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Cross border consumer contractual disputes: Guidance on the rules of jurisdiction and applicable law in contractual disputes with consumers outside the European Union and EFTA.
Outside the scope of the Brussels and Lugano Conventions there are at present no multilateral international agreements on jurisdiction and enforcement of judgments to which the UK is a party.
A possible convention on jurisdiction and judgments is under discussion in the Hague Conference on Private International Law. It has been decided that this will not include consumer provisions.
So far as English law is concerned, the English courts will, in principle, assume jurisdiction over a case where a claim form has been served on a defendant who is physically or in corporate terms present in England and Wales.
They will also have jurisdiction where the defendant has voluntarily submitted to the jurisdiction of the English courts.
Finally, there are some circumstances where jurisdiction arises from the service of a claim form abroad. Service of this kind is a matter in the discretion of the court and it is, for example, necessary for the claimant to satisfy the court that there is a serious issue to be tried on the merits of the case. There are certain circumstances where service abroad is permitted in relation to contractual claims, for example, where the contract in question was made in England and Wales.
It is advisable for traders to say in their standard contract terms which country will have jurisdiction in the event of a dispute. This could be done through a clause in the trader's standard contract saying that in the event of any dispute the English (or Scottish) courts (or the courts of any other country in the world) will have jurisdiction.
The UK has bi-lateral agreements with a number of mostly Commonwealth countries about the enforcement of judgments. Where those agreements do not apply, a claimant who obtains a judgment in the UK may have difficulty enforcing it in a foreign jurisdiction, although this will depend on the legal system in question. In practice, for example, a foreign consumer wishing to sue a UK based trader might prefer to do so here rather than sue abroad and then seek to enforce here. Likewise a UK consumer wishing to sue a foreign based trader might in practice need to sue abroad, even though he or she could be entitled to take the action in the UK court.
As far as applicable law is concerned, the Rome Convention is applied by the courts within the EU even where the applicable law is that of a third country or the parties are not resident or established in the EU; and under the Contracts (Applicable Law) Act 1990, it is also applied by courts in the UK in deciding whether English, Scots or Northern Ireland law applies.
Those concerned about jurisdiction or applicable law in situations outside the EU/EFTA should seek legal advice.
