In a recent judgment, the High Court sent a stark reminder to claimants that failing to meet the threshold for jurisdiction and effecting service of proceedings in time will put claims in jeopardy.1
The underlying claim was for competition law damages brought by a group of car manufacturers against certain suppliers of car-cooling components. The judgment concerned an application by the defendants to challenge the timeframe for service as well as the jurisdiction of the English courts to hear the claim. It was held that (i) the claimants had delayed in effecting service of the proceedings and (ii) certain of the defendants prevailed on the forum conveniens rule meaning that the claims against them were dismissed, even though the claimants succeeded on establishing jurisdiction through the CPR gateways.
Whilst the outcomes were undesirable for the parties involved, they serve as a reminder of what can be at stake when trying to get proceedings off the ground as explored below.
Service of the proceedings
The first issue was whether the court's prior order on extending the time for service of the proceedings on defendants outside of the jurisdiction should be set aside. The court was persuaded that the lack of proactive steps by the claimants, resulting in a delay of more than a year, was unreasonable and that no good reason was provided. The claimants' reasons rejected by the court included that they had to prepare Particulars of Claim, there were backlogs at the Foreign Process Section which were exacerbated by the cyber-attack on Royal Mail in 2023, that an extension was necessary to accommodate longer times for service in certain jurisdictions and the claimants had hoped that settlement discussions would take place which might negate the need to serve the claims at all. The court held that the actual reason for the extension was simply that the claimants did not take any steps to serve until time to do so was almost over. Claimants will therefore only be able to benefit from additional time in which to effect service where there are compelling reasons, and it will be necessary for claimants to show that there is real and substantial progress in settlement discussions if this is to constitute a basis for extending the time for service of proceedings.
Establishing jurisdiction
The second issue was whether the claimants had established jurisdiction by reference to the CPR jurisdictional gateways and whether England & Wales (E&W) was the appropriate forum for the claim.
On the former, the court was persuaded by the claimants that the jurisdictional gateways had been met. Although the court did not reach a view on the merits of the claims, it found that the claim was adequately pleaded in respect of certain losses and that there was at least a plausible basis for the claims alleged.
However, on the latter issue, the defendants contended that France was the most appropriate jurisdiction by reference to the fact that many of the litigants were based there, France was the host of relevant witnesses and documents, and the claims partly pleaded French law. The court held that the claim had no connecting factor whatsoever with E&W because E&W accounted for a minuscule amount of the relevant supplies of the affected products, all relevant factual evidence would come from France and that France was an available forum (even where the claims there may be time-barred). The court held that the "real reason" for issuing the claim in E&W was to obtain English-style disclosure, this being a "deliberate litigation strategy" but it was ultimately not "a sufficient reason for trying the proceedings" there.
Discussion
It is common for claims which seek damages arising from breaches of competition law to have an international dimension, either because the litigants include overseas entities and/or the losses claimed were sustained across multiple jurisdictions. In such claims, the claimant must undertake a multifactorial assessment when deciding where to issue proceedings – but with an awareness that defendants can later mount a challenge once they have been served with proceedings. Each assessment will depend heavily on the specific facts of the case, but the judgment sets out guidance as to the factors which ought to form part of such an assessment when undertaking a jurisdiction analysis, with the upshot being that claimants should be cautious in taking matters for granted.
Challenges to service and jurisdiction are not uncommon, and defendants are incentivised to take points early on where doing so can knock-out otherwise meritorious claims. This was the second (successful) jurisdiction challenge since Brexit within the competition damages arena2, and a jurisdiction challenge was heard earlier this month in the Competition Appeal Tribunal in the context of proposed collective proceedings arising from the Salmon cartel (in respect of which judgment is pending at the time of writing). Given that Brexit removed the reliance by claimants on establishing jurisdiction through the Brussels Regulation, it has opened up a new front for challenges based on English courts not having appropriate jurisdiction (forum non conveniens), and it is to be expected that such challenges will continue to be a risk area for claimants.
The judgment shows that reliance on an anchor defendant alone is insufficient where that is the only connection with the jurisdiction, and where it is self-evident that a particular jurisdiction has been chosen due to certain procedural advantages that may be on offer (here, a wide-ranging disclosure regime). Unless jurisdiction has been agreed between the parties, claimants are unable to completely shield themselves from a jurisdiction challenge and therefore they should continue to carefully assess where to bring their claims, including by reference to the limitation position of all possible jurisdictions that are open to them. It may be appropriate in some cases for claimants to take steps to protect their potential claims, for example by issuing protective claims and/or taking steps to suspend limitation. However, it may also be the case that claimants are able to justify their decisions by reference to the time and costs implications of taking such steps – and to put into evidence that there is a real risk that justice will not be achieved in the natural forum. It will be interesting to see how the English courts will grapple with such issues when they are put in evidence, especially in a world where, as the facts of this case appear to suggest, the EU Damages Directive has yet to establish a level-playing field in the private enforcement of competition law – noting the clear differences between the disclosure regimes of E&W and France.
The adage that "justice is open to all; like the Ritz hotel" neatly sums-up the strict approach to jurisdiction being taken by the English courts. In this specific case, the court was persuaded that France was the forum in which the action has the most substantial connection as a whole. Whilst claimants should continue to exercise caution when assessing where to bring their claims, the judgment demonstrates that each case is heavily fact-specific and not every jurisdictional analysis will generate the same result.