Private International Law of Reinsurance and Insurance

Raymond Cox; Louise Merrett and Marcus Smith

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7 REINSURANCE AND INSURANCE JURISDICTION AT COMMON LAW

7.1 Common law jurisdiction rules remain important in relation to reinsurance and insurance because of the prevalence of business in non-EU countries such as the USA, Japan, China, Korea, Russia and Commonwealth countries. In this chapter we deal with the jurisdiction rules applicable under English law where the Brussels Regulation does not apply. By way of a convenient and commonly used shorthand we refer to this law as the common law, as distinct from the law contained in the European legislation, although all the court’s exorbitant jurisdiction derives from statute and there may be other particular English legislation which is relevant. The usage is justified because the principles in this area have been and continue to be very largely developed by the courts. 7.2 The approach of the common law to clashes of jurisdiction is very different from the civil law:

“This part of the law is concerned with the resolution of clashes between jurisdictions. Two different approaches to the problem have emerged in the world today, one associated with the civil law jurisdictions of continental Europe, and the other with the common law world. Each is the fruit of a distinctive legal history, and also reflects to some extent cultural differences which are beyond the scope of an opinion such as this. On the continent of Europe, in the early days of the European Community, the essential need was seen to be to avoid any such clash between member states of the same community. A system, developed by distinguished scholars, was embodied in the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (1968) (Schedule 1 to the Civil Jurisdiction and Judgments Act 1982), under which jurisdiction is allocated on the basis of well-defined rules. This system achieves its purpose, but at a price. The price is rigidity, and rigidity can be productive of injustice. The judges of this country, who loyally enforce this system, not only between United Kingdom jurisdictions and the jurisdictions of other member states, but also as between the three jurisdictions within the United Kingdom itself, have to accept the fact that the practical results are from time to time unwelcome. This is essentially because the primary purpose of the Convention is to ensure that there shall be no clash between the jurisdictions of member states of the Community. In the common law world, the situation is precisely the opposite. There is, so to speak, a jungle of separate, broadly based, jurisdictions all over the world. In England, for example, jurisdiction is founded on the presence of the defendant within the jurisdiction, and in certain specified (but widely drawn) circumstances on a power to serve the defendant with process outside the jurisdiction. But the potential excesses of common law jurisdictions are generally curtailed by the adoption of the principle of forum non conveniens - a self-denying ordinance under which the court will stay (or dismiss) proceedings in favour of another clearly more appropriate forum.”1

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