Insights / News
Insights / News
The music entertainment industry is enormous business on the island of Ibiza. According to the local industry group, it is worth an eye-watering €20 billion to the economy. Its popularity with the UK market is well-established. Young people flock to Ibiza to relax in the sunshine in the ultimate party town.
One such person was Jonathan Hutchinson. The former professional footballer travelled to Ibiza in early summer 2016 for a sunshine holiday. Together with his friend, they purchased tickets to the OBeach ‘dayclub’ in San Antonio, a pool-based music entertainment venue.
OBeach is a decidedly UK-oriented venue, with a UK booking site in English and associated Twitter feeds. It has special effects including a black taxi cab in the grounds and the website showing a red London bus suspended overhead from a crane. After a few hours at the club, a terrible accident occurred. Whilst the precise circumstances will probably never be known, it is likely that Jonathan attempted to dive into water and struck his head on the bottom of the pool. He was found floating face down in the pool and dragged from the water. He had sustained injury to his spinal cord leaving him tetraplegic with total paralysis of his body save for some impaired ability to move his shoulders, elbows and wrists. He will be totally dependent on others for all aspects of his daily living for the remainder of his life.
Mr Hutchinson brought a claim against the club and its insurers, MAPFRE, for damages alleging that the signage and supervision at the pool did not meet the local standards.
MAPFRE and OBeach each challenged the jurisdiction of the English Court to hear and determine Mr Hutchinson’s claims.
MAPFRE relied on the contractual terms it had concluded with OBeach which stated that its liability to indemnify OBeach was limited to judgments obtained in the Spanish courts. Indirectly this had the effect of requiring Mr Hutchinson to bring his proceedings in Spain.
Mr Hutchinson stated that this clause was not valid in accordance with Spanish law.
However, even if it were valid in principle under the governing law, there was an additional issue, namely that the effect of section III of the Brussels I Recast Regulation required Member States to provide that their courts would have jurisdiction over the direct claims by the weaker injured third party victim against the insurer and that it was not open to an insurer to ‘contract out’ of its obligations under EU law, whether directly or indirectly, as in this case, by including a contract term with the policyholder.
OBeach, surprisingly, adopted the position that its insurance cover was limited to claims brought in Spain, even though it had separate legal representation from its insurer. Additionally, it argued that consumer contract provisions in Brussels Recast did not apply because Mr Hutchinson had not ordered his ticket over the internet but purchased it in San Antonio at the ticket office. It also sought to suggest that it did not owe any duty of care to its guests if they entered the pool from a VIP area without a VIP ticket. It even belatedly tried to suggest that there were Spanish proceedings which constituted a lis pendens even though there were but a few documents from the Spanish court which appeared to show that the criminal proceedings had been closed for want of evidence.
The Court considered Spanish law expert evidence and made findings in accordance with the threshold for jurisdiction challenges as recently explored by the UKSC in Brownlie v Four Seasons. Andrews J held that Mr Hutchinson was arguably correct that Spanish law would not permit an insurer to contract in this fashion with its policyholder. Mr Hutchinson had a good arguable case that the contract was not binding on C in any event because it was a rights limiting clause under Spanish law which would not bind a consumer.
She dismissed the suggestion that the Spanish courts were seised of an identical or similar claim.
It is not permissible to derogate by way of contractual arrangement with the insured against a third party victim.
The reasoning of the AG in Assens Havn v Navigators Management (UK) Ltd and Axa v Belgium Case C-112/03 explain that it is not permissible for the territorial scope clause of an insurance contract to have the effect of requiring the third party victim to lose his jurisdictional choice of his own domicile. To find otherwise would undermine the purpose of this section which is to protect the economically and legally weaker party because insurers would all simply write such terms into contracts and they would rarely be negotiated.
Insofar as OBeach itself was concerned, the three requirements of the consumer jurisdiction provisions were met: C was a consumer and had entered a contract with OBeach. The contract fell within the scope of the activities of OBeach which were directed to consumers in the UK. It would be inconsistent with the decision in Emrek v Sabranovic Case C-218/12 to require any causal link between the marketing activities to consumers in the UK and the specific consumer contract on which reliance was placed. The argument concerning the location within the club was firmly rejected as being unsustainable on the evidence.
Subsequent commentators have expressed surprise at this conclusion, but it is suggested that this fails to appreciate the nature of the Brussels I Recast scheme. Where there is no general discretion for the Member State’s courts to hear and determine claims, there will always be a requirement for the rules to provide exceptions to promote access to justice for non-commercial parties. Moreover, it is difficult to see why Mr Hutchinson should not have been permitted to bring his claim in England: Spanish legal principles still applied to the merits of the claim.
Sarah Crowther QC has experience in all claims for injury, illness or accident with an international element, including disputes over jurisdiction and applicable law. She has appeared in recent high-profile cases in the Court of Appeal and Supreme Court and is experienced in working with expert evidence of foreign law and handling claims to which foreign law applies.
Sarah was instructed by Irwin Mitchell to represent Joey Hutchinson. They have secured a landmark legal ruling, paving the way for him to progress his case to fund the specialist support he requires, through the English Courts.
If you would like to discuss any of the issues covered in this article please contact Sarah directly or via her practice management team; Paul Barton or Mark Gardner on +44 (0)20 7353 6381 who would be happy to have a discussion in the strictest of confidence.