13
Jan
21
Articles, Travel & Cross Border Claims
Special Briefing: Continuing Developments in Jurisdiction under Regulation (EU) No. 1215/2012 (recast Brussels)

Practitioners undertaking cross border work could be forgiven for thinking that they might be permitted a brief moment of calm after the flurry of pre-Brexit activity immediately preceding 31st December 2020, but early indications are that there will be no such let up. In the dying moments of the year two jurisdictional challenges raised very different issues, one of them leading to what must surely be the last English reference to the Court of Justice of the European Union. Tom Collins and Sarah Prager of 1 Chancery Lane were involved in the cases.

 

Parasitic claims under Brussels I (recast): is the CJEU finally set to consider the Arguments in Keefe?

In what is likely to be the last ever reference by an English court under Article 267 of the Treaty on the Functioning of the European Union, the CJEU has been asked for a preliminary ruling as to whether it is a requirement of Article 13(3) of recast Brussels that, for an injured person to make a parasitic claim against the insured, the claim against the insured must involve “a matter relating to insurance”.

The reference was made on 30th December 2020 by District Judge Hennessy, sitting in the County Court at Birkenhead after handing down judgment in Tattersall v Seguros Catalana Occidente SA and Basque, unreported.

The ruling will provide much-needed clarity as to the rights of injured persons to pursue parasitic claims against an insured in the courts of their domicile. This is an issue that has been left hanging since the parties in Hoteles Pinero Canarias SL v Keefe [2015] EWCA Civ 598 compromised the claim after the Supreme Court had referred the issue to the CJEU but before the CJEU could rule on the issue and despite subsequent attempts being made to obtain a further reference (including in Cole and Others v IVI Madrid SL and Zurich Insurance Plc (Unreported) QBD, 24 September 2019 and Hutchinson v MAPFRE and Ice Mountain [2020] EWHC 178 (QB)).

The Background

The Claimant, Betty Tattersall, was aged 83 at the date of the accident and was staying with family in a rental villa in Alicante when she tripped and fell down an unmarked step. As a result, she suffered a fractured wrist and hip and required surgery in Spain. She brought a claim against Seguros Catalana, the public liability insurer of the villa and, due to concerns over the validity or effect of the policy, the owner of the villa, Emily Basquille.

It was common ground between the parties that the insurance contract was governed by Spanish law and that pursuant to Spanish law a direct claim against Seguros Catalana was permitted.

Ms Basquille disputed that the English courts had jurisdiction over any claim against her and applied for an order under CPR Part 11.1 that the court lacked jurisdiction.

Shortly before Ms Basquille’s application was heard, a dispute emerged as to whether her use of the property as holiday accommodation to paying guests was covered by the terms of her insurance policy.

The issue: was Keefe wrongly decided?

The parties agreed that the English courts had jurisdiction to hear the direct claim against Seguros Catalana. This followed from the decision of the CJEU in FBTO Schadeverzekeringen NV v Odenbreit (C-463/06) that article 13(2) of recast Brussels I extended the right of policyholders to pursue actions against their insurer in the courts of their domicile (conferred by article 11(1)(b)) to actions brought by injured persons.

The issue was whether article 13(3) permitted the Claimant to sue Ms Basquille in England as a claim “parasitic” upon the direct claim against Seguros Catalana under article 13(2).

Article 13(3) provides that “if the law governing such direct actions provides that the policy holder or the insured may be joined as a party to the action, the same court shall have jurisdiction over them.”

The parties’ positions

The Claimant’s argument was straightforward. She relied on the Court of Appeal decision in Keefe, that a parasitic claim was permissible regardless of whether the claim against the insured could be regarded as involving a matter relating to insurance. It was also pointed out that Keefe had been followed in Lackey v Mallorca Mega Resorts and Anor [2019] EWHC 1028 (QB) (a decision of Master Davison).

Ms Basquille argued that the court should not follow Keefe for the following reasons:

  • Permission had been granted by the Supreme Court to the insured in Keefe to appeal against the Court of Appeal decision and the Supreme Court considered it necessary to make a preliminary reference to the CJEU regarding article 13(3) in order to give judgment.
  • The claim was settled before the CJEU provided its answer.
  • In Kabeg v MMA IARD (Case C-340/16), Advocate General Bobek expressed the view that for Section 3 of recast Brussels to apply the cause of action against a particular defendant must relate to the ascertainment of rights or duties arising out of the insurance relationship. The opinion of Advocate General Bobek was followed by the CJEU (albeit it did not address the question of whether the claim against the insurer had to concern a “matter relating to insurance”).

Ms Basquille therefore invited the court to refer to the CJEU a number of questions, but the central issue was whether it was a requirement of article 13(3) that the injured party’s claim against the insured involved a matter related to insurance.

