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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Ace European Ltd & Ors v Howden Group Ltd & Anor [2012] EWHC 2427 (Comm) (17 September 2012) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2012/2427.html Cite as: [2012] EWHC 2427 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
London EC4 1NL |
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B e f o r e :
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(1) ACE EUROPEAN LIMITED (2) HDI-GERLING INDUSTRIE VERSICHERUNG AG (3) NEW HAMPSHIRE INSURANCE COMPANY (4) PORTMAN INSURANCE LIMITED (5) QBE INSURANCE (EUROPE) LIMITE (6) SWISS RE EUROPE SA |
Claimants |
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and – |
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(1) HOWDEN GROUP LIMITED (2) HOWDEN NORTH AMERICA INC. (formerly HOWDEN BUFFALO INC.) |
Defendants |
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Richard Jacobs QC (instructed by Covington & Burling LLP) for the Defendants
Hearing dates: 26 & 27 June 2012
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Crown Copyright ©
Mr Justice Field:
It does not appear, however, that English law would apply. It should be noted that the court's analysis pertaining to the applicable law is at this stage a preliminary assessment because the parties did not fully brief the matter. … It is sufficient for purposes of these motions to conclude that it is unlikely English law will apply and this court must respectfully disagree with the High Court's determination that English law would apply. In any event it appears that, as between Pennsylvania and England, Pennsylvania has a more significant relationship to the disputes than England and a greater governmental interest in seeing its laws enforced.
I do not believe that an appeal in relation to the exercise of discretion on a question of jurisdiction is justified or should be allowed unless the judge has made an error which risks having adverse consequences on the trial of the action that significantly outweigh the prejudice that will inevitably be caused to the proceedings by the appeal process.
In Longmore LJ's view, Beatson J had made no error at all, let alone an error which risks having any adverse consequences on any trial of the action. With the concurrence of the other members of the court, Ward LJ and Sir Stephen Sedley, he dismissed the appeal.
1. There is power to grant a negative declaration in an appropriate case, the fundamental test being whether it would be useful.
2. However, careful scrutiny will be exercised not only to test the utility, or on the other hand the futility, of seeking to determine the claim by means of a negative declaration in England, but also to ensure that inappropriate forum shopping is not allowed, let alone encouraged.
3. A negative declaration will not be appropriate where it is premature or hypothetical, viz where no claim has been made or threatened against the plaintiff.
4. The existence of imminent or a fortiori current foreign proceedings is always a highly relevant consideration, not only for the purpose of testing the utility of the English claim, but also so as to having in mind the need to avoid the twin dangers of forum shopping and of the vices of concurrent proceedings.
1. The Pennsylvania and English choice of law rules are substantially different and Judge Conti has held that it is unlikely that English law will be determined to be the governing law in the Pennsylvania Coverage Actions.
2. Even if English law were held to apply, the US Federal Court was well able to establish what the relevant English law was and how it impacted on the construction of the policies.
3. No order dispositive of the Pennsylvania Coverage Actions will result from the English proceedings because the declarations are not framed to achieve this outcome and the doctrine of issue preclusion will not apply to the governing law question because the choice of law rules in Pennsylvania and England are different. The Pennsylvania Coverage Actions will therefore continue regardless of whether this court retains jurisdiction, and regardless of whether this court grants the declarations sought.
4. The English proceedings are not an attempt to assist the Federal Court but are an inappropriate exercise in forum shopping.
5. As to policies 9-14 (the post 1999 policies which contain an express English law and England jurisdiction clause) the defendants disavow claims for US asbestos personal injury actions and accordingly the above contentions as to lack of utility apply to these policies a fortiori. The court should take the same course as was taken by Beatson J in Faraday in respect of the second and third Faraday policies. There, as regards those policies, the defendants gave an assurance that that no claims would be made thereon as regards US asbestos personal injury actions in the light of which Beatson J held that the declarations sought in respect of those policies lacked the necessary utility.
1. The overall claim for coverage by HNA was being brought in continuing proceedings in Pennsylvania where a dispositive order was being sought. The English proceedings are a fragment of that overall claim. Such fragmentation of litigation, with the possibility of inconsistent judgments and litigation in two places rather than one, is a strong factor which indicates that England is not clearly the appropriate forum.
2. It is far more appropriate for the real dispute between the parties – namely whether the Insurers are required to provide coverage for the actual claims which are being made in the United States – to be fought out in the context of the existing proceedings in Pennsylvania.
3. It is entirely normal for a US policyholder, faced with mass tort litigation in the United States, to seek recovery against his insurers in the jurisdiction where the litigation is continuing.
4. When the claimant insurers wrote this risk, they knew they were providing liability insurance to US companies in respect of liabilities that would arise in the United States, and the policies contain various references to the United States insureds. If a policy is written in such circumstances, without an English jurisdiction clause, the insurer must surely contemplate the likelihood of litigation on the policy (in the event of dispute) in the United States.
