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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Flowers & Ors v Centro Medico Salus Baleares SL & Anor [2021] EWHC 2437 (QB) (31 August 2021) URL: https://www.bailii.org/ew/cases/EWHC/QB/2021/2437.html Cite as: [2021] EWHC 2437 (QB) |
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QUEENS BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
sitting as a Judge of the High Court
____________________
(1) PETER FLOWERS (2) EMMA FLOWERS (3) SOPHIA DAVIES (a child by her mother and litigation friend Emma Davies) (4) HARRISON DAVIES (a child by his mother and litigation friend Emma Davies) (5) ASHLEY DAVIES (6) AMELIE DAVIES (a child by her father and litigation friend Ashley Davies) (7) MATTHEW FLOWERS |
Claimants |
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- and - |
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(1) CENTRO MEDICO SALUS BALEARES SL (t/a Hospital Clinica Benidorm) (2) BERKLEY ESPAÑA SUCURSAL EN ESPAÑA |
Defendants |
____________________
Ms Sandra Healy (instructed by Browne Jacobsen Solicitors) for the Defendants
Hearing dates: August 24th and 25th 2021
____________________
Crown Copyright ©
His Honour Judge Wood QC
Introduction and Background
SECTION 1
PRELIMINARY MATTERS
EVIDENTIAL THRESHOLD FOR A JURISDICTIONAL CHALLENGE
"The reference to "a much better argument on the material available" is not a reversion to the civil burden of proof which the House of Lords had rejected in Vitkovice . What is meant is (i) that the Claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the Court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it. I do not believe that anything is gained by the word "much", which suggests a superior standard of conviction that is both uncertain and unwarranted in this context."
"13. My interpretation of the state of the law and the three limb test is straightforwardly as follows:
(i) In limb (i) the Court must decide if it can who has the better of the case. If it decides that the Claimant has the better of the case, he will have a good arguable case or a plausible evidential basis. If the defendant has the better of the case then the Claimant fails.
(ii) Limbs (ii) and (iii). The judge may have to struggle because at the jurisdiction stage the evidence may be wholly uncertain and insufficient and, in particular, because there has been no testing of that evidence by cross-examination or otherwise, and usually no adequate disclosure of documents by either side. He or she may not be able to reach even a provisional conclusion as to which party has the better case, and even if the judge tried to do so he or she may well turn out to be wrong. In such a circumstance where the judge cannot decide, after conscientiously doing his or her best, who has the better of the case, then it is sufficient if the Claimant has a plausible evidential basis and that will suffice for a good arguable case."
"64. In summary:
i) The onus is on ING to establish that they have a "good arguable case" that the English court has jurisdiction.
ii) The burden is on them to show that it has the "better argument on the material available" (making due allowance for the limitations of the material available at an early stage of the case).
iii) The standard is, for the purposes of the evidential analysis, between proof on the balance of probabilities (which is not the test) and the mere raising of an issue (which is not the test either).
iv) The test is context specific and flexible and, if there is an issue of fact, the court must use judicial common sense and pragmatism,[5] not least because the exercise is to be conducted with due despatch."
THE JURISDICTIONAL GATEWAYS UNDER EUROPEAN LAW
"(13) There must be a connection between proceedings to which this Regulation applies and the territory of the Member States. Accordingly, common rules of jurisdiction should, in principle, apply when the defendant is domiciled in a Member State…….
(15) The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant's domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction."
"(16) In addition to the defendant's domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen……."
"(18) In relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules."
"Article 10
In matters relating to insurance, jurisdiction shall be determined by this Section,………….
Article 11
1. An insurer domiciled in a Member State may be sued:
(a) in the courts of the Member State in which he is domiciled;
(b) in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, in the courts for the place where the Claimant is domiciled; or
(c) ……………"
Article 13
1. In respect of liability insurance, the insurer may also, if the law of the court permits it, be joined in proceedings which the injured party has brought against the insured.
2. Articles 10, 11 and 12 shall apply to actions brought by the injured party directly against the insurer, where such direct actions are permitted.
3. If the law governing such direct actions provides that the policyholder or the insured may be joined as a party to the action, the same court shall have jurisdiction over them.
Article 15
The provisions of this Section may be departed from only by an agreement:
(1) which is entered into after[6] the dispute has arisen;
(2) which allows the policyholder, the insured or a beneficiary to bring proceedings in courts other than those indicated in this Section;
(3) which is concluded between a policyholder and an insurer, both of whom are at the time of conclusion of the contract domiciled or habitually resident in the same Member State, and which has the effect of conferring jurisdiction on the courts of that Member State even if the harmful event were to occur abroad, provided that such an agreement is not contrary to the law of that Member State; L 351/8 Official Journal of the European Union 20.12.2012 EN
(4) ……………….