Referral to CJEU

District Judge Hennessy described this as a ‘vexed issue’ and considered that Keefe and the Advocate General’s opinion in Kabeg ‘very plainly’ conflicted.  She concluded that she found herself in the same position as the Court in Cole and Hutchinson and could not decide the issue without a ruling from the CJEU.

The decision was further complicated by the dispute which subsequently arose regarding insurance cover. District Judge Hennessy considered however that the existence of this dispute did not ‘alter the status of the claimant’s case against either defendant’. In other words, it did not (in and of itself) make it a ‘matter relating to insurance’. The Court has however asked the CJEU to address that issue in the alternative.

Postscript

As of 1st January recast Brussels ceased to apply in the UK and so this ruling will only directly affect claims already instituted before the end of the year. However, with no agreement in sight to replace recast Brussels with an equivalent instrument, and as the UK looks to accede to the Lugano Convention which mirrors Article 13 of recast Brussels word for word, the ruling may yet prove to be of great significance in this developing area of law.

Tom Collins appeared for the Claimant, instructed by Colin Murphy at Leigh Day.

About the Authors

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.

Colin Murphy is a solicitor at Leigh Day, Manchester. He is a specialist in travel and private international law.

 

Residence Founding Jurisdiction: Chowdhury v PZU S.A., unreported, 5th January 2020

This decision concerned an application made by the Defendant to the claim contesting the jurisdiction of the courts of England and Wales on the basis that neither the Claimant nor the Defendant were domiciled within the jurisdiction for jurisdictional purposes.

The Application

Mr Chowdhury was a British national. At the time of the accident which was the subject of the claim he was working in England for a British company, but was on sick leave. On 27th August 2017 he was involved in a road traffic accident in Poland, liability for which was admitted on the part of the Polish road traffic insurer for the tortfeasor. In April 2018 he moved to Germany in order to receive medical treatment; in August 2020 he issued a claim seeking very significant damages directly against the insurer. The insurer duly challenged jurisdiction on the grounds that at the time the claim was issued the Claimant was not domiciled within the jurisdiction within the meaning of Article 62(1) of recast Brussels, which reads:

“In order to determine whether a party is domiciled in the Member State whose courts are seised of a matter, the court shall apply its internal law.”

The relevant statutory provision insofar as the courts of England and Wales are concerned is the Civil Jurisdiction and Judgments Order 2001 (SI 2001/3929), as amended. Insofar as it is relevant, pursuant to paragraph 9 of Schedule 1 to the Order:

(1) …the following provisions of this paragraph determine, for the purposes of the Regulation, whether an individual is domiciled in the United Kingdom or in a particular part of, or place in, the United Kingdom or in a state other than a Regulation State.

(2) An individual is domiciled in the United Kingdom if and only if—

(a)he is resident in the United Kingdom; and

(b)the nature and circumstances of his residence indicate that he has a substantial connection with the United Kingdom.

(4) An individual is domiciled in a particular place in the United Kingdom if and only if he—

(a)is domiciled in the part of the United Kingdom in which that place is situated; and

(b)is resident in that place…

(6) In the case of an individual who—

(a)is resident in the United Kingdom, or in a particular part of the United Kingdom; and

(b)has been so resident for the last three months or more,

the requirements of sub-paragraph (2)(b) or, as the case may be, sub-paragraph (3)(b) shall be presumed to be fulfilled unless the contrary is proved…”

The Facts

There was no question but that the Claimant had been resident in England and Wales until April 2018, when he had gone to Germany solely for the purpose of seeking medical treatment. He provided a comprehensive witness statement in which he stated that he intended to return to England as soon as his treatment was completed, and set out (and evidenced) his continuing ties to the jurisdiction:

  1. He was a British citizen;
  2. He had a UK passport;
  3. He was registered on the British electoral register;
  4. His family all resided in England, which was where his family home, most of his friends, and the vast majority of his belongings were located, some of them in storage for which he paid rather than moving them to Germany;
  5. He returned to England for four weeks in early 2020, and but for the current pandemic would have done so more latterly in 2020;
  6. He had a UK mobile phone number;
  7. He had a UK driving licence;
  8. He was registered on the UK organ donor register;
  9. He was a member of a UK union;
  10. His employer was registered in England;
  11. He was paid in England;
  12. He was taxed in England;
  13. His financial affairs were all based in England, which was where he held his investments;
  14. He had no German social connections and did not speak the language;
  15. He did not have a German visa or residence permit;
  16. He received UK disability benefits;
  17. His treatment was funded by the British NHS;
  18. He was planning to purchase a property in England.

The Submissions

Against this background the Claimant contended that he remained resident in England for jurisdictional purposes after April 2018, although he was not himself physically present within the jurisdiction.

