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Commercial Court considers test for transfer of cases between divisions of the High Court

In Southern Rock Insurance Company Limited v (1) Brightside Group Limited (2) Brightside Insurance Services Limited QBD (Comm) (Leggatt J) [2015], Lyons Davidson’s Commercial Litigation team successfully opposed applications to transfer three related sets of proceedings from the Chancery Division of the High Court in the Bristol District Registry to the specialist Commercial Court in the Queen’s Bench Division in the Royal Courts of Justice, London.

All three sets of proceedings had been commenced in the Chancery Division of the High Court in Bristol. The applicants applied to the Commercial Court in London to transfer all three claims to that court. The respondents opposed the applications.

In making its decision, the Commercial Court distinguished the separate procedural questions of:

  • Transfer between locations (e.g. from Bristol to London); and
  • Transfer between divisions of the High Court (e.g. Chancery to Commercial Court).

The applicants had attempted to morph these separate issues into one application. The court concluded that it could only rule upon the second question and proceeded to do so on the basis that, if it agreed that transfer between divisions was appropriate, it would then require the blessing of the Chancery Division in Bristol. In deciding the application, the court was therefore not prepared to take account of any relative advantages of having the claims dealt with in London over Bristol because it is quite possible to apply for a case to be moved to London while remaining in the Chancery Division.

Accordingly, the sole question for the court was whether the Commercial Court or the Chancery Division was a more suitable forum for the claims. The court considered recent High Court authorities on the issue, including (1) NATL Amusements (UK) Limited (2) National Amusements, Inc (3) National Amusements, Ltd v (1) White City (Shepherds Bush) Limited Partnership (2) Commerz Real Investmentgesellschaft mbH [2009]. In reconciling the authorities, Mr Justice Leggatt held that the sensible practical test for whether a case should be transferred was whether it appeared that the Commercial Court was a “significantly more suitable” court for the claims to be tried than the Chancery Division. The court emphasised the word “significantly” because, it said, as a matter of common sense, if the factors are closely balanced then a claim ought to be left where it is, given the disruption and costs involved in a transfer.

The court held that, in deciding which division was more suitable, the overriding consideration must be the subject matter of the proceedings and whether the claims could benefit from the expertise of judges in the Commercial Court.

The court concluded that none of the three claims in question were significantly more suited to be tried in the Commercial Court than the Chancery Division. The claims primarily turned upon matters of contractual construction rather than niche issues of insurance law that might benefit from the specific expertise of a Commercial Court judge. The application was refused. In doing so, the court recognised that there is nowadays a significant overlap between the work undertaken by the Chancery Division and the Commercial Court (and other Divisions/specialist lists of the High Court) particularly regarding commercial disputes.

You can read the report on the applications on Lawtel (requires login).

For more information on any of the issues raised in this article, please contact Alistair Stewart on astewart@lyonsdavidson.co.uk/0117 904 5804 or Sarah Holland on sholland@lyonsdavidson.co.uk/0117 904 5898.

Posted on Feb 23rd, 2015 by Lyons Davidson