The long arm of the law: expanded gateways will increase the opportunity to litigate in England
Service on a party outside of the UK generally requires the permission of the court. This is especially so following the UK’s departure from the EU, which means permission is needed to serve on parties located in EU Member States. Permission to serve out requires a claimant or applicant to establish three things: (i) that there is a good arguable case the claim falls within one of the gateways in Practice Direction 6B (PD 6B), (ii) that England and Wales is the appropriate forum for to hear the claim, and (iii) that there is a serious issue to be tried. The changes made to PD 6B effective from 1 October 2022 make it much easier to satisfy the gateway requirement.
The amendments and additions to the available gateways reflect developments in policy about the English court’s jurisdiction. We recently wrote about the more expansive reading being given to Gateway 20, noting the Court of Appeal’s 2018 comment that the English court is now less cautious about allowing service out. We also commented on the hotly anticipated introduction of Gateway 25, for service of information orders on non-parties, brought in to address the significant rise in the use of such orders in international fraud and asset tracing cases. The full suite of additions and amendments (of which new Gateway 25 is one) covers a broad range of scenarios. The additions include:
- a new gateway for declarations of non-liability, which the Civil Procedure Rules Committee (CPRC) noted would be in keeping with the change in judicial attitude towards declarations of non-liability generally, which had become popular under the European regime;
- new gateways for breach of trust and breach of fiduciary duty claims. These have been introduced to address the apparent lacuna that while most causes of action had their own gateways, these did not;
- a new gateway for contempt applications, which the CPRC considered necessary in particular for situations where contempt is alleged against both a company and its director(s); and
- a new gateway to serve out on an overseas entity for claims that arise out of the operations of a branch, agency or other establishment that is within the jurisdiction of the English court (if the claim cannot be served on the branch, agency or other establishment itself). This is directly based on an article of the previously applicable European regime.
There are also several amendments to other gateways. For example, a range of changes are introduced for contractual disputes. One pragmatic example is that it is now explicitly possible to bring claims in respect of contracts where the offer was received within the jurisdiction. The old version of this gateway referred only to claims in respect of contracts made within the jurisdiction, which the CPRC noted had been criticised. The purpose of this change is to deal with the modern commercial reality that the parties to the contract probably will not sit down in a room together to sign, and that even if they did so that location may well be arbitrary. Additionally, the previous requirement that breaches of contract must have been committed within the jurisdiction has been expanded to include breaches which are likely to have been committed within the jurisdiction. The international and fluid nature of modern business means it can be difficult to pinpoint precisely where a breach was committed. These sorts of changes reflect the desire of the English court to keep pace with the realities of its users needs and the practices of international commerce.
This wholesale broadening of the available gateways might be taken as a signal that the burden will be shifted onto the appropriate forum test. The idea of scrapping the gateways entirely and relying solely on the appropriate forum test has support, most notably from Professor Adrian Briggs KC, a leading academic on private international law. The idea was, however, considered and rejected by Mr Justice Foxton in his lecture and paper The Jurisdictional Gateways – Some (Very) Modest Proposals, published in Lloyd’s Commercial and Maritime Quarterly. Ultimately, the CPRC Service sub-committee (of which Mr Justice Foxton was a member), considered it to be beyond the scope of its project to address the bigger question of whether to remove the gateway requirement altogether. This seems correct as it would involve a substantive change to how our service out, and thus our jurisdiction regime operate.
The package of changes and additions is substantial and will be welcomed by international litigants, many of whom actively seek out the jurisdiction of the English Court (often in the face of opponents who seek to avoid it) as an impartial decision maker with robust and sophisticated tools available to it. International litigants need the rules of Court to match the realities of cross-border disputes and the consistent message from the English Court is one of pragmatism and flexibility in making its services available. The CPRC Service sub-committee noted in its final paper on the proposed amendments that the principal purpose of this work was “to seek to ensure that the scope of the gateways matches the policy objectives underpinning the existing gateways”. Such objectives surely include maintaining the English Court’s leading position in international commercial litigation – after all, approximately 75% of the English Commercial Court’s work is international, and has been since around the turn of the century. These reforms to the gateways for seeking permission to serve out affirm that outward looking attitude of the English Court, which while no longer party to the European regime, remains very much open for business to international litigants.