This week's caselaw
Gunn v Diaz: Whether Costa Rican insurance company was a necessary or proper party to a claim/interpretation of a policy condition
The English claimant and her relatives (and insurers) claimed against various parties after she was injured in a road accident in Costa Rica. It was argued that the car hire company which had hired out the car which hit the claimant was "an anchor defendant" under one of the gateways under PD6B para 3.1(3), so that the Costa Rican insurer of the car could be served out of the jurisdiction as it was "another person who is a necessary or proper party" to the claim against the car hire company.
At the time when the original application was made to serve out of the jurisdiction on all the defendants, there were some authorities at first instance supporting the proposition that if consequential loss and damage was suffered within the jurisdiction following an accident abroad, that would suffice to bring the claim within the tort gateway. The Court of Appeal, in Brownlie v Four Seasons (see Weekly Update 25/15), has since ruled that "damage" for the purposes of the tort gateway means direct damage, not consequential loss.
Accordingly, at the time the order for service out was made it was valid. Although it was not automatically nullified by the Court of Appeal's decision in Brownlie, the attention of the court should have been brought to this case when an application to extend time for service was made, without notice, later on. The judge held that "Permission that was rightly granted will not be discharged simply because circumstances have changed; but decisions of a higher court which change the view of the law which prevailed at the time when permission was granted do not change the law: they clarify what the law has always been. Thus permission that was granted on a mistaken view of the law can be discharged in circumstances where a higher court has subsequently corrected the mistake". Accordingly, there was no permissible "anchor party" on which jurisdiction over the insurance company could be based.
The claim against the Costa Rican insurer was in any event a claim based on contract, rather than tort (under Costa Rican law, a third party claimant can step into the shoes of an insured if the insured does not claim against its insurer). With the loss of an "anchor defendant" in this jurisdiction, there was no other basis for finding that the court had jurisdiction over the insurer. In any event, even if the court had jurisdiction in respect of the car hire company, the insurer would not have been a "necessary or proper party" to that claim: "There is no, or no sufficient connection between a claim that a defendant who is not an assured under the insurance policies is liable in tort for the negligence of the driver, and a claim by the injured party to be subrogated to the rights of the driver.. against their insurers". She did, however, concede that "I can see that in another case, there might be a sufficient connection between a claim in tort against the driver or owner of the car, and the claim of the injured party to be subrogated to the driver's or owner's rights under an insurance policy covering him for such tortious liability".
A preliminary issue had been whether the insurer was entitled to decline cover on the basis of the following condition in the policy which excluded cover: "where there has been fault or negligence of the insured ... in the attention of the judicial process and it has influenced its result, causing a greater obligation in the indemnities to be borne by the insurer".
The car hire company and the (possible) driver of the car had allowed default judgment to be entered against them. On the facts, it was shown that the car hire company was not actually an insured under the policy. In any event, the judge said that even if it had have been an insured, she doubted that it would be possible to conclude on the evidence that the failure to defend had left the insurers any worse off. As for the driver, he would have had no defence on liability and even if certain heads of damage or quantum would have been susceptible to challenge, the policy limit would have been exhausted by the claim "come what may".
Commerzbank v Liquimar: Court considers whether an asymmetric jurisdiction clause conferred exclusive jurisdiction on the English court
Article 25 of EU Regulation 1215/2012 provides that if the parties agree that the courts of an EU Member State have jurisdiction, those courts will have exclusive jurisdiction (unless the parties agree otherwise). Accordingly, if the courts of any other Member State are seised, those courts shall stay their proceedings. The issue in this case was whether an asymmetric jurisdiction clause confers exclusive jurisdiction.
In an asymmetric jurisdiction clause, one of the parties must bring proceedings in a certain Member State, whereas the other party can choose to bring proceedings elsewhere. So, for example, in this case, one of the parties agreed that the English courts had jurisdiction, whereas the other party could bring proceedings in any court of competent jurisdiction.
Cranston J held that the clause conferred exclusive jurisdiction on the English court, so it could hear the case, even though it was not the courts first seised: "That this applies in respect of a claim by the defendants alone does not detract from this effect".
MacInnes v Gross: Costs and currency fluctuations
One of the issues in this case was whether the defendant, in whose favour costs were ordered, should be entitled to recover additional sums to reflect currency losses caused by the decline in the exchange rate between the Pound and the Euro since costs payments had been made.
The defendant sought to rely on the recent decision of Elkamet v Saint-Gobain (see Weekly Update 01/17), in which Arnold J held that "If one accepts, as I do, that in principle the court has power to make an order for damages or costs in a foreign currency, then it seems to me to follow as a matter of logic that the court ought to have power, if it decides to make an order in sterling, to compensate for any exchange rate loss."
However, Coulson J declined to follow that decision. Unlike in Elkamet, he did not have particular figures to consider. He also said that he was uncomfortable with the idea that an award of costs should be treated like a claim for damages: an order for costs will almost never allow the payee to recover the actual costs that have been incurred. Furthermore, he said that "I do not myself see the close analogy between ordering interest on costs, which is commonplace, and ordering exchange rate losses due to the particular time that the costs were paid, which is not. The paying party can work out in advance the additional risk created by the potential liability to pay interest on costs, but any potential liability to pay currency fluctuations is uncertain and wholly outside his control".
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