Brexit in the courts. Miller loses, but Supreme Court to hear on 17 Sept.

Gina Miller’s challenge to prorogation was unsuccessful but an appeal to the Supreme Court has been scheduled for 17 Sept. The court’s reasons are to be released shortly.

With the possibility of a new PM early next week this may all become somewhat academic.

Today the House of Lords has passed the Benn bill to prevent a no-deal Brexit and it will receive the Royal Assent on Monday.

It has been revealed that a former Prime Minister has been referred to by Mr Johnson in a leaked memo as ‘a girly swot’.

A Brexit Dictionary (2). Pro rogue, or anti rogue?

 

Constitutional crisis. What would happen if Mr Johnson advised the Queen to refuse the Royal Assent to an Act of Parliament requiring he seek an extension under article 50.

Contempt of Parliament. Mr Johnson’s possible situation if he refused to abide by any Act of Parliament requiring he seek an extension under article 50. Michael Gove has refused to say whether the government would abide by legislation against no-deal Brexit, if it were passed by Parliament. A case of ‘Who GOVErns Britain’ then (c. Heath, E 1974).

Cummings. ee, American poet (1894-1962) who broke the rules of punctuation. Dominic, chief adviser and major domo to Mr Johnson.

General Election. Cannot be called until 2022 under the Fixed Term Parliament Act 2011 unless either the Government or the Opposition put forward a motion of no confidence in the government. If this is passed there are then fourteen days for an alternative government to be formed and if this is not possible Parliament will be dissolved and there will be a general election at a time specified by the Prime Minister. Alternatively, as in 2017, Parliament may be dissolved before the expiry of five years from the previous general election if there is a two thirds majority for this in the House of Commons. The opposition may not necessarily cooperate in which case there could be no ‘snap election’ for Mr Johnson, but Mr Corbyn might have to accept the soubriquet ‘frit’ (c Thatcher, M).

GNU. A Wildebeest, celebrated in song by Flanders and Swann.  Alternatively, a Government of National Unity.

Interdict. Scottish for ‘injunction’. This was refused on Friday in the current proceedings in Scotland challenging the legality of the prorogation of Parliament by Mr Johnson, but the hearing of the proceedings has been advanced to this Tuesday. Gina Miller has launched a separate application for judicial review of Mr Johnson’s prorogation of Parliament to be heard on Thursday. Today’s ‘Times’ reports that space has been made for the Supreme Court to hear the inevitable appeal this coming Friday. A further application is before the court in Northern Ireland. A busy week for the judiciary.

Labour votes. What Mr Johnson may need to get a new withdrawal agreement through Parliament (see ‘Spartans’ below).

No deal Brexit, ways of stopping.

  1. Mr Johnson renegotiates a withdrawal agreement and seeks an extension from the EU under article 50 to get Parliament’s approval.
  2. Article 50 is revoked. Must be done by a PM so need a new PM via Vote of No Confidence (VONC).
  3. An extension to article 50 is sought. Must be done by a PM so need a new PM via VONC.
  4. Act of Parliament requiring PM to seek further specified extension under article 50 and to revoke article 50 if the EU had not given the extension sought by 30 October. See, too, contempt of parliament, constitutional crisis.

Making your mind up. Rare Eurovision win for UK in 1981. Alternatively, something Parliament was incapable of doing in the indicative votes in the Spring.

Rebel Alliance. Han Solo, Luke Skywalker, Princess Leia (still fighting the same enemy thirty odd years after their decisive victory).  Alternatively, Oliver Letwin, Dominic Grieve, Anna Soubry etc

Spartans.  Members of the European Reform Group who are likely to vote against any new withdrawal agreement negotiated with the EU by Mr Johnson.

Standing Order 24

From Parliament’s website

“An MP may apply to the Speaker for an emergency debate on Mondays to Thursdays during sitting time under the rules of Standing Order No. 24.

If the Speaker has given the MP leave they will have three minutes to make a speech after question time and any urgent questions or ministerial statements. The Speaker then decides whether to submit the application to the House.

The House will have to agree that the debate takes place. If the House agrees to the application the emergency debate will take place on a future day, usually the next sitting day. The motion to be debated will be “That the House has considered the matter of [Topic]”.

Expect Speaker Bercow to allow an emergency debate on a bill requiring the PM to apply to the EU for an extension under art.50.

TBP. The Brexit Party.  Hovering in the wings.

 

 

The Brexit dictionary.

 

P is for prorogue.

