The Weekly Roundup: the Good Cheer Edition

Articles

30/11/2020

This week we had good news for Claimants and Defendant insurers alike in the form of the judgment in the judicial review on recoverability of benefits in R v Secretary of State for Work and Pensions, on the application of Aviva Insurance, Swiss Reinsurance [2020] 11 WLUK 282, as well as good news for hoteliers following the decision of the Court of Justice of the European Union in Wikingerhof GmbH & Co. KG v Booking.com BV, Case C-59/19. Good news for international lawyers? That came in the form of the decisions in Tate v Allianz IARD [2020] EWHC 3227 (QB) and in Qatar Airways Group v Middle East News FZ LLC [2020] EWHC 2975 (QB) (pleading foreign law); watch out for Henk Soede’s forthcoming Special Briefings on the latter and on Aviva Insurance for in-depth analyses of those cases.

 

Loving lis pendens: Tate v Allianz IARD [2020] EWHC 3227 (QB)

In Tate v Allianz Iard SA [2020] EWHC 3227 (QB) the High Court was asked to consider the lis pendens provisions in Article 29 and 30 of Regulation (EU) No. 1215/2012 (“recast Brussels”). This note sets out Soole J’s reasoning on the determinative question – namely, whether jurisdiction over the claim brought in the English courts should be declined (or the proceedings stayed) under those Regulations due to a concurrent pending action in the courts of another member state (i.e., France).

Background

The Claimant was a British national domiciled in the UK. The Defendant insurer was domiciled in France. On 20 February 1991 the Claimant suffered injury in France as a pedestrian when he was stuck by a bus belonging to a local bus company and insured by the Defendant. The Claimant brought proceedings in France and in April 1999 recovered compensation for his injury and loss (“the 1999 judgment”). Unfortunately, the Claimant considered the amount was insufficient and successfully appealed the decision in May 2004 (“the Douai judgment”). It was noted in the Douai judgment that the Claimant had reserved a right to further damages in the event his condition worsened. Quite independently of that, the Claimant was entitled to bring a further claim for additional compensation under French law (an “action en cas d’aggravation”) in the event his condition deteriorated. The French experts agreed that from a procedural point of view such a claim was a “new claim” but disagreed as to the meaning to be given to a ‘new claim’. It was this further claim that the Claimant sought to make, albeit in the English courts.

It was agreed that recast Brussels governed the allocation of jurisdiction and that, subject to lis pendens, the High Court would have jurisdiction pursuant to Articles 11 and 13(2). However, the Defendant contended that by reason of proceedings allegedly pending in France and the provisions of Articles 29 and 30, the High Court must decline jurisdiction or alternatively stay the action. It was this dispute that Soole J was required to resolve.

Articles 29 and 30 of recast Brussels

It is no secret that Brussels 1 Recast detests parallel proceedings, much like its predecessors (the Brussels Convention and Regulation 44/2001). This stance is expressed in Section 9 of recast Brussels, and Articles 29 and 30 are the central provisions. The Defendant made three submissions in respect of Article 29:

1) there was a pending action in the French courts;

2) the French proceedings and the present action involve the same cause of action and are between the same parties; accordingly,

3) the Court must decline jurisdiction. In the alternative, the Defendant submitted that its application should succeed under Article 30. As set out below, the determinative issue was 1) – that is, the existence (or not) of a pending action in the French courts.

Reasoning

The guiding principles were those summarised by the Supreme Court in Starlight Shipping Co. v Allianz Marine & Aviation Versicherungs AG (“the Alexandros T”) [2013] UKSC 70 in respect of the 2001 Regulation: see [27]-[28]. It was these principles that underpinned Soole J’s analysis: see [51].

