15
Mar
21
Articles, Travel & Cross Border Claims
The Weekly Roundup: the Handy Hints Edition

This week we thought we’d gather together a few thoughts on travel claims generally, from clinical negligence claims arising from treatment abroad, to holiday sickness claims, to the issues around taking timeous instructions from foreign Defendants. But really our thoughts have already turned to the Court of Justice of the European Union and its imminent decision in X v Kuoni, about which Matthew Chapman QC will be commenting in due course. And we’re all steadily working our way through chambers’ handsomely bound edition of the Encyclopaedia Britannica in anticipation of the quiz on 31st March; if you’d like us to squeeze you in, do email sprager@1chancerylane.com to book your place.

 

Consumer claims post-Brexit

Although much of the post-transition-period legal landscape is new, there are still some areas where little has changed. One of these is international consumer claims. The Brussels Recast rules have been incorporated into domestic law, through sections 15A-E of the Civil Jurisdiction and Judgments Act 1982. This means that the courts in England and Wales continue to have jurisdiction in ‘consumer contract’ claims when the consumer is based here and the other party is outside the jurisdiction. This doesn’t just apply to EEA-domiciled defendants, either – the rules are of general application.

So what is required for a claim to involve a ‘consumer contract’ as defined? It requires a ‘consumer’ – a person acting outside of their trade or profession. Consumer contracts for goods bought on credit, and loans or credit to finance the sale of goods are ‘consumer claims’. Otherwise, it requires that the other party to the contract “pursues commercial or professional activities in the part of the United Kingdom in which the consumer is domiciled”, or “by any means, directs such activities to that part or to other parts of the United Kingdom including that part”, and that the contract “falls within the scope of such activities”.

The “by any means…” provision is likely to be the most contentious. Fortunately, the 1982 Act specifically says that the courts will have regard to the pre 2021 CJEU case-law when interpreting these provisions, and the CJEU considered this in some detail in Pammer v Reederei Karl Schluter and Hotel Alpenhof v Heller (C-585/08 and C-144/09). The answer is whether, before contracting with the consumer, “the trader envisaged doing business with consumers in the…state of the consumer’s domicile”. Simply having a website or email address accessible to that consumer is not sufficient. But the CJEU set out a non-exhaustive list of “matters capable of constituting evidence” which a court could use to conclude that the trader did so envisage. These are:-

  • The international nature of the activity;
  • Mention of itineraries from other Member States going to the place where the trader was established;
  • use of a language or currency other than the language or currency generally used in the Member State where the trader was established;
  • Mention of telephone numbers with an international code;
  • Outlay of expenditure on an internet referencing service in order to facilitate access to the trader’s site by customers domiciled in other Member States;
  • Use of a top-level domain name other than that of the Member State in which the trader was established; and
  • Mention of an international clientele composed of customers domiciled in various Member States.

Not all contracts involving consumers will be ‘consumer contracts’ for the purposes of these provisions. But where there is a ‘consumer contract’, S15A-E will be very useful.

About the Author

Andrew Spencer was called to the Bar in 2004, and is listed in the Legal 500 as a Band 1 practitioner in travel law. He acted for the Claimant in the seminal case of Japp v Virgin Holidays Limited [2013] 11 WLUK 131, in which the Court of Appeal considered the time at which applicable local standards should be determined for the purposes of liability under Regulation 15(2) of the Package Travel Regulations; but he is equally comfortable acting for Claimants and Defendants in all travel related claims.

 

Connecting the dots: Collateral use of documents in holiday sickness claims

‘Contamination must be proved; and it might be difficult to prove that food (or drink) was not of satisfactory quality in this sense in the absence of evidence of others who had consumed the food being similarly afflicted’. Travel lawyers will be familiar with this passage from Burnett LJ’s judgment in Wood v TUI UK Ltd [2017] EWCA Civ 11. The same view was expressed by Sir Brian Leveson at [34].

Whether these were careful observations made in light of sound scientific evidence or throwaway remarks, they have come to identify (for many judges at least) a quasi-legal burden for claimants in holiday sickness claims. The problem is this: How do you build an accurate picture of the prevalence of intestinal illness at a particular hotel at a given time when (i) the completeness of the documents provided by the hotel cannot be relied upon because it is not a party and has not signed a disclosure statement, and (ii) customers of the tour operator with whom your client contracted made up only a small fraction of the hotel guests? Part of the answer may lie in an underused procedural tool: the collateral use of documents from one set of proceedings in another.

It is not at all uncommon for lawyers to discover that their roster of clients include people who fell ill while staying at the same hotel either (i) at the same time as one another but with a different tour operator or (ii) with the same tour operator but some days apart. Being able to cross-pollinate both sets of proceedings with documents from the other may be crucial to establishing the existence of an outbreak of illness.

CPR 31.22 provides that documents may be used for purposes other than the proceedings in which they are disclosed where:

(a) the document has been read to or by the Court, or referred to, at a hearing which has been held in public;

(b) the Court gives permission; or

(c) the party who disclosed the document and the person to whom the document belongs agree.