(5) ………………..
Article 25
1. If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise…...
2………
3. ……..
4. Agreements or provisions of a trust instrument conferring jurisdiction shall have no legal force if they are contrary to Articles 15,[7] 19 or 23, or if the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue of Article 24
Article 17
1. In matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession, jurisdiction shall be determined by this Section, without prejudice to Article 6 and point 5 of Article 7, if:
(a)…………………..;
(b)………………….; or
(c) in all other cases, the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer's domicile or, by any means, directs such activities to that Member State or to several States including that Member State, and the contract falls within the scope of such activities.
Article 18
1. A consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or, regardless of the domicile of the other party, in the courts for the place where the consumer is domiciled.
2……………...
3……………….
ISSUES TO DETERMINE
(i) Was there a contract between the late Mrs Flowers and Centro Medico?
(ii) If there was, was it a consumer contract within the meaning of section 4?
(iii) Does the Claimant's claim against Centro Medico fall outside the scope of the consumer contracts section because it has not been brought by the "consumer" within the meaning of the section?
(iv) Was the deceased (or for that matter the first Claimant) at any time domiciled in England?
(i) Whether Article 13 (2) of the Brussels Regulation Recast is inapplicable because under Spanish law (as the law governing the issue whether a direct action against Berkley España is permitted) the Claimants would not be permitted to pursue a direct action against them before the English courts on the basis of the terms in the Berkley España insurance policy on the geographical delimitation of the risks covered;
(ii) If Article 13 (2) does not confer jurisdiction on the English courts over the Berkley España claim, whether it follows that Article 13 (3) does not apply to the claim against Centro Medico;
(iii) If it does confer jurisdiction, whether the Claimants are precluded against Centro Medico because it is not a matter relating to insurance within the meaning of Article 10 of the Brussels Recast Regulation.
THE RESPECTIVE POSITIONS OF THE PARTIES IN OUTLINE
SECTION 2
DOMICILE
Applicable legal principles
"Article 62
1. In order to determine whether a party is domiciled in the Member State whose courts are seized of a matter, the court shall apply its internal law."
"Domicile of individuals (section 41)
"9.—(1) Subject to Article 59 (which contains provisions for determining whether a party is domiciled in a Regulation State), the following provisions of this paragraph determine, for the purposes of the Regulation, whether an individual is domiciled in the United Kingdom or in a particular part of, or place in, the United Kingdom or in a state other than a Regulation State.
(2) An individual is domiciled in the United Kingdom if and only if—
(a) he is resident in the United Kingdom; and [14]
(b) the nature and circumstances of his residence indicate that he has a substantial connection with the United Kingdom."
"(6) In the case of an individual who—
(a) is resident in the United Kingdom, or in a particular part of the United Kingdom; and
(b) has been so resident for the last three months or more,
the requirements of sub-paragraph (2)(b) or, as the case may be, sub-paragraph (3)(b) shall be presumed to be fulfilled unless the contrary is proved."
"44. From the above cases, I would identify the following propositions:-
(1) It is possible for a defendant to reside in more than one jurisdiction at the same time.
(2) It is possible for England to be a jurisdiction in which a defendant resides even if it is not his principal place of residence (ie even if he spends most of the year in another jurisdiction).
(3) A person will be resident in England if England is for him a settled or usual place of abode. A settled or usual place of abode connotes some degree of permanence or continuity.
(4) Residence is not to be judged according to a "numbers game" and it is appropriate to address the quality and nature of a defendant's visits to the jurisdiction.
(5) Whether a defendant's use of a property characterises it as his or her "residence", that is to say the defendant can fairly be described as residing there, is a question of fact and degree.
(6) In deciding whether a defendant is resident here, regard should be had to any settled pattern of the defendant's life in terms of his presence in England and the reasons for the same.
(7) If a defendant visits a property in England on a regular basis for not inconsiderable periods of time, where his wife and children live, in order to see his wife and children (including where the centre of the defendant's relationship with his children is 20 England), such property has the potential to be regarded as the family home or his home when in England, which itself is evidence which may go towards supporting the conclusion that England is for him a settled or usual place of abode, and that he is resident in England, albeit that ultimately it is a question of fact and degree whether he is resident here or not, having regard to all the facts of the case including any discernible settled pattern of the defendant's life or as it has also been put according to the way in which a man's life is usually ordered."
