22
Mar
21
Articles, Travel & Cross Border Claims
The Weekly Roundup: the Anniversary Edition

This week marks the first anniversary of the Weekly Roundup. It’s hard to believe that it was a year ago that we at 1CL decided to bring a little sunshine to our readers’ drab lives, like a Legal Dame Edna Everage. But what a year it’s been! We launched our ever-popular 1CL Webinar series and Youtube channel, we’ve participated in a number of embarrassingly hard-fought Virtual Quizzes, and there have been any number of Special Briefings (the latest, on the important CJEU decision in X v Kuoni Case-578-19, can be found here) And of course we’ve all been navigating our way through the pandemic, the Great Refund Saga, and Brexit.

This week the domestic courts have been busy clarifying the position on pre-Brexit jurisdictional issues, Claimants’ Part 36 offers, and (in Ras Al Khaimah Investment Authority v Azima [2021] 3 WLUK 193) the admissibility of evidence obtained via hacking; whilst the CJEU has given judgment in X v Kuoni, Case C-578/19 and is mulling over the Opinion of the Advocate General in Airhelp Limited v Scandinavian Airlines System, Case C-28/20 (strikes can amount to extraordinary circumstances, but only where the greatest efforts have been made to avoid them – something airlines operating out of Heathrow Airport might be interested in, with 41 strikes to be held over 23 days following the Easter Bank Holiday). The future looks interesting, too; the Austrian Supreme Court has referred a question to the CJEU regarding the definition of the term ‘bodily injury’ within the meaning of the Montreal Convention, and the exclusivity of the Convention.

 

Herriot-Watt University v Schlamp [2021] SAC (Civ) 12

A Scottish university has succeeded in its appeal to overturn the dismissal of its claim for unpaid tuition fees against a former distance learning student from Germany.

The Heriot-Watt University pursued former business student Christian Schlamp for approximately £7,000 of unpaid fees. Mr Schlamp received a doctorate in business administration after studying full time at the University on a distance learning programme. The course was undertaken entirely remotely, with Mr Schlamp remaining in Germany for the duration of the course. All written submissions, coursework and engagement of supervision was conducted online or by telephone, and his final thesis examination was conducted by video conference.

Proceedings were brought in Scotland and defended on the basis that the Scottish courts had no jurisdiction as the course was provided pursuant to a consumer contract regulated by German law and as such, the action had to be brought in Germany.

The University argued that he was not a consumer because his enrolment on the course was closely related to his self-employment as a business and finance consultant. As such, the contract’s performance (payment of the fees) should have been made in Edinburgh, thus conferring jurisdiction on the Scottish court.

At first instance the court held that there was no evidence that Mr Schlamp had entered into the contract in anything other than his personal capacity. In the circumstances, his weaker bargaining position allowed him to rely on the protections afforded by Regulation (EU) No. 1215/2012 (recast Brussels) which stipulated that an individual should be sued in the jurisdiction in which they reside.

Recast Brussels

Under recast Brussels the main ground of jurisdiction is the defendant’s domicile. The preamble states:

“(18) In relation to insurance, consumer and employment contracts, the weaker party should be protected by the rules of jurisdiction more favourable to his interests than the general rules”

Section 4 relates to consumer contracts, with Article 17 providing that:

 “In matters relating to contracts by a person, the consumer, for a purpose which can be regarded as outside his trade or profession, jurisdiction shall be determined by this section…”

Article 17(c) regulates contracts where a creditor business provides goods or services to a consumer. This states that where a party which pursues commercial or commercial activities in the Member State of the consumer’s domicile (or by any means directs such activities to that member state), then the consumer has a choice. In terms of Article 18 the consumer can bring an action against the commercial party either in the commercial party’s court or in the consumer’s court. It will generally be more likely that the consumer will prefer to institute proceedings in his “home” court rather than going to the inconvenience of raising proceedings in commercial party’s court.

However, the choice which the consumer has is unavailable to the commercial party, who must initiate proceedings in the court of the consumer’s domicile.

If Mr Schlamp was not a “consumer”, then a different rule applies. Article 8 provides that the consumer may be sued “In matters relating to a contract, the courts for the place of performance of the obligation in question.”.

If the course could be said to be connected with or within Mr Schlamp’s trade or profession, then the University would be entitled to bring proceedings in the Scottish courts, where performance of the contract took place.

The Decision

In overturning the first instance decision the Sheriff Appeal Court found that “What we may describe as the consumer jurisdiction in Section 4 of the 2012 Regulation (recast Brussels) is a derogation from the general rule that a party should be sued in the courts of their domicile and, as such, ‘consumer contract’ must be strictly construed.”

Further, “In the case of a mixed contract, namely where there is both private use and use as part of a trade or profession, so long as the trade or professional aspect is negligible or marginal then the contract is a consumer contract. [The] burden of proof rests with the party invoking the consumer jurisdiction: the opponent having the right to lead evidence to the contrary.”

The court held that the first instance judge had erred in not considering that the defendant had to prove his status as a consumer.

The appeal court held that whilst the matter was not “free from doubt” the correct test for whether the contract could be classed as a consumer contract remained the “non-negligible” test rather than the “predominant purpose” test.

