Posts Tagged Joinder
Spring v MOD and Evangelisches Krankenhaus Bielefeld. Joinder (based on Article 8(1) Bru I Recast) ultimately fails given limitation period in the lex causae.
 EWHC 3012 (QB) Spring v MDO and Evengelisches Krankenhaus Bielefeld is unreported as far as I can tell (and I have checked repeatedly). Thank you Max Archer for flagging the case and for sending me copy of judgment a few months back. (I am still chipping away at that queue).
In 1997, Claimant was stationed in Germany with the British Army. The Claimant very seriously fractured his right leg and ankle whilst off duty in Germany (the off duty element evidently having an impact – on duty injuries arguably might not have been ‘civil and commercial’). He was then treated at the Second Defendant’s hospital under an established arrangement for the treatment of UK service personnel between the First (the Ministry of Defence) and Second Defendants (the German hospital). Various complications later led to amputation.
The Brussels I Recast Regulation applies for claimant did not introduce the claim against the second defendant until after its entry into force: 18 years in fact after the surgery. This was the result of medical reports not suggesting until after July 2015 that the German hospital’s treatment has been substandard. Rome II ratione temporis does not apply given the timing of the events (alleged wrongful treatment leading to damage).
Yoxall M held that Article 8(1)’s conditions for anchoring /joinder were fulfilled, because of the risk of irreconcilable judgments (at 35). Even if the claim against the First Defendant is a claim based on employer’s liability whereas the claim against the Hospital is based on clinical negligence. Should the proceedings be separate there is a risk of the English and German courts reaching irreconcilable judgments on causation of loss. At 35: ‘It would be expedient for the claims to be heard together – so that all the factual evidence and expert evidence is heard by one court. In this way the real risk of irreconcilable judgments can be avoided.’
With reference to precedent, Master Yoxall emphasised that ‘in considering Article 8(1) and irreconcilable judgments a broad common sense approach is justified rather than an over-sophisticated analysis’ (at 36).
Yoxal M is entirely correct when he states at 37 that Article 8(1) does not include a requirement that the action brought against the different defendants have identical legal bases. For decisions to be regarded as contradictory the divergence must arise in the context of the same situation of law and fact (reference is made to C-98/06 Freeport).
Next however the court considers as a preliminary issue, the limitation period applying between claimant and the German defendant and holds that the Hospital have an arguable case that the claim is statute barred in German law (German expert evidence on the issue being divided). The latter is the lex causae for the material dispute (on the basis of English residual private international law), extending to limitation periods per Section 1(3) of the Foreign Limitations Period Act 1984 (nota bene partially as a result of the 1980 input by the Law Commission, and not entirely in line with traditional (or indeed US) interpretations of same). This ultmately sinks the joinder.
As a way forward for plaintiff, the Court suggests  EWCA Civ 1436 Masri. In this case the Court of Appeal essentially held that joinder on the basis of Article 8(1) may proceed even if litigation against the England-based defendants are not the same proceedings, but rather take place in separate action. Masri has not been backed up as far as I know, by European precedent: Clarke MR held it on the basis of the spirit of C-189/87 Kalfelis, not its letter. Moreover, how the German limitation periods would then apply is not an obvious issue, either.
An interesting case and I am pleased Max signalled it.
(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 220.127.116.11.
As Bot AG put it, Joined Cases C-24 and 25/16 Nintendo v Big Ben gave the Court an opportunity to determine the territorial scope of a decision adopted by a court of a Member State in respect of two co-defendants domiciled in two different Member States concerning claims supplementary to an action for infringement brought before that court.
The case concerns the relation between Brussels I and Regulation 6/2002 – which was last raised in the recent BMW case, particularly as for the former, the application of Article 6(1) (now 8(1))’s rule on anchor defendants. And finally the application of Rome II’s Article 8(2): the identification of the ‘country in which the act of infringement was committed’. In this post I will focus on the impact for Brussels I (Recast) and Rome II.
The Landgericht held that there had been an infringement by BigBen Germany and BigBen France of Nintendo’s registered Community designs. However, it dismissed the actions in so far as they concerned the use of the images of the goods corresponding to those designs by the defendants in the main proceedings.