"29. I do not accept Mr Jacob's submission that, in determining whether a residence is a "usual" residence within CPR 6.9 , the test to be applied is essentially one of merely comparing the duration of periods of occupation, taking little account of the nature or "quality" of use of the premises, and ignoring altogether that the premises are occupied permanently by the defendant's family and that the premises can fairly be described as the family home. Mr Jacob's suggested approach is too narrow and artificial. I agree with Mr Peter Shaw, counsel for Relfo, that the critical test is the defendant's pattern of life. In Levene v Commissioners of Inland Revenue [1928] AC 217 the House of Lords considered whether the taxpayer was "ordinarily resident" for the purposes of income tax. Viscount Cave LC said at page 225:
"The suggestion that in order to determine whether a man ordinarily resides in this country you must count the days in which he spends here and those which he spends elsewhere, and that it is only if any year the former are more numerous than the latter that he can be held to be ordinarily resident here, appears to me to be without substance"."
Evidence on residence/domicile
Arguments on domicile
Claimants
Defendants
Discussion on domicile
SECTION 3
CONSUMER CONTRACT GATEWAY
(i) Was there a contract between the late Mrs Flowers and Centro Medico?
(ii) If there was, was it a consumer contract within the meaning of section 4?
(iii) Does the Claimant's claim against Centro Medico fall outside the scope of the consumer contracts section because it has not been brought by the "consumer" within the meaning of the section?
The first is a question of fact determined on the evidence to the requisite standard, the second is mixed fact and law, and the third is a matter of law.
Applicable legal principles
"… Despite the requirement to give a restrictive interpretation to provisions which are exceptions to the domiciliary rule of general jurisdiction, there is no reason to suppose that it excludes claims which deny the existence or validity of a disputed contract………….. The natural interpretation of the policy which justified this provision is that disputes concerning a contract and its enforceability which may or may not be disputed, should gain the benefit of this provision. Any narrower interpretation would damage the proper interests of the weaker party."
In other words, the fact that the Defendants deny the existence of a contract should not, by itself, carry any significant weight.
"26. Next, as the Court has consistently held, the objectives of the Convention include unification of the rules on jurisdiction of the Contracting States' courts, so as to avoid as far as possible the multiplication of the bases of jurisdiction in relation to one and the same legal relationship and to reinforce the legal protection available to persons established in the Community by, at the same time, allowing the plaintiff easily to identify the court before which he may bring an action and the defendant reasonably to foresee the court before which he may be sued ( Case 38/81 Effer v. Kantner [1982] ECR 825 , paragraph 6, and Case C-25/92 Mulox IBC [1993] E.C.R. I–4075 , paragraph 11).
27. It is also consonant with that aim of legal certainty that the court seised should be able readily to decide whether it has jurisdiction on the basis of the rules of the Convention, without having to consider the substance of the case."[18]
"21 In order to determine the nature of the civil liability claims brought before the referring court, it is important first to check whether they are, regardless of their classification under national law, contractual in nature (see, to that effect, Case C-167/00 Henkel [2002] ECR I-8111, paragraph 37)."
"26 It is therefore for the referring court to determine whether the purpose of the claims brought by the applicant in the case in the main proceedings is to seek damages, the legal basis for which can reasonably be regarded as a breach of the rights and obligations set out in the contract which binds the parties in the main proceedings, which would make its taking into account indispensable in deciding the action.
27 If that is the case, those claims concern 'matters relating to a contract' within the meaning of Article 5(1)(a) of Regulation No 44/2001. Otherwise, they must be considered as falling under 'matters relating to tort, delict or quasi-delict' within the meaning of Article 5(3) of Regulation No 44/2001."
"52. Secondly, applying Brogsitter , Ergo , and Amazon , the contract between BNP and the respondent was not simply part of the background to the claim (as it was found to be in Bosworth ); it is the basis for the obligations of which the respondent is said to be in breach. Although it is unwise to be over-definitive as to the precise test to be derived from the European authorities, I derive the following from these three cases:
(a) The mere fact that a contracting party brings a civil liability claim against the other party does not by itself mean that the claim concerns "matters relating to a contract" but it will be sufficient if the conduct complained of may be considered a breach of contract ( Brogsitter [24]) or if the purpose of the claim is to seek damages, the legal basis for which can reasonably be regarded as a breach of the rights and obligations set out in the contract ( Brogsitter [26]).
(b) Only an obligation freely consented to by one person towards another and on which the Claimant's action is based is a 'matter relating to contract' ( Ergo [44]).
