September 2015 saw some of the biggest changes to Scotland’s civil justice system for a generation. The Courts Reform (Scotland) Act 2014 introduced two new courts in the form of the All-Scotland Personal Injury Court and the Sheriff Appeal Court. The threshold for commencing an action in the Court of Session was raised from £5,000 to £100,000. These changes aside, the rules regarding which court an action should be raised in remained much the same. Yet a recent case in the Sheriff Appeal Court has shown that jurisdiction is still a trap for the unwary.
Ramsay v Mann
In Edgar Ramsay v Graham Mann, the Pursuer raised an action in Edinburgh Sheriff Court against the Defender who resided in Glasgow. The Pursuer claimed that he only loaned money to a third party on the advice of the Defender. Matters did not work out and the Pursuer came to court seeking reparation for following the Defender’s advice. The action was defended on several grounds, including that Edinburgh Sheriff Court did not have jurisdiction to determine the dispute.
The Pursuer’s pleadings did not state where the Defender had provided the advice to the Pursuer. This omission would prove to be crucial. The case came before the court for a debate (a hearing on legal argument without witnesses). After hearing the parties, the sheriff held that the Pursuer had not set out any basis as to why Edinburgh Sheriff Court could hear the case and dismissed the action. The Pursuer appealed to the Sheriff Appeal Court.
Before the Sheriff Appeal Court, the Pursuer explained that the Defender’s advice was provided to him in Home Street, Edinburgh. He also argued that the Defender had given an Edinburgh address as director of a company on a return to Companies House. Edinburgh Sheriff Court therefore had jurisdiction.
In reply, it was argued for the Defender that the case seemed to be based on delict (a civil wrong). It was for the Pursuer to explain where the harmful event had occurred and why the court had jurisdiction. The Pursuer’s pleadings were silent on this vital point. The Pursuer had been given the opportunity to adjust his pleadings. He could have transferred the claim to Glasgow. As he had done neither, it was right that the sheriff had dismissed the action.
The Sheriff Appeal Court agreed with the Defender and refused the Pursuer’s appeal.
Civil Jurisdiction and Judgments Act 1982
In Scotland, the rules regarding jurisdiction are contained in Part III and Schedule 8 of the Civil Jurisdiction and Judgments Act 1982. Jurisdiction can be claimed on a number of grounds, however, the default rule is that a defender should be sued where it is domiciled. For an individual, this is where he/she ordinarily resides. Non-natural persons, such as companies or partnerships, are domiciled where their registered office or principal place of business is located.
The 1982 Act sets out other grounds of jurisdiction which may apply instead of domicile. Three of the most frequently occurring are:
- Place of performance. A pursuer can raise an action based on the place where the defender was due to perform its part of the contract. So, in a simple contract for the supply of goods, the seller could sue in the court having jurisdiction over the place where he was due to be paid. On the other hand, the buyer could sue in the court having jurisdiction over the place where the goods were due to be delivered.
- Harmful event. A pursuer can raise an action in the court having jurisdiction over the place where a harmful event occurred. Suppose a person from Glasgow is walking in Stirling and is hit by a car driven by someone from Edinburgh. Stirling Sheriff Court could hear a claim for any damages arising from the incident.
- Prorogation. The parties may agree that a particular court will have jurisdiction to settle any disputes arise between them. A “governing law” clause is a common sight in contracts. This could stipulate that Scottish law will apply and the Scottish courts will determine any disputes. Parties can go one step further and state that a specific court will have jurisdiction to hear any claims, such as the commercial court in Glasgow Sheriff Court.
Consumers, in addition to all the other grounds of jurisdiction in the 1982 Act, can also raise an action in the court where they are domiciled. If, however, a consumer is a defender in an action, other than in very limited circumstances, they must be sued in the court where they are domiciled. For the purposes of the 1982 Act, a consumer is a person acting outside their trade or profession.
How can Brodies help?
The importance of getting jurisdiction right is critical. Proceeding in the wrong court may result in your claim being dismissed. You may also have to pay the defender’s expenses. If a time-bar deadline is looming, it could be too late to start again in the correct court. Brodies can advise you at an early stage on jurisdiction to ensure that your claim is raised in the right court.
For defenders, we can check to see if the pursuer has chosen the right court to sue you. Knocking out a claim at an early stage can create an advantage in a dispute and help reach a resolution.
If we can be of assistance, please contact Craig Donnelly or your usual Brodies contact.
On October 8, 2018