This article was first published on Lexis®PSL Dispute Resolution on 30 January 2017. Click for a free trial of Lexis®PSL.
Third parties, jurisdiction clauses and Brussels I (recast) (Roberts v Soldiers, Sailors, Airmen and Families Association)
Dispute Resolution analysis: How did the courts decide whether a claim for clinical negligence using a jurisdiction clause invoked under Brussels I (recast) was valid or not? Christopher Deacon, associate at Stewarts, examines the case of Roberts v Soldiers, Sailors, Airmen and Families Association, which involved applying Brussels I (recast) to a clinical negligence case.
Roberts (a child and protected party, by his mother and litigation friend) v Soldiers, Sailors, Airmen and Families Association — Forces Help and another  EWHC 2744 (QB),  All ER (D) 01 (Dec)
The Queen’s Bench Division held that having regard to the relevant factual background in relation to a claim in clinical negligence, jurisdiction in relation to a third party had been established under article 8(2) of the Brussels Recast Regulation (EU) 1215/2012 (Brussels I (recast)).
What are the practical implications of this case?
While the backdrop to the case was a clinical negligence action, it has wider application in the field of cross-border litigation and commercial contracts.
The case confirms that a Part 20 claimant can bring a third party domiciled in another Member State into the English courts under article 8(2) of Brussels I (recast) provided there is a ‘close connection’ with the main proceedings. In doing so, the case expands on the line of reasoning in earlier case law that the purpose of allowing third party proceedings under article 8(2) of Brussels I (recast) is ‘to secure the rational and efficient disposal of trials and in particular to avoid the risk of irreconcilable judgments’ (see cases applying article 6(2) of Brussels I (recast): Barton v Golden Sun Holidays  151 SJLB 1128 at para  and Shetty v Al-Rushaid  EWHC 1460 (Ch),  All ER (D) 195 (Jun) at para ).
Roberts v The SSAFAA and MoD also highlights the contractual relationship which is needed for a choice of jurisdiction clause under Brussels I (recast), art 25 to be given precedence by the English court — it is not enough for the jurisdiction clause to merely be part of the commercial background to the parties’ pre-contractual negotiations if one of the parties to the proceedings was not actually a party to the contract expressly incorporating the jurisdiction clause.
What issues did this case raise?
The defendants to the main action for clinical negligence, the Soldiers, Sailors, Airmen and Families Association (SSAFA) and the Ministry of Defence (MoD), brought additional proceedings pursuant to CPR 20 against the German provider of medical facilities and treatment, Viersen, which the SSAFA and MoD said was ultimately responsible for the treatment provided to the claimant’s mother which resulted in him suffering cerebral palsy.
The MoD had appointed Guy’s & St Thomas’ Hospital Trust (GSTT) to procure services from the local medical providers and it was GSTT which had ultimately entered into a contract with Viersen for the provision of those services. The contract contained an arbitration and choice of jurisdiction clause in favour of the German courts. Neither the oD nor SSAFA were a party to that contract.
The main issues in the case were:
- whether the English court had jurisdiction under article 8(2) of Brussels I (recast), over the additional proceedings for a contribution or indemnity brought pursuant to CPR 20, and
- if the court did have jurisdiction under article 8(2) of Brussels I (recast), whether it was bound, under Brussels I (recast), art 25 by the jurisdiction clause contained in a contract concluded by GSTT on behalf of SSAFA and MoD
There was a further issue relating to whether ostensible authority amounted to an agreement ‘in writing or evidenced in writing’ for the purpose of article 25 of Brussels I (recast).
To what extent is the judgment helpful in clarifying the law in this area?
Mr Justice Dingemans’ judgment helpfully clarifies that, for the third party contribution/indemnity claim to be heard alongside the main proceedings when the third party is domiciled in another Member State, it is necessary to show a ‘close connection’ between the main claim and the third party claim. He sets out a three-part test to considering the necessary ingredients for establishing English jurisdiction under Brussels I (recast), art 8(2):
- the provisions of the CPR relating to bringing third party claims (CPR 20) must be satisfied, which of course includes the CPR 20.9(2) requirements
- a close connection between the main claim and the third party proceedings must be established
- the connection must be such that it is rational to join the third party proceedings to the main claim and this furthers the ‘harmonious and efficacious’ administration of justice
In formulating this three-part test, Mr Justice Dingemans drew on the principles set out by the Court of Justice in Sovak — Schwarzmeer und Ostee Versicherungs-Aktiengesellschaft v If Vahinkovakuutusyhtio Oy, Case c-521/14,  All ER
(D) 191 (Jan). [see also ‘News Analysis: Brussels I and third party claims (Sovag v If Vahinkovakuutushtio)’]
The judgment follows a line of authority from the English High Court and the Court of Justice which has read into article 8(2) of Brussels I (recast), (by way of its forerunner article 6(2) of Brussels I), that the need to establish a ‘close connection’ with the main proceedings is an essential requirement. This reflects the wording at CPR 20.9(2) where the closeness between the main claim and third party claim is a strong factor for the English court to take into account when considering whether to allow an additional claim to be made under CPR 20. Such an approach is also consistent with that adopted by the High Court previously in Barton v Golden Sun Holidays Lexis Citation 1266 and Shetty v Al- Rushaid  EWHC 1460 (Ch),  All ER (D) 195 (Jun).