(c) The classification of an obligation for the purposes of Rome I or Rome II depends on the (contractual or non-contractual) source of that obligation ( Amazon , AG's opinion [48]). A contractual obligation implies at the very least an actual and existing commitment ( Amazon [50]).
53. On an application of all or any of those principles, it is clear that the pleaded strict liability claim can only be characterised as a contractual claim. It is a claim for damages for breach of the obligations set out in the contract, freely entered into by both sides. That contract is the source of the relevant obligations and imposed the necessary commitments. To put it another way, to use Judge Waksman's words in AXA (paragraph 43 above), the contract was not "a stepping stone to the ultimate liability of [the respondent but] the basis for the obligation actually relied upon…".
"13 For the purpose of answering that question, it is necessary to bear in mind the principle, established by case-law ……….according to which the concepts used in the Convention, which may have a different content depending on the national law of the Contracting States, must be interpreted independently, by reference principally to the system and objectives of the Convention, in order to ensure that the Convention is uniformly applied in all the Contracting States. This rule must apply, in particular, to the concept of "consumer" within the meaning of Article 13 et seq. of the Convention, in so far as that concept is the principal factor in the determination of rules governing jurisdiction."
Relevant evidence
The respective arguments
Claimants
"44. In contrast, where the statutory assignee of the rights of the directly injured party may himself be considered to be a weaker party, such an assignee should be able to benefit from special rules on the jurisdiction of courts laid down in those provisions. This is particularly the situation, as the Spanish Government states, of the heirs of the person injured in an accident."
"AG28. As a preliminary terminological remark common to the entire argument, I wish to stress that in this Opinion, I use the term "subrogation" in a general, neutral way, as generically referring to all kinds of legal "substitution". 7 It simply captures the situation of a person who steps into another person's shoes to enforce rights or assume obligations."
This, it is submitted, is no more than that which the Claimants have done in the present case.
37. Fourthly, it should also be recalled that the Court has held that the purpose of the reference in art.13(2) of Regulation 1215/2012 is to add injured parties to the list of Claimants contained in art.11(1)(b) of that Regulation, without restricting the category of persons having suffered damage to those suffering it directly (judgment of 20 July 2017, Landeskrankenanstalten-Betriebsgesellschaft - KABEG v Mutuelles du Mans assurances - IARD SA (C-340/16) EU:C:2017:576; [2017] ILPr 31 , [33]and the case law cited).
38. Thus, the forum actoris must be extended respectively to the heirs of an insured party and to the employer who continued to pay the salary of an employee injured in a road accident while he is on sick leave after that accident (judgments of 17 September 2009, Vorarlberger Gebietskrankenkasse (C-347/08) [2010] I.L.Pr. 2 , [44], and of 20 July 2017, MMA IARD (C-340/16) [2017] ILPr 31 , [35]).
"AG96. First, the Court has indeed already had the opportunity to examine whether the forum actoris of consumers is applicable to assignees of consumer claims that are not themselves parties to a contract. In the Henkel and Shearson Lehman Hutton judgments, the Court found that the special consumer jurisdiction was not applicable to legal persons acting as assignees of the rights of a consumer. However, the Court arrived at that conclusion not only because, as the applicant submits, those legal persons (a private company and a consumers' association) were not "weaker parties", but also, as clearly stated in both decisions, because those persons were not themselves parties to the contract.
AG97. Secondly, according to the applicant, the case law of the Court relies on an abstract need of consumer protection as the determining element for establishing the forum, irrespective of the assigned nature of claims. In this regard, both the Austrian Government and the applicant have referred to the Court's judgment in Vorarlberger Gebietskrankenkasse , where it was stated that contrary to the social security institutions, "where the statutory assignee of the rights of the directly injured party may himself be considered to be a weaker party, such an assignee should be able to benefit from special rules on the jurisdiction of courts laid down in those provisions. This is particularly the situation … of the heirs of the person injured in an accident".
AG98. Inasmuch as reliance on that case can still be of relevance in the light of the Court's recent judgment in MMA IARD 27 which has considerably nuanced the approach adopted in Vorarlberger Gebietskrankenkasse , the analogy with the present case is misplaced for two reasons. First, the special head of jurisdiction for matters related to insurance is differently conceived and, is, in itself, much broader. Secondly, and more importantly, in Vorarlberger Gebietskrankenkasse , the request was to keep the already extant special forum and to be allowed to pass it on to a third party. What the applicant is effectively asking for is the creation of a new special forum particular to the assignee or successor to the claims, in a situation where those claims have been assigned purely for litigation purposes."
