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The Weekly Roundup: The Self-Congratulatory Edition

Articles, News | Mon 3rd Oct, 2022

Our devoted readers will already be aware that today is a very special day in the history of the Weekly Roundup; it will cease to be the 1CL Weekly Roundup, and becomes the Deka Chambers Weekly Roundup. This is due, of course, to the merger of two sets with an impeccable pedigree, 1CL and 9 Gough Chambers, to form a stellarset. And it is particularly apt that the merger should be completed at the same time as the Legal 500 rankings are published; not only has the new chambers retained its rankings, it has improved them, something we scarcely thought possible. For we are delighted to be able to tell you that Henk Soede has been recognised as a Rising Star in travel work, and Dominique Smith as a Rising Star in both travel and clinical negligence. There’s also the usual rankings for the old timers. Overall chambers is ranked in tier one in travel, with five silks, three tier one practitioners, two tier two practitioners, one tier three practitioner, and two rising stars; more entries in the category than any other set. Not a bad haul, to start with, and we are not unaware that these excellent results are down to you, our friends and colleagues, who have done so much to support us and who continue to provide us with references that make even us blush with becoming modesty. Once again, we find ourselves in your debt: thank you.

Cutting the Gordian Knot: Obtaining third party disclosure orders against foreign suppliers of package holidays

The greatest challenge in package holiday litigation is often, how to get at the documents you need: In the majority of cases, where a consumer has suffered an injury or illness as a result of an event within the confines of the hotel, it is the hotel, not the tour operator, which has control over the documents which will determine liability, but the tour operator which bears the disclosure obligation. Invariably, claimant lawyers are told that the tour operator can only ‘request’ documents from their hotel supplier but has no control over what they do or don’t provide.

The recent Court of Appeal decision in Gorbachev v Guriev & Ors [2022] EWCA Civ 1270 might provide the solution. It upholds the decision of Mr Justice Jacobs to permit service of a third-party disclosure application outside the jurisdiction and confirms that in appropriate cases the Court will exercise its discretion to grant such permission.

The decision is significant in that it distinguishes the recent decision of Mrs Justice Cockerill in Nix v Emerdata Ltd & Anor [2022] EWHC 718 (Comm) in which she reached the opposite conclusion on the same issue.

Factual Background

The application arises out of a dispute between Alexander Gorbachev and Andrey Guriev regarding their interests in a Russian fertiliser business, PJSC PhosAgro. One of the key issues is how, and why, the Claimant was financially supported by two Cyprus trusts of which T.U. Reflections Limited and First Link Management Services Limited (the “Trustees”) are the trustees.

The Claimant sought, pursuant to CPR 31.17 and section 34 of the Senior Courts Act 1981 (“SCA”), to obtain an order for third-party disclosure of certain documents held by Forsters LLP (“Forsters”) the English law firm advising the Trustees. Forsters contended that the documents were held on behalf of the Trustees and that the Trustees were the only proper parties to the application. Accordingly, the Claimant applied for, and was granted, an order joining the Trustees to the original application and for permission to serve the same on them in Cyprus.

The legal framework

It was common ground that if a party wished to apply under CPR 31.17 (Orders for disclosure against a person not party), the application must be made by an application notice, which would also need to be served on the non-party. The Court held at first instance that CPR 6.39 (Service of application notice on a non-party to the proceedings) implicitly applies the ordinary rules for service out of the jurisdiction to cases where an application notice is to be served on a non-party outside the jurisdiction. The Claimant’s application for permission to serve the application out of the jurisdiction therefore had to satisfy three conditions:

  • That there is a good arguable case that the application falls within one of the ‘jurisdictional gateways’ under PD 6B paragraph 3.1 (such as Gateway 20(a));
  • In relation to the Trustees, there is a serious issue to be tried; and
  • In all the circumstances, England is clearly or distinctly the appropriate forum and the Court ought to exercise its discretion to permit service out of the jurisdiction.

Gateway 20(a) provides that the claimant may serve a claim form outside the jurisdiction with the court’s permission where:

“(20) a claim is made—

  • under an enactment which allows proceedings to be brought and those proceedings are not covered by any of the other grounds referred to in this paragraph” (emphasis added).

In Orexim Trading Ltd v Mahavir Port and Terminal Private Ltd  [2018] EWCA Civ 1660, Lewison LJ held that the only limitation on the scope of Gateway 20(a) is that the relevant enactment must allow proceedings to be brought against overseas persons. Otherwise, Lewison LJ found that Gateway 20(a) should be given a “neutral” construction, as with the increasing globalisation and digitisation of commerce, the Court is “less cautious than before in contemplating service out of England and Wales”.

The Court’s analysis

The principal issue was whether an application under s.34 SCA (Power of High Court to order disclosure of documents) and CPR 31.17 falls within Gateway 20(a) (i.e. if the Court has the power to permit service of third-party disclosure applications outside the jurisdiction). If Gateway 20(a) was available, then the Court would need to decide if this was an appropriate case to exercise its discretion to serve out of the jurisdiction.

Jacobs J, whose analysis was adopted by the Court of Appeal, found that that Gateway 20(a) did give the Court jurisdiction to order service out in respect of a s.34 SCA/CPR 31.17 application for the following reasons:

  1. An application under CPR 31.17 and s.34 SCA is a “claim”, relying in particular on the broad definition of a “claim” under CPR 6.2(c), which includes applications made before action.
  2. An application under CPR 31.17 and s.34 SCA does “allow proceedings to be brought”. The Court considered that as between an applicant and the non-party respondent, the application notice is the originating process which commences proceedings.
  3. It was clear from Orexim that, for the purposes of Gateway 20(a), it was not necessary for the relevant enactment to expressly authorise the bringing of proceedings against overseas persons. Jacobs J held that the question is whether the statute, on its true construction, does so, and, on the facts, he found that s.34 SCA neither expressly nor impliedly provides that applications can only be brought against persons in England.

Whilst the Court acknowledged that disclosure applications against overseas third parties should generally be made using the letter of request regime (as Cockerill J had held in Nix), in the present case, there were good reasons not to use that procedure. In particular, the relevant documents were held by English solicitors in England and were the Claimant to use the letter of request process in Cyprus, there would likely be a significant (12 month) delay, meaning the documents would not arrive in time for trial.

Comment

When taken together with the substantial changes to CPR 6B, it is clear that the courts are becoming more emboldened to find ways to grant orders for service out on non-parties. This offers clear opportunities to claimants in travel cases seeking to cut out the middleman and ensure that foreign suppliers of holidays provide timely and comprehensive disclosure instead of the patchy and piecemeal approach which has become all too common. The focus for Claimants hoping to rely on Gateway 20(a) must be on persuading the Court that the letter of request regime is unsuitable on the facts. 

About the Author

Called in 2010, Tom Collins is ranked in the Legal 500 as a specialist in Travel Law. He has considerable experience across a wide range of travel and private international law disputes and has advised claimants and defendants in multi-party actions.

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