A recent judgment in a Transport and General Workers’ Union matter against the UK Secretary of State for Defence (SSD) has gone against decades of supposition and practice in Gibraltar over the treatment of UK government departments.

The decision by Chief Justice Schofield overturned a previous judgment of the Gibraltar Supreme Court by holding that UK government departments can no longer operate in Gibraltar as if immune from claims for breaches of statutory duty or negligence. Schofield CJ also decided that, in cases covered by Council Regulation (EC) 44/2001 (the regulation), Gibraltar claimants do not have to bring claims against UK government departments before the UK courts and may instead do so in Gibraltar.

The decision, which has not been appealed, is a noteworthy advance in Gibraltar’s constitutional law, as it will subject UK government departments operating in Gibraltar to the same ‘judge over your shoulder’ scrutiny that they are subject to at home, albeit that judge will sit in a Gibraltar court.

The background

The Ministry of Defence (MoD) is a major employer in Gibraltar, accounting for around 3.7 per cent of gross domestic product and employing approximately 7 per cent of its workforce.

On 17 February 2005, the MoD announced that it intended to transfer a significant portion of the infrastructure support services provided to it in Gibraltar by civilian employees to private contractors. Around a third of the civilian workforce would transfer.

The affected employees and their trade unions maintain that the MoD and/or the SSD failed to inform and consult them properly, as required by the employees’ employment contracts and the duties imposed on the MoD by rules contained in Gibraltar’s Employment Ordinance (EO) and the EC Acquired Rights Directive.

vThe defendants’ arguments on jurisdiction

The defendants sought to argue in a preliminary hearing that the case could not be heard before the Supreme Court of Gibraltar. The main arguments they advanced concerning jurisdiction were:

  • The MoD was not a legal entity and so was incapable of being sued in Gibraltar.
  • Even if the MoD was a legal entity, it was not one that could be sued in Gibraltar. The SSD was, likewise, not a legal entity capable of being sued in Gibraltar. Both of these propositions derived from the Crown Proceedings Ordinance (CPO) and common law, which provide that when the Crown is sued in Gibraltar, the correct defendant is the Gibraltar Attorney-General.
  • The claim for breach of statutory duty, being a tort, could not be brought against the Crown because the CPO specifically precluded such claims.
  • The Acquired Rights Directive was not applicable directly and so cannot not be applied by litigants except when alleging that a government has failed to implement it.

The claimants’ counter-arguments

The claimants argued that the court had jurisdiction over the defendants, albeit that they are an emanation of the Crown in right of the UK, by virtue of the regulation, as read along with Section 39(1) of the Civil Jurisdiction and Judgments Ordinance (CJJO).

The critical aspect about the way the CJJO implements the regulation was that, by virtue of Section 39(1) of the CJJO, for all purposes connected with the operation of the regulation, Gibraltar and the UK are to be treated as if each were a separate regulation state. So the defendants could make use of the CJJO’s rules enabling claimants to sue in Gibraltar if the conditions in those rules are met.

The CPO was irrelevant to jurisdiction in this case as it was intended to govern actions against the Crown in right of the government of Gibraltar only. Second, and separately, the rules of the CJJO supplanted those of the CPO because they derive from an EC regulation and the CJJO was enacted after the CPO.

The Acquired Rights Directive’s most recent iterations had direct effect because the deadlines for their implementation into Gibraltar law had passed and their terms were clear, unambiguous, unconditional and not dependent on further action being taken by community or national authorities. Accordingly, the rights set out in them could be availed of by the claimants.

The Supreme Court’s decision

Schofield CJ agreed with the claimants in almost every respect. He held that:

  • Gibraltar’s CPO does not apply to the Crown in right of the UK Government. It is concerned only with the Crown in right of the government of Gibraltar. There is therefore no CPO immunity enjoyed by the Crown in right of the UK Government when operating in Gibraltar.
  • The Gibraltar Attorney-General is the law officer of the Gibraltar government. They are not the correct defendant for any matter in which the Crown in right of the UK Government (or an emanation of it) is the defendant.
  • The correct entity to be sued in this matter is the Secretary of State (not the MoD, which although capable under UK statute of being sued in that jurisdiction, is not a legal entity outside it).
  • The claimants have substantive claims under constitutional law. The Supreme Court of Gibraltar has jurisdiction to hear the constitutional claims against the Secretary of State pursuant to the Gibraltar Constitution.
  • The claimants also have substantive claims in tort and contract. The Supreme Court of Gibraltar has jurisdiction to hear the tort (breach of statutory duty) and contract claims, pursuant to the CJJO.
  • The correct method for bringing the claims is by way of the standard procedure under the Civil Procedure Rules, pursuant to the Administration of Justice Ordinance.
  • The claimants’ claim of breach of the Acquired Rights Directive is to be struck out because the breaches complained of are already covered by the main claim for breach of the EO.

The legal significance of this case is that it enables the Gibraltar courts to scrutinise the activities of UK government departments in a way not previously thought possible. In practical terms, it places Gibraltar litigants on a similar footing to that of their UK counterparts when the defendant is an emanation of the UK Government. So the activities of those UK entities will be influenced – and improved – by the increased likelihood that aggrieved parties may litigate against them in the Gibraltar courts.

Conn MacEvilly is a senior associate at Hassans