Defendants
"Whereas section 3 of title II applies to all insurance matters, there is a more restrictive definition, or identification, of consumers or their contracts included in section 4. This is partly statutory and partly judicial….."
43. In that respect, it should be recalled, first of all, that the rules on jurisdiction laid down in s.4 of Ch.II of Regulation 44/2001 constitute a derogation both from the general rule of jurisdiction laid down in art.2(1) of that Regulation, which confers jurisdiction upon the courts of the Member State in which the defendant is domiciled, and from the rule of special jurisdiction for contracts, set out in art.5(1) of that Regulation, under which jurisdiction lies with the courts for the place of performance of the obligation in question. Thus, those rules must necessarily be interpreted strictly (see judgment of 28 January 2015, Kolassa (C-375/13) [2015] ILPr 14 , [28] and the case law cited).
44. Next, the Court has already held that, since the special system established in art.15 et seq. of Regulation 44/2001 is inspired by the concern to protect the consumer as the party deemed to be economically weaker and less experienced in legal matters than the other party to the contract, the consumer is protected only in so far as he is, in his personal capacity, the plaintiff or defendant in proceedings. Consequently, an applicant who is not himself a party to the consumer contract in question cannot enjoy the benefit of the jurisdiction relating to consumer contracts (see, to that effect, judgment of 19 January 1993, Shearson Lehmann Hutton Inc v TVB Treithandgesellschaft fur Vermogensverwaltung und Beteiligungen mbH (C-89/91) EU:C:1993:15; [1993] ILPr 199 , [18], [23] and [24]). The same considerations must also apply to a consumer to whom the claims of other consumers have been assigned.
45. The rules on jurisdiction laid down, as regards consumer contracts, in art.16(1) of the Regulation apply, in accordance with the wording of that provision, only to an action brought by a consumer against the other party to the contract, which necessarily implies that a contract has been concluded by the consumer with the trader or professional concerned (judgment of 28 January 2015, Kolassa (C-375/13) [2015] ILPr 14 , [32]).
AG78. The applicant submits that the consumer bringing the claim does not necessarily need to be the same consumer who is party to the consumer contract. Both he and the German Government, argue that art.16(1) of Regulation 44/2001 refers to " a consumer" as the person who can bring the claim not to " the consumer". According to the applicant, requiring identity between the contractual parties and the parties to the proceedings would amount to a contra legem unwritten condition for the application of art.16(1) , not admissible under the Regulation.
AG79. This argument fails to convince. The wording of both art.15 and art.16 of Regulation 44/2001 clearly stresses the importance of the identity of the parties to the concrete contractual relationship in the determination of the applicability of those provisions.
AG80. First, drawing such significant conclusions from the simple use of an indefinite Article at the beginning of a sentence appears somewhat far-fetched. It starts to crumble when inspecting other language versions, such as those in Slavic languages, which do not use (in)definite Articles and where accordingly no such distinction is made. Above all, however, even in the languages that employ Articles and make this distinction, it would be quite logical that since the word "consumer" is mentioned for the first time in a sentence, the first reference is to "a" consumer (using the indefinite), whereas the second reference to the same consumer in that sentence is "the" consumer.
AG81. Secondly, the wording of art.16(1) of Regulation 44/2001 is clear: "a consumer may bring proceedings against the other party to a contract ". 18 In the same vein, art.16(2) of Regulation 44/2001 provides that "proceedings may be brought against a consumer by the other party to the contract only in the courts of the Member State in which the consumer is domiciled".
32. As the Advocate General observed, in [AG47] of his Opinion, the notion of the "weaker party" has a wider acceptance in matters relating to insurance than those relating to consumer contracts or individual employment contracts.
33. It should also be recalled that the Court has held that the purpose of the reference in art.11(2) of Regulation 44/2001 is to add injured parties to the list of plaintiffs contained in art.9(1)(b) of that Regulation, without restricting the category of persons having suffered damage to those suffering it directly……..