This is the action of discontinuing a session of a parliament or other legislative assembly without dissolving it. The Prime Minister, Mr Johnson, has today announced his intention to ask the Queen to prorogue Parliament in the second week of September ahead of a Queen’s Speech on 14 October.

Other notable proroguers have been Charles I, James II, Clement Attlee, and John Major.

Last month Lord Doherty in the Scottish Court of Session fast-tracked a legal challenge backed by 75 MPs and peers to prevent the Prime Minister Mr Johnson proroguing parliament to force through a no-deal Brexit. A hearing is scheduled for the end of the next week and in the meantime Jolyon Maugham QC who is representing the challengers has stated that he will be seeking an order that the prospective prorogation of Parliament for four and a half weeks from 11 September announced today be put on hold until after the result of that hearing.

S is for Supreme Court

Which is where this will probably end up.

Brussels I Recast — not as long-arm as you feared

It’s not often that what is essentially a family law case causes commercial lawyers to sigh with relief, but one suspects this may be true of yesterday’s decision of Lavender J in Gray v Hurley [2019] EWHC 1972 (QB).

Under Art.4 of Brussels I Recast, readers will recall that a UK-domiciled defendant has a prima facie right not to be sued anywhere in the EU except in the UK, unless one of the exceptions in the Regulation applies. But what if he finds himself sued in some court outside the EU? Does Art.4 extend to give him a further right not to be sued anywhere in the world except here, and thereby justify the issue by the English courts of an anti-suit injunction to stop the foreign proceedings in their tracks?

In Gray, a supposedly beautiful extra-marital relationship broke up in tears, as is so often the way with such things. There was a good deal of wealth in a number of places to argue about. She being domiciled in England and he resident here, she sued him in the English courts. Meanwhile he sued her in New Zealand, where he had close connections. Having finally established the jurisdiction of the English courts to hear her case, she asked for an anti-suit injunction to stop the New Zealand proceedings, arguing that this was necessary to vindicate her Art.4 right to be sued here, and only here — and for good measure that her human right (to protection of her possessions) would be infringed unless the order went.

Lavender J was having none of it. Art.4 of Brussels I gave her no right analogous to that derived from an exclusive English jurisdiction clause that entitled her to the courts’ intervention in the absence of strong reasons to the contrary; and being sued abroad in respect of one’s assets in an action that had no guarantee of success could not be said to be an attack on one’s possessions sufficient to engage the pretensions of A1P1 of the European Convention on Human Rights. It followed that, like any other litigant, if she wanted an anti-suit injunction she had to show that England was clearly most appropriate forum and that there was no countervailing justification for him suing in New Zealand — which she could not.

With respect this seems absolutely right. For one thing there is something odd about the idea of EU law justifying the granting of a peculiarly common-law remedy that fills most EU private international lawyers with horror, and indeed is banned entirely by EU law in the case of EU courts. Admittedly this has not stopped the English courts so holding in respect of the exclusive jurisdiction over employment contracts in what is now Art.22.1 (see Petter v EMC Europe [2015] EWCA Civ 828); but that case is itself controversial, and it is good to see its spread curbed.

More to the point, however, if this claim had succeeded, the effects on comity would have been considerable. Courts in countries outside the EU would not have been gratified to see the English courts issuing anti-suit injunctions almost as a matter of course telling litigants not to proceed there in commercial claims against English-based defendants for no better reason than that the EU, an organisation they were not a member of and owed no allegiance to , disapproved of the proceedings being brought there.

As we said before, we suspect much gentle relief in the commercial legal community, which can now be allowed to get on with business as usual.

EU takes action against cyber-enabled ‘IP theft’ perpetrated from outside the EU

In the first EU measure of its type, Council Regulation (EU) 2019/796 concerning restrictive measures against cyberattacks threatening the Union or its Member States [17th May 2019] contains targeted sanctions against online “external threats” to IP. This Regulation is aimed at threats which originate from outside the EU, use infrastructure from outside the EU, or otherwise the person(s) instrumental in such a cyberattack are established abroad (Article 1).

