The Dekagram 7th November 2022

Articles, News | Mon 7th Nov, 2022

This week has seen a number of decisions which will be of concern to practitioners representing Claimants, including Part 20 Claimants. First, in Stait v Cosmos Insurance Limited Cyprus [2022] EWCA Civ 1429 Claimants working abroad lost some of their jurisdictional rights; and then, in SSAFA v Allgemeines Krankenhaus Viersen GmbH [2022] UKSC 29, the Supreme Court reversed the decision of the Court of Appeal that the Civil Liability (Contribution) Act 1978 overrides applicable foreign law. On the other hand, the American courts have held (in Petteway v Miami International Airport Inc, WL 4076577.D. Fla. 2022) that flights between Guantanamo Bay and Miami constitute international carriage within the meaning of the Montreal Convention, notwithstanding arguments that the base is a US territory for the purposes of the Convention). So now we know. Don’t say we never give you any useful information.

Contribution Claims and Foreign Law: Does the Civil Liability (Contribution) Act 1978 Apply?

In SSAFA v Allgemeines Krankenhaus Viersen GmbH [2022] UKSC 29, the Supreme Court held that the Civil Liability (Contribution) Act 1978 (“the 1978 Act”) does not override the law otherwise applicable to a contribution claim. The majority judgment was delivered by Lord Lloyd-Smith.

Background

On 14 June 2000, Mr Roberts (“C”) suffered an acute hypoxic brain injury at a hospital in Germany (the “hospital”) as a result of negligence on the part of the attending midwife. At the time, C’s father was stationed with UK armed forces in Germany. The attending midwife was employed by the Soldiers, Sailors and Airmen and Families Association – Forces Help (“SSAFA”). C sued SSAFA and the MoD (together, the “the defendants”), which had agreed to indemnify SSAFA. The defendants denied liability. The defendants also alleged negligence on the part of the obstetricians (the “third party”) employed by or working at the hospital and a contribution claim was brought under the 1978 Act.

The domestic choice of law rules were the common law rules and not Rome II, as the events giving rise to damage occurred before 11^th January 2009. Those rules are summarised in Macmillan Inv v Bishopsgate Investment Trust Plc (No 3) [1996] 1 WLR 387 at 391-2 and Raiffeisen Zentralbank Osterreich AG v Five Star Trading LLC [2001] EWCA Civ 68 at [26]. Under those rules, C’s claim against the defendants was governed by German law. As to the contribution claim, that claim would also be governed by German law, unless the 1978 Act had overriding effect. The question of whether the 1978 Act had overriding effect was highly material: if the contribution claim was governed by German law, that would extend to limitation under section 1(1) of the Foreign Limitation Periods Act 1984, and limitation had expired under German law.

The defendants’ core contention was that the 1978 Act did have overriding effect and that the contribution claim was not therefore time-barred under section 10 of the Limitation Act 1980. The courts below agreed. The Supreme Court saw things differently.

Judgment

In Dicey, Morris & Collins on the Conflict of Laws (16^th Ed), overriding statutes are described as “those which must be applied regardless of the normal rules of the conflict of laws, because the statute says so” and observes that “overriding statutes are an exception to the general rule that statutes only apply if they form part of the applicable law” (para 1-054). The question of whether the 1978 Act was an example of such a statute turned on its construction.

Section 1 of the 1978 Act sets out the entitlement to contribution. It is said in section 1(6) that “it is immaterial whether any issue arising in any such action was or would be determined (in accordance with the rules of private international law) by reference to the law of a country outside England and Wales.” The Court of Appeal considered that the fact section 1 could apply even where the underlying claim was subject to foreign law was an indication that the 1978 Act must have been intended to apply irrespective of the choice of law which would otherwise govern the contribution claim (see Irwin LJ at [55], [64]; Phillips LJ at [74]; and David Richards LJ at [88]-[92]). Lord Lloyd-Jones disagreed:

1. Firstly, that was a non-sequitur: the law governing the principal liability of the tortfeasors to the victim and that governing contribution claims between them are distinct matters and section 1(6) was concerned with providing guidance as to what liabilities may be considered for the purposes of s.1 [40]. The approach adopted by the Court of Appeal ignored the preliminary choice of law question and the question of whether the 1978 Act had any application at all [ibid];
2. Secondly, if it were indeed the case that there was no realistic chance that English law could apply to a contribution claim where the underlying claim was governed by foreign law, then there would be a powerful argument that Parliament must have intended for section 1 to have overriding effect because the second part of section 1(6) (“it is immaterial…”) would otherwise be pointless: [42]. Lord Lloyd-Jones, however, disagreed with the premise: “it seems clear to me that there will be many situations in which a contribution claim will be governed by English law, notwithstanding the fact that the underlying liabilities are governed by a foreign law” [82]. Accordingly, that point did not justify the overriding effect of the 1978 Act. 

Lord Lloyd-Jones went on to consider other arguments concerning whether Parliament intended to give overriding effect to the 1978 Act. In Arab Monetary Fund v Hashim (No.9), The Times, 11 October 1994, Chadwick LJ considered that Parliament’s intention with section 1(6) was to remedy a failure of foreign law to provide for contribution claims and that the absence of such a provision would be a defect in English law. Lord Lloyd-Jones disagreed: “I can see no sound reason why the UK Parliament should be legislating in order to remedy perceived deficiencies in foreign laws in the manner suggested and there is nothing in the legislation to suggest that that was the objective” [83]. Lord Lloyd-Jones references the academic critique of that decision at [74]-79].