"35. First, it is to my mind important to note that the title to section 3 "Jurisdiction in matters relating to insurance" is broader than the words of Article 7(1) "matters relating to a contract " (emphasis added). Similarly, it is wider than the titles of section 4 "Jurisdiction over consumer contracts" and section 5 "Jurisdiction over individual contracts of employment". The difference in wording is significant as it would require to be glossed if it were to be read as "Matters relating to an insurance contract". Such a gloss would not be consistent with the requirement of a high level of predictability of which recital (15) speaks…"
"43. I respectfully disagree with that conclusion. There is no "weaker party" exception which removes a policyholder, an insured or a beneficiary from the protection of Article 14 . I have come to this view for the following six reasons, which I will vouch when I discuss the case law below. First, the reason why Article 14 protects the policyholder, the insured and the beneficiary of an insurance policy is because they are generally the weaker party in a commercial negotiation with an insurance company and are as a matter of course presented with a standard form contract. Secondly, while recital (18) explains the policy behind, among others, section 3 of the Regulation, it is the words of the relevant Articles which have legal effect and the recitals are simply an aid to interpretation of those Articles. Thirdly, derogations from the jurisdictional rules in matters of insurance must be interpreted strictly. Fourthly, the CJEU in its jurisprudence has set its face against a case by case analysis of the relative strength or weakness of contracting parties as that would militate against legal certainty. Instead, it has treated everyone within the categories of the policyholder, the insured or the beneficiary as protected unless the Regulation explicitly provides otherwise. Fifthly, the CJEU looks to recital (18) not to decide whether a particular policyholder, insured or beneficiary is to be protected by section 3 but in the context of reaching a decision whether by analogy those protections are to be extended to other persons who do not fall within the list of expressly protected persons. Sixthly, the policy which underlies the jurisprudence of the CJEU when it decides whether to extend the protection to persons not expressly mentioned in section 3 is that the court seeks to uphold the general rule in Article 4 that Defendants should be sued in the courts of the member state of their domicile and allows extensions to the protection of section 3 only where such an extension is consistent with the policy of protecting the weaker party."
121. I have read the opinions of Advocate General Darmon and Advocate General Bobek in Shearman Leahmann and Shrems respectively and the judgments of the CJEU in those cases. I am satisfied that the Advocate Generals and the CJEU in those cases did make it clear that "consumer" under Article 18 has the same meaning as "consumer" under Article 17 . I refer by way of example to:
- (a) paragraph 21 of the opinion of Advocate General Darman in Shearman Lehmann where he says "the alternative jurisdictions and the special jurisdiction for which a consumer qualifies under the first paragraph of Article 14 of the Brussels Convention [18 RB1 ] apply only where "a consumer"… brings proceedings against the other party to the contract.. The concept of "consumer" within the meaning of Article 14 [18 RB1] necessary refers to that contained in Article 13 [17 RB1] . It is inconceivable in the absence of an express provision that the term "consumer" used in two consecutive Articles should refer to two different things"…; and
- (b) paragraphs 28 – 32 of the opinion of Advocate General Bobek in Shrems as to Article 15 and 16 [17 and 18 of RB1] "… Two elements are discernible under Article 15 [17 RB1] : first the consumer is not defined in general, abstract terms, but always with regard to "a contract…." It means that an assessment of the consumers status is always contract – specific: the specific contractual relationship at issue must be considered… The determination of consumer status must be made by reference to the position of that person in a particular contract….".
122. I am also satisfied that Article 17 provides that to be regarded as a consumer for the purposes of Article 17 (and therefore, on my findings also for the purposes of Article 18 ) the proceedings must relate to a contract entered into by a consumer with a party pursuing commercial or professional activities. That is the clear wording of Article 17 which provides "In matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession, jurisdiction shall be determined by this section ….. If: ….(c)… The contract has been concluded with a person who pursues commercial or professional activities in the member state of the consumers domicile or, by any means, directs such activities to that member state….."
Discussion
"…..The wording of both art.15 and art.16 of Regulation 44/2001 clearly stresses the importance of the identity of the parties to the concrete contractual relationship in the determination of the applicability of those provisions…."
"…..the CJEU in its jurisprudence has set its face against a case by case analysis of the relative strength or weakness of contracting parties as that would militate against legal certainty…."
SECTION 4
INSURANCE GATEWAY
Common Ground
"The injured party or his heirs will have direct action against the insurer to demand the fulfilment of the obligation to compensate, without prejudice to the insurer's right to repeat against the insured person, in the event that it is due to the malicious conduct of the latter, the damage or harm caused to a third party. The direct action is immune from the exceptions that may correspond to the insurer against the insured person. The insurer can, nevertheless, enforce the exclusive fault of the injured party and the personal defences that he has against the latter. For the purposes of the exercise of the direct action, the insured person is obliged to inform the injured third party or his heirs of the existence of the insurance contract and its content."
Applicable legal principles
"Thus, the principle of party autonomy enables the policyholder, the weakest party to the contract, to waive either of the two forms of protection afforded by the Brussels Convention . However, by virtue of the overriding aim of protecting the economically weakest party, that autonomy does not extend so far as to allow such a policyholder to waive entitlement to the jurisdiction of the courts of his domicile. As the weakest party, he must not be discouraged from suing by being compelled to bring his action before the courts in the State in which the other party to the contract is domiciled."
"38. Consequently, a jurisdiction clause based on Art.12(3) of the Convention cannot in any event be accepted as enforceable against a beneficiary unless it does not undermine the aim of protecting the economically weakest party.
39. As the Advocate General observed in points AG62 and AG67 of his Opinion, the enforceability of such a clause would have serious repercussions for a third-party beneficiary domiciled in another contracting state. First, it would deprive that insured of the opportunity to bring proceedings before the courts for the place where the harmful event occurred or to bring proceedings before the courts of his own domicile, by compelling him to pursue the enforcement of his rights against the insurer before the courts of the latter's domicile. Secondly, it would enable the insurer, in proceedings against the beneficiary, to have recourse to the courts of his own domicile.
40. The result of such an interpretation would be to accept a conferral of jurisdiction for the benefit of the insurer and to disregard the aim of protecting the economically weakest party, in this case the beneficiary, who must be entitled to bring proceedings and defend himself before the courts of his own domicile."
"33. As regards whether an agreement on jurisdiction may be invoked against the victim of damage, it is apparent, firstly, that, under art.13, Point 5, of Regulation 44/2001, read in conjunction with art.14 , Point 2(a), thereof, it is possible to derogate by such an agreement from the provisions of s.3 of that Regulation, in particular in the case of insurance contracts covering all liabilities arising from the use or operation of vessels.
34. Secondly, it is not in dispute that art.11(2) of Regulation 44/2001, pursuant to which arts 8, 9 and 10 of that Regulation apply to direct actions brought by a victim against an insurer, does not refer to arts 13 and 14 of that Regulation and, accordingly, agreements of prorogation of jurisdiction.
35. It is therefore not apparent from the scheme of the provisions of Ch.II, s.3, of Regulation 44/2001 that an agreement on jurisdiction may be invoked against a victim.
36. In that regard, the Court has previously noted that, in matters of insurance, prorogation of jurisdiction is strictly circumscribed by the aim of protecting the economically weaker party (see, to that effect, judgment of 12 May 2005, Société financière et industrielle du Peloux (C-112/03) [2005] ILPr 32, [31]).
37. Thus, art.13 of Regulation 44/2001 lists exhaustively the cases in which the parties may derogate from the rules laid down in its Ch.II, s.3."
"this policy will only cover claims submitted within Spanish jurisdiction for events that taken place in Spain leading to liability or other obligations imposed in accordance with the legal provisions in force within the territory of Spain."
"83. Article 15 is concerned with an agreement between a liability insurer and an insured who are domiciled or habitually resident in the same Member State " which has the effect of conferring jurisdiction on the courts of that state". That is precisely the effect of this clause, albeit that the effect is indirect. The reasoning in Assens Havn applies with equal force to a clause of this nature. It cannot be used to force a stranger to the contract to give up his rights to sue Mapfre (or Ice Mountain) in the courts of his own domicile or make those rights meaningless. It is an impermissible derogation from the special jurisdictional rules.
84. If a clause which has that effect can be relied on against a person such as Mr Hutchinson it would drive a coach and horses through the special rules on insurance laid down under Section 3 of Chapter II . It would provide every liability insurer (not just Spanish insurers) with the simplest means of depriving the injured party of the choice of additional jurisdictions conferred upon him by Articles 11 to 13 of Recast Brussels 1 . It would be the easiest thing in the world for an insurer, as the economically strongest party, to include a standard term in the policy that he is only liable for claims that have been brought against the policyholder in the courts of the policyholder's and/or the insurer's own domicile."
"98. At this stage, I find Mr Villacorta's argument far more persuasive. The object of liability insurance is the legal liability of the assured to pay compensation to third parties arising from a specified event or occurrence, and that liability will not be defined by the place where the injured party makes his claim. In fact, it will already have arisen before any claim is made. It is highly artificial to define the insured risk as "the risk of being liable to pay a Spanish judgment" or "the risk of being liable to pay a claim made in Spain" rather than "the risk of being liable to pay damages under Spanish law for an event that happened in Spain"."