The Court can make an order restricting or prohibiting the use of the document even where it has been read to or by the Court, or referred to, at a hearing which has been held in public.

Documents read/referred to in Court include those read by the Judge outside of Court which informed the conduct of the hearing in Court, even if those documents may only briefly have been referred to in Court (per Lord Bingham in Smithkline Beecham Biologicals SA v Connaught Laboratories Inc [1999] 4 All ER 498).

In the recent decision of Lakatamia v Su [2020] EWHC 3201 (Comm) Mrs Justice Cockerill, drawing in particular on the Court of Appeal decision in Tchenguiz v Serious Fraud Office [2014] EWCA Civ 1409, held that the following general principles apply to a Collateral Use Application:

  • The collateral purpose rule contained in CPR 31.22 exists for sound and long established policy reasons. Unless there are special circumstances which constitute a cogent reason for permitting collateral use the Court will not grant permission under rule 31.22(1)(b).
  • There is a strong public interest in promoting the just resolution of civil litigation. Whether that public interest justifies releasing a party from the collateral purpose rule depends on the circumstances of the case.
  • It is for the first instance judge to balance the conflicting public interests. An appellate court will only interfere with a decision if the judge erred in law or failed to take into account a relevant factor.

Whilst collateral use of documents provides great opportunity in travel litigation, care must be taken not to fall foul of the rules: documents cannot simply be slipped into the bundle in the hope that no objection will be taken.

  • Applicants first need to consider CPR 31.22 and whether permission is needed to use documents in other proceedings.
  • If so, permission may be needed not only to use those documents but to review them to determine whether they are relevant. ‘Use’ is a very broad concept. Doing anything other than realising that documents would be relevant to other actual or contemplated proceedings may constitute collateral use (Tchenguiz v Grant Thornton [2017] EWHC 310 (Comm)).
  • Whilst the application generally will be made in the proceedings where the documents are intended to be used (rather than where they were disclosed) the disclosing party ought to be made aware of the application and given an opportunity to make representations.

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 advises claimants and defendants in multi-party actions.

 

Extending Time to File a Defence: Approach With Caution

Confession time- until recently, my view was that a Defendant who applied for an extension of time to file a defence would be granted such an extension fairly routinely and that, supposing a defence was late, while that exposed the Defendant to default judgment, there was no particular problem so long as the defence was filed before such default judgment was obtained.

I suspect that this was the position assumed by many litigators. However, this was somewhat naïve, and the position for a Defendant may actually be a great deal starker than this.

The Test for an Application to Extend Time

In Billington v Davies & Anor [2016] EWHC 1919 (Ch)[1], DM Pickering reviewed the case law, particularly R (On the application of Hysaj) v Secretary of State for the Home Department [2015] 1 WLR 2472[2] and concluded, at [20] that:

“20 In short, therefore, the position as set out in Sayers was confirmed; on an application to extend time the relevant principles are the same as, or analogous to, those to be applied on an application for relief from sanctions.”

This means, therefore, that the principles in Denton v TH White [2014] EWCA Civ 906[3] apply to such an application. This may come as something of a surprise (welcome or otherwise) to a litigant, given the high threshold imposed by Denton.

The practical application of those principles was summarised recently in in Razaq v Zafar [2020] EWHC 1236 (QB)[4] and the factors described there are a useful guide. It seems to me that applying these specifically to such an application, the following are likely to be of relevance:

Was the failure serious or significant? Failure to serve a Defence is arguably inherently serious or significant or both. That seriousness would be compounded by the application for an extension being made out of time, particularly significantly, or by other significant delay, or perhaps mitigated by the absence of those factors. The seriousness could be mitigated by production of a draft defence, albeit one which might still need clarification or instructions in certain parts; but might be aggravated if the Defendant had already had a long period to investigate the claim. The party’s conduct is likely to be relevant, for example, if the Claimant had already granted an extension, that would significantly aggravate the failure to comply within that period.

Was there a good excuse? A “good excuse” for the requirement of extra time is still the very high threshold at Mitchell MP v News Group Newspapers Ltd [2013] EWCA Civ 1537[5] at [41]. A debilitating illness of a solicitor or the Defendant or an unexpected development which made compliance unreasonable might provide a good excuse; perhaps if the Particulars of Claim were enormous in volume or exceptionally poorly drafted. However, mere oversight, delay, or carelessness arising from overwork or a poor understanding of the rules will not be a good excuse. This will probably also be true of a litigant in person Defendant, applying the Supreme Court’s determination in Barton v Wright Hassall LLP [2018] UKSC 12[6].

Do the interests of justice grant require a grant of an extension? This is of course a catch-all provision and invites a freewheeling approach. It is clear that an application must be prompt- see Pepe’s Piri Piri Ltd & Anor v Muhammad Ali Junaid Food Trends Ltd (Now Dissolved) & Ors [2019] EWHC 2769 (QB)[7], and any failure to do so will be relevant to this head. The scale and complexity of the claim, and the value of the sums involved are also likely to be relevant- a court may be much more sympathetic to an insurer Defendant which risks default judgment in a multi-million-pound brain injury claim than a few-thousand-pound whiplash claim. A realistic prospect of defending the claim, or clear evidence of significant vitiating factors such as fraud or fundamental dishonesty might also be relevant.

