UK: (Re)insurance Weekly Update 46 - 2015

Last Updated: 30 December 2015
Article by Nigel Brook

A summary of recent developments in insurance, reinsurance and litigation law

This Week's Caselaw

Cook v Virgin Media; McNeil v Tesco: Whether recast Regulation applies where competing jurisdictions are within the UK; court's power to strike out where no jurisdictional challenge made

The main issue in this case is whether the recast Regulation (Regulation 1215/2012) applies to jurisdictional issues where the competing jurisdictions are within the UK. Here, the claimants commenced proceedings in England (where the defendants have their registered offices) but the judge at first instance held that Scotland was the most appropriate forum (relying on the forum non conveniens doctrine, which allows a court to dismiss an action, even though it has jurisdiction, on the basis that another country is a more appropriate forum). It was not disputed that Scotland would be the most appropriate forum – what was in dispute was whether the forum non conveniens rules applied at all, or whether the situation was instead governed by the recast Regulation (which precludes forum non conveniens arguments).

The Court of Appeal noted that, surprisingly, there is no prior caselaw authority on this point. It concluded that the recast Regulation does not apply to proceedings which are "purely" domestic. It cited textbook authority that "if a matter is demonstrably wholly internal to the United Kingdom, so that the only jurisdictional question which may arise is as to the part of or a place within the United Kingdom which has jurisdiction, it is not one in which the Regulation is designed to have any role".

Instead, the Civil Jurisdiction and Judgments Act 1982 applies, and this expressly allows the application of forum non conveniens principles.

The Court of Appeal also agreed that the first instance judge had had power to stay or strike out the proceedings on the ground of forum non conveniens even though the claimants had not applied to the English court for a declaration that it did not have jurisdiction. The judge's power derived from his general case management powers under CPR r3. However, the Court of Appeal cautioned that "to strike out a claim on jurisdictional grounds after a defendant has admitted liability is undesirable. The better course in both cases would have been to stay the proceedings under rule 3.1(2)(f)". However, the decision to strike out was not the subject of the appeal.

Michael Wilson & Partners v Emmott: Appealing a refusal to permit an appeal to the Court of Appeal

A judge refused permission to appeal to the Court of Appeal after dismissing an appeal from an arbitrators' award. Section 69(8) of the Arbitration Act 1996 prohibits any further appeal if the judge at first instance refuses permission.

However, the appellant sought to rely on the Court of Appeal's "residual jurisdiction" to set aside a judge's refusal to grant permission to appeal if the judge has not made a "true decision" (eg he did not hear any argument on the point). The appellant therefore filed a notice of appeal asking for the judge's order to be set aside and seeking permission to appeal. Longmore LJ refused permission on the basis that the application was totally without merit.

The appellant then sought to argue that its application to the Court of Appeal had not been an "appeal" at all, and so permission had not been required. It based its argument on the fact that it was invoking the court's residual jurisdiction and that does not involve an appeal. That argument has now been rejected by the Court of Appeal which has held that, if that had not been an appeal, then it had no jurisdiction to hear the application at all. It further held that the residual jurisdiction in fact derives from section 16(1) of the Senior Courts Act 1981, and the right to invoke that jurisdiction is a "right of appeal".

Thevarajah v Riordan: Supreme Court considers appeal against refusal to grant relief from sanctions

The first instance decision in this case was reported in Weekly Update 38/13. It concerns an application for relief from sanctions. The claimant obtained a freezing order against the defendants which contained certain disclosure obligations. The defendants failed to comply with these disclosure obligations and an unless order was then obtained by the claimant. When the defendants failed to comply with the unless order they were debarred from defending the claim and the defence was struck out. The defendants sought relief from sanctions pursuant to CPR r3.9. That was refused by Hildyard J and the defendants then made a second relief application to a deputy judge. Relief from sanctions was then granted. However, the appeal to the Court of Appeal was allowed, on the basis that CPR r3.1(7) had applied instead in relation to the second application (this rule, part of the court's general case management powers, gives the court the power to vary or revoke an order). Accordingly, relief should have been granted only if there had been a "material change of circumstances". The deputy judge had held that, in any event, there had been a material change because the defendants had now substantially complied with their disclosure obligations.

The Supreme Court has now held that the Court of Appeal was correct to find that CPR r3.1(7) applied to the second relief application. Even if it did not, an application for relief which effectively requires an order be varied or rescinded will require a material change of circumstances. Furthermore a material change of circumstances cannot be the mere fact that the defendant has now complied with an earlier unless order.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Nigel Brook
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