendant to dispute the court’s jurisdiction to try a claim. Rule 11(1) provides that a defendant who wishes to dispute the court’s jurisdiction to try the claim or to argue that the court should not exercise any jurisdiction which it may have “may apply to the court for an order declaring that it has not such jurisdiction or should not exercise any jurisdiction which it may have”. A defendant who wishes to make such an application must first file an acknowledgement of service (rule 11(2)) and an application under rule 11(1) must be made within 14 days after filing an acknowledgement of service and be supported by evidence (rule 11(4)). If the defendant (a) files an acknowledgement of service and (b) does not make an application within the 14 day period, “he is to be treated as having accepted that the court has jurisdiction to the try the claim” (rule 11(5)).
No application was made by either defendant under rule 11(1). Having considered the papers in both cases, DJ Park ordered of his own initiative that the claims be stayed on the grounds that Scotland was the most convenient forum. He gave the claimants time to show cause why their claims should proceed in England. Having considered the statements subsequently filed on behalf of the claimants, he remained of the view that the claims should be issued in Scotland and struck out both of them. He gave written reasons for concluding that England was not the forum conveniens and that Scotland was.
The claimants applied to DJ Park for an order setting aside his decision. He gave a full judgment on 30 July 2014. He said that he did not consider that the fact that the defendant in the case of Cook had admitted liability made any difference to the decision that he had to make. He explained in some detail why he considered that the power to stay or strike out on the ground of forum non conveniens was available notwithstanding the European jurisprudence contained in authorities such as Owusu. At para 15 of his judgment, he said:
“Finally, I should stress, I think, that I am not making this decision under Part 11 of the CPR. No application has been made by either Defendant under Part 11 for the court to decline jurisdiction. This decision is being made by the court of its own motion. It is being made because we now under the CPR must actively case manage cases and that includes making sure that they are dealt with for the convenience of all, including the undoubted greater convenience to all the witnesses, lay and expert, if the case is heard in Scotland but also because of the number of Scottish cases which now appear in Carlisle County Court. We seem to be the county court for Scotland. There are a lot of claims coming out of Scotland, both accidents on the road and in factories and in places like Tesco, where proceedings are issued in England.”
Although he did not refer in terms to CPR r 3, it clear that DJ Park was purporting to exercise the wide general case management powers conferred on the court by that rule. Of particular relevance is rule 3.1(2)(m) which gives the court the power to “take any other step or make any other order for the purposes of managing the case and furthering the overriding objective”. The overriding objective, which is defined in rule 1.1, includes dealing with cases justly and proportionately. The court is required by rule 1.1(2)(e) to allot an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases. Rule 3.3 (1) provides that, except where a rule or some other enactment provides otherwise, the court may exercise its powers on an application or on its own initiative.
Mr Mead submits that DJ Park had no jurisdiction to stay or strike out the claim on the ground of forum non conveniens. The defendants’ failure to contest jurisdiction by availing themselves of the rule 11 procedure precluded the court from subsequently invoking the doctrine of forum non conveniens, (whether pursuant to an application by the defendants or of its own initiative). Mr Mead relies on the decision of this court in Hoddinott v Persimmon Homes (Wessex) Ltd  EWCA 1203,  1 WLR 806 in support of his argument. In that case, the court held that, if a defendant does not make an application under rule 11(1)(b), he will be treated as having accepted that the court has and should exercise its jurisdiction to try the claim.
I shall assume that, in the circumstances that occurred in the present cases, where the conditions stated in rule 11(5)(a) and (b) were satisfied, it was not open to the defendants to apply for an order staying, striking out or dismissing the claims on the ground of forum non conveniens. But the reasoning in Hoddinott does not touch the question whether the court, acting of its own initiative and exercising its case management powers in accordance with the overriding objective, was prevented by reason of the defendants’ failure to make an application under rule 11(1) from exercising jurisdiction which it would otherwise have been able to exercise to try the claims. What DJ Park said about this at para 15 of his judgment (and upheld by HH Judge Hughes QC) was correct.
This aspect of the appeals is limited to the question whether the court had and could exercise the power to invoke the doctrine of forum non conveniens where the defendants had failed to make an application under rule 11(1) within the 14 day period (or at all). There is no distinct ground of appeal that the court was wrong to exercise its power to strike out the claim where (as occurred in the case of Cook) the defendant had admitted liability. I accept that the court had the power to make such an order. But in my judgment, to strike out a claim on jurisdictional grounds after a defendant has admitted liability is undesirable. The better course in both cases would have been to stay the proceedings under rule 3.1(2)(f). But as I have said, the decision of the district judge to strike out, rather than stay, the claim is not the subject of the appeals to this court.