06 July 2022

In the case of Cornwall Renewable Developments Ltd v Wright, Johnston & MacKenzie LLP [2022] EWHC 441 (Ch), the Scottish law firm Defendant, which has no place of business in England, failed in a jurisdiction challenge in a professional negligence action brought in England.

The Claimants are a renewable energy property developer operating in south-west England.  The Defendants are a Glasgow law firm, whose practice includes advising on both Scots and English law concerning green energy.  The Defendants have five offices in Scotland, but none in England. 

The Defendants were approached by the Claimants to advise on developing and obtaining planning consent for wind farms in Cornwall.  The Claimants entered into heads of terms with the owners of two sites on which it proposed to obtain planning permission for the construction and operation of wind farms to generate and sell electricity.  A planning application was made to Cornwall Council, the local planning authority, relating to developing wind farms on one of the sites. The planning application was refused and the Claimants filed an appeal with Cornwall Council for their refusal to grant planning permission.  The appeal was formally withdrawn 5 months later and proceedings were served on the Defendants less than 5 years later alleging breach of duty, improper advice, inadequate drafting and research, failure to advise that the agreements drafted were inadequate, and failure to advise what might be done on refusal of planning permission.

Although the Defendants’ terms of business stated that any contracts with clients were governed by Scottish law and were subject to the exclusive jurisdiction of the Scottish Courts, the Defendants accepted that there was no evidence that a retainer letter was sent by the Defendants to the Claimants and similarly, no evidence that the Claimants were aware of the exclusive jurisdiction term.

The Claimants argued that although the Defendants were domiciled in Scotland and prima facie ought to be sued there, the English Courts had jurisdiction over the claim on the basis that the claim concerned matters relating to a contractual obligation, the place of performance of which was England, or a tort in respect of which the harmful event had occurred in England. The Defendants denied that the English Courts had jurisdiction on either basis.

The Judge did question why the Claimants had instructed a Scottish law firm, but was advised that they did not attach any significance to where the solicitor dealing happened to be located when the agreements were drafted. They said it would have made no difference had the drafting been done in Scotland or in England. Everything of commercial or legal relevance was connected with England and the Defendants’ instructions were to provide the agreement to the Claimants in England.

The Judge went on to conclude that the obligation at the heart of the claim was for the solicitor dealing with the transaction to provide advice and to draft agreements as a solicitor qualified to act in England and Wales, regulated by the Law Society in England and Wales, to an English client, in respect of parties in England, relating to land in England, satisfying planning requirements of an English Council so that the development in England could proceed.  The Judge was satisfied that the place of performance of the contract was England and that the centre of gravity in this case was England.  The Judge concluded that it was plain that the appropriate forum for the claim was the Court in England and so the challenge to jurisdiction was refused.

The general rule of thumb is that a Defendant/Defender must be sued in the state in which they are domiciled, with alternative bases for jurisdiction depending on the type of dispute as follows:

• the place of performance of the obligation at issue is an alternative basis for jurisdiction in a contractual dispute; or

• the location of the harmful event is an alternative basis for jurisdiction in a delictual claim (tort).

It is clear from this decision that the issue of jurisdiction is not as straightforward as it seems and the decision in this case serves as an important reminder that law firms in Scotland with dual-qualified staff advising clients in a different jurisdiction may be sued in that jurisdiction.

For more information please contact:

Gillian Harman, Associate: gah@bto.co.uk / 0141 2218012