Amongst other criteria, Article 2 of the Regulation targets an actual or attempted cyberattack on IP which has a, potentially, “significant effect”, on the “loss of commercially sensitive data”. Such commercially sensitive data will fall within the definition of a ‘trade secret’ under Council Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure [8 June 2016] if that data: 1. is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; 2. has commercial value because it is secret; 3. has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

Article 3 of this new Regulation imposes an asset freeze on natural or legal persons, entities or bodies who are responsible for the actual or attempted cyberattack; provide financial, technical or material support for or are otherwise involved in the cyberattack; or are associated with the natural or legal person, or bodies involved. As a result of such an asset freeze, all funds and economic resources belonging to, or controlled by, such listed persons and that fall under EU jurisdiction (e.g. held by EU banks) will be frozen. In addition, no funds or economic resources may be made available to or for the benefit of the said listed person by parties falling under EU jurisdiction.

This latest EU Regulation should serve to remind us that the “big international question” of cyberspace governance still remains to be resolved, albeit Sir Mark Sedwill (Cabinet Secretary, Head of the UK Civil Service and UK National Security Advisor) would note that the major private sector providers are more receptive than ever to its resolution (see Public Accounts Committee Oral evidence: Cyber Security in the UK, HC 1745 [1st April 2019] Q93).

In his article Jurisdiction In Cyberspace: A Theory of International Spaces Darrel Menthe asserts that, “unless it is conceived of as an international space, cyberspace takes all of the traditional principles of conflicts-of-law and reduces them to absurdity.” Akin to the “law of the flag” on the high seas, nationality of a vessel (manned or unmanned) in outer space or the nationality of the base in Antarctica, Menthe advocates, even in the absence of such a sui generis treaty regime as regulates the other three international spaces, that jurisdictional analysis requires cyberspace should be treated as a fourth international space governed by a comparable set of default legal rules (see Darrel Menthe, Jurisdiction In Cyberspace: A Theory of International Spaces 4 MICH.TELECOMM.TECH.L.REV 69 (1998)).

Brexit. UK to exit with no deal on 31 October unless Parliament passes vote of no confidence in the government.

With the resignation of Mrs May and the end of any prospect of Parliament passing the withdrawal agreement reached with the EU last November, it is looking very likely that the UK will leave the EU with no deal on 31 October. This is the default position under the EU Withdrawal Act 2018. Analysis by Maddy Thimont of the Institute of Government shows that the only way a no-deal exit could be stopped would be by Parliament passing a vote of no-confidence in the government. https://www.instituteforgovernment.org.uk/blog/new-prime-minister-intent-no-deal-brexit-cant-be-stopped-mps-0

The ‘Cooper’ clause added to the 2018 Act would only have effect in relation to any proposed ratification of the proposed withdrawal agreement with the EU. The clause in the 2018 Act requiring required the Government to hold a vote in the Commons if no agreement had been reached with the EU by 21 January is somewhat time expired now.

Who’d want to be PM now?

Shipping casualties and clearing-up

After a casualty the clear priority for shipowning, P&I and insurance interests alike is to clear up the mess as soon as possible and start trading again. The last thing they want is a run-in with well-meaning administrators saying that nothing can be done until form after form has been filled in, checked, rubber-stamped and filed, and permission to act obtained from Old Uncle Tom Cobleigh and all. Yet this was exactly what happened in 2012 to the owners of the 86,000 dwt container vessel MSC Flaminia. A fire broke out on a voyage from Charleston to Antwerp, forcing the crew to abandon ship and resulting in the vessel being towed dead to Wilhelmshaven in Germany. The owners wanted to send her directly to an entirely reputable ship-repairer in Romania for cleanup and repair, but the German environmental authorities were having none of it. The vessel was full of filth, sludge, metal debris and the dirty water used to extinguish the fire. This was, they said, waste and subject to the Waste Directive 2008 and Regulation 1013/2006, requiring extensive documentation, planning and administrative oversight before any transfer could take place. Owners argued in vain that Art.1.3(b) specifically excepted waste produced on board ships, trains, etc and later discharged for treatment: debris from a casualty, said the bureaucrats, was not within the exception. The result was that the ship remained marooned in Wilhelmshaven for seven months before it was finally allowed to go to Romania. The German courts, in proceedings to recover the resulting losses from the state, initially supported the Teutonic bureaucracy, but the Munich Landgericht then sent the question off to the ECJ: was waste resulting from a marine casualty within the exception?

The ECJ, much to everyone’s relief, today said that it was. The Directive had to be interpreted purposively and there was no reason to give special treatment to waste resulting from a casualty, especially as the terms of Art.1.3(b) were unqualified. Within the EU this now means that vessels can get out of ports of refuge quickly and be sent with due expedition to wherever they can be cleaned up and repaired most efficiently. And a good thing too.

The decision, under the name of Conti II v Land Niedersachsen (Case C‑689/17) [2019] EUECJ C-689/17, is here (unfortunately only in French).

