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Articles | Tue 26th May, 2020
It’s been another busy week at 1 Chancery Lane. No sooner had we torn our eyes from the ongoing Refunds Saga (we see that BA are now offering Avios points instead of refunds; whatever will they think of next?), than Brexit reared its head once more. And as if that were not enough, there’s been another decision involving expert evidence on local standards. Add to that the team’s news referred to at the end of this briefing, and really our cup runneth over, as the psalmist has it.
Europe and Enforceability
The below picks up from an article by Matthew Chapman QC of a few weeks ago on Brexit and the Lugano Convention.
Back to Brexit, and it was reported last week that negotiations between the UK and EU teams had reached something of an impasse. Le plus ça change… The principal issue on which the parties are someway apart is the so-called level playing field (rules on labour, environment, tax etc) in the free trade agreement. Although this much-trumpeted FTA is only one of the whole cosmos of spheres of UK-EU27 cooperation which will need replacing, deadlock in one zone risks the whole board. And one area for increasing concern in the UK legal sector as the clock continues to tick is what, if any, deal will be reached on what is labelled ‘Civil Judicial Cooperation’ (CJC).
Rewinding to Autumn 2017, Brexitorians may recall that CJC was introduced into withdrawal discussions as an area which would require ‘winding down’ provisions in the Withdrawal Agreement. Eventually this led to Title VI of Part 3 of the Withdrawal Agreement where, in broad terms, we see how the Rome and Brussels Regulations continue to apply to actions which ‘straddle’ the end of the transition period. What Title VI does not tell us, is what the future of CJC looks like where the actions are firmly footed after the end of the transition period. This is an effect of the EU’s ‘sequencing’ requirements for negotiations, which meant that discussions on the future were excised from those on divorce (except interestingly when it came to cheese and ham – but that’s a different story).
By virtue of the EU’s ordering of events, the UK lost some of that leverage which armchair negotiators were always fierce to discuss. There could be no horse-trading between UK offers on orderly exit and EU offers on the new relationship, and this has led to potential UK losses across the board, including on CJC. The UK’s desire has always been to accede to both the Hague and Lugano Conventions, key interstate agreements in CJC matters including enforcement of judgments. The former Convention did not need any negotiation, as the UK can unilaterally accede to Hague without needing sign-off from the other Parties (in fact, the UK did take steps way back in January 2019 to do just that); for the second, however, agreement is needed from both EFTA and the EU (as Matthew Chapman QC noted, the EFTA states have already nodded their approval). The UK could not get this agreement as part of the withdrawal package, and so into the current pot of ‘UK asks’ another chit goes.
It’s a big pot, and it’s already full of fish, crops, livestock, databases, satellites, universities, and lorries; a lot of lorries. And (putting this as neutrally as possible), the EU’s pot is likely slightly smaller and they’ve already secured a fair bit of what they wanted (including that cheese and ham I mentioned before). The auguries for an agreement on Lugano are, in my view, not good. The Prime Minister’s Europe advisor, David Frost, last week suggested that the UK was willing to compromise on the ask of zero-tariffs across all sectors; this amounts to a pretty big concession – fairly significant trade barriers accepted in return for sovereignty over LPF rules.
Given any EU ask on Lugano will probably involve the four dreaded letters C-J-E-U, one can rapidly see how quickly the sides might agree to take this particular horse off the trading floor.
And, in fact, its availability for trade always has been illusory. Keen-eyed observers will have seen that although it was a withdrawal issue, CJC did not make the cut in the Political Declaration. This document would have been the place to look for lawyers working in cross-border disputes wanting to know what the sun rising on the New Era might look like. The document is silent on such matters, save for a very brief section outlining an intention to “explore” judicial cooperation in family matters (paras 55-56) – but nothing beyond. Slides produced for negotiations by TF50 in 2018 (remember that was the time when EU-friendlier Sir Oliver Robbins was at the helm) were equally silent on any offer in this area.
