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New and extended gateways for service out of the jurisdiction from 1 October 2015

Practitioners should take note that from 1 October 2015, there will be additional grounds on which they may serve defendants domiciled outside Europe, subject to the court’s permission. The making document published as part of the 81st update to the CPR introduces new jurisdictional gateways and amends some of the existing jurisdictional gateways in paragraph 3.1 of PD 6B.

The changes will be welcome by claimants involved in disputes with an international element.

For defendants domiciled outside Europe, the court may have jurisdiction over the claim under the common law or traditional rules. CPR 6.36 and PD 6B enable the court to exercise jurisdiction over foreign defendants where the subject matter of the dispute has a sufficient connection with England. The court may, therefore, give permission to serve proceedings abroad, if the claim fits within one of the jurisdictional gateways set out in paragraph 3.1 of PD 6B. However, importantly, there is a second and separate stage, where the court decides, in its discretion, whether England would be the most appropriate forum for bringing the claim. This means that permission will not be granted unless the claimant can persuade the court that (a) England is the proper place to hear the dispute and (b) that it is appropriate to exercise its discretion in favour of granting permission.

New and amended jurisdictional gateways

The background to the proposals for the new and extended gateways is set out in detail in a final report of a Chancery Working Group, chaired by Henderson J, which was set up to consider proposals from the Lord Chancellor’s Advisory Committee on Private International Law, chaired by Lord Mance. The proposals for new and amended gateways were discussed at the Civil Procedure Rule Committee Meeting on 12 June 2015 and published in the making document setting out changes to practice directions as part of the 81st update to the CPR.

In this blog post, I summarise the key changes to paragraph 3.1 of PD 6B.

New general gateway 4A – general grounds: The claimant may serve a claim form out of the jurisdiction with the permission of the court where:

“A claim is made against the defendant in reliance on one or more of paragraphs (2), (6) to (16), (19) or (21) and a further claim is made against the same defendant which arises out of the same or closely connected facts.”

The purpose of this new gateway is to enable related claims against the same defendant to be tried together in England and Wales, even if the further claim would not by itself satisfy any of the relevant gateways. The gateway will only apply where the court has jurisdiction over the defendant because the claim falls within certain gateways (for example, the claim relates to an injunction, or is in respect of a contract made in the jurisdiction).

New gateway 21 – breach of confidence or misuse of private information: The claimant may serve a claim form out of the jurisdiction with the permission of the court where:

“A claim is made for breach of confidence or misuse of private information where –
(a) detriment was suffered, or will be suffered, within the jurisdiction, or
(b) detriment which has been, or will be, suffered results from an act committed, or likely to be committed, within the jurisdiction.”

This new gateway seeks to address the problems typically found by claimants with claims for breach of confidence against defendants domiciled abroad. Such claims tend to cause problems as it is not clear which existing gateway applies to them. The new gateway makes the position clear.

The Chancery Working Group explained in its report that claims for misuse of private information have also been included in new gateway 21, in the event that the Supreme Court differs from the view of the Court of Appeal in Google Inc v Vidal-Hall that claims for misuse of private information fell within the existing gateway for tort claims (gateway 9).

Expansion of gateway 9 (tort claims): The claimant may serve a claim form out of the jurisdiction with the permission of the court where:

“A claim is made in tort where –
(a) damage was sustained, or will be sustained, within the jurisdiction; or
(b) damage which has been or will be sustained results from an act committed, or likely to be committed, within the jurisdiction.”

The existing gateway 9 has been expanded to include claims in respect of damage which will be sustained in England and Wales to accord with new gateway 21, which refers to detriment which will be suffered.

Expansion of gateway 16 (restitution claims): The claimant may serve a claim form out of the jurisdiction with the permission of the court where:

“A claim is made for restitution where –
(a) the defendant’s alleged liability arises out of acts committed within the jurisdiction, or
(b) the enrichment is obtained within the jurisdiction, or
(c) the claim is governed by the law of England and Wales.”

This new gateway repeats the existing gateway 16, but adds two further limbs to widen its scope.

Expansion of gateway 11 (property claims): The claimant may serve a claim form out of the jurisdiction with the permission of the court where:

“The subject matter of the claim relates wholly or principally to property within the jurisdiction, provided that nothing under this paragraph shall render justiciable the title to or the right to possession of immovable property outside England and Wales.”

This gateway has been expanded, in part, to ensure that it applies to claims relating to trust funds which mainly comprise property within the jurisdiction, but also include some foreign investments.

Expansion of gateway 13 (claim relating to trusts, etc): The claimant may serve a claim form out of the jurisdiction with the permission of the court where:

“A claim is made for any remedy which might be obtained in proceedings for the administration of the estate of a person who died domiciled within the jurisdiction, or whose estate includes assets within the jurisdiction.”

This gateway has been expanded to clarify that it applies, where a person dies domiciled abroad, but has assets in England and Wales.

Expansion of gateway 15 (claim relating to trusts, etc): The claimant may serve a claim form out of the jurisdiction with the permission of the court where:

“A claim is made against the defendant as constructive trustee, or as trustee of a resulting trust, where the claim arises out of acts committed or events occurring within the jurisdiction or relates to assets within the jurisdiction.”

This gateway has been expanded to include claims against trustees of a resulting trust to deal, in part, with the controversy about the distinction between constructive and resulting trusts. It has also been extended to include claims arising from events occurring within the jurisdiction or relating to assets within the jurisdiction, to reflect the varied circumstances in which constructive and resulting trusts may arise.

Implications

The amendments to paragraph 3.1 of PD 6B broaden the heads of jurisdiction within which a claim can be brought. However, their application is qualified by the requirement that the court exercise a discretionary judgment as to the appropriateness of actually exercising its jurisdiction.

The new and amended gateways, in particular new gateway 4A and extended gateway 16, reflect the fact that many disputes have an international element and confirm that England and Wales will be an available forum for such disputes, even where the defendant is not domiciled in Europe.

The addition to the list of potential heads of jurisdiction of claims for breach of confidence and the clarification that claims for misuse of private information is also welcome, as claimants will no longer need to consider whether to classify their claim for misuse of private information (instead of as a claim for breach of confidence) for the purposes of service out.

Practical Law Dispute Resolution Martha Castaneda Wilcox

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