The Civil Procedure Rule Committee has approved a number of new jurisdiction gateways in PD 6B, as well as amendments to existing gateways, aimed at filling in perceived gaps in the current rules or, in some cases, clarifying their meaning. The changes are expected to come into effect in October this year and some of the key changes are summarised in brief below.
The extension of the gateways is significant given that, post-Brexit, if you are unable to serve proceedings on a defendant within the jurisdiction, permission is needed to serve out, even for EU and Lugano defendants, absent a jurisdiction clause or a consumer or employment claim.
The expansion of the gateways appears in tune with the courts’ approach in recent cases, which have taken an expansive view of the gateways and left the heavy lifting to the forum conveniens test. Most significantly, in the Brownlie case, the Supreme Court took a very wide view of the tort gateway, finding it extended (in the personal injury context at least) to pretty much any damage experienced within the jurisdiction.
Increase in international cases?…..probably not
Whether the changes will result in more international cases being heard by the English courts, however, remains to be seen. While there will be more and wider gateways, a claimant will still have to show that England is the forum conveniens, and that test is likely to prove more difficult to satisfy post-Brexit, given that the English court is no longer obliged to exercise jurisdiction over anchor defendants domiciled in the jurisdiction.
So for example, before Brexit, if you had an English domiciled defendant and an application to serve out against a New York co-defendant, if the English court refused permission, there would be proceedings in England against the English defendant and proceedings elsewhere against the New York party (as the English court could not stay its proceedings against the English defendant because of the ECJ decision in Owusu). Refusing permission meant increased costs and the risk of inconsistent judgments, and was often a strong factor in the English court deciding to accept jurisdiction over co-defendants. Now, post-Brexit, with the English courts again having power to stay proceedings against the English party, that issue has gone away, and the court can take a view on which country is the most appropriate for the case against all defendants to be heard in.
Additional and wider gateways may therefore mean less focus on whether claims fall within gateways, as a clearly applicable gateway will often be found, but there will still be plenty to argue over when it comes to where the claim should be heard.
No reduction in cost
The gateway changes are unlikely to have any great effect, unfortunately, on the cost involved in obtaining permission to serve outside of the jurisdiction, much of which is incurred in satisfying the third part of the service out test, “serious issue to be tried”. Extensive evidence is often put before the court to ensure that full and frank disclosure has been given (with the threat of permission being overturned in a future jurisdiction challenge if the court considers it has not been told something it should have been).
Jurisdiction challenges are also unlikely to be reduced to any great extent, with forum and merits continuing to be fought over.
More fundamental change in the future?
Proposals aimed at streamlining the process (including getting rid of the expensive permission stage for something more akin to the tick box approach in the Brussels regime) have very recently been put forward by Professors Briggs and Dickinson, but such fundamental change is some way off, even assuming it attracts the buy-in needed from the private international law community, judiciary and government.
Key gateway changes – in brief
The CPR service sub-committee divided its proposed amendments into three categories, anticipating that some would be more controversial than others, although in fact all the proposals were accepted by the full Civil Procedure Rule Committee without opposition at its recent meeting.
- The test for domicile is clarified as being the residence plus substantial connection test in the Civil Jurisdiction and Judgments Act 1982, rather than the common law test (other than for claims involving administration of estates).
- There is a new gateway for disputes arising out of the operations of a branch, agency or other establishment, derived from the similar provision in the Brussels regime.
- There is a new specific gateway for negative declarations where a corresponding claim brought against the claimant would have fallen within certain of the gateways.
- Gateway 4A (claims arising out of same or closely connected facts) is to be amended so as to apply in more circumstances, including where service takes place in the jurisdiction, unless that is because the defendant agreed to accept service.
- There is a new specific gateway for contempt applications, taking on board the court’s comments in Deutsche Bank v Sebastian Holdings Inc (Nos 1 and 2).
- Amendments will be made to CPR 62.5 to permit service of arbitration claim forms out of the jurisdiction without the need for permission in some circumstances.
- There are new gateways for breaches of trust or fiduciary duty within the jurisdiction.
- The tort, constructive trust, fiduciary duty and breach of confidence/privacy gateways are extended to claims governed by English law.
- The gateway for contracts made within the jurisdiction is amended to include where a contract was concluded by the acceptance of an offer made within the jurisdiction.
- There is a new gateway for Norwich Pharmacal and Bankers Trust applications.
- There are new trust, fiduciary duty and confidentiality/privacy gateways where the legal relationship came into existence in the jurisdiction.
- There are new gateways for claims against third parties for unlawfully causing or assisting in breaches of contract, trust, fiduciary duty or confidentiality/privacy where the relevant relationship or the breach has certain connections with the jurisdiction
- There are new gateways for claims for declarations that no trust, fiduciary duty or duty of confidentiality/right to privacy has arisen where if it had done so it would satisfy a gateway.