Tempus fugit. By 30th June we will know whether a transition extension will be agreed. Assuming no, the deadline for agreement on Lugano is 30th September (allowing for three months’ notice of accession). In international negotiation terms this is quite a short time to go from silence to handshake, even without the present elephant-in-the-room externalities.
In the event of a ‘no deal’ on CJC, judges and lawyers in England and Wales would of course still be well versed in the enforcement of foreign judgments, dealing with such as we currently do for non-Lugano States under the common law. But for judgment creditors, enforcing English judgments abroad will naturally become a more difficult prospect, with the potential for 31 different rulesets. The risk for the UK legal services market may be that claimants with a choice of jurisdiction will opt to bring their actions in an EU State, and shop for their legal services elsewhere. Will someone, please, think of the lawyers?
About the Author
Tom Yarrow is chambers’ latest acquisition, having been called in 2018. Before joining chambers Tom was a civil servant working in various government departments, including as a policy advisor on the UK-EU Withdrawal Agreement at the Department for Exiting the European Union. During pupillage he worked with the Government Legal Department, practising in public law in the fields of public international law, justice and security, human rights and immigration. He has regularly appeared in judicial review proceedings for the Secretary of State for the Home Department, and as a member of the Attorney General’s ‘junior junior’ scheme, he is able to take instructions directly from government clients. He now practises in all of chambers’ practice areas and is an enthusiastic and valued member of the travel team.
Set Aside and Standards
We were interested to see reports of a decision which seems to suggest that the requirement for Claimants to adduce evidence of local standards might be weakening.
The Claimants, Dimitris Palaiokrassas and Eftykia Tsakou, went on a package holiday in October 2016. As part of the package they took a flight from Addis Ababa to South Omo, in Ethiopia, performed by a local supplier. As it touched down, however, the aircraft left the runway and collided with a tree, bursting into flames, and causing the Claimants to sustain significant injuries.
The Claimants duly brought a claim against the tour operator, relying on a local accident investigation report as supporting their assertion that the incident was due to negligence on the part of the pilot. The Defendant failed to file or serve an Acknowledgement of Service timeously, and accordingly the court entered Judgment in Default. The Defendant applied for judgment to be set aside on the basis that it had a reasonable prospect of successfully defending the claim. It asserted that in order for the claim to be successful it would be necessary for the Claimant to show what the local safety standards were, and that they had been breached. In the absence of expert evidence, so it alleged, there was a reasonable prospect that the claim could successfully be defended.
The court accepted the Claimants’ counter-argument that aviation is governed by a set of international rules, however, Master Thornett observing:
“I entirely accept the claimant’s submissions that it surely cannot be defence having any realistic prospect of success to argue that there might be a different local standard in Ethiopia how to fly and land an aircraft; as distinct from, say, standards of maintenance or cleansing. The defendant fails to satisfy me that anything could be argued to the effect that the manner in which an aircraft is operated can vary from locale to locale: with or without the assistance of expert evidence in this regard.”
Interesting. But is the decision of any wider application?
The first point to bear in mind is that generally it will be for a Claimant to prove his or her claim, whereas in the case of an application to set aside judgment it is for the Defendant to prove that it has a reasonable prospect of success. Where there is an evidential vacuum the burden of proof becomes of critical importance; a claim might fail for lack of expert evidence, but if judgment in default has been entered it might not be set aside in the absence of some evidence in support of a defence.
Secondly, the Claimants’ case that aviation is an international operation was a strong one. Readers will recall the classic statement of the nature of the duty owed by tour operators set out in Wilson v Best Travel Ltd  1 All ER 353 by Phillips J:
“…Save where uniform international regulations apply there are bound to be differences in the safety standards applied in respect of the many hazards of modern life between one country and another…the duty of care of a tour operator is likely to extend to checking that local safety regulations are complied with. Provided that they are, I do not consider that the tour operator owes a duty to boycott a hotel because of the absence of some safety feature which would be found in an English hotel unless the absence of such a feature might lead a reasonable holidaymaker to decline to take a holiday at the hotel in question…”
This, surely, is a rare example of a claim falling within the first limb of Wilson; where uniform international regulations apply. Or so, at least, the Master appears to have concluded.