Pending action

A pending action in the French courts was an explicit requirement for the application of Article 30 and an implicit requirement of Article 29. The authorities were clear that what was required was a concurrent, extant action: see Tavoulareas v Tsavliris [2005] EWHC 2643 (Comm) citing Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] 1 WLR 2295. Moreover, it was a question of autonomous European law whether there was in fact a lis pendens (Gubisch Maschinenfabrik KG v Giulio Palumbo [1989] ECC 420) and therefore whether proceedings in the court first seised have been terminated by judgment.

Although it followed from the guiding principles that the national law on the question of lis pendens cannot be determinative, it did not follow that the position under national law was irrelevant ([55]). The central point on this issue related to a possible analogy between an “action en case d’aggravation” and a claim for provisional damages under s.32A Senior Courts Act 1981, where the original proceedings remain extant for that purpose. It was held that the two actions were distinct in that the former was free-standing and did not depend upon any prior order or permission from the court nor any reservation of right by the claimant ([57]). On Soole J’s analysis, that provided powerful support for the conclusion that “the proceedings before the French Courts have, as a matter of European law, come to an end” ([ibid]).

Soole J then rejected the submission that there was any evidence of extant proceedings in the French courts. The 1999 judgment contained no indication that the claim was still live, and the Douai judgment only referred to the Claimant’s freestanding right to make an ‘action en case d’aggravation’. It was clear both judgments were final ([66]]). What’s more, the Defendant’s application had failed to identify any French court wherein the Claimant could pursue extant proceedings and insofar as the refusal of jurisdiction would require the Claimant to institute an “action enc as d’aggravation” in an (unidentified) French Court, the only recourse would be to institute fresh proceedings. Soole J considered that it must follow from that that there were no pending proceedings ([60]). It followed that neither Articles 29 nor 30 could have any application.

Soole J also noted his view that, in any event, there was no risk of irreconcilable or inconsistent judgments. As to liability, if the action was dismissed in England due to a failure to prove negligence, that would not be irreconcilable with the no-fault liability established in the French courts – “on the contrary, the judgments would be reconciled through the contrasting ingredients of the causes of action under the respective national laws; and consistent for the same reason” ([64]), As to the assessment of damages, the English court would not be adjudicating on the claim which had been determined by the Douia court. Its focus would solely be on the discrete aggravation claim, which had not been determined or assessed in France ([65]).

Remaining issues

Although it was not strictly necessary, Soole J briefly considered whether the French and English proceedings were between the same parties and involved the same cause of action. As for the first point, there was no evidence as to whether the relevant liability insurance policies gave the insurer control of the defence of the action ([68]). Consequently, the issue could not be decided. As for the second point, even if the French proceedings were extant, the objects of the English proceedings and the French proceedings were distinct – the object of the English proceedings was the aggravation claim, which was not presented to the French courts ([72). This narrower interpretation of the “object” of the proceedings (c.f., the Defendant’s interpretation – i.e., both proceedings have the same object of achieving full compensation for the injuries) was to be preferred ([73]).

About the Author

Henk Soede was called to the Bar in 2019 and is chambers’ newest recruit. Since April 2020, he has been instructed by solicitors for both Claimants and Defendants in cross border disputes, package travel and other related claims. He is eager to build on his experience in these areas​, but accepts briefs in all chambers’ areas of work.

 

Hurrah for Hoteliers! Wikingerhof GmbH & Co. KG v Booking.com BV, Case C-59/19

We’ve reported on the CJEU’s recent spate of activity in the travelsphere in previous editions of the Weekly Roundup; this week in Wikingerhof GmbH & Co. KG v Booking.com BV, Case C-59/19 it turned its attention to the relationship between Booking.com and its hoteliers.

The German hotelier had entered into a contract with Booking.com, a Dutch company, on the latter’s standard terms and conditions. These were subsequently altered on a number of occasions. The hotelier contended that it had no choice but to accept these unilateral variations, due to the booking platform’s dominant position in the marketplace for intermediary services and accommodation reservation portals, even though, it alleged, the variations were unfair and in breach of competition law.

The hotelier eventually became so fed up with Booking.com’s variations that it brought proceedings in its home court, the Regional Court of Kiel, in Germany, seeking an injunction to prevent the platform from:

(i) affixing to the price specified by Wikingerhof, without the latter’s consent, the indication ‘preferential price’ or ‘discounted price’ on the accommodation reservation platform;

(ii) withholding the contact information provided by its contracting partners on that platform; and

(iii) making the placement of its hotel in search requests dependent on the granting of commission in excess of 15%.

The court upheld a jurisdiction challenge founded on an exclusive jurisdiction clause giving the courts of Amsterdam jurisdiction over all disputes arising from the contract, and this in turn was upheld on appeal, the domestic German courts also holding that since Booking.com was incorporated in The Netherlands, the claim had to be brought there; none of the exceptions to the general rule contained in Article 4(1) of Regulation (EU) 1215/2012 (recast Brussels) applied. On the hotelier’s further appeal to the Federal Court of Justice the matter was referred to the CJEU for a preliminary ruling on the question of whether Article 7(2) of recast Brussels (special jurisdiction in matters relating to tort) applied.

The CJEU gave short shrift to the argument that the matter was governed by the exclusive jurisdiction clause; it had not been validly concluded in accordance with Article 25 of recast Brussels, so it did not apply. The Court therefore went on to give guidance on how domestic courts should approach the determination of whether a particular matter is a contractual or a tortious (or quasi-tortious) dispute.

In the present case, the hotelier relied, in its application, on an infringement of German competition law, which laid down a general prohibition of abuse of a dominant position, independently of any contract or other voluntary commitment. Thus, so the Court found, the legal issue at the heart of the case in the main proceedings was whether Booking.com committed an abuse of a dominant position within the meaning of German competition law. In order to determine whether the practices complained of against Booking.com were lawful or unlawful in the light of that law, it was not indispensable to interpret the contract between the parties to the main proceedings, such interpretation being necessary, at most, in order to establish that those practices actually occur. The Court therefore concluded that, subject to verification by the referring court, the action brought by the hotelier, in so far as it was based on the legal obligation to refrain from any abuse of a dominant position, was a matter relating to tort, delict or quasi-delict within the meaning of Article 7(2) of recast Brussels.

This is the latest in a series of judgments which underline the CJEU’s insistence that the classification of causes of action under recast Brussels should be undertaken by reference to law at European and not domestic level; these are European concepts which must be interpreted accordingly so as to achieve harmonisation within Member States (cf in  particular Brogsitter v Fabrication de Montres Normandes EURL, Case C‑548/12, flyLAL-Lithuanian Airlines v Starptautiskā lidosta ‘Rīga’ VAS, Case C‑27/17). Of course, post-Brexit the relevance of these cases will diminish as recast Brussels falls away; but as we have seen recently, there are still plenty of claims making their way through the courts of England and Wales to which recast Brussels applies. And following this decision, any British supplier thinking about challenging the dominance of certain booking platforms would do well to consider its position without delay.

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 and the Lawyer Monthly Women in Law Awards 2020: Personal Injury.

 

…And Finally…

And finally we bring good news for couples whose weddings have been cancelled as a result of the pandemic. The CMA has turned its attention to venues which have not provided what it refers to as ‘fair refunds’, and those who have misled clients about the level of refund they are entitled to expect or who have offered them the opportunity to rebook, but only at a higher price. If all this sounds faintly familiar, it is; but the shift in focus can only be good news for airlines and tour operators. The Guidance is here: COVID-19 refunds: CMA warns wedding firms over unfair practices – GOV.UK (www.gov.uk) and is of interest to any lawyers advising on the thorny issue of accommodation only cancellations.

Of course, we at 1CL have more than an academic interest in all of this; a chambers wedding was cancelled in the midst of the first throes of Lockdown1, and we’re eager to don our new hats and get the silver-plated fish slice wrapped and shipped to the happy couple.

Our congratulations to all happy couples whose weddings have been cancelled this year. Well, not that precisely, but you know what we mean.

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