Relevant evidence
"b. Clause 6 of the Special Conditions states:
"6. GEOGRAPHICAL LIMITATION The guarantee under this policy includes the liability of the insured derived from acts performed or damages caused within the geographic scope specified under the Specific Terms and Conditions, insofar as the claim is filed with the Spanish courts and pursuant to the Spanish law. Any indemnity and cost arising from this insurance shall be always paid in euros and in Spain.
……..
This insurance guarantee is applicable and limited to the liability derived from damages caused within the Spanish territory and claimed or recognised by the Spanish courts as per the Spanish legal system."
The respective arguments
Claimants
Defendants
Discussion
"It would be the easiest thing in the world for an insurer, as the economically strongest party, to include a standard term in the policy that he is only liable for claims that have been brought against the policyholder in the courts of the policyholder's and/or the insurer's own domicile."[25]
"82. …………….Mr Doherty was constrained to accept that the substantive effect of the clause would be to compel an injured party with a direct right of action against Mapfre under Spanish law in respect of an accident in Spain for which Mapfre's insured is potentially liable in Spanish law, to sue both the insured and the insurer in Spain. If he did not bring the proceedings in Spain, he would lose his direct right of action. He would not be able to pursue a direct action against the insurer alone in the courts of his own domicile, or pursue claims against both insured and insurer there, as Mr Hutchinson has sought to do."
The substantive effect of the clause in the present case is an entirely appropriate consideration, in my judgment, and determines this issue having regard to EU principles.
SECTION 5
ALTERNATIVE ROUTE FOR JURISDICTION IN RESPECT OF CENTRO MEDICO – ARTCLE 13(3)
SECTION 6
CONCLUSION
Summary of determination
1. The Claimants have provided plausible evidence and have thus passed the threshold of a good arguable case in relation to an English domicile for the late Mrs Flowers and the First Claimant.
2. Whilst there is plausible evidence of an agreement to pay certain private fees of the hospital, and that in principle this amounts to evidence of a consumer contract between Mrs Flowers and Centro Medico within the meaning of the consumer contracts section, I cannot be satisfied that the claim is being brought by a consumer within the meaning of the regulation. The Claimants cannot step in the shoes of the consumer on the basis of current European case law as her heirs.
3. The Claimants have a good arguable case of a direct claim against the insurer under Spanish law, pursuant to Article 13(2) notwithstanding the geographical limitation clause purporting to restrict cover;
4. The jurisdictional claim under Article 13 (3) whereby Centro medico might be joined in the English action should be stayed pending determination of the CJEU reference in BT.
Consequential matters
GW
23.8.2021
Note 1 The interests of both defendants coincide, and they are represented by the same counsel. I shall refer to the Defendants for the most part collectively, although where any issue concerns either, individually as D1 or D2, [Back] Note 2 I will refer to this as the “Brussels Regulation Recast” throughout. [Back] Note 3 Lord Sumption at paragraph 7 [Back] Note 4 Upheld on appeal by the CA [2021] EWCA Civ 687 [Back] Note 7 Again, my emphasis, for reasons which will become apparent later in this judgement. [Back] Note 8 Paragraph 18 referring to the letter of her instructing solicitor dated 26th March 2021 to the court [Back] Note 9 Page A132 in the hearing bundles [Back] Note 10 It is clear that although the list of issues in the solicitor's letter (and in counsel's skeleton argument) was more expansive, the claimants have not sought to rely upon article 13 (1) to enable Berkeley España to be joined into the proceedings via that route. [Back] Note 11 Examined in more detail in next section. [Back] Note 12 it is not disputed that the 2nd to 7th Claimants are domiciled in the United Kingdom. [Back] Note 15 Etherton LJ (as he then was) [Back] Note 16 This is denied by Mr Flowers [Back] Note 17 By this, of course, I am referring to the First Claimant Mr Flowers, on his own behalf, and on behalf of his late wife [Back] Note 19 My emphasis provided [Back] Note 20 See paragraph 89 above and the extract provided [Back] Note 21 See, for example, Cole, supra. [Back] Note 22 Considered at paragraph 83 above [Back] Note 23 In both respects the predecessor provisions to 13(2) and 11 (1)(b) in the current regulation. [Back] Note 24 Dealt with in more detail in the following section. [Back] Note 25 Hutchinson para 84 [Back] Note 26 At paragraph 91 of her judgment, Andrews J appears to suggest that there may be one such case arising out of the Balearic islands, although the text of the particular clause was not examined, and the court in any event allowed a hotel to be indemnified against a claim brought in England by a holidaymaker who was injured at the hotel [Back] Note 29 Referred to above in the context of the consumer contract gateway at paragraph 107 [Back]