As a moth is drawn to the light, so is a litigant drawn to the United States. If he can only get his case into their courts, he stands to win a fortune. At no cost to himself, and at no risk of having to pay anything to the other side. The lawyers there will conduct the case 'on spec' as we say, or on a 'contingency fee' as they say. The lawyers will charge the litigant nothing for their services but instead they will take 40% of the damages, if they win the case in court, or out of court on a settlement. If they lose, the litigant will have nothing to pay to the other side. The courts in the United States have no such costs deterrent as we have. There is also in the United States a right to trial by jury. These are prone to award fabulous damages. They are notoriously sympathetic and know that the lawyers will take their 40% before the plaintiff gets anything. All this means that the defendant can be readily forced into a settlement. The plaintiff holds all the cards. If you wish to know how it is all done, you should read Castanho v Brown & Root (UK) Ltd  1 All ER 143,  AC 557. There a Portuguese sailor was badly injured at Great Yarmouth in England. It was an American ship. He started an action in England but was persuaded by American lawyers to take proceedings in the United States. I was against it (see  3 All ER 72 at 76-83,  1 WLR 833 at 849–858). But when it got to the House of Lords they allowed the litigant to go ahead in the United States (see  1 All ER 143,  AC 557). His American lawyers won a huge settlement to the profit of the litigant and of course for themselves as well. You should
also read Piper Aircraft Co v Reyno (1981) 454 US 235 decided on 8 December 1981 by the Supreme Court of the United States. A small commercial aircraft crashed in Scotland, killing all six Scottish people on it. The propellers had been manufactured in the United States. The widows and children were persuaded by lawyers in the United States to bring proceedings there against the manufacturers of the propellers, alleging that they were faulty. No doubt the lawyers had their eyes on the heavy damages and their contingency fees. The Supreme Court of the United States refused to allow the proceedings to continue in the United States. They should have been brought in Scotland, which was the only appropriate forum.
Now we have another case of that ilk. Dr Maurice Bloch lives in England. He has a complaint against an English company. He says that they broke their contract with him. It was an English contract governed by English law. The obvious place where it should be tried is in England. Yet he has gone to American lawyers and they have found an excuse for bringing it in the United States. It is because the English company was a wholly-owned subsidiary of an American corporation. So the American lawyers for Dr Bloch have brought an action in the United States courts against the English subsidiary and its American parent, hoping, no doubt, to get a good settlement out of it, both for themselves and Dr Bloch, at no cost to him.
Now here is the twist in the story. The English company and its American parent wish to stop the proceedings in the United States courts. They want to nip them in the bud. They have applied to the United States courts to stop them. But with no success so far there. An American judge has made an order allowing Dr Bloch to go ahead with the proceedings in the United States court.
Having been thus rebuffed in America, the English subsidiary (and now its American parent) have applied to the English court. They ask us to issue an injunction against Dr Bloch to restrain him from proceeding in the United States. They say that he is quite at liberty to sue them in England if he is so advised, in which case they will defend themselves. But he should not be allowed to go on in the United States. I may say that, even in England, Dr Bloch is 'sitting pretty' anyway. He has got legal aid with the result that all his costs here will be paid by the legal aid fund.
At the moment the English High Court has acceded to the request of the English subsidiary and its American parent. It has issued an injunction against Dr Bloch stopping him from going on with his proceedings in the United States court; he now appeals to this court.
Now there is yet a further twist. Dr Bloch has asked the United States court to issue a counter-injunction against the American parent to stop it from coming to the English court; and an American judge has made the order.
It is apparent from this account of proceedings that there is a conflict of jurisdiction between our courts here in England and the courