At first sight, the following questions and comments arose. It may be that, with the benefit of more time for reflection, some of these points or concerns may be seen to be illusory. I have tended to use `Act' where it may have been more proper to use `Bill'. I have not made any attempt to re-draft parts of the Bill which seem to me to be in need of it, because I see more in the way of questions; it is not for me to presume to have answers.

  Clause 1(4): does `judgment or decree' mean a judgment from an English court? Or does it include a judgment which was given by a foreign court but which qualified or would have qualified for recognition in English private international law? Or does it include a foreign judgment which, however, would not qualify for recognition in English private international law? It seems improbable that the last of these is included, but the middle option is harder to predict. What is the effect, for example, of a judgment from a foreign court declaring that the insurer had no liability to the insured?

  Clause 2(7): I am not clear whether this provision deals with the case in which the liability of the insurer to the insured, and no more, is according to the policy of insurance required to be sorted out by arbitration, or a case in which the third party, to whom the rights have been transferred, has to bring his direct claim against the insurers by way of arbitration.

  If it is the former, I am not sure how this would work, for if it is only the rights which are transferred to the third party by clause 1, it is not obvious that the obligation (duty, burden) to proceed by arbitration does transfer. If `rights' means `rights and associated obligations', this would be less of a point, but that does not strike me as the way to interpret `rights'.

  If it is the later, it would appear to be necessary to say specifically that this Act shall be applied in arbitration proceedings? What would happen if the arbitrators were to come to the conclusion that, because they are entitled to choose the law which they will apply, that they will choose to apply the law which governs the contract of insurance and that as a result they will not apply the provisions of the Act? It may be that this is the intended result, and that the power of the tribunal to choose the law which applies in the dispute is more important than the application of the rules of this Act. But at the moment, I do not see what will prevent arbitrators choosing not to apply the provisions of the Act in a case in which they consider that the claim of the third party should be dealt with by (and rejected by reference to) the law which governed the insurance contract.

JURISDICTION AGREEMENTS IN INSURANCE CONTRACTS

  I do not see what is intended to be the result if the insurance contract provides, on a true construction, that all claims under it (including any direct claim) are to be brought before a particular court. In the context of jurisdiction agreements falling within the scope of the Brussels I Regulation, I can see that there may be little which legislation can say. But what is to happen if the insurance provides that all claims against the insurer are to be brought before the courts of New South Wales? Jurisdiction clauses are not proscribed by clause 18: does that mean that a court can give effect to such a clause? If that is so, it looks odd that a court is directed by clause 18(c) to apply the Act even though there is a choice of law agreement for another law, but is not prevented from giving effect to an agreement on jurisdiction which will mean that the Act is not applied after all. I suspect that I have not fully understood the intention here.

Service out of the jurisdiction on insurers to whom the Brussels I Regulation does not apply to give or to refuse jurisdiction

  If the claim under the Act is seen as one falling within CPR r 6.33(3), which it seems to me that it is, service out on an overseas insurer will be allowed without the prior permission of the court. That would mean that an Australian insurer could be served without the prior permission of the court, even though the insurance contract was not governed by English law, the liability of the insured to the insurer had nothing to do with England or English law, and none of the parties had any residential connection to England. That may be exactly what is intended, but it is a striking assertion of jurisdiction over a case whose component parts may have little to do with England.

  If such service is made (or if the insurer has been served here), may the insurer nevertheless apply for a stay of proceedings on the ground of forum non conveniens, pointing to the weakness of connection to England and the strength of connection to another jurisdiction? It is not obvious to me, but there must be a possibility that the wording of the Act would lead a court to the conclusion that no power to stay is permitted. First, if permission is not needed to serve, it may seem odd that that discretionary element still returns to play a part if the defendant insurer contests the jurisdiction or its exercise. Second, clause 18 could be taken to say that the Act is to apply even though there are these foreign elements; that if there is a stay on the grounds listed as irrelevant to the application of the Act in clause 18, the effect would be that the Act would not apply, and that therefore the court may not grant a stay of proceedings. That would give the Act a very wide sphere of operation.

Application of the Act in cases where all the contacts are not with England: Clause 18

  It is easy to see why the Act should not be prevented from applying just because the contract of insurance is governed by a foreign law when everything else is English, or when the insurer is foreign (esp, perhaps, if it is Gibraltarian) when everything else is English, and so forth; and Clause 18 says that. But it also appears to say that the Act will still apply even though all the matters listed in Clause 18 are non-English; the Notes on Clauses could easily be read as making that point. Or, to put it another way, there is no geographical, personal, or other limit on the application of the Act. Is it really intended that it should apply to cases in which there is no English connection at all?

  It may be that the correct way to read Clause 18 is simply saying that the factors listed do not prevent the application of the Act, but that the question whether the Act does apply is also subject to (answered by) the principle that Parliament is presumed not to intend to legislate for its laws to have extra-territorial effect. Something similar arose before the House of Lords in Serco Ltd v Lawson [2006] UKHL 3, which dealt with unfair dismissal. The legislation in that case was also silent as to its scope, but no-one really supposed that it applied to and employee and employer from Ruritania who were parties to a Ruritanian contract performed in Ruritania. Lord Hoffmann was able to deduce and limit the scope of the Act, but it cost a lot of someone's money for Parliament's will on this point to be ascertained, and to be shown to be different from what the Court of Appeal had found it to be.

  In the case of this proposed Act, is it the will of Parliament that the Act apply to every single case in which a person with a claim against an insured wishes to pursue the insurer? If it is not the will of Parliament that this be permitted in every single such case (and bearing in mind that service out appears to be available as of right if the insurer is not here), I cannot myself see where the limitation is. Reasonable people may disagree as to what it should be, but it is not apparent to me that the answer is given on the face of the text.

Application of Clause 18 and the Rome I Regulation

  In a case in which it is intended to that the Act apply, but in which the lex contractus is not English, it may be assumed that Clause 18 will make the Act apply. But it is possible to see the argument which would defeat this. If the liability of an insurer to the third party is seen as a matter relating to the contract of insurance, there is a chance that it will be seen as a contractual obligation for the purposes of the Rome I Regulation (Reg (EC) 593/2008). In this regard, the fact that the Court of Appeal is inclined to the view that, as a matter of common law private international law, a direct claim is to be characterised as a claim in tort is of no relevance: Maher v Groupama Grand Est [2009] EWCA Civ 1191 is authority on the common law, but not on the interpretation of the Regulation.

  That Regulation applies its own choice of law regime for matters falling within its material scope. Suppose that the law which governs the policy of insurance does not allow for the transfer of rights, or does so only in a way which conflicts with the provisions of the Act. On the face of it, it would not be possible for the Act to be applied, to override the contradictory provisions of the law which governed the contract of insurance. If it is intended that the Act nevertheless apply, it would have to be under the mechanism in Article 9 of the Regulation, that is, on the basis that the Act is an `overriding mandatory provision' of English law as law of the forum. Looking at the current wording of clause 18, it is not certain that it would pass the test as this is explained in Article 9.1, for the introductory wording of clause 18 is rather understated. It does not say, for example, that `The provisions of this Act shall be applied notwithstanding that ..'. Such language would, to my mind at least, make it more likely that an English judge would find (and if the European Court ever had to address the question, would be more likely to accept) that the provisions of the Act would measure up to the standard set out in Article 9.1 of the Regulation and have the effect they were evidently intended to have.

  Equivalent foreign laws on direct actions. I suppose that there is no need to provide that the corresponding provisions of a foreign equivalent Act do not apply? If the idea is that in England, this Act applies to all direct actions, what would happen if a claim were to be made under an equivalent foreign law (assuming this to be the law otherwise applicable to the direct claim, as to the identification of which there is room for debate) which was more generous in some respect, whether as to the need to obtain a declaration of liability to the insured, or (perhaps more plausibly) as to limitation? I do not see anything in the Act which prevents a claimant seeking to rely on a foreign equivalent law. It will not be easy for him, not least because the jurisdictional rules which allow service out to be made without permission will not apply. But if the intention is that this Act, and no other foreign analogous law, govern direct claims in England, it may be helpful for it to say so.

  A slightly similar issue arose in relation to the Civil Liability (Contribution) Act 1978, in AMF v Hashim, in which the judge ventured to suggest that the 1978 applied to the case before him, but if it did not, a foreign law still might do so. The answer to this will, one supposes, depend on whether (the Serco v Lawson point, above) there are cases in which the Act has no application (as distinct from there being cases in which the Act does apply but does not give a remedy, or maybe does not give the third party as good a remedy as, for example, the law which governed the contract of insurance would have done). The Act does not, expressly at least, provide that other laws shall not be available to a claimant, or does not provide that the Act is to be exclusive of all other laws. But if it does not intend to preclude other claims, how is the conflict of laws to be resolved?

Adrian Briggs

Professor of Private International Law

St Edmund Hall, Oxford

14 January 2010