The Landgericht ordered BigBen Germany to cease using those designs throughout the EU and also upheld, without territorial limitation, Nintendo’s supplementary claims seeking that it be sent various information, accounts and documents held by the defendants in the main proceedings, that they be ordered to pay compensation and that the destruction or recall of the goods at issue, publication of the judgment and reimbursement of the lawyers’ fees incurred by Nintendo be ordered (‘the supplementary claims’).
As regards BigBen France, the Landgericht held that it had international jurisdiction in respect of that company and ordered it to cease using the protected designs at issue throughout the EU. Concerning the supplementary claims, it limited the scope of its judgment to BigBen France’s supplies of the goods at issue to BigBen Germany, but without limiting the territorial scope of its judgment. It considered the applicable law to be that of the place of infringement and took the view that in the present case that was German, Austrian and French law.
BigBen France contends that the German courts lack jurisdiction to adopt orders against it that are applicable throughout the EU: it takes the view that such orders can have merely national territorial scope. Nintendo ia takes the view that German law should be applied to its claims relating to BigBen Germany and French law to those relating to BigBen France.
At 52 the CJEU holds that ‘Taking into account the objective pursued by Article 6(1) of Regulation No 44/2001, which seeks inter alia to avoid the risk of irreconcilable judgments, the existence of the same situation of fact must in such circumstances — if proven, which is for the referring court to verify, and where an application is made to that effect — cover all the activities of the various defendants, including the supplies made by the parent company on its own account, and not be limited to certain aspects or elements of them.’
If I understand this issue correctly (it is not always easy to see the jurisdictional forest for the many IP trees in the judgment), this means the Court restricts the potential for the use of anchor defendants in Article 8(1): the more facts one needs to take into account, the less likely these will be the ‘same’ that matter for the alleged infringement of the anchor defendant.
As for the application of Article 8(2) Rome II, at 98 and following inter alia analysis of the various language versions of the Article, the CJEU equates the notion ‘country in which the act of infringement is committed’ with the locus delicti commissi: ‘it refers to the country where the event giving rise to the damage occurred, namely the country on whose territory the act of infringement was committed.‘ At 103: ‘…where the same defendant is accused of various acts of infringement falling under the concept of ‘use’ within the meaning of Article 19(1) of Regulation No 6/2002 in various Member States, the correct approach for identifying the event giving rise to the damage is not to refer to each alleged act of infringement, but to make an overall assessment of that defendant’s conduct in order to determine the place where the initial act of infringement at the origin of that conduct was committed or threatened.’
At 108 the Court rules what this means in the case at issue: ‘the place where the event giving rise to the damage occurred within the meaning of Article 8(2) of [Rome II] is the place where the process of putting the offer for sale online by that operator on its website was activated’.
At 99 however it warns expressly that this finding must be distinguished as being issued within the specific context of infringement of intellectual property rights: Regulation 6/2002 as well as Rome II in its specific intention for IP rights, aims to guarantee predictability and unity of a singly connecting factor. This is a very important caveat: for while this approach by the CJEU assists with predictability, it also hands means for applicable law shopping and, were the Court’s approach for locus delicti commissi in IP infringement extended to jurisdiction, for forum shopping, too.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 18.104.22.168; Chapter 3.
Schmidt v Schmidt: CJEU confirms Kokott AG’s views on forum rei sitae & forum connexitatis in Brussels I Recast.
Much as expected, the Court has this week confirmed Kokott AG’s views on Article 24(1) and Article 8(4) Brussels I Recast, in C-417/15 Schmidt v Schmidt. Please refer to my review of the Advocate General’s Opinion for detail of the case.
A request for voidance of a contract of gift of immovable property, on grounds of incapacity, is not covered by Article 24(1). The fact that the contract for which a declaration of invalidity is sought concerns immovable property is irrelevant to the issue of its validity, the immovable nature of the subject matter of the contract being only of marginal significance in that context (at 36). This does not endanger the ratio legis of Article 24(1): by ruling on the request for the avoidance of a contract of gift on the ground of the donor’s incapacity to contract, the court before which the dispute is brought is not required to carry out investigations strictly related to the immovable property concerned so as to justify an application of the rule of exclusive jurisdiction provided for in that article (at 37). In the present case, the action in the main proceedings is based on the alleged invalidity of the contractual obligation consisting of the conveyance of ownership of the immovable property, which, provided that the contract is valid, must be, and which was initially, performed in Austria. This therefore establishes jurisdiction for that court on the basis of Article 7(1) a of the Brussels I Recast.
The separate request for removal from the land register of the donee’s right of ownership, in turn is based on the invalidity of the conveyance of ownership and, therefore, on the right in rem relied on by the applicant in the main proceedings in the immovable property concerned:this action is covered by Article 24(1). This latter court may also rule on the request for voidance: there is a connection between the claims pursuant to Article 8(4) of Regulation 1215/2012. Unlike the AG, the CJEU does not add that this possibility for joinder must not be abused, however there is no reason why the prohibition of abuse must not apply to Article 8(4). Given the possibility of joinder, a race to court of course is triggered between, in this case, father and daughter.
Schmidt v Schmidt is once again a useful reminder for courts and notaries alike, not to shy away from contracts, gifts, matrimonial property etc. simply because it involves real estate located elsewhere. Plenty of the legal issues surrounding such constructions can be perfectly dealt with outside the locus rei sitae.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6
Schmidt v Schmidt: Family feud again leads to discussion of forum rei sitae & forum connexitatis in Brussels I Recast.
An unusually high proportion of cases under Article 22 (old) or 24 (Recast) Brussels I relate to family disputes on property. Webb v Webb, Weber v Weber, Komu v Komu, and now, C-417/15 Schmidt v Schmidt. It’s all about keeping up with the Joneses.
Kokott AG opined in Schmidt last week – the Opinion is not available in English. Mr Schmidt had gifted a (otherwise unspecified) piece of Vienna real estate to his daughter, who lives in Germany. Ms Schmidt is included in the land register as the owner. Mr Schmidt subsequently sues in Austria for the annulment of the gift due to alleged incapacity at the time of the gift, and for removal of the registration. Is the action caught by Article 24? (in which case Ms Schmidt’s claim of lack of jurisdiction fails).
The Advocate General first of all suggests that the referring court’s request should not be turned down simply because it did not specify the time of seizure: in other words it is not clear whether the case is covered by the old or the Recast Brussels I Regulation. Ms Kokott however suggests the Court should not be pedantic about this and answer the question regardless, seeing as the rule has not changed.
Next up and potentially trickier, is the exclusion of capacity from the scope of application of the Regulation. However the Advocate General is right when she suggest that the exclusions should only be relevant where they concern the main object of the litigation. Not, as here, when they are raised incidentally. (She discusses in some detail the linguistic implications given different wording in the different language versions of the Regulation).
Then to the real question. With respect to the annulment of the (gift) agreement, the object and purpose of plaintiff’s action is not the establishment or confirmation of an erga omnes right in rem. Rather, the confirmation of voidness of an agreement transferring such right, due to incapacity. That this will have erga omnes consequences if successful, is not to the point given the long-established need to apply Article 24 restrictively. In this respect this case is akin to C-294/92 Webb and Webb.
The analysis is different however, the AG suggests, for the request to delete the entry in the land register. This does aim directly at erga omnes consequences under Austrian law.
Ms Kokott subsequently rejects the notion that as a result of part of the suit being subject to Article 24, this should drag the remainder into the exclusive bath with it: at 48: if only because if one were to accept this, forum shopping would be facilitated. Including in its suit a procedure covered by Article 24 would enable plaintiff to draw in a whole range of other issues between the parties.
Finally, the AG suggests joinder of the contractual claim (the nullity of the gift) to the right in rem claim, is possible under Article 8(4) and rejects that national rules of civil procedure should or even can play a role in this respect. This part of the Opinion may be optimistically short. For if the joinder route of Article 8(4) may lead to the same result as the one the AG had just rejected, one assumes there ought to be discretion for the national courts to reject it. Not, as the AG rightly suggests, by reference to national civil procedure rules (that would lead to unequal application) but rather by reference to the (probably) EU inspired rule that abuse of Article 8 be avoided.
