In Roberts v The Soldiers, Sailors, Airmen And Families Association – Forces Help & Anor [2020] EWCA Civ 926, the Court of Appeal confirmed that the Civil Liability (Contribution) Act 1978 has extraterritorial effect. In this blog post, Megan Griffiths and James Beeton outline the decision and consider its implications for future litigation.
Background
The case concerned a claim for clinical negligence resulting in the Claimant suffering brain damage at birth in German hospital. We discussed the underlying facts in detail in an earlier blog post on the High Court’s ruling on applicable law and limitation here.
The Claimant’s case was that his injuries were caused by the attendant midwife, who was employed by the first defendant: the Soldiers, Sailors and Airmen and Families Association – Forces Help (“SSAFA”). He also sued the Ministry of Defence.
Both Defendants brought a claim for a contribution against the German hospital. Section 1(1) of the Civil Liability (Contribution) Act 1978 provides for the English law right to a contribution:
Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
The relevant applicable law apart from the 1978 Act would have been German law. It was agreed that a contribution claim in German law would have been time-barred. However, if the 1978 Act had extraterritorial effect, and liability arose under the Act, then the contribution claim would be in time.
At first instance, Soole J held that the 1978 Act did have extraterritorial effect. The German hospital appealed against this ruling. The appeal was dismissed by the Court of Appeal.
Reasons
Although the Act was “tortuous in its structure” the Court of Appeal found that “the analysis of the language of the Act favour[ed] the Respondent’s interpretation” ([62]). The Court of Appeal considered that sections 1(6) and 7(3) were the most helpful to this interpretive exercise.
Section 1(6) says:
References in this section to a person’s liability in respect of any damage are references to any such liability which has been or could be established in an action brought against him in England and Wales by or on behalf of the person who suffered the damage; but it is immaterial whether any issue arising in any such action was or would be determined (in accordance with the rules of private international law) by reference to the law of a country outside England and Wales.
The Court of Appeal found that the ordinary language of section 1(6) meant that “the relevant liability must have been or must be able to be established in an English court, but not necessarily by an application of English law” ([54]–[55]). Therefore, the threshold for the Act to apply was whether the action could be brought in an English court of law, irrespective of the substantive law that applied to the claim.
Section 7(3) says this:
The right to recover contribution in accordance with section 1 above supersedes any right, other than an express contractual right, to recover contribution (as distinct from indemnity) otherwise than under this Act in corresponding circumstances;
This language was also found to be perfectly clear, since it specified that the right to contribution superseded “any” right. Irwin LJ said at [61] “I find it hard to see why this should not be thought to include provisions of foreign law”. This covered the competing provisions of German law which otherwise would have applied to the contribution claim.
This interpretation was consistent with the purpose of the 1978 Act, which Irwin LJ characterised at [64] as “the object of simplifying and standardising contribution claims”. In that respect, Irwin LJ noted that
It would have been simplicity itself to provide that where the proper law of the contribution claim was a foreign law, then the statutory right did not arise. Parliament set no such limit or exclusion … the natural interpretation of the language of the Act sits well alongside a presumed purpose of a standardisation and simplification of limits on the statutory claim for contribution which otherwise would be affected by foreign law.
Irwin LJ concluded at [65]–[70] by noting that this analysis (and in particular the focus on the clear meaning of the language of the statute) was consistent with Lord Sumption’s explanation in Cox v Ergo Versicherung AG [2014] UKSC 22 of when a statute may be considered to have extraterritorial effect.
Phillips LJ fully agreed with Irwin LJ’s analysis, commenting at [74]:
The creation of (i) a statutory right of contribution as between persons notwithstanding that the liability of one or more of them arises under foreign law and (ii) the exclusion of other rights of contribution (save for express contractual rights) can and should be read together as giving rise to the plain implication that the 1978 Act has extraterritorial effect.
David Richards LJ agreed that the 1978 Act had extraterritorial effect, but, unlike the other two appeal judges, he based this conclusion entirely on s. 1(6) rather than s. 7(3). Section 7(3), he explained at [95], was in his view actually consistent with either intra- or extra-territoriality.
Comment
This important decision suggests that, in claims for contribution or indemnity heard in the courts of England and Wales, the Civil Liability (Contribution) Act 1978 regime will apply. This includes its provisions on limitation.
Significantly, the applicable law in this case was governed by the Private International Law (Miscellaneous Provisions) Act 1995 rather than by the Rome II Regulation. Could there be a different conclusion in contribution claims relating to damage post-dating 11 January 2009?
It is possible, but we think it is unlikely.
The Court of Appeal’s finding that the Civil Liability (Contribution) Act 1978 has extraterritorial effect according to its terms seems a compelling reason for it to be considered an “overriding mandatory provision” of English law in accordance with art. 16 of Rome II.
This says:
Nothing in this Regulation shall restrict the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation.
Article 20 of Rome II deals with “multiple liability”. It says that, where one of a number of defendants (called “debtors”) has satisfied a claim in whole or in part “the question of that debtor’s right to demand compensation from the other debtors shall be governed by the law applicable to that debtor’s non-contractual obligation towards the creditor.”
But this raises the question of what is “the law applicable to that debtor’s non-contractual obligation towards the creditor”? This must be the law as determined by Rome II, which by virtue of art. 16 will include any overriding mandatory provisions of English law. Based on this decision, it seems to us that the Civil Liability (Contribution) Act 1978 is likely to be among them.
But (as always) there is counterargument. A problem with the proposition that the 1978 Act has overriding mandatory effect is that the parties are free to regulate or exclude rights of contribution by agreement (see s. 7(3)). Recital 37 of the Rome I Regulation (the sister Regulation to Rome II) suggests that this is inconsistent with the statute being an overriding mandatory provision.
This decision is therefore perhaps not the end of the line. We await a final determination of the issue in the context of the Rome II Regulation with interest.