The case concerns a claim for fraud where service out had taken place on the Defendant’s Lebanese lawyer without provision to that effect in the original order. Among the issues was whether such service could be validated retrospectively and whether, notwithstanding limitation issues, the claim form could be extended so as to permit prospective alternative service on the Defendants’ lawyers in Lebanon and in the UK. The Deputy Judge (Sir Edward Evans-Lombe) held that despite the lack of express provision in the CPR, the court did have the power retrospectively to order alternative service abroad. He also ordered that service on the Lebanese lawyer should be treated as good service and that the extensions of time and order for prospective alternative service on the Defendant’s lawyers should be treated as valid.
Allowing the appeal, the Court of Appeal held that the High Court had been wrong to validate the service retrospectively and to allow extensions of time for the claim form and alternative service thereafter. In the view of the Court of Appeal, the Claimants could have avoided these “retroactive gymnastics” if they had issued the claim form much earlier rather than left it towards the end of the limitation period.
This decision has now been unanimously overturned in the Supreme Court which has ordered the judgment of the High Court to be restored. The leading judgment of Lord Clarke affirmed that CPR rule 6.37(5)(b)(i) is to be construed as conferring the power retrospectively to validate alternative service into the rules governing service abroad. In cases not involving the Hague Service Convention or a bilateral service treaty, the court should simply ask whether, in all the circumstances, there is ‘good reason’ to make the order sought. In answer to this, Lord Clarke found that the Deputy Judge had not erred in principle and was correct in finding good reason that the steps already taken constituted good service. Lord Clarke, with whose speech the other Justices agreed, held that
The Supreme Court therefore found that the Court of Appeal had been wrong to interfere with the decision of the Deputy Judge.
Lord Sumption’s speech focused on the Court of Appeal’s finding that the power to order service out of the jurisdiction by an alternative method is an exorbitant power and must be ‘exercised cautiously…and should be regarded as exceptional’. His opinion (with whom the other Justices agreed) was that past concerns relating to sovereignty were now outweighed by ‘a far greater measure of practical reciprocity’. He highlighted that ‘litigation between residents of different states is a routine incident of modern commercial life’ and a lower threshold could be justified ‘in the interests of the efficient conduct of litigation in an appropriate forum’.
In departing from the strong caution expressed by the Court of Appeal who suggested a high threshold before intervention abroad could be justified, the unanimous ruling of the Supreme Court has signalled a more pragmatic and efficient approach to jurisdiction being taken by the English Court in international disputes. This marks an important development in service out cases generally.