English Court Of Appeal Confirms The Width Of The Consumer Contract Jurisdictional Gateway In Financial Services Claims

• Published date: 22 December 2022
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Financial Services, Corporate and Company Law, Contracts and Commercial Law
• Law Firm: Quadrant Chambers
• Author: Prof. Gerard McMeel KC

OVERVIEW

Post-Brexit, the jurisdictional landscape is very different for claimants. One reasonably constant feature is the bespoke jurisdictional gateway for consumer contracts, which has recently come to prominence in financial services claims. Its first iteration was in the Brussels Convention 1968, as modified on the accession of the UK. Article 13(3) of the Convention provided:

"In proceedings concerning a contract concluded by a person for a purpose which can be regarded as being outside his trade or profession, hereinafter called 'the consumer', jurisdiction shall be determined by this section..., if it is'
1. ...
2. ...
3. any other contract for the supply of goods or a contract for the supply of services, and
(a) in the State of the consumer's domicile the conclusion of the contract was preceded by a specific invitation addressed to him or by advertising; and
(b) the consumer took in that State the steps necessary for the conclusion of the contract....

This was very much a product of its time, pre-internet advertising and trading, and, apparently, principally aimed at cross-border mail order catalogues. It most stringent requirement was that the contract should be "preceded by a specific invitation addressed to him or by advertising" in the consumer's domicile. If the test was satisfied, article 14 permitted the consumer to sue in his or her home jurisdiction. Article 15 precluded jurisdiction agreements, unless entered into post-dispute.

In its second incarnation the Brussels Regulation, and the test was modernised to make it more media-neutral, enhance consumer protection and extend the consumer contract gateway. Article 17(1)(c) of the recast Regulation, states:

"in all other cases, the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer's domicile, or, by any means, directs such activities to that Member State or to several Member States including that Member State, and the contract falls within the scope of such activities."

Post-Brexit it was considered appropriate for the UK to maintain two of the three situations in which the EU measures had created special jurisdiction rules for unequal relationships (insured parties not being seen as sufficiently weak against insurers), and therefore sections 15A to 15E of the heavily amended Civil Jurisdiction and Judgments Act 1982 contain two special jurisdiction regimes for consumer and employment contracts. Article 17 has effectively been replicated in the post-Brexit provisions of sections 15A to 15E, and in particular the definition of "consumer contract" in section 15E (inserted by the Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019, SI 2019/479). The consumer contracts test in the 1982 Act was recently considered by the Court of Appeal in Soleymani v Nifty Gateway LLC [2022] EWCA Civ 1297.

This note focuses on a subsequent decision of the Court of Appeal inDooley v Castle Trust and Management Ltd [2022] EWCA Civ 1569 ("Dooley"), which may represent something of a curiosity as it is based on the first incarnation of the consumer contracts gateway in the Brussels Convention. The claim was effectively a replay of the previous year's appellate decision inAdams v Options SIPP UK LLP (formerly Carey Pensions LLP) [2021] EWCA Civ 474; [2021] Bus LR 1568 ("Adams"), but with a...