Jurisdiction and foreign hotels post-Keefe

This blog post is by Spencer Turner of 12 King’s Bench Walk.

In Lackey v Mallorca Mega Resorts and Anor [2019] EWHC 1028 (QB), Master Davison held that the Claimant, who had been paralysed as a result of an accident at a holiday resort, could sue a Spanish hotel and its insurer in England.

There are three points of interest arising from this case:

  1. A party making an application to contest the jurisdiction later than 14 days post-acknowledgment of service must apply for relief from sanctions.
  2. Notwithstanding the Supreme Court’s decision to refer three questions to the CJEU in Hoteles Pinero Canarias SL v Keefe (Case C-491/17), this case suggests that the lower courts may be inclined to follow the Court of Appeal ([2015] EWCA Civ 598) in permitting the joinder of a foreign hotel to a direct claim against its insurer without re-referring those questions.
  3. However, Master Davison’s willingness to follow Keefe may also be explained by the availability of an alternative route to jurisdiction on the basis that the claimant was also suing as a “consumer” for the purposes of arts. 17 and 18 of the Recast Brussels Regulation. To qualify as a consumer, it was not necessary for the Claimant to be the member of her travelling party who had actually made the booking.

Background  

The Claimant was one of a party of 22 friends who went on holiday to Magaluf in Mallorca. The holiday booking was not made by the Claimant, but by a different member of the travelling party. During the holiday the Claimant sustained a fracture of her cervical spine caused by the activation of a wave machine in a pool at her hotel. The Claimant’s injuries left her tetraplegic. Her ongoing claim is valued in the region of £9 million.

The Claimant sued both the hotel and its insurer. It was common ground that the Claimant had a right of action against the hotel’s insurer under Spanish law. However, it emerged that the policy of insurance had a cover limit of €300,000 or €450,000. Having initially accepted the court’s jurisdiction in its acknowledgment of service, the hotel made a late application for a declaration that the English court did not have jurisdiction over it.

The Issues

The Claimant argued (i) that she had jurisdiction against the insurer pursuant to arts. 11 and 13 of the Recast Brussels Regulation and that she was entitled to join the hotel to that action following Hoteles Pinero Canarias SL v Keefe [2015] EWCA Civ 598; and (ii) that she was in any event entitled to sue the hotel in England in her capacity as a “consumer” pursuant to arts. 17 and 18 of the Recast Brussels Regulation.

In respect of the first point, the hotel argued that subsequent developments in CJEU case law supported the arguments which had been raised by the Spanish hotel in Keefe. Alternatively, the Master was invited to refer the same questions to the CJEU as had been referred by the Supreme Court in that case. In respect of the second point, the hotel argued that the Claimant could not be characterised as a “consumer” for the purposes of arts. 17 and 18, since she had not personally made the booking.

Decision 

The hotel’s application to contest the jurisdiction was made a month after the prescribed 14-day period post-acknowledgment of service (pursuant to CPR r. 11(4)). Master Davison therefore noted that it had been “necessary” for the hotel to make an application for relief from sanctions. The substance of the application was dealt with briefly:

“there was a change of solicitors and a change of opinion as to the stance to be taken to jurisdiction. That, combined with the intervening Christmas break, invites sympathy. Further, this is a £9 million claim and jurisdiction is a central, important and moderately complicated issue. Having regard to those factors, it is obvious that I should grant relief from sanctions and allow the application to be made and I will so order.”

However, the Master went on to dismiss the challenge to the court’s jurisdiction. The hotel’s argument that CJEU decisions since Keefe were suggestive of a relevant change in EU law was comprehensively rejected. Insofar as the submission then became a rerun of the arguments aired in Keefe, the Master declined to make a reference to the CJEU.

The decision not to follow the Supreme Court in referring identical questions to the CJEU is interesting since it might have been assumed that the lower courts would feel obliged to refer these questions rather than simply following the Court of Appeal in Keefe.

The key point here appears to be that there were two important features of the case distinguishing it from Keefe which made such a reference unnecessary.

  • The first was that, unlike in Keefe, there was in fact a policy dispute between the insurer and the hotel about the level of cover available. It will be recalled that it had been submitted by the hotel in Keefe that a dispute of this nature was necessary joinder of the hotel.
  • The second was that “the claimant has another and different gateway anyway” – namely, the “consumer” gateway under arts. 17 and 18.

In respect of arts. 17 and 18, there was nothing in those provisions to say that a “consumer” had to be the person who actually concluded the contract. The hotel’s proposed definition would be more restrictive than that applied to claims governed by the Package Travel Regulations and would “offend against common sense”. There was, the court found, no linguistic of purposive justification for the hotel’s suggested interpretation of the word “consumer”.

Furthermore, it could rightly be said that the Claimant herself had concluded the contract in question, albeit she had done this through the medium of an agent: the preceding argument about the identity of the consumer was therefore redundant.

The result was that the hotel’s challenge to the jurisdiction of the court therefore failed.

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