Special Briefing: Claims under the Civil Liability (Contribution) Act 1978 and Applicable Law

Those practitioners undertaking cross-border work regularly encounter several conundrums; one of these is the question of where the Civil Liability (Contribution) Act 1978 fits into the applicable law regime. The decision of the Court of Appeal in Roberts v The Soldiers, Sailors, Airmen and Families Association [2020] EWCA Civ 926, handed down on 17^th July, provides some clarity on the issue.

The facts

The facts of the case are straightforward but tragic. Harry Roberts sustained a brain injury at the time of his birth in June 2000. It was claimed on his behalf that his injury arose as a result of negligence on the part of the midwife, who was employed by the First Defendant, which sought an indemnity from the Second Defendant, the Ministry of Defence. Both Defendants, in turn, sought an indemnity from the Additional Party, the hospital, pursuant to the provisions of the Civil Liability (Contribution) Act 1978.

The question

It was common ground that the applicable law was that of Germany, the alleged clinical negligence having occurred in that jurisdiction. Under German law, any claim for contribution or indemnity was time-barred; but under the Act, it was not. The question therefore arose: does the Act have extraterritorial effect?

Master Yoxall, with the consent of the parties, had defined the preliminary issue as follows:

“a. the defendant’s claims for contribution against the part 20 defendant will not be time-barred if the question whether the defendants are entitled to contribution is covered by English law by reason of the applicability of the Civil Liability (Contribution) Act 1978…, but will otherwise be time-barred because German law applies;

1. the relevant question for the purposes of the trial of the preliminary issue is whether or not the 1978 Act has mandatory or overriding effect and applies automatically to all proceedings for contribution brought in England and Wales, without reference to any choice of law rules. If not, German law will apply to the Defendants’ claims for contribution against the Part 20 Defendant and they will be time-barred”.

The answer

In a comprehensive 38-page judgment the Court of Appeal conducted an exhaustive examination of the travaux preparatoires to the Act, academic commentary, the Law Commission report which preceded it, a Law Commission Working Paper which followed it, and judicial authorities which had considered it.

In The Arab Monetary Fund v Dr Hashim & others (1994) The Times, 11^th October, Chadwick J had found in favour of the Act having extraterritorial effect; that is to say, in any claims for contribution or indemnity brought before the English courts, the Act would apply. But this decision had been criticised in academic textbooks by no less prestigious commentators than Professors Stevens (author of Restitution and the Conflict of Laws) and Briggs (in Lloyds Maritime and Commercial Law Quarterly), and Dr Charles Mitchell (in Restitution Law Review).

Soole J, giving judgment for the Part 20 Claimants at first instance in Roberts, had followed the nonbinding decision of Chadwick J in The Arab Monetary Fund. The Additional Party appealed on the basis that both were wrong. The Part 20 Claimants contended that both were right and that the Act is a self-contained code which stands apart from the applicable law.

The Court of Appeal agreed. It held that even where the underlying claim made against the tortfeasor is governed by foreign law, the contribution claim, which may also be governed by foreign law, may include a claim made under the Act. The contribution claim, which would have been time-barred under the applicable law, could therefore proceed under the Act.

Conclusion

It is hoped that this decision will put to rest the long running controversy regarding the interplay between the Act and the applicable law. In claims for contribution or indemnity heard by the English courts, the Act will apply, including its provisions on limitation.

It should be noted, however, that since the cause of action accrued prior to 11^th January 2009, the court was concerned with the common law rules on applicable law, rather than the regime under Regulation (EU) No.864/2007 (‘Rome II’). Given that Rome II now applies in relation to all claims brought before the courts of England and Wales, it may be thought that the decision in Roberts is of limited, historical interest only. However, it will apply in relation to damage sustained prior to 11^th January 2009, and with the country apparently hurtling towards a No Deal Brexit, prudent practitioners will be refamiliarising themselves with the common law rules in relation to jurisdiction and applicable law in readiness for the upheaval to come.

Furthermore, there is a good argument to the effect that Roberts should apply irrespective of the application of the Rome II regime. Pursuant to Article 20 of Rome II:

“If a creditor has a claim against several debtors who are liable for the same claim, and one of the debtors has already satisfied the claim in whole or in part, the question of that debtor’s right to demand compensation from the other debtors shall be governed by the law applicable to that debtor’s non-contractual obligation towards the creditor.”

But this only tells us what the applicable law should be under Rome II; the decision in Roberts tells us that irrespective of what that law is determined to be, the provisions of the Act apply. There is no principled reason why the fact that the applicable law is determined by the operation of Rome II rather than common law principles should make any difference to the applicability or operation of the Act.

The decision is also of interest to practitioners seeking to apply the Fatal Accidents Act 1976 extraterritorially; although mentioned in passing, and strictly obiter, the Court of Appeal did briefly consider the operation of the Act in Cox v Ergo Versicherung AG [2014] AC 1379 (in which the Supreme Court found that the FAA 1976 did not apply extraterritorially).

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. She was recently named Best Lawyers’ Travel Lawyer of the Year 2020/2021.