One of the first issues to determine when deciding whether or not to pursue a matter is the issue of viability i.e. is there a defendant who can be sued who has the means to satisfy an award of damages. One issue that often arises at this early stage is that the defendant is foreign and appears to be out of the reach of the English courts, particularly in cases involving cross-border commerce.
When the possibility of suing a foreign defendant arises, many claimants and solicitors run for the hills in fear of an expensive and complex piece of litigation. This just isn’t the case. Yes, there may well be some additional costs and some smart thinking required in relation to some aspects of the case such as service of the claim form and documents but this should not defeat a competent solicitor or a claim against a foreign defendant!
There are many useful sources of law a claimant solicitor can use when suing a foreign defendant, the most important of these being the Brussels Regulation. The Brussels Regulation and its EU-wide reach is very useful in determining a Member States’ jurisdiction in cross-border disputes, the starting point of which is Article 2 which states that a defendant must be sued in his local court. This basically means that where there is a foreign defendant they must be sued in a court in their state. This isn’t sounding too promising yet but stay with it because there are a number of very practical and useful exceptions to establish jurisdiction for the English courts rather than suing the defendant in their own country or not at all.
The exceptions:
Article 5(1):- this provision confers jurisdiction in contract cases on the courts of the Member State where the place of the performance of the contract is to take place i.e. in sale of goods cases, the place in the Member State where the goods are delivered or should have been delivered and in provision of services cases, the place in the Member State where, under the contract, the services were provided or should have been provided.
Article 5(3):- this provision confers jurisdiction in tort cases on the courts of the Member State where the harmful event occurred or may occur. This means a claimant can sue where the tort was committed (e.g in the case of a defective product, the factory where it was made in the defendant’s Member State) or where the harm occurred (e.g. England, where the product caused damage to property or harm to a person).
Article 22:- this provision confers exclusive jurisdiction in some situations relating to land, companies, intellectual property, entries in public registers and enforcement proceedings.
It is clearly possible to get round jurisdiction issues when considering pursuing a foreign defendant and in many cases it will be possible to sue them through the English courts. Some thought will need to be given to serving the defendant but permission to serve out of the jurisdiction does not need to be applied for in these cases however, some thought may need to be given to the permitted methods of service in the Member State in which the defendant is located. What must be considered early on is whether the defendant is likely to issue proceedings themselves or apply for a declaration of non-liability from a court in their Member State. If this happens that court will then be seised with the claim and it will not be possible to issue proceedings in England based on the same cause of action. For tactical reasons it is therefore very important to ensure you win the jurisdiction race when suing a foreign defendant!
