The Court of Appeal in the case of Hewitsons LLP v Wood (2014) considered an application for permission to appeal in relation to the question of whether a claim for a payment of fees by the Claimant English firm of solicitors needed to be brought in the Defendant's place of domicile, Scotland.

Background

The Defendant ("Wood") instructed a firm of English solicitors ("Hewitsons") to investigate the validity of a will.  Hewitsons brought a claim in England against Wood for breach of contract after Wood failed to pay Hewitsons' fees.

Wood claimed that the proceedings against her should have been brought in Scotland as this was her place of domicile. The County Court found in favour of Hewitsons. On first appeal, the High Court upheld the County Court's judgment finding that Hewitsons were not obliged to pursue proceedings in Scotland. Wood then sought a second appeal in relation to the same issue.

Legal position

Generally, questions relating to the allocation of jurisdiction between Member States of the European Union are governed by the provisions of the Brussels Regulation (the "Regulation"). However as the UK is one single Member State, the Regulation does not apply to the allocation of jurisdiction between its constituent parts. The principles of the Regulation are brought into UK domestic law and applied to internal UK jurisdiction by the Civil Jurisdiction and Judgments Act 1982 ("CJJA")1.

Section 16 CJJA refers the question of determining jurisdiction within the UK to Schedule 4 CJJA. Paragraph 3(a) of Schedule 4 provides that in matters relating to a contract, a person domiciled in a part of the UK may be sued in another part of the UK, in the court of the place of performance of the obligation in question. Paragraph 7 provides that for matters relating to a contract for a purpose outside a consumer's trade or profession, jurisdiction shall be determined by Paragraphs 8 and 9 of Schedule 4 if, according to part (c), the contract "…has been concluded with a person who pursues commercial or professional activities in the part of the United Kingdom in which the consumer is domiciled or, by any means, directs such activities to that part or to other parts of the United Kingdom including that part, and the contract falls within the scope of such activities."

If the above test is satisfied, "proceedings may be brought against a consumer by the other party to the contract only in the courts of the part of the United Kingdom in which the consumer is domiciled" (Paragraph 8(2)).

Decision

It was clear for the purposes of section 16 CJJA that Wood was domiciled in Scotland and that under Paragraph 7 of Schedule 4 she was a consumer and end user of legal services.

Wood argued that Hewitsons were a member of a large consortium of law firms called the "Law Exchange International" and described themselves as a leading UK firm serving national and international clients. Further, Hewitsons had close relationships with a firm in Scotland with whom they collaborated on the provision of legal services. As such, Wood argued that Hewitsons could readily have started proceedings in Scotland.

The Judge also turned to the European Court of Justice case of Peter Pammer v Reederei Karl Schlüter GmbH & Co KG (2012) to determine whether the test in section 7(1)(c) CJJA had been met. Peter Pammerprovides a non-exhaustive list of factors which can be used to determine whether a trader's activity is directed to the Member State of the Consumer's domicile and which can be used to apply the test in section 7(1)(c) CJJA. Relevant considerations for this case were:

  • the international nature of the activity; and
  • outlay of expenditure on an internet referencing service.

Lewison J concluded that Hewitsons could have started the action in Scotland, but the more relevant consideration was whether Hewitsons were obliged to do so. Being part of an international network of law firms does not in itself suggest that a firm is engaged in international activities, given that being within such an international grouping is becoming more common. Further, the fact that links on Hewitsons' website direct browsers to firms in Scotland evidences  that Hewitsons do not actually carry out services and activities in Scotland themselves.

The Court of Appeal held that the appeal did not have a real prospect of success and refused Wood permission to appeal.

Comment

This case confirms the position set out in Schedule 4 of CJJA and in the Peter Pammer case.  In contractual disputes, a person may be sued in the UK in the place of performance of the contract even if that person is domiciled in a different part of the UK.  This case highlights that the Defendant could also be sued in their place of domicile but the Claimant is not obliged to do so.