The width of the tort service out “gateway”

For the purpose of assuming jurisdiction over tort claims based on damage sustained within the jurisdiction, should the English court refer only to direct, immediate, injury, or also to consequential losses? That was the essential question for the UK Supreme Court in FS Cairo (Nile Plaza) LLC v Brownlie [2021] UKSC 45.

Sir Ian Brownlie QC was one of the foremost public international lawyers of recent times. In 2010, whilst on a family holiday in Egypt, he was involved in a car accident on a sight-seeing tour arranged through the concierge of his hotel. Tragically, the accident claimed the lives of Sir Ian and his daughter. His wife, Lady Brownlie, and his daughter’s two children, were seriously injured but survived.

Since then, Lady Brownlie has been attempting, in England, to obtain redress for the incident, claiming breach of contract and tortious liability against the corporate entity that operated the hotel. 

So far, the proceedings concern Lady Brownlie’s attempt to obtain permission to serve the claim form out of the jurisdiction. Insofar as her claims are founded in tort, the case has raised the question of whether they can correctly be said to fall within the tort “gateway” of CPR PD6B, paragraph 3.1(9)(a). That issue came before the UK Supreme Court. 

Service out and CPR PD6B, paragraph 3.1(9)(a)

Under the common law rules on jurisdiction, permission to serve the claim form out of the jurisdiction requires a “gateway” in CPR PD6B paragraph 3.1 to be met, as well as the claim to have a reasonable prospect of success, and England to be the appropriate forum. This case concerns, in the context of a tort claim, the first of those hurdles – in particular, the interpretation of the relevant rule, being CPR PD6B, paragraph 3.1(9) which applies to a claim made in tort where –

(a) damage was sustained, or will be sustained, within the jurisdiction…

(a separate head (b) exists for when the act which caused damage occurred within the jurisdiction, but that was not engaged in Brownlie). 

The question, for the UKSC, was whether “damage”, for these purposes: (i) is limited in scope only to the immediate damage which completes a cause of action (i.e. in this case, the injuries suffered in the car accident, which happened in Eqypt); or (ii) carries a wider meaning of actionable harm, direct or indirect, caused by the wrongful act alleged (i.e. in this case, funeral, medical expenses and non-pecuniary damage arising from the accident and claimed for by Lady Brownlie – which could be said to have been sustained in England). 

As to that issue, the UKSC, by a 4-1 majority, decided that the gateway bore that latter, wider, meaning [81-83]. The court gave a number of reasons, including that the narrow reading would be unjustifiably restrictive [48-51], and that the common law rules on jurisdiction should not be read as having assimilated the approach of EU jurisdictional rules on tort (which, insofar as a concept of damage is relevant, take a narrower view). As to that latter reason, the court concluded that it was permissible for the English common law to take a wider approach, since the common law was not based on the same rules as EU law, and also had the concept of forum non conveniens which could operate as a safety valve to avoid the court assuming jurisdiction where it was not otherwise the most appropriate forum [52-56,77-80].

What about cases involving purely financial loss….? 

The UKSC’s interpretation of CPR PD6B, paragraph 3.1(9)(a) is important, as its expansive view of damage extends the English court’s jurisdictional reach. Unfortunately, however, the impact of Brownlie in tort claims involving purely financial, or economic, loss – rather than personal injuries – is less clear. This is as a result of the manner in which the UKSC surveyed previous English authorities in that sphere [69-76]. Those cases, influenced by EU jurisprudence, took a narrower approach to the meaning of “damage”; focussing on immediate, direct, financial harm, rather than indirect consequences. The UKSC’s approach to these in the Brownlie judgment was, unfortunately, somewhat opaque. On the one hand, the UKSC criticised those decisions for overlooking the differences between the common law and EU jurisdictional regimes [74]. On the other, however, the court did not expressly say that they were wrongly decided and appears to have regarded cases of economic loss as giving rise to a “need for constraints on the legal consequences of remote effects” and as requiring a “careful analysis” in order to determine the jurisdictionally relevant damage [75]. The court went on to suggest that, as, in a personal injury claim, the type of consequential damage before the court will have been suffered “in a very real sense” by a claimant there was, in any event, no inconsistency with those decisions (insofar as they called into question the relevance of more remote consequences) [76].

The sum of the above seems to be that the UKSC might recognise, for these purposes, some distinction between economic loss and personal injury cases. If that is the case, however, then query what is the precise yardstick for carrying out the requisite “careful analysis” of the jurisdictionally relevant damage in cases where a tort causes purely economic loss? In its general rejection of any read across of EU jurisprudence into CPR PD6B, paragraph 3.1(9)(a), and its specific criticism of previous cases in the economic loss sphere for relying on the distinctions drawn therein, the question is left somewhat hanging. Perhaps future cases will provide greater clarity on this latter point. 

Click here for the judgment.