Bearing these factors in mind, I do not think that the decision can be taken as an indication that the requirement for a Claimant to adduce evidence of local standards has been diluted in any way. Even in claims arising out of road traffic accidents, in which there has been some debate over the years in relation to the necessity for expert evidence on local standards, it is probably necessary for Claimants to obtain evidence of local driving mores. After all, it is by no means clear that there is international consensus on driving, the most obvious example of which being that some countries drive on the correct side of the road, and others on the right side of it; and most countries have their own version of the Highway Code, many of which differ in subtle ways.
In the view of the author, therefore, it is still necessary for most Claimants in package travel claims to obtain and adduce expert evidence of local standards in the usual way; but if a Defendant wishes to have judgment set aside, it should obtain its own expert evidence in support of its position.
About the author
Called to the Bar in 1997, Sarah Prager has been listed in the legal directories as a Band 1 practitioner in travel law for many years. Together with her colleagues at 1 Chancery Lane, Matthew Chapman QC and Jack Harding, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade.
Price Hikes and Profitability
Many countries across Europe have begun to relax their lockdown measures. In a recent televised address, foreign tourists were informed by the Spanish Prime Minister that international tourism will resume in Spain from July. Whilst many other countries have not, as of yet, considered opening their borders to tourists, this news provides a glimmer of hope for the travel industry. However, there are growing concerns that the cost of going on holiday will be far greater than before, as businesses attempt to recoup their Covid-19 related losses.
It appears inevitable that, following lockdown, some of the costs associated with going on holiday will increase. When looking at the aviation industry, it is plain that enforcing social distancing on flights is not a feasible business model, particularly as rows of seats may have to be left empty. In addition, the cost of package holidays, or indeed hotel stays, or holiday lets, are likely to rise. Hotels will remain underfilled to ensure social distancing can adequately take place. Moreover, there will be additional costs associated with cleaning and training of staff, as well as the provision of PPE, which will have to be recouped somewhere.
Even if holidaymakers overlook these potential costs to go on holiday, they could be faced with further unforeseen expenses when they reach their destination. Recent reports have indicated that some Italian businesses, such as coffee shops and restaurants, have increased their prices by over 50% following lockdown. There is, of course, a possibility that local businesses may instead compete with each other, slashing their prices to lure in tourists. However, this course of action seems unlikely, as the costs of overheads and wages will have to be met to allow a business’s survival.
There is a possibility that increased holiday costs could render travel an elitist activity. The once-cheap breaks to Benidorm could soon outprice tourists from travelling there at all. As holidaymakers face their own increased money worries in the face of furlough schemes and redundancies, it appears inevitable that expensive holidays will drive tourists away. This raises the question as to whether the golden age of travel is over, or if it can ever be reclaimed.
About the author
Dominique Smith was called in 2016 and undertook pupillage in chambers under Jack Harding, Andrew Spencer and Sophie Mortimer. Her experience as a pupil in the field of travel law translated into a busy practice, and she is now a highly regarded practitioner within the area in her own right. She undertakes work for both Claimants and Defendants and has a particular interest and expertise in Coroners’ Inquests.
The travel team at 1 Chancery Lane is delighted to congratulate Jack Harding and Andrew Spencer on their appointment as Deputy District Judges. We regard this as the best of both worlds: most of the time they will continue to represent their clients without fear or favour, but they will also be able to devote some small portion of their time to educating the judiciary on the niceties of cross border litigation in a less adversarial context. Together with His Honour Judge Saggerson, it seems to us that the Lord Chief Justice now has a dream team of travel lawyers on his hands; we hope he knows how lucky he is.