5. It is, in principle, undesirable to have competing actions in two different jurisdictions, with the risk of inconsistent, piecemeal or competing judgments. It is far more efficient to have issues litigated and resolved in one setting. New Hampshire is a Pennsylvania corporation. Gerling has extensive commercial contacts with Pennsylvania.
6. The Claimants' case in the Pennsylvania proceedings includes issues as to whether underlying policies have been properly exhausted by payment of asbestos-related defence and indemnification costs. There are also cross-claims between many of the insurers. Judge Conti is concerned generally with HNA's insurance programme. Recovery under policies other than those immediately in dispute will directly impact on how much money, if any, HNA seeks to recover from the Insurers.
7. In a case involving progressive diseases, where a policyholder's coverage encompasses many policies in effect during many years, the overall insurance coverage is relevant to each insurer's liability; not simply because of potential issues as to when the attachment point is reached, but also because insurers will inevitably seek contribution from each other. This is what has already happened following the joinder of the Insurers to the 2011 litigation.
8. The documentary evidence and witnesses, including defence counsel, the plaintiffs, their counsel, and medical evidence relating to the timing of their injuries and the circumstances surrounding their exposure to asbestos are located exclusively in the United States. If the key issue is whether personal injury occurred during the policy period, it will be necessary to examine the medical evidence, including the pathogenesis of the underlying claimants' particular asbestos-related disease, their work history and periods of exposure to different classes of asbestos fibres.
Utility
If made, the declarations sought would be sufficiently useful for the court to exercise jurisdiction since:
1. Judge Conti had not finally ruled on the issue of choice of law and there was a real prospect that the court in Pennsylvania would ultimately decide that English law was the governing law, in which event the English court's decision would be of undoubted use to the Pennsylvania judge notwithstanding that that decision might not be of preclusive effect. The parties had not made full submissions on the issue in the Motions to Dismiss and Judge Conti said in the course of a hearing on 4 June 2012 in which she held that a report on English law by Mr Bright, an English solicitor, could be admitted in the proceedings, "English law may or may not be relevant; that's something that certainly could be argued"[4] and "I don't know yet whether I'm going to need [Mr Bright's report on English law] or not. I mean that's making me agree with you [HNA's counsel], that English law is absolutely not applicable, and I haven't made that final determination. I haven't been asked to do that yet."[5]
2. Moreover, there are significant similarities between the English and Pennsylvania approaches to choice of law.
3. If the Pennsylvania Court were to refuse to apply the law expressly or impliedly chosen by the parties, the declarations sought, if made, would nonetheless be extremely useful in allowing the Claimants to protect themselves from attempts to enforce such a Pennsylvania judgement in England, the EU or anywhere else where an English judgement is recognised.
4. As for policies 9 to 14, Mr Greaney of Covington & Burlington LLP, Counsel for HNA in the 2009 Pennsylvania Coverage Action, had represented to Judge Conti that it was not HNA's intention to join in the pending Pennsylvania litigation any claim HNA might have under the 1999 and 2000 policies, and, in the absence of an identical undertaking to the English Court which would include asbestos-related property damage claims, there is no reason to dismiss the claim in respect of these policies.
Appropriate forum
1. As a general rule, the English Court is regarded as the natural forum for determining questions of construction of contracts governed by English law, see e.g. CGU International Insurance plc v Szabo [2002] CLC 265.
2. The trial of these claims for declaratory relief would largely turn on questions of law and construction and would require very limited factual evidence and no significant investigation into the underlying asbestos proceedings. The trial would therefore be brief and could come on quickly being heard together with Faraday.
3. The Claimants' claims will not create unduly fragmented litigation. The policies in issue were entered into separately with HNA and written from year to year without any joint underwriting decision.
4. In the light of the Court of Appeal's judgement in Faraday, there is in any event going to be a trial of the declarations sought in those proceedings which will overlap with the Pennsylvania proceedings and give rise to the risk of inconsistent judgements.
5. In accepting jurisdiction in this case, the English Court would not be preventing the Pennsylvania Court from continuing to conduct the 2009 and 2011 Actions as it sees fit.
Note 1 The 14 policies are listed in a Schedule to the Particulars of Claim and are referred to hereafter by reference to the number assigned to them in that list. [Back] Note 2 This was Gerling’s second motion to dismiss on forum non conveniens grounds. The first was filed on 1 February 2010 and was dismissed on 26 May 2010 [Back] Note 3 See A K Investment CJSC v Kyrgyz Mobil Tel Ltd [2011] UKPC 7 at [71]. [Back] Note 4 Transcript p.4, lines 17-18. [Back] Note 5 Transcript p.11, lines 12-16. [Back] Note 6 Portman Insurance Company and QBE Insurance (Europe) Ltd. are English subsidiaries of French and Australian conglomerates, AXA S.A. and QBE Insurance Group Ltd, respectively. [Back] Note 7 No dispositive judgement is expected before the Spring of 2013. [Back]