This means that a Claimant can take a fairly aggressive stance. However, faced with such an application, it must consider carefully whether it is meritorious. Unsuccessfully to oppose a clearly well founded application invites an adverse costs order- see, e.g. Lakatamia Shipping Company Ltd v Su & Ors [2014] EWCA Civ 636[8].

Does a Late Defence Prevent Default Judgment?

Billington v Davies also concludes, controversially, at [12] that a “defence” for the purposes of CPR 12.3(2)- i.e. whether default judgment can be obtained- means only a timely defence. Thus, contrary to the argument advanced in that claim and contrary to widely believed practice, an application for default judgment is not automatically be defeated whenever a defendant files a Defence, and, by extension, the Claimant will be entitled to default judgment if the Defendant does not apply for and obtain relief.

This remains good law and can properly be argued by a suitably aggressive Claimant. However, it was criticized as “unpersuasive and unsatisfactory” by Baker J in Cunico Resources NV & Ors v Daskalakis & Anor [2018] EWHC 3382 (Comm)[9], and, candidly, is probably wrongly decided. However, there is not, as yet, binding authority on this point, and there is scope for an enterprising firm of solicitors to pursue such an appeal.

When is the Deadline for a Defence?

Under CPR 15.4, a defence is due no more than 14 days after service of the Particulars of Claim; extended to 28 days if acknowledgment of service is served. Plainly any application to extend should be made within the same period if it cannot be kept.

Pursuant to CPR 6.26, where a document other than a Claim Form (such as a Defence) is to be served in the UK by a particular date, it must be served by 16:30 on that date. This could well be relevant in the new era of remote electronic working, where service is increasingly likely by email.

Should an Extension of Time Be Agreed?

Under CPR 15.5, a Claimant may agree to extend the deadline for filing a defence by up to 28 days.

Since CPR 15.5 applies, CPR 3.8(3)-(4) does not. Materially, this means that:

  • CPR 51ZA does not extend the 28-day period to 56 days, so no such period should, or could, be consented to.
  • The Claimant’s prior written consent is not required. An agreement could (in principle) be reached orally and after time has already expired. However, under CPR 15.5(2), the Defendant must inform the court of any such agreement.

So should the extension be agreed to? Failing to do so unreasonably was heavily criticised in Denton at [43] and to do so without good cause would inevitably invite costs sanction.

However, in R (Idira) v SSHD [2015] EWCA Civ 1187[10], it was emphasised that this did not mean that a litigant was obliged to consent to every extension sought. The Claimant is perfectly entitled to weigh up the merits of the Defendant’s request by reference to Denton factors and is unlikely to face cost penalties for a reasonably justifiable decision.

About the Author

Robert Parkin was called in 2009. He has a mixed civil practice, including in the area of travel and cross-border claims. He was junior drafting counsel in Barclay-Watts & Others v Alpha Paraneti & Others [2019] HQ11X02379, a substantial cross border dispute involving mis-selling of holiday lets in Cyprus.

 

…And Finally…

As our readers well know, the team at 1CL have run some ambitious cases in our time. But even we were a bit nonplussed to learn of the American woman who, having been injured in a road traffic accident in Jamaica, sued not only the driver tortfeasor, but the rental company from whom he had hired the car involved in the accident, alleging vicarious liability. The company applied for summary judgment on the basis that the driver could not be said to have been acting as its servant or agent at the time of the accident; and, for good measure, on the grounds that it had been struck from the list of registered companies at the time the claim was filed. The Supreme Court of Jamaica agreed, and the claim against the company was struck out, but since the Claimant is also suing the drivers of both vehicles involved, as well as the tour bus company on whose bus she was travelling at the time, it seems likely that her claim will succeed in the end. The only mystery remaining is why she sued the rental company in the first place.

[1] https://www.bailii.org/ew/cases/EWHC/Ch/2016/1919.html

[2] https://www.bailii.org/ew/cases/EWCA/Civ/2014/1633.html

[3] https://www.judiciary.uk/wp-content/uploads/2014/07/denton-decadent-utilise.pdf

[4] https://www.bailii.org/ew/cases/EWHC/QB/2020/1236.html

[5] https://www.bailii.org/ew/cases/EWCA/Civ/2013/1537.html

[6] https://www.bailii.org/uk/cases/UKSC/2018/12.html

[7] https://www.bailii.org/ew/cases/EWHC/QB/2019/2769.html

[8] https://www.bailii.org/ew/cases/EWCA/Civ/2014/636.html

[9] https://www.bailii.org/ew/cases/EWHC/Comm/2018/3382.html

[10] https://www.judiciary.uk/wp-content/uploads/2015/11/idira-v-sshd-2.pdf

 

Written by or involving: Andrew Spencer, Robert Parkin, Tom Collins

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