Tag: Brussels I

Commercial firms possibly to breathe easier — courtesy of the ECJ

A City firm advises a commercial client from elsewhere in the EU on a big deal. Months or years later the client alleges the advice was bad and that it has suffered loss. If it comes to a claim in tort, can the firm insist on being sued in London, or must it (and its PI insurers) gear up to fight the proceedings in Tallinn, Trieste, or wherever the client is located? This depends on what is now Art.7(2) of Brussels I Recast, allowing suit in tort “in the courts for the place where the harmful event occurred or may occur”, and whether an Italian or Estonian trader is deemed to suffer loss in Italy or Estonia because — well — it is based there.

The ECJ today, sensibly, said No: see Universal Music International Holding (Judgment) [2016] EUECJ C-12/15. So a multinational that got its fingers burnt in a Czech acquisition couldn’t sue in Holland merely because its profits there were diminished. As we said, a matter for relief in EC3 and EC4.

AMT

Double insurance and contribution, EU-style — where can you sue?

A decision last Friday from a deputy High Court judge which may raise the odd Euro-eyebrow: see XL Insurance Company SE v AXA Corporate Solutions Assurance [2015] EWHC 3431 (Comm) (available on BAILII).

Put simply, in 2008 there was a nasty railroad smash in California involving Connex. Connex’s insurer XL paid up to the victims. They then alleged that AXA, a French insurer, had insured the same risk and claimed contribution from it in London on the basis of double insurance. AXA applied to strike on the basis that, being French-based, it had the right to be sued in France under Brussels I Recast, Art.4. XL countered on the basis that this was a claim “relating to a contract” under Art.7(1), or one “relating to tort, delict or quasi-delict” under Art.7(2); in which case AXA could be sued in the place of performance or the place where the harmful act occurred as the case might be.

HHJ Waksman QC obliged by striking out.

This was not a claim relating to a contract, since although there were a couple of insurance contracts in the background, a claim relating to a contract involved a contractual duty of some sort obliging the defendant to render performance to the claimant: this wasn’t the case here. If anything, one insurer’s liability to contribute to the other’s payment is a claim in unjust enrichment. True, an EU Advocate-General had said exactly the opposite a couple of months earlier in Ergo Insurance v P & C Insurance Cases C-359 and 475/14 (see http://curia.europa.eu/juris/document/document.jsf?text=&docid=168543&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=281090), opining that this was a contract claim, with the place of performance being that of the underlying insurance policies. But the judge did not mince his words: he said that Adv-G Sharpston (incidentally an English ex-academic long since inveigled away by the good life in Brussels) did not understand the matter and was simply wrong.

Nor was this anything “relating to tort, delict or quasi-delict”. Taking the narrow view of this as requiring at least some degree of liability for wrongs (see Reichert v Dresdner Bank [1992] I.LPr. 404), it didn’t embrace contribution: no wrong was committed by one insurer not paying while another insurer did.

This all matters, if only because contribution claims can’t normally be subjected to a jurisdiction agreement. Put shortly it seriously raises the bar for those seeking contribution if their lawyers may potentially have to jurisdiction-hop anywhere in the EU to obtain their money. But the betting is strong that this isn’t the last word. Watch this space.