Supreme Court state immunity ruling could lead to 'tidal wave of cases'

A Supreme Court ruling that sovereign immunity does not allow foreign states to escape accountability for injuries caused by acts directed from overseas could open the door to a wave of cases in the UK courts, experts have predicted. 

In Kingdom of Bahrain v Shehabi, a majority of justices found that electronic snooping by the Bahraini government involved ‘legally causative acts’ which fell within the exceptions set out in the State Indemnity Act 1978. It was ruling on an appeal by Bahrain against court findings that it should be held responsible for the harm caused to two UK-based opposition activists, Dr Saeed Shehabi and Moosa Mohammed, whose computers were infected with spyware. 

Although the hacking is presumed to have been carried out in Bahrain, Shehabi and Mohammed argued that the government is not immune from civil proceedings in England and Wales over the harm caused.

In a 110-page judgment, Lord Lloyd-Jones, Lord Hamblen and Lady Simler rejected the appeal; Lord Leggatt and Lord Burrows dissented. The lead judgment noted that the 1978 act states that immunity from court proceedings does not apply in respect of personal injury or property damage ‘caused by an act or omission in the United Kingdom’.

In the present case, they said, the surveillance involved a serious and intrusive interference with the territorial sovereignty of the UK. ‘It makes no difference that surveillance is carried out by means of computer hacking rather than by a human.’ The case therefore falls within the exception to immunity. 

Dissenting, Lord Leggatt said that the act ‘could and should be read’ as confining the exception to acts or omissions of an agent who is in the UK. Lord Burrows agreed, adding that if the ‘presence in the UK’ requirement is regarded as ‘unprincipled or contrary to good policy’, parliament should reform the act by making it clear that the relevant act or deed not be by someone in the UK.

Jehad Mustafa, partner at London firm Farrer & Co, described the judgment as the most significant state immunity case to come before the courts in recent years. By dismissing the appeal, the court has opened the door for ‘a tidal wave of novel legal cases’. 

‘The consequences of this judgment are likely to be profound,’ he said. ‘By holding that a foreign state can face proceedings in England for sovereign conduct directed from abroad, the UK has become an outlier in the international community. The decision will likely make London the preferred forum for a range of claims against states. Some may welcome this, but it will likely have a major effect on the UK’s international relations.’