In Roberts v SSAFA and MOD, the ‘close connection’ was established because the proceedings in both the main action brought by the claimant and the third party proceedings would involve determining liability, breach of duty and causation, or to use the judge’s words, ‘a critical evaluation of the treatment received’. There was a risk that the courts in England and Germany might form a different view on legal responsibility, a risk of irreconcilable judgments and therefore, it was rational, and in the interests of the administration of justice, for the English court to exercise jurisdiction over the third party proceedings.
Contrast this with the outcome in Barton, where the judge refused to allow the English tour operator to join the Cypriot hotel to the main proceedings because the main claim had already settled, was unlikely to be revived and therefore the risk of irreconcilable judgments did not arise.
The decision also, unsurprisingly, confirms that where there is no ostensible authority for one party to enter into a contract on behalf of another, the jurisdictional clause contained therein is not binding on a non-party to the contract. The court therefore did not have to decide whether acting by ostensible authority is a sufficient basis to show an agreement ‘in writing or evidenced in writing’ for the purpose of article 25 of Brussels I (recast).
How has the concept of ‘close connection’ under article 8(2) of Brussels I (recast) developed through case law?
Unlike article 8(1) of Brussels I (recast), the wording of article 8(2) does not expressly require a ‘close connection’ and only makes reference to removing the third party from the courts which would otherwise be competent. The requirement for a ‘close connection’ has developed through the jurisprudence of the European court. See the case of Groupement d’intérêt économique (GIE) Réunion européenne and others v Zurich España and another, Case C-77/04,  1 All ER (Comm) 488, determined under the Brussels Convention, where the European court held at paras  and  that:
‘…the national court seised of the original claim…must satisfy itself that the third-party proceedings do not seek to remove the Defendant from the jurisdiction of the Court which would be competent in the case.
It follows that art 6(2) of the Convention does not require the existence of any connection other than that which is sufficient to establish that the choice of forum does not amount to an abuse.’
The European court’s approach has been heavily influenced by the objective behind Brussels I (recast) (and its predecessor) as set out in the recitals — to enable the harmonious administration of justice, minimise the possibility of concurrent proceedings and therefore the risk of irreconcilable judgments.
What are the implications for practitioners? What will they need to be mindful of when advising in this area?
Claimants and defendants alike need to have a keen eye early-on in a case as to who the third parties to the action might be and whether the introduction of an additional claim via CPR 20 might lead to a jurisdictional challenge. Those seeking a contribution or indemnity in this way should act quickly to avoid the risk of being denied jurisdiction because the main claim has already reached a conclusion. Claimants need to be alive to these issues which can significantly slow down the progress of the main claim, particularly where defendants ask for a stay of proceedings while they serve the Part 20 defendant.
Consideration should always be given as to whether parties domiciled in another Member State should be brought in through the mechanism of article 8(1) of Brussels I (recast). In reality, if there is going to be a jurisdictional challenge, whether under article 8(1) of Brussels I (recast), or article 8(2), the ‘close connection’ will need be established. For the parties, it is likely to be a consideration of the strength of their cause of action, the costs implications and the benefit to the likely outcome in any given claim. Claimants have an advantage over defendants and CPR Part 20 claimants when using the article 8(1) of Brussels I (recast) jurisdictional route because a separate application to permit an additional claim under CPR Part 20 will not be necessary.
In Roberts v The SSAFA and MoD, a binding jurisdiction clause could have successfully ousted the English court’s jurisdiction under article 8(2) of Brussels I (recast). Parties negotiating contracts with a jurisdiction clause are therefore reminded of the need to ensure that the clause and contract(s) are drafted in such a way that all of the intended parties are caught by the choice of jurisdiction provisions. Simply giving notice of the jurisdiction clause to a third party (whether implied or express) may not be enough for the clause to be binding on them.
Two further evidential and procedural points arise from the decision. The first is that if a party intends to rely on a foreign law in support of their submissions then this should be pleaded and permission sought to rely on such evidence in good time before the hearing. In the absence of any evidence as to the foreign law, the English court will have no option but to assume its provisions mirror those of English law.
Second, the art 8(2)of Brussels I (recast) argument on which most of this case turned was not expressly raised by the CPR 20 defendant, Viersen, in its application challenging jurisdiction. This point came late, although the defendants and CPR Part 20 claimants were relying on it to obtain English jurisdiction. Mr Justice Dingemans nevertheless allowed the Brussels I (recast), art 8(2) point of law to be argued before him, but reminded the parties that those seeking a very late amendment face a very heavy burden to persuade the court to permit the same.
Are there still any unresolved issues practitioners will need to watch out for? If so, how can they avoid any possible pitfalls?
The question of whether an agent acting with apparent or ostensible authority is an agreement ‘in writing or evidenced in writing’ as required under article 25(1)(a) of Brussels I (recast) was not resolved in this case. The judge did not need to decide this point as he found that GSTT did not have ostensible authority to act on behalf of the SSAFA/MoD. In cases where ostensible authority under the law of agency is established, it remains a moot point whether this is sufficient to come within art 25(1)(a) of Brussels I (recast).
The case highlights the importance of a robust and all-encompassing chain of contractual documents which make clear which parties, including non-parties to the main contract, are subject to a jurisdictional clause. If this is evidenced in writing and clearly communicated at the time a contract is concluded, then questions of written evidence and ostensible authority may be avoided.
Interviewed by Alex Heshmaty.