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FS Cairo (Nile Plaza) LLC v Lady Brownlie in the Supreme Court

28 January 2022

The Supreme Court handed down its much anticipated judgment in Brownlie (number 2) late last year. It concerns the issue of service out of the jurisdiction and finally resolves the question of whether Lady Brownlie was entitled to bring her claim in the courts of England and Wales, as well as looking at issues relating to applicable foreign law and how it is pleaded. Sara-Jane Eaton examines the judgment and its implications post-Brexit.

Background and Facts

FS Cairo (Nile Plaza) LLC v Brownlie [2021] UKSC 45)

The fact that this is a long running case, which has not yet even begun to resolve substantive issues relating to the claim itself, does not negate the very tragic circumstances arising from the road traffic accident which occurred in Egypt in 2010. The claimant, Lady Brownlie, was on holiday with her late husband Sir Ian Brownlie and his daughter, both of whom sadly died in the accident in which Lady Brownlie and her grandchildren were also seriously injured. It is argued that Lady Brownlie had arranged an excursion in a chauffeur driven vehicle to Fayoum booked via the Four Seasons Hotel Cairo at the Nile Plaza. The Egyptian driver was to blame and was found guilty of manslaughter in Egypt.

The issue of jurisdiction has been extremely contentious and resulted in almost ten years of legal wrangling. In the Supreme Court's first judgment in Brownlie in 2017 (see our earlier article), the Supreme Court Justices concluded that the defendant was a non-trading holding company and therefore no claim could be brought against it in the courts of England and Wales. Due to the seeming lack of transparency regarding the defendant's identity however, the Supreme Court permitted the claimant to substitute the defendant for the correct party.

In Brownlie (2), it was necessary for Lady Brownlie to apply for permission to serve out of the jurisdiction against the Egyptian Hotel and in order to do so, she needed to establish three points:

  1. That she had a good, arguable case that fell within the jurisdictional tort gateway.
  2. That she had a reasonable prospect of success; and
  3. That the courts of England and Wales were the proper/appropriate place in which to bring her claim.

The defendant appealed on the issue of jurisdiction and contended that as the damage sustained by Lady Brownlie and her family members took place in Egypt, the claim should not pass through the relevant gateway under CPR 6 Practice Direction 3.1(9)(a). In addition, the defendant submitted the Court of Appeal was wrong to apply the 'default rules' or to presume that in the absence of any specific pleading in relation to Egyptian law, that Egyptian law would be the same as English law on assessing whether the claimant's claim had a reasonable prospect of success.

Findings

The Supreme Court in Brownlie (2) found that the concept of damage sustained by Lady Brownlie and others in the accident in Egypt should not be unduly restrictive in its meaning and referred to the actionable harm, direct or indirect, caused by the wrongful act alleged. This broader interpretation of damage will therefore extend to the indirect damage that was sustained by Lady Brownlie and her family in the UK, not just the immediate effects of the accident in Egypt. The court also confirmed that in a case where foreign law is pleaded, such as this case but without detail, the court could make a finding that the said foreign law is materially similar to English law. The Supreme Court, therefore, dismissed the appeal brought by the defendant and allowed the claims to continue in the courts of England and Wales, with only Lord Leggatt dissenting on the issue of the tort gateway.

The Supreme Court did not consider that the argument in relation to the tort gateway required an analysis of 'direct' and 'indirect' damage in the same way as it would be considered in EU Law under the Brussels Regulation as recast. The Supreme Court Justices did nevertheless make it clear that provided some 'significant' damage is sustained in the jurisdiction coupled with a substantial connection between the damage sustained and the jurisdiction of the courts of England and Wales, then the claim should be able to proceed in that jurisdiction. Lord Leggatt's dissenting view was that a narrow interpretation in relation to damage should be followed such that the damage in this case was not, in his view, sustained in the UK at all but rather in Egypt so that the claims should not be able to pass through the gateway under paragraph 3.1(9)(a).

Comment

It is clear that litigating a case that occurred abroad can be extremely long-winded, complex and challenging for practitioners and clients alike. It is a salutary lesson for all to ensure that at the very beginning, the correct defendant is sued and that comprehensive foreign law advice and pleadings are secured and drafted at the earliest stage possible.

The Brownlie 2 judgment is far from a panacea for claimants seeking to secure UK jurisdiction following an accident abroad, but it is of great significance for those dealing with private international law cross-border personal injury claims. The judgment will, in theory at least, bring claimant UK victims one step closer to being able to issue and serve their claims whether arising within the EU or outside of the EU in the jurisdiction of the courts of England and Wales even though the Recast Brussels Regulation fell away following the end of the Brexit transition period on 31 December 2020 (unless cases were instituted before that date and are ongoing). This applies even though post-Brexit a UK claimant can no longer rely on the Odenbreit ruling to sue automatically in his or her country of domicile.

Absent the UK acceding to the Lugano Convention, which would confer similar rights in relation to the ability to sue in one's own country of domicile following an accident abroad to those in the Recast Brussels Regulation, the Brownlie 2 judgment does potentially open the door to the courts of England and Wales for those with 'significant' claims that have arisen overseas. However, there are still many hurdles to overcome for UK claimants who find themselves in such a situation following an accident abroad. For example, it will still be necessary for the claimants to show that the courts of England and Wales are the convenient forum for the claim. In addition, even if the matter proceeds and judgment is obtained, there is still a question specifically in relation to where and how a judgment may be enforced if the defendant is a foreign insurer with no presence in the UK given that the reciprocal recognition of and enforcement of judgments between the UK and the EU fell away at the end of the Brexit transition period. One can assume that only in situations where damage sustained by a UK victim abroad is 'significant' and clearly ongoing in the UK jurisdiction will that victim take their chance and proceed to apply to the courts of England and Wales for jurisdiction. For now, only time will tell.

If you require any further information, please contact Sara-Jane Eaton.

Further Reading