Conclusions

For those reasons, Lord Lloyd-Jones concluded: “the Civil Liability (Contribution) Act 1978 does not have overriding or mandatory effect. It does not apply automatically to all proceedings for contribution brought in England and Wales, without reference to any choice of law rules. Accordingly, in the present case, German law applies to the Defendants’ claim for contribution against the Part 20 Defendant and those claims will be time-barred.” [84].

About the Author

Henk Soede was called to the Bar in 2019. He has developed a specialist practice in the field of travel and private international law and is a contributing editor to the leading practitioner text in this area, Saggerson on Travel Law and Litigation (7^th Ed.). Henk has built up expert knowledge in all private international law matters, including issues relating to jurisdiction, foreign applicable law and the enforcement of foreign judgments. He also acts in contractual disputes between travel business which necessitate detailed understanding of the package travel legislation landscape. He is presently instructed by a major UK tour operator as sole counsel in a high value arbitration concerning the Covid-19 pandemic and various indemnity provisions linked to liability under package travel legislation. Henk is listed in the Legal 500 2023 as a Rising Star.

Residence and Jurisdiction: Members of the Armed Forces Posted Abroad May Lose Their Jurisdictional Rights

The Court of Appeal in Stait v Cosmos Insurance Limited Cyprus [2022] EWCA Civ 1429 considered whether a member of the British Armed Forces posted abroad was resident in the place of his posting for jurisdictional purposes. The claim was governed by Regulation (EU) 1215/2012 (‘recast Brussels’), but the decision is of ongoing importance because ss.15A to 15E of the Civil Jurisdiction and Judgments Act 1982 preserve the court’s jurisdiction under recast Brussels in claims arising from consumer and employment contracts.

The Claimant in Stait was a member of the Army posted for five years to RAF Akrotiri, a British Overseas Territory on the Greek island of Cyprus. He and his family moved to the Sovereign Base Area in 2016 and, on 24^th October 2017, he was seriously injured in a road traffic accident which occurred in Cyprus outside the SBA. On 29^th October 2020 he issued proceedings against the responsible Cypriot car driver’s insurer, a Cypriot company. At that time he remained on his posting, but in August 2021 he returned, as anticipated, to England.

The Court of Appeal found that at the time proceedings were issued Mr Stait was not resident in England and Wales and that as a consequence the English courts did not have jurisdiction to hear the claim, since the accident happened in Cyprus and the Defendant was Cypriot. In doing so the Court rejected the argument that members of the Armed Forces posted abroad either remain resident solely in the UK or take on an additional residence in the place of their posting. Thus when they are posted abroad they lose their automatic right to bring proceedings within this jurisdiction for the purposes of the Act.

The decision is a disappointing one for Claimants; but there are two consolations. First, the Court did reject the Defendant’s contention that intention to return to the jurisdiction is irrelevant to the question of residence, so it is now clear that a party’s stated (and/or realised) intention to return can be taken into account in this respect. Secondly, and importantly, the Court accepted the contention that where it is known that a party is resident within the jurisdiction up until a particular time, there must be a ‘distinct break’ for him or her to lose that residence. The Court concluded that in this particular case the Claimant’s posting abroad amounted to such a break, but it can readily be anticipated that in other cases a foreign posting might not fall within the same category, particularly if it were for a shorter period of time.

Perhaps surprisingly the Court did not consider that the facts that Mr Stait continued to pay tax in the UK and to be registered to vote here were relevant to the enquiry as to residence. This, it is suggested, leads to an imbalance which may be seen as being unfair; a person may owe duties to the nation, both financial and civic, and yet not be permitted to use its court system for lack of residence. In the case of members of the Armed Forces the potential unfairness is rendered still more acute in that not only does such a person owe financial and civic duties to the UK, it is in the inherent nature of his or her job to work for it, sometimes at risk to his or her personal safety. And yet (s)he has no concomitant automatic right to access the civil justice system, for which (s)he pays. This result appears a counter-intuitive one, at least to the author.

Of course, if the Brexit Bonfire written about by Tom Yarrow here (Special Briefing – The Brexit Bonfire: The Retained EU Law (Revocation and Reform) Bill – Deka Chambers – Barristers’ Chambers) occurs, the jurisdictional rights retained in ss.15A to 15E of the Act will be swept away; but in the meantime, the decision will have the effect of restricting the jurisdictional rights not only of members of the Armed Forces but of all employees and others required to live abroad for significant periods of time.

Sarah Prager and Henk Soede, instructed by Irwin Mitchell, represented the Claimant in Stait v Cosmos Insurance Limited Cyprus [2022] EWCA Civ 1429.

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 Deka Chambers, 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. Last year she was named Best Lawyers’ Travel Lawyer of the Year and the Lawyer Monthly Women in Law Awards: Personal Injury, and she was a member of the Consultative Group of Experts to the UNWTO Committee for the Development of an International Code for the Protection of Tourists, and is a member of the Admiralty Court Users’ Committee. She undertakes purely domestic high value personal injury work as well as cross border work and has a wealth of experience of difficult and sensitive cases.