English Law, Scots Jurisdiction!
I thought it was worth a brief blog on an issue that continues to raise its head.
There are a number of contracts where both parties to the contract are based in Scotland, or where it would be desirable to pursue a party based in Scotland (because of ease of enforcement or some other issue), but where the contract provides that English law applies. The question we are sometimes asked is does that mean it is inevitable that only the English court has jurisdiction?
Jurisdiction, or the rules on which court has the right to hear particular cases, is a complicated matter. However, unless the parties have specifically agreed that the Scottish courts will not have jurisdiction, for example by agreeing that any litigation will be in some other European Union member state, or before the English courts, the Scottish courts will generally retain the right to hear litigations involving the pursuit of a company or entity based in Scotland.
We are then asked how that squares with a contract that provides that English law is to be applied? The way the Scottish court would approach such a case (and it would of course be up to the lawyers to form a view with advice from the jurisdiction whose law is to apply to the dispute as to whether it would make a material difference, given the added layer of complexity to make an issue of things) is to treat the issue of the foreign law as if it was any other type of expert evidence that has to be set out in the court pleadings. In short, what happens is an expert report is commissioned from the other jurisdiction from a reputable and specialist independent lawyer there. That lawyer acts as an expert witness rather than an advocate usually giving a report setting out what they believe the legal position is to the particular problem or dispute applying their jurisdiction’s law. That is then an issue for evidence (rather than legal submission) and in the case of English law being applied it can often be that a barrister would be required to be brought in as an expert witness from England to give evidence as to what the position would be before the English courts.
Litigation in Scotland is expensive, but comparatively it can be much more reasonable in cost than litigation before the courts in England and Wales. That being the case, businesses should remember that just because an English law clause is in a contract (and of course this is a thing that should be thought about when the contracts are entered into, as to whether actually a Scots law clause governing the contract would be better for a party) is not the end of the matter as to where the case is litigated.
Eric Baijal is head of litigation at BBM Solicitors.