The Defendant founded its challenge on the fact that the Claimant had not returned to the jurisdiction between April 2018, and had only done so for a matter of weeks in early 2020. He had therefore spent very little time in the jurisdiction in the last couple of years. It was submitted on the part of the Defendant that it was incumbent upon the Claimant to show that during this period he was resident at a particular address within the jurisdiction, whereas he could only show that he maintained a room in his parents’ house and a storage facility for his belongings; he had no family home or property of his own.

The legal framework was largely agreed between the parties. The relevant authorities were comprehensively reviewed most recently by Julian Knowles J in Sang Youl Kim v Sungmo Lee [2020] 8 WLUK 82, at paragraphs 31 to 49. At paragraph 41 the point was made that a party may have more than one residence; in that paragraph and at paragraph 42 there was reference to a ‘settled or usual place of abode’, ‘connoting some degree of permanence or continuity’; time spent in a particular jurisdiction ‘may or may not play an important part in determining residence’, depending on the facts of a particular case. At paragraph 43 the importance of the family home, and of the quality, rather than the quantity, of use of premises was emphasised.

The relevant principles were summarised at paragraph 44 (references are to defendants, but are equally applicable to claimants):

“(1) It is possible for a defendant to reside in more than one jurisdiction at the same time.

(2) It is possible for England to be a jurisdiction in which a defendant resides even if it is not his principal place of residence (ie even if he spends most of the year in another jurisdiction).

(3) A person will be resident in England if England is for him a settled or usual place of abode. A settled or usual place of abode connotes some degree of permanence or continuity.

(4) Residence is not to be judged according to a ‘numbers game’ and it is appropriate to address the quality and nature of a defendant’s visits to the jurisdiction.

(5) Whether a defendant’s use of a property characterises it as his or her ‘residence’, that is to say the defendant can fairly be described as residing there, is a question of fact and degree.

(6) In deciding whether a defendant is resident here, regard should be had to any settled pattern of the defendant’s life in terms of his presence in England and the reasons for the same.

(7) If a defendant visits a property in England on a regular basis for not inconsiderable periods of time, where his wife and children live, in order to see his wife and children (including where the centre of the defendant’s relationship with his children is England), such property has the potential to be regarded as the family home or his home when in England, which itself is evidence which may go towards supporting the conclusion that England is for him a settled or usual place of abode, and that he is resident in England, albeit that ultimately it is a question of fact and degree whether he is resident here or not, having regard to all the facts of the case including any discernible settled pattern of the defendant’s life or as it has also been put according to the way in which a man’s life is usually ordered.”

The Judgment

On 5th January 2021 Master Brown gave judgment in favour of the Claimant, dismissing the jurisdictional challenge and refusing the Defendant permission to appeal. In doing so he found that it was unnecessary for jurisdictional purposes for the Claimant to prove that he was resident at a particular address within the jurisdiction; he need only prove that he had not abandoned his residence within England and Wales when he went to Germany for treatment. The judge found that he had not done so. Although it was true that he had not spent substantial periods of time within the jurisdiction between April 2018 and August 2020, this was only one factor to be weighed in the balance; and it was relevant that initially he had suffered from psychological sequelae which had prevented him from flying, and more latterly he had been prevented from travelling from Germany to England as a result of the measures taken in response to the Covid-19 pandemic. He had not chosen to remain in Germany, and his intention to return to England following treatment was a factor to be weighed against his physical presence in Germany. On the evidence, he had not severed his connection with the jurisdiction such that it could be said that he was no longer resident within England and Wales.

Analysis

The judgment reiterates the principle emphasised in all of the authorities on residence that it is not what is referred to as a ‘numbers game’; whether or not a party is resident within the jurisdiction cannot be determined solely by an assessment of how many days per year he or she spends here, particularly where, as recently, there is good reason for presence or absence. It is also important to bear in mind the reason for presence or absence in a particular jurisdiction; as in the case of Panagaki v Apostolopoulos [2015] 5 WLUK 332, the fact that a party seeks medical treatment at a particular facility may contraindicate an intention to reside in that country for jurisdictional purposes.

Essentially the enquiry is a fact-based one, taking into account all relevant factors, and the parties’ submissions are only as good as the evidence in support of them. In this case the Claimant had evidence in abundance that it was his intention to take up the reins of his life in England as soon as he had completed his medical treatment in Germany, and that he had not built a life for himself at his temporary address. There seems no reason why his inability to travel from Germany to England as a result of the pandemic should deprive him of his jurisdictional rights under recast Brussels, and the decision stands as confirmation that involuntarily presence or absence in a particular place does not and cannot determine residence for jurisdictional purposes.

Sarah Prager appeared for the Claimant, instructed by Ciaran McCabe at Hugh James.

About the Authors

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.

Ciaran McCabe is a partner at Hugh James. Ciaran is a leading specialist in catastrophic injury claims, acknowledged by both Chambers and Partners and the Legal 500 as a leading brain and spinal cord injury specialist.

 

Written by or involving: Sarah Prager, Tom Collins

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