Is divergence inevitable in a post-Brexit legal landscape?

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2022-01-17

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This article was originally published on Thomson Reuters Practical Law Dispute Resolution blog.

This article was co-authored by David Armstrong, Trainee Solicitor, London.

Brexit has an undeniably huge role in shaping our legal system for the future. On 9 December 2021, the Court of Justice of the European Union (CJEU) handed down judgment in Tattersall v Seguros Catalana Occidente S.A and Basquille on the long debated ‘Keefe question’. It is important to consider the significance of this judgment and the effect that Brexit will have on such issues moving forward.

Background

The claimant, Ms Tattersall, was staying with family in a rental villa in Spain when she tripped and fell down an unmarked step, suffering inquires that required surgery in Spain.

The claimant brought a claim for compensation against the public liability insurer of the villa and, due to concerns over the policy, the owner of the villa, Ms Basquille, was also named as a defendant.

It was agreed between the claimant and the public liability insurer that the courts of England and Wales had jurisdiction pursuant to Article 13 (2) of the Brussel recast. However, Ms Basquille’s insurer disagreed that the English courts had jurisdiction over any claim against her.

The matter was referred to the CJEU.

The Keefe question

The Keefe question originates from Hoteles Pinero Canarias SL v Keefe [2015], in which a claimant domiciled in England was injured while staying in a hotel in Spain.

In the courts of England and Wales, a direct action was brought against the hotel’s liability insurer as the Brussels I recast special rules relating to insurance meant that jurisdiction was established.

The insurance policy limit was significantly lower than the £5 million claimed for, so the claimant joined the hotel as a second defendant, citing Article 13(3) in doing so. The issue was therefore whether Article 13(3) allowed for an insured to be joined to an action against an insurer where jurisdiction had been established.

The insured argued that Article13(3) had limited scope, only applying where there is an insurance dispute involving the insured. The hotel therefore contended that this was a claim resulting from negligence and as such, should not be thought of as an insurance claim. In turn, this would mean the special rules relating to insurance do not apply, excluding jurisdiction over the hotel.

The Court of Appeal in Keefe held that English court jurisdiction was established over the claim against the insured. Article13(3) was therefore interpreted as meaning the insured could be joined to an action where jurisdiction had been established over the insurer.

Judgment

In contrast to the approach in Keefe, the recent CJEU decision in Tattersall considered the position of Article 13(3) and provided much needed clarity whilst coming to the opposite conclusion to the Court of Appeal. In the CJEU’s reasoning, the court stated that the special rules on insurance are to address an imbalance between the parties as an insurer is considered a stronger party. The claimant and the insured are seen as weaker parties, so there is no reason to allow a claimant to sue a defendant in their member state of domicile under the special rules.

What next?

Following the end of the Brexit transition period, this may well be the last matter that the courts of England and Wales refer to the CJEU. The significance of this cannot be understated, as such issues in the future will not benefit from resolution by the CJEU and the final decision will come from our home courts.

The Keefe question is a perfect example of the relevancy of this development. Had this case not been referred to the CJEU, the current outcome may not have been reached. Hotly debated topics such as this may never reach the CJEU in the future, demonstrating the potential for divergence between a post-Brexit legal system and the alternative CJEU rulings.

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