The case was remitted to the lower court.

About the Author

Chris Pask was called in 2013. He undertakes work arising out of contractual disputes, including cases involving sale of goods and supply of services, and in particular claims raising issues of fundamental dishonesty. Chris accepts instructions by way of Direct Public Access.

 

90% Part 36 Offer not effective where causation in dispute

In Seabrook v Adam [2021] EWCA Civ 382, the Court of Appeal held that a claimant’s Part 36 offers to accept 90% of damages were not effective where breach of duty was admitted but causation was in dispute.

The claim arose out of a low value road traffic accident. The Defendant admitted that the accident was caused by his breach of duty but denied causation of injury. The Claimant claimed to have suffered a neck and back injury.

The Claimant made the following offers:

“To accept on condition that liability is admitted by the offeree, 90% of the claim for damages and interest, to be assessed.” (the “First Offer”)

“To agree the issue of liability on the basis that the Claimant will accept 90% of the claim for damages and interest, to be assessed.” (the “Second Offer”).

The trial judge awarded damages for injury but found that causation of the back injury was not proved. The Claimant argued that had the Defendant accepted either of the offers, judgment would have been entered and the Defendant would only have had to have paid 90% of the damages awarded. The Claimant had therefore bettered his Part 36 offers.

The district judge held that the offers were not genuine offers to settle. The Claimant unsuccessfully appealed to a circuit judge who held that in fact it was the Defendant who had bettered the offers, since liability was limited to only one of the two alleged injuries.

In the Court of Appeal, the Claimant argued that the effect of the offers was that in return for an admission that some damage had been caused by the Defendant’s breach of duty, the Defendant would benefit by receiving a 10% discount on the damages he had to pay. Further, the Claimant argued that the Defendant could still have disputed causation in relation to the lower back injury.

The Court of Appeal held that in the context of the pleadings and the admission of breach, the reasonable reader would have understood both offers to be addressing liability and causation in relation to both heads of damage.

It would make no sense if the offers were construed to mean liability in the sense of breach of duty, rather than liability and causation. If the offers were only concerned with breach of duty, which had already been admitted, they could not have been genuine attempts to settle.

Further, both offers were framed as discounts to “the claim for damages and interest to be assessed.” They made no reference to the separate heads of damage in relation to the two injuries. The reasonable reader would construe “the claim for damages” to mean the claim in its entirety and construe the offers as requiring a concession as to liability and causation in relation to both injuries.

The Court of Appeal held that it was not open to the Claimant to argue that the Defendant was only being asked to accept that some damage had been caused. That was not the natural and ordinary meaning of either offer. There was no room to accept the offers and dispute causation in relation to either or both of the alleged injuries.

The Claimant relied on cases including Lunnun v Singh [1999] 7WLUK 5. The Court of Appeal held that these cases are authority for the proposition that a defendant can contest the extent of causation after a default judgment or summary judgment has been entered, only in so far as they do not seek to go behind the issues that the judgment is taken to have determined. They do not establish that it is always open to a party to contest causation having admitted liability. They depend on their facts and the precise pleadings.

The correct construction of the offers was that accepting them would have meant admitting liability for both the neck and back injuries. Since the Defendant was found liable only in relation to the neck injury, he bettered both offers. The appeal was dismissed.

For those wondering how they can avoid similar issues, Asplin LJ had this advice:

Cases of this kind turn, inevitably, on the precise wording of the pleadings and the particular terms of the Part 36 offer. In order to avoid the kind of dispute which has arisen here, especially in a low value claim, it is important to make express reference in the Part 36 offer to whether the offer relates to the whole claim or part of it and/or the precise issue to which it relates, in accordance with CPR 36.5(1)(d). In particular, if the issue to be settled is “liability”, it would be sensible to make clear whether the defendant is being invited only to admit a breach of duty, or if the admission is intended to go further, what damage the defendant is being invited to accept was caused by the breach of duty.”

About the Author

Ella Davis was called to the Bar in 2013. She undertakes work in the cross border field on behalf of both Claimants and Defendants. She has particular expertise in claims involving allegations of fundamental dishonesty and has a good deal of experience in conducting trials around the issues which arise from such allegations.

 

…And Finally…

Imagine the surprise of the partner at JMW Solicitors when he received a letter of claim drafted by himself. It turned out that the suspiciously familiar letter had been plagiarised and sent out by another firm on no fewer than 242 occasions (the firm in question says it had instructed a barrister to draft a letter of claim for them, and this was the result). The whole sorry saga reminds the older members of the team of the occasion when Alan Saggerson, now His Honour Judge Saggerson, was instructed to plead a Defence to one of his own Particulars of Claim, which had been plagiarised by a firm which had previously instructed him in another, similar matter. We still remember the glee with which he pleaded that his Particulars of Claim disclosed no cause of action and ought to be struck out without delay.

The moral, we feel, is this: Neither a borrower nor a lender be, For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry. In other words, it’s probably best not to pinch someone else’s work.

Written by or involving: Ella Davis, Christopher Pask

Share:   


LATEST ARTICLES
[View All News]

Subscribe for our newsletters, updates and seminars


Subscribe