28
Feb
22
Articles, Travel & Cross Border Claims
The Weekly Roundup: The State Authority Edition

This week the discussions around the 1CL dining table have turned to issues of recognition of State authority; whence do governments derive their right to govern, and what do they do with those rights once they have them? We refer, of course, to the doctrine of acta iure imperii, as our readers will no doubt already have appreciated. And sometimes state actors get things wrong; when they do, it becomes necessary for them to reflect on their choices and try to put them right. Just such a process is occurring within the EC as we speak; yes, the consultation on the 2015 Package Travel Directive is under way, and once again the team is crystal ball gazing. A brave endeavour in these unpredictable times.

 

Acta iure imperii and applicable law

Before the Rome Regulations were adopted in the UK by automatic operation of EU law, the instrument governing the way in which the courts handled conflicts of laws issues was the Private International Law (Miscellaneous Provisions) Act 1995. The old regime is preserved for a few categories of cases which fall outside the scope of the Rome Regulations. One such cohort is of cases concerning the tortious liability of the State for acts and omissions in the exercise of State authority (acta iure imperii).

This could be a relevant consideration for practitioners involved in cases involving diplomats or consular staff around the globe, soldiers, police officers in special overseas jurisdictions, border officials stationed at foreign ports, or official delegations at summits, who have come to harm.

The case of Rai v Ministry of Defence (unreported), 9 May 2016, (Middlesbrough District Registry) provides a useful discussion of the legal principles relating to acta iure imperii and the application of Rome II or the 1995 Act. In that case, the claimant was injured when a horse kicked him in the head as he was attempting to clean its hoof whilst in Alberta, Canada, in the course of his duties as a Ghurkha soldier in the British Army. The claimant brought proceedings against the Ministry of Defence as his employer (or quasi-employer) and contended that the matter was civil and commercial and within scope of Rome II; the defendant argued that the alleged negligence arose from acta iure imperii.

HHJ Mark Gargan sitting as a deputy High Court Judge in that case determined that on the facts, it was a civil matter which fell within scope of Rome II and not an exercise of state power. The Judge said it was not enough that the purpose or motive of the relevant act is to serve the purposes of the State – for example to train a soldier – it is necessary that the act has the character of a governmental act as opposed to an act which a private citizen can perform, for only then is the state acting in the exercise of its public/sovereign powers rather than in its private capacity.

What is the difference between the two regimes when it comes to determining the substantive law of the proceedings? In many cases it will not make any difference other than to the pleadings which instrument applies. Like Article 4 of Rome II, the 1995 Act contains a ‘general rule’ – the lex causae will be the law of the country in which the events constituting the tort in question occur: that is, for personal injury, the country in which injury was sustained (s.11). The 1995 Act also includes a displacement of the general rule akin to Article 4(3) of Rome II where it “is substantially more appropriate for the applicable law for determining the issues arising in the case, or any of those issues, to be the law of the other country” (s.12) – ‘substantially more appropriate’ being akin to the ‘manifestly closer connection’ test under Rome II.

Where the two regimes differ is the absence of a corollary in the 1995 Act to Article 4(2) of Rome II – where the parties are both habitually resident in a different country. This has the potential to shift the burden of argument. In Rai, for instance, because both the soldier and the MOD were domiciled in England and Wales, the presumption under Rome II was that English law would apply under Article 4(2); the burden was on the party wanting to show that Albertan law should apply to make the case that it was substantially more appropriate. Under the 1995 Act, however, the presumption was that Albertan law applied and the burden was on the party wanting to apply English law to show that England was manifestly closer connected to the tort. In Rai, it made no difference: the case for English law was made either way; but it is not hard to see how the shifting of the burden could affect the outcome in more marginal cases.

The other key difference which may have a bearing on any given case, even where the 1995 Act and Rome II point to the same lex causae, is in respect of the assessment of damages. English law traditionally (i.e. before Rome II) treats the recoverability of a head of loss or damage as a substantive matter to be determined according to the applicable law, but the assessment or quantification of that loss is a matter of procedure and dealt with according to the law of the forum (that is, according to English law). This was the position before Rome II and continues to be the position for all cases to which the 1995 Act applies (Harding v Wealands [2006] UKHL 32). Under Rome II, in contrast, the law applicable to substantive matters includes both the determination of the head of loss and the assessment or quantification of that damage. Article 15(c) of Rome II, under the sub-heading, “Scope of the law applicable”, sets out that, “The law applicable to non-contractual obligations under this Regulation shall govern in particular … (c) the existence, the nature and the assessment of damage or the remedy claimed”.

The consequence of this is that the 1995 Act, and the traditional English approach, gives judges more flexibility to make an award of damages which is more closely tied to the claimant’s reality. As practitioners will be all too familiar with, it is a great oddity of Rome II that in so many cases an injured party convalescing in England should have his/her damages assessed by reference to the cost of living in Spain.

Jacob Rees-Mogg in a column in the Sun a couple of weeks ago invited readers to write to him with suggestions for Brussels-derived law which the unyoked UK could alter, or do away with. I very much doubt many will write in suggesting Rome II – the general public no doubt sharing the government’s prioritised concerns about imperial measures, pint glasses, and bendy bananas – but it is an area where the government could arguably sell ‘a win’ by a minor reversion to the traditional, more flexible, English way of dealing with conflicts of laws. What better way to ‘take back control of our laws’ than by using them more often. There is an exercise of state power unlikely to be injurious.