From Borstal boys to Parent Companies. Tort liability for the acts of third parties.

 

2017 saw three ‘anchor defendant’ cases before the High Court involving tort claims against a UK parent corporation in respect of the activities of its overseas subsidiary. The claimants sought leave to serve the subsidiary out of the jurisdiction under the ‘necessary and proper party’ gateway for service out of the jurisdiction in paragraph 3.1 of Practice Direction 6B in the Civil Procedure Rules (“CPR”). In two cases, AAA v Unilever and Okpabi v Shell, leave was refused but was granted in the third case, Vedanta Resources PLC and another v Lungowe. The key issue was whether there was a triable issue against the UK parent corporation. Lungowe involved alleged pollution from toxic emissions from a copper mine in Zambia owned by a Zambian company, KCM, whose ultimate parent company is Vedanta Resources Ltd which is incorporated and domiciled in the UK.

The Supreme Court, [2019] UKSC 20, in which Lord Briggs gave the lead judgment, has upheld the findings at first instance and in the Court of Appeal that there was a triable issue as regards Vedanta on the basis of a plausible case that its involvement in the activities of KCM gave rise to a duty of care to those affected by those activities.

There were four issues before the Supreme Court on which the claimants succeeded on 1,2, and 4 but not on 3.

(1) whether it is an abuse of EU law to rely on article 4 of the Recast Brussels Regulation for jurisdiction over Vedanta as anchor defendant so as to make KCM a “necessary or proper party”.

The EU case law suggests that the abuse of law doctrine is limited to situations where EU law is invoked collusively to subvert other EU provisions. In light of the decision in Owusu v Jackson (C-281/02) [2005] QB 801 (CJEU), arguments based on forum conveniens cannot justify derogating from the primary rule of jurisdiction in article 4.1 The concern about the wide effect of article 4.1 in this case is best addressed under the domestic law on the “necessary or proper party” gateway.

(2) whether the claimants’ pleaded case and supporting evidence disclose no real triable issue against Vedanta

The assertion that the negligence claim against Vedanta raises a novel and controversial legal issue was misplaced, as the liability of parent companies in relation to the activities of their subsidiaries is not, in itself, a distinct category of negligence unsuited to summary determination. The relevant principles for determining whether A owes a duty of care to C in respect of the harmful activities of B are not novel and can be traced back to the decision of the House of Lords in Dorset Yacht Co Ltd v Home Office [1970] AC 1004, the case involving Home Office responsibility for damage caused by absconding borstal boys when they boarded a yacht and collided with the plaintiff’s yacht. The duty  would arise from a sufficiently high level of supervision and control of the activities  at the mine with sufficient knowledge of the propensity of those activities to cause toxic escapes into the surrounding watercourses. This was a question for Zambian law, which it was agreed followed English tort law, but the question what that level actually was is a pure question of fact. On the facts, there was sufficient material identified by the judge in support of the view that the claimants’ case was arguable and the judge made no error of law in assessing this issue, so his decision on the negligence claim must stand.

The Judge had identified the following evidence as establishing that there was an arguable case that Vedanta owed a duty of care. There was part of the published material, namely a report entitled “Embedding Sustainability” which stressed that the oversight of all Vedanta’s subsidiaries rested with the board of Vedanta itself, and which made particular reference to problems with discharges into water and to the particular problems arising at the Mine. There was the management services agreement between Vedanta and KCM , and a witness statement of Mr Kakengela.

Lord Briggs stated[61]:

“For my part, if conducting the analysis afresh, I might have been less persuaded than were either the judge or the Court of Appeal by the management services agreement between the appellants, or by the evidence of Mr Kakengela. But I regard the published materials in which Vedanta may fairly be said to have asserted its own assumption of responsibility for the maintenance of proper standards of environmental control over the activities of its subsidiaries, and in particular the operations at the Mine, and not merely to have laid down but also implemented those Page 23 standards by training, monitoring and enforcement, as sufficient on their own to show that it is well arguable that a sufficient level of intervention by Vedanta in the conduct of operations at the Mine may be demonstrable at trial, after full disclosure of the relevant internal documents of Vedanta and KCM, and of communications passing between them.”

(3) whether England is the proper place in which to bring the claims;

The domestic law ‘proper place’ test requires a search is for a single jurisdiction in which the claims against all defendants may most suitably be tried. The courts have treated the risk of irreconcilable judgments as a decisive factor in favour of England as the proper place for the claim against the non-EU defendant as well. The judge in this case applied that approach but that was a legal error in circumstances where Vedanta had by the time of the hearing offered to submit to the Zambian jurisdiction, so that the whole case could be tried there. The risk of irreconcilable judgments would be the result of the claimants’ choice to exercise their article 4 right, rather than because Zambia is not an available forum for all the claims. The risk of irreconcilable judgments was still a relevant factor but was no longer a trump card such that the judge made an error of principle in regarding it as decisive. Looking at the relevant connecting factors in the round, Zambia would plainly have been the proper place for this litigation as a whole, provided substantial justice was available to the parties in Zambia

(4) if Zambia would otherwise be the proper place, whether there was a real risk that the claimants would not obtain access to substantial justice in the Zambian jurisdiction.

Even if the court concludes that a foreign jurisdiction is the apparently the proper place, the court may still permit service of English proceedings on the foreign defendant if cogent evidence shows that there is a real risk that substantial justice would not be obtainable in that foreign jurisdiction. In this case, the judge identified two “access to justice” issues in Zambia First, the practicable impossibility of funding such group claims where the claimants are all in extreme poverty, because they could not obtain legal aid and because conditional fee agreements (CFAs) are unlawful in Zambia. Secondly, the absence within Zambia of sufficiently substantial and suitably experienced legal teams to enable effective litigation of this size and complexity, in particular against a well-resourced opponent like KCM.

The claims will now proceed against the parent company and its Zambian subsidiary in the English High Court.

PM gets extension to article 50.

 

The EU last night agreed to extend the period referred to in Article 50 as follows.

Conclusions – 10 April 2019
EUCO XT 20015/19 1
EN
1. The European Council takes note of the letter of Prime Minister Theresa May of 5 April 2019 asking for a further extension of the period referred to in Article 50(3) TEU.
2. In response, the European Council agrees to an extension to allow for the ratification of the Withdrawal Agreement. Such an extension should last only as long as necessary and, in any event, no longer than 31 October 2019. If the Withdrawal Agreement is ratified by both parties before this date, the withdrawal will take place on the first day of the following month.
3. The European Council underlines that the extension cannot be allowed to undermine the regular functioning of the Union and its institutions. If the UK is still a Member of the EU on 23-26 May 2019 and if it has not ratified the Withdrawal Agreement by 22 May 2019, it must hold the elections to the European Parliament in accordance with Union law. If the United Kingdom fails to live up to this obligation, the withdrawal will take place on 1 June 2019.
4. The European Council reiterates that there can be no opening of the Withdrawal Agreement, and that any unilateral commitment, statement or other act should be compatible with the letter and the spirit of the Withdrawal Agreement and must not hamper its implementation.
5. The European Council stresses that such an extension cannot be used to start negotiations on the future relationship. However, if the position of the United Kingdom were to evolve, the European Council is prepared to reconsider the Political Declaration on the future relationship in accordance with the positions and principles stated in its guidelines and statements, including as regards the territorial scope of the future relationship.
6. The European Council notes that, during the extension, the United Kingdom will remain a Member State with full rights and obligations in accordance with Article 50 TEU, and that the United Kingdom has a right to revoke its notification at any time.

 

Accordingly, provided Parliament approves the necessary statutory instrument to amend ‘exit day’ in the EU Withdrawal Act 2018 in time, the UK will not leave the EU at 11pm  on 12 April 2019. The requisite SI is The European Union (Withdrawal) Act 2018 (Exit Day)
(Amendment) (No. 2) Regulations 2019.

Is half a deal better than a no-deal exit in a fortnight? Parliament votes today.

29 March. The government today is putting forward a motion to pass part of its withdrawal agreement with the EU, the withdrawal agreement, but not the political declaration. If this passes there will be an extension to exit day to 22 May in accordance with the agreement reached between the PM and the EU last week. If not, exit day will be 12 April unless a further extension is requested by the PM, whoever that may be. In the meantime Parliament votes again on indicative votes on Monday after the failure of any of the proposals put forward on Wednesday to obtain a majority.

 

MPs  voted by 286 to 344 to reject the government’s withdrawal agreement.

 

9 April. The House of Commons has just approved the government motion that the Prime Minister requests an article 50 extension until 30 June. Leaders of the 27 EU Member States will consider the request tomorrow at the meeting of the  Council of Ministers. If there is no unanimous agreement to extend article 50 then the UK leaves the EU without a withdrawal agreement on Friday at 11pm.