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In this post, Maxie Chopard, a trainee solicitor at CMS, comments on FS Cairo (Nile Plaza) LLC v Brownlie [2021] UKSC 45, an important judgment providing guidance on the rules governing service out of the jurisdiction.

On 20 October 2021, the Supreme Court delivered its judgment in FS Cairo (Nile Plaza) LLC v Brownlie [2021] UKSC 45. The two issues on appeal were:

(i) whether Lady Brownlie’s claims in tort passed through the gateway in paragraph 3.1(9)(a), CPR Practice Direction 6B (the “tort gateway”), in that “damage was sustained…within the jurisdiction” so as to allow service to be effected on FS Cairo, a foreign defendant (the “tort gateway question”); and
(ii) whether Lady Brownlie could rely on English law or must adduce evidence of Egyptian law in showing that her claims (both in contract and in tort) had a reasonable prospect of success (the “foreign law question”).

FS Cairo’s appeal was dismissed by a 4-1 majority on the tort gateway question with Lord Lloyd-Jones delivering the leading judgment. The Supreme Court unanimously dismissed the appeal on the foreign law question, for reasons set out in the judgment of Lord Leggatt.

Background

In 2010, Sir Ian Brownlie QC and his wife, Lady Brownlie, stayed at the Four Seasons Hotel Cairo while on holiday in Egypt. Lady Brownlie hired a chauffeur-driven car through the hotel, which was operated by FS Cairo. A serious road traffic accident occurred in which Sir Ian Brownlie QC and his daughter were killed. Lady Brownlie and the remaining passengers suffered serious injuries.

In 2012, Lady Brownlie brought claims in contract and tort against Four Seasons Holdings Incorporated (“FS Holdings”), a Canadian company, in the High Court, seeking damages: (i) for personal injury in her own right; (ii) in her capacity as executrix of the estate of her late husband for wrongful death; and (iii) for bereavement and loss of dependency in her capacity as her late husband’s widow. She was granted permission to serve the proceedings out of the jurisdiction in 2013. FS Holdings challenged the English courts’ jurisdiction.

In 2018, the Supreme Court found that the English courts had no jurisdiction to try the claims against FS Holdings as it was a non-trading holding company that did not own or operate the hotel (“Brownlie 1”).

Lady Brownlie was subsequently allowed to substitute FS Cairo as the defendant. As FS Cairo is an Egyptian company, she once again required permission for service out of the jurisdiction. To this end, Lady Brownlie had to show in respect of each claim that:

(i) it falls within a jurisdictional gateway under Practice Direction 6B;
(ii) it is a claim that has a reasonable prospect of success; and
(iii) England is the proper place in which to bring the claim (forum non conveniens).

The High Court declared that the court had jurisdiction to try Lady Brownlie’s claims in contract and in tort. FS Cairo appealed against this decision on two grounds: (i) that Lady Brownlie’s claim did not fall within the tort gateway; and (ii) that she had not shown that her claims in tort and contract had a reasonable prospect of success. The Court of Appeal (Lord Justice McCombe, Lord Justice Underhill and Lord Justice Arnold) affirmed this decision by a majority, with Lord Justice Arnold dissenting on both grounds.

The Tort Gateway Question

Majority Opinion

In the Supreme Court Lord Lloyd-Jones favoured a broad reading of “damage” as referring to actionable harm, direct or indirect, caused by the wrongful act alleged. This interpretation reflected the ordinary and natural meaning of the word and was in accordance with the purpose of the tort gateway. He held that all three heads of claim related to actionable harm suffered in the jurisdiction as a result of the wrongful acts alleged, and therefore passed through the tort gateway.

Lord Lloyd-Jones also did not think that this wide interpretation of “damage” would give all claimants in personal injury cases a right to bring proceedings in the jurisdiction of their residence. Claims which did not have their closest connection with England and Wales would not be accepted. The jurisdictional gateways formed only one element of the test; it must also be shown that this is the proper place in which to bring the claim. Further, the courts’ structured and predictable exercise of discretion under forum non conveniens would prevent the acceptance of jurisdiction where there was merely a “casual or adventitious link” between the claim and this jurisdiction.

Finally, Lord Lloyd-Jones found that it was not necessary or appropriate to limit the tort gateway by a restrictive reading or by attempting to distinguish between direct and indirect damage. The line of authority for economic tort cases in which it was held that “damage” was not the place where financial losses were suffered should be distinguished from personal injury cases.

Dissenting judgment

On the other hand, Lord Leggatt favoured a narrow interpretation of “damage” as direct damage, in line with the approach adopted in cases involving economic torts. He disagreed that “damage” as a matter of ordinary language meant all physical, psychological or economic harm which the claimant sustains in England and Wales. In personal injury cases, the place where the damage was sustained would be where the accident took place. Dismissing the appeal on this ground, he held that Egypt was the place where all the damage falling within the scope of the tort gateway was sustained.

Lord Leggatt was firmly of the view that the English courts should interpret the tort gateway in a manner that gives effect to its purpose of requiring a real and substantial connection with the jurisdiction. He cautioned that if the broad interpretation advocated by the majority was correct, a claimant could create a link with the jurisdiction which satisfied the gateway requirement for suing a foreign defendant in the English courts by travelling to England, for example for medical treatment, after the event giving rise to the damage has occurred.

He was also critical of using judicial discretion exercised under forum non conveniens to rein in the wide jurisdiction accorded by the tort gateway. The two limbs of the jurisdictional test were distinct. The jurisdiction gateways were aimed at establishing a sufficient connection with the jurisdiction as a prerequisite to permitting a foreign defendant to be sued in England and Wales. At the forum non conveniens stage, the considerations were whether it would be just or legitimate for the English courts to assert jurisdiction over the defendant.

The Foreign Law Question

Lord Leggatt clarified that there was no scope for applying English law by default given that Lady Brownlie’s amended claim form and particulars of claim were claims for damages “pursuant to Egyptian law”. English law could only be applied based on the presumption that the content of the applicable foreign law is materially similar to the English law on the matters in question (the “presumption”).

The presumption was justified by: (i) similarities among different systems of law; (ii) the requirement of materiality i.e. unless there is a real likelihood that any differences between the applicable foreign law and English law on a particular issue may lead to a different outcome, there is no good reason to put a party to the trouble and expense of adducing evidence of foreign law; and (iii) that the presumption does not determine any legal issue but only operates unless and until evidence of foreign law is adduced.

Lord Leggatt therefore found that Lady Brownlie could rely on the presumption to show that her pleaded claims had a real prospect of success. While the precise nature and extent of the obligations owed would differ from one legal system to another, it was reasonable to presume that under any system of law a hotel operator who entered into a contract with a guest for an excursion in a chauffeur-driven car provided by the hotel would owe contractual or tortious obligations to ensure the safety of its guests.

Nonetheless, Lord Leggatt agreed with the Court of Appeal that Lady Brownlie should serve revised particulars of claim detailing her case under Egyptian law going forward. Parties were entitled to rely on the presumption but this did not alter the ordinary rules of pleading. FS Cairo was entitled to know the case against it, including whether Lady Brownlie would address gaps in her evidence of foreign law or if she would continue to rely solely upon the presumption.

Comment

The Supreme Court followed the approach taken in other common law jurisdictions to adopt a wide interpretation of “damage” encompassing the continuing physical, psychological and economic harm beyond the immediate effects of personal injury suffered overseas. The definition of “damage” side-steps difficult issues such as where to draw the line between direct and indirect damage and distinguishing between various types of harm. Clarity on the legal position in this jurisdiction is welcome for English claimants, who may also benefit from the increased latitude of the courts in exercising discretion on whether England is the proper place to bring the claim.

On the foreign law question, the Supreme Court’s decision is a practical approach from a case management perspective. In the early stages of proceedings, the presumption offers parties an option to manage the costs of adducing expert evidence on foreign law, particularly when the substantive issues are a matter for trial.