About the Author

Tom Yarrow was called in 2018. Before joining chambers Tom was a civil servant working in various government departments, including as a policy advisor on the UK-EU Withdrawal Agreement at the Department for Exiting the European Union. During pupillage he worked with the Government Legal Department, practising in public law in the fields of public international law, justice and security, human rights and immigration. He has regularly appeared in judicial review proceedings for the Secretary of State for the Home Department, and as a member of the Attorney General’s ‘junior junior’ scheme, he is able to take instructions directly from government clients. He now practises in all of chambers’ practice areas and is an enthusiastic and valued member of the travel team.

 

European Commission consults on changes to the Package Travel Directive: All change or business as usual?

Just when we’re starting to tell our ‘packages’ from our ‘linked travel arrangements’ and our ‘traders’ from our ‘retailers’, the European Commission (EC) has launched a formal consultation on revising the Package Travel Directive (EU) 2015/2302 (PTD). Whilst any revisions will not automatically become part of our law, following the UK’s departure from the EU at the end of January 2020, UK legislators have indicated a willingness to follow suit and UK companies trading in Europe will need to comply in any event.

The public consultation was launched on 15th February 2022 and follows a combined evaluation and Inception Impact Assessment Roadmap, published in August 2021. Whilst the EC invites comment on perennial issues such as the definition of a ‘package’, it focuses on recent challenges to the industry; in particular, those arising out of the Covid-19 pandemic and the failure of Thomas Cook.

Some of the key proposals under discussion (and our view on their likelihood of coming to fruition) are as follows:

Creation of a ‘crisis fund’

In the early days of the pandemic, airlines found themselves entirely unable to meet the avalanche of demands for refunds for cancelled flights within 14 days (or at all) after they were effectively grounded. The EC is considering creating a ‘crisis fund’ in order to give travel companies access to liquidity in the event of ‘unavoidable and extraordinary circumstances’.

Likelihood of happening: Nil

The obvious question is: who would fund it and how. It is very unlikely that state actors would be prepared to provide (in effect) an overdraft facility to private companies, or that cash-strapped travel companies would be willing to act as a mutual. Likewise, such a fund would not be sufficient where, as happened with Covid, the entire sector found itself in need of liquidity at the same time.

Approval of the use of vouchers for cancelled holidays

In response to the issues above, it became widespread practice for customers to be issued with vouchers instead of cash refunds (as required by law). The EC is considering whether to revise the PTD to sanction this practice provided certain conditions are met. Namely, that (i) the customer agrees, (ii) a refund is automatically issued if the voucher is not used within a given period and (iii) the voucher is financially protected.

Likelihood of happening: Evens

 

The significant benefits to the travel industry in being permitted to issue vouchers are self-evident and the conditions likely to be attached to their use mitigate the potential for unfairness. But the right to a prompt, cash refund is a crucial aspect of consumer protection in this area and the EC will be wary of diluting this, particularly given the unequal bargaining position between consumers and travel companies.

Writing foreign office advice into refund rights

It comes as something of a shock to many (if not most) consumers that advice from the Foreign Office not to travel – either to a specific destination or generally – does not confer an automatic right to a refund if that consumer then cancels their holiday. The PTD is currently silent on the relevance of government advice and the EC is considering making express reference to the same.

Likelihood of happening: Too early to say

Any proposal enlarging the consumers’ right to cancel and receive a refund will meet with stiff resistance from the travel industry. As things stand, it is too early to say either what kind of government advice would fall within the scope of the PTD or how it would translate into rights to a refund. One would not expect a change in advice against travel to Brazil due to an increased risk of contracting malaria to attract a refund. But where travel is all but forbidden, for instance because of a substantial terrorist threat, it is hard to see why the consumer should bear the entirety of the financial risk of cancelling.

Travel companies are invited to submit responses on the above and other issues by 10th May 2022.

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.

 

…And Finally…

We at 1CL consider that we have adapted to remote working as well as anyone; we were amongst the first at the Bar to declutter the house and purchase books by weight to add to the shelves of Jackie Collins novels to be seen in the background behind us. It is precisely this Can Do attitude that our readers like to see. But even we would draw the line at attempting to participate in a remote hearing whilst driving the 1CL van. No such scruples troubled a witness appearing recently before Recorder Douglas Campbell QC, however; first he tried to give evidence by balancing his mobile phone on the passenger seat of his van, and then, told to stop driving and find somewhere quiet to sit, he made the attempt from a busy office. On the third attempt he retreated to a store room, but regrettably forgot to take his witness statement with him. Having retrieved it, he was asked about the exhibits to it, but didn’t have those either, and had no idea where they might be. Perhaps unsurprisingly, the judge gave his evidence no weight. Litigators may wish to reflect on the wisdom of providing witnesses with some guidance on how to give evidence remotely; and, as a bare minimum, all witnesses should be given an accessible copy of the trial bundle.

 

Written by or involving: Tom Collins, Thomas Yarrow

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