The Court will probably not answer all the questions the case raises, particularly on Article 8. Expect this to return.
(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6
Jurisdiction rules on joinders apply regardless of whether they are brought by or against third parties. The insurance title does not apply between professional parties. CJEU in Sovag.
The CJEU has held in Case C-521/14 Sovag that Article 6(2) Brussels I (Article 8(2) in the Recast) applies regardless of whether the proceedings are brought against (which is what inter alia the English language version suggests) or by a third party.
A, the victim of a traffic accident that took place in Germany, brought an action in Finland against SOVAG, with which the vehicle responsible for the damage was insured. That traffic accident also constituting a work accident under the Law on accident insurance, If, which is established in Finland, paid A compensation for the accident in accordance with that law. After A had brought the action against SOVAG, If itself sued SOVAG before the same court of first instance.
The national court in first instance held that, in accordance with Article 8 of Regulation 44/2001, in matters relating to insurance jurisdiction may be determined by the provisions of Section 3 of Chapter II of that Regulation alone. According to SOVAG, Article 6(2) of Regulation 44/2001 is indeed not applicable because Section 3 of Chapter II of the same Regulation establishes an autonomous system for the conferring of jurisdiction in matters of insurance. On this issue, the CJEU (at 30) reminded the national court of earlier case-law that where the action at issue in the main proceedings concerns relations between professionals in the insurance sector, and will not affect the procedural situation of a party deemed to be weaker, the insurance title does not apply. [Relevant precedent is in particular C-347/08 Voralberger v WGV-Schwabishe]. The objective of protecting a party deemed to be weaker being fulfilled once jurisdiction is established on the basis of Section 3 of Chapter II of Regulation 44/2001, subsequent procedural developments concerning only relations between professionals cannot fall within the ambit of that section.
Next, the wording of several of the language versions of Article 6(2), in particular the German, French, Finnish and Swedish versions, does not prevent the court before which the original proceedings are pending from having jurisdiction to hear and determine an action brought by a third party against one of the parties to the original proceedings. However, other language versions of that provision, particularly the English language version, appear to restrict its scope to actions brought against third parties (‘a person domiciled in a Member State may also be sued: … as a third party’).
While the CJEU acknowledged that the special jurisdictional rules need to be applied restrictively, ie not going beyond their purpose, here the purpose of Article 6(2) is the harmonious administration of justice, namely minimising the possibility of concurrent proceedings and ensuring that irreconcilable judgments will not be given in two Member States. Therefore Article 6(2) must also apply where the third party brings the proceedings, not just where it is drawn into those proceedings by others.
However, the Court also sanctioned the Finnish rule of civil procedure that the right of a third party to bring an action in connection with pending judicial proceedings, is contingent on that action being linked to the original proceedings. Given that Article 6(2) does not apply where the proceedings were brought ‘solely with the object of removing’ the party concerned from the jurisdiction of the court which would ordinarily have jurisdiction to hear the case, the CJEU OK-ed the Finnish rule as being one that assist in helping to avoid abuse of the rule on joinders.
I would have thought the Court would have made that rule one of EU law, given its insistence on autonomous interpretation. (Rather than simply OK-ing a national rule). Whether there is such a European rule therefore must stay into the open a little longer.
Don’t leave the store without asking. Joinders, and the Aldi principle applied in Otkritie. On the shopping list for the EU?
Postscript 21 November 2017: For an application in Hong Kong see Far Wealth Ltd v Lo Ki Mou, reported here: proceedings dismissed as an abuse of process because the plaintiffs could have protected their position by way of a counterclaim in prior proceedings commenced against them by the defendants.
A posting out off the box here, so bear with me. Neither Brussels I nor the Recast include many requirements with respect to (now) Article 8(1)’s rule on joinders. A case against a defendant, not domiciled in the court’s jurisdiction, may be joined with that against a defendant who is so domiciled, if the cases are ‘so closely connected that it is expedient to hear and determine them together in order to avoid the risk of irreconcilable judgments’. There is of course CJEU case-law on what ‘so closely connected’ means however that is outside the remit of current posting.
As I reported recently, the CJEU has introduced a limited window of abuse of process viz Article 8(1), in CDC. The Court’s overall approach to Article 8(1) is not to take into account the subjective intentions of plaintiff, who often identify a suitable anchor defendant even if is not the intended target of their action. The Court does make exception for one particular occasion, namely if it is found that, at the time the proceedings were instituted, the applicant and that defendant had colluded to artificially fulfil, or prolong the fulfilment of, (now) Article 8’s applicability.
What if at the time the proceedings were instituted, applicant artificially ignores the fulfilment of, (now) Article 8’s applicability?
The Aldi rule of the courts of England and Wales, and its recent application in Otkritie, made me ponder whether there is merit in suggesting that the CJEU should interpret Article 8(1) to include an obligation, rather than a mere possibility, to join closely connected cases. I haven’t gotten much further than pondering, for there are undoubtedly important complications.
First, a quick look at the Aldi rule, in which the Court of Appeal considered application of the Johnson v Gore Wood principles on abuse of process of the (then) House of Lords, to an attempt to strike out a claim for abuse of process on the basis that the claim could and should have been brought in previous litigation. Aldi concerned complex commercial litigation, as does Otkritie. The result of Aldi is that plaintiffs need to consult with the court in case management, to ensure that related claims are brough in one go. Evidently, the courts need to walk a fine rope for the starting point must be that plaintiffs have wide discretion in deciding where and when to bring a claim: that would seem inherent in Article 6 ECHR’s right to a fair trial.
In Otkritie [the case nota bene does not involve the Brussels Regulation], Knowles J strikes the right balance in holding that the Aldi requirement of discussing with the court had been breached (and would have cost implications for Otkritie in current proceedings) but that otherwise this breach did not amount to abuse of process.
Now, transporting this to the EU level: to what degree could /should Article 8 include a duty to join closely related proceedings? Should such duty be imposed only on plaintiff or also on the court, proprio motu? A crazy thought perhaps for the time being, but certainly worthwhile pondering for future conflicts entertainment.
Paris suing FoxNews. (Birmingham joining optional). A dream essay for conflict of laws, many questions for practitioners..
Exam time for conflict of laws students the world over, I imagine. Here’s a dream essay question. (Pick and mix a definite possibility). Bear in mind each of these questions exercises practitioners, too.
‘It is widely reported that Paris (the town, not the socialite) may sue FoxNews. (For the sake of this essay assumed to be incorporated in Delaware, USA). A FoxNews analyst suggested the existence of ‘no go’ zones for non-muslims in the French capital.
1. How would you qualify Paris’ suit?
2. Where would you advise Paris to file the suit and why? What legal basis supports your litigation advice?
3. Assuming a French court would entertain the suit. What law would it apply to the case at hand?
4. Assuming a US (State) court would entertain the suit. What law would it apply to the case at hand?
5. Assume FoxNews countersues Paris.
5.1. Under the assumption of Q3, can the French Court join the countersuit to the original one?
5.2. Under the assumption of Q4, can the US Court join the countersuit to the original one?
5.3. Assume FoxNews is successful on its countersuit in a French court and wishes to have that judgment recognised and enforced against the bank account of Paris with BancoFrancais in London. Would an English court apply state immunity?
5.4 Assuming the same as under 5.3 however against assets held in Belgium. Would you come to the same conclusion?
5.5 Assume the same as under 5.3 however on a countersuit in a US court. Would FoxNews be succesful in enforcing the judgment in France?
6. Replace ‘Paris’ with ‘Birmingham (United Kingdom)’. Revisit all of the questions above.
7. Add (rather than replace) a claim against FoxNews by Birmingham, UK. Could a French court assumed to have already upheld jurisdiction over Paris’ claim, join a Birmingham claim? On what legal basis? (if at all).’