T&N Ltd & Ors v In the matter of the Insolvency Act 1986

For torts committed abroad, the transitional rule in section 14(1) of the Private International Law (Miscellaneous Provisions) Act 1995 refers to the defendant’s acts or omissions, not the later occurrence of damage. Where those acts or omissions occurred before 1 May 1996, the common-law rules apply.

At common law, the double-actionability rule requires the claimant to satisfy both English law and the law of the country where the act occurred, subject to the flexible exception permitting one country’s law to govern a particular issue or the whole case. The distinction between substance and procedure in damages remains a developing, fact-sensitive question. Assessment or quantification involving judicial judgment is generally procedural and governed by the lex fori, but fixed foreign rules such as caps or minimum awards may be substantive.

The administrators of T&N Limited sought directions concerning the treatment in a possible English liquidation of asbestos-related personal injury claims by United States residents based on exposure to asbestos in the United States.

The application raised four principal questions. The court had to determine whether claims involving pre-1 May 1996 acts or omissions but later damage were governed by the common law or by the Private International Law (Miscellaneous Provisions) Act 1995. It also considered the common-law double-actionability rule, the exception recognised in Red Sea Insurance Ltd v Bouygues SA [1995] 1 AC 190, and whether the quantification of damages was procedural and therefore governed by English law.

Related questions arose on the assumption that the 1995 Act applied, including the meaning of “country” in section 11 and the treatment of quantification where United States law governed substantive issues.

1. Transitional provision. Section 14(1) of the Private International Law (Miscellaneous Provisions) Act 1995 is directed to the defendant’s acts and omissions. The words “which occur before the commencement of this Part” qualify those acts or omissions. They do not require the resulting damage or accrued cause of action to have occurred before 1 May 1996. Accordingly, claims based on pre-commencement acts or omissions are governed by the common law, irrespective of when the asbestos-related damage occurred.

2. Common law. Subject to the exception recognised in Red Sea Insurance Ltd v Bouygues SA [1995] 1 AC 190, a foreign tort must satisfy a double test. The claimant must establish the elements necessary for success under English law and under the law of the country where the act was committed. The exception may justify applying either English law or foreign law to a particular issue or to the whole case, but its application depends on the facts. No useful general declaration was made on paragraphs 4(1) and 4(2) of the application.

3. Substance and procedure. Harding v Wealands [2005] 1 WLR 1539 could not be put aside. The distinction between substantive and procedural rules remains governed by the common law, which may develop over time. There is no comprehensive rule that every issue concerning quantification is substantive or that every such issue is procedural. The question must be examined in light of the precise foreign rule and its effect.

4. Quantification. Leaving aside specific non-discretionary foreign rules, such as a fixed minimum or maximum, an English court or liquidator assessing damages exercises its own judgment under English law as the lex fori. It need not assess the level of damages that might be awarded by a United States court or receive evidence of foreign awards. The administrators’ broad proposed declaration was therefore declined, as was the contrary general formulation advanced by the asbestos claimants.

5. Application of the 1995 Act. In a federal system, “country” in section 11 includes the relevant constituent state. The answer to paragraph 5(1) was therefore affirmative. Section 14(2) and (3) do not give “procedure” a meaning different from that at common law, so paragraph 5(2) was answered in the same manner as paragraph 4(3).