Forum shopping in the European Union

Forum shopping involves claimants (or defendants) choosing the jurisdiction in which they pursue or defend their claim. The ‘choice’ when forum shopping is the result of jurisdictions being prepared to adjudicate claims arising elsewhere on the basis of a variety of pretexts, including the fact that some of the litigants have a ‘link’ with the jurisdiction in question. Such shopping can take place within a country (as with choice of state in the US), within a continent (as might happen across EU state borders) or across continents (between, say, the US and the EU). Evidence from US asbestos litigation shows that payouts can vary systematically across different jurisdictions. For example, compared to Pennsylvania, litigating an ‘equivalent’ case in five other states increases payouts by between $800,000 and $3.8mn. Other strategic advantages of forum shopping can include access to faster or slower outcomes and to particular remedies that may not be available elsewhere. A recent report, produced by the Lloyd’s insurance market in conjunction with RAND Institute of Civil Justice (ICJ) and RAND Europe, examined the trend of forum shopping. The report, which represents Lloyd’s latest 360 risk project report on transatlantic litigation trends, warns that despite regulatory attempts at harmonisation, forum shopping can still arise in the EU. It advises companies to start familiarising themselves with how member jurisdictions are developing, and monitor developments closely to help them understand the impact on their business and manage any changing risks. The report was introduced by Sean McGovern, Director and General Counsel of Lloyd’s.