In a recent case a UK-based consumer asked if they were able to bring a claim in the UK courts under a contract with a non-UK business. A high court judge has said (in some circumstances) yes. For businesses based outside of the UK this is a helpful reminder that, even if your consumer contracts contain a clause granting exclusive jurisdiction to another country, this alone won’t prevent a UK consumer from bringing a claim against you in the UK courts.
A link to the full judgment is below, but for a snappy summary carry on reading...
Mr Bitar, who lived in the UK, had a sum of around 4 million dollars held in a Lebanese bank. The bank attempted to repay the money via a special form of bankers’ cheque which, due to restrictions on the ability for such cheques to be deposited into UK accounts, resulted in the money becoming trapped in the Lebanese banking system. Mr Bitar brought a claim against the bank, in the UK, to reclaim this money. The bank, being based in Lebanon and having a clause in their contract with Mr Bitar that stated that any dispute would fall under the jurisdiction of the courts of Beirut, argued that the UK courts did not have jurisdiction.
The legal bit
While the normal mantra of lawyers is always, first and foremost, to “check the contract”, on this occasion the contract wasn’t all that was relevant. The Civil Jurisdiction and Judgments Act 1982 steps in, in the case of consumer contracts, to override exclusive jurisdiction clauses and allow UK consumers to bring proceedings in the UK when the commercial activities of the business they are dealing with has directed their commercial or professional activities to the UK.
Importantly, whether or not a business has ‘directed’ their commercial or professional activities to the UK is an objective test. Therefore, even if a business didn’t intend for this to be the case, that won’t be relevant.
In this case, while the judge didn’t believe that the bank intended to direct its activities to the UK, the fact that the bank’s website referenced a strategy to target the European market, and contained an annual report referring to its residential mortgage business with private clients in London was enough to convince him that, to a fair-minded observer, the bank was directing its activities to the UK.
So, what do you need to know?
It seems from this case that it will be relatively easy for a UK consumer to show that, objectively, a trader has directed their commercial or professional activities to the UK; references to the European market were enough to do the trick. Therefore, international businesses who have consumers in the UK should be aware of the implication this may have on where they may end up in court, and that the contract alone won’t necessarily have the last word.
…if subjective intention were the relevant test I would be prepared to accept that on the evidence before me the better argument is that the Bank did not intend to direct its business to the United Kingdom...But that is not the test and it seems to me that the website pages to which I have referred which were visible from the United Kingdom do indeed give the impression to a fair-minded observer...that the Bank was interested in obtaining custom from the expatriate Lebanese community in whichever part of the world not insignificant numbers of those who can be treated as falling within that expression were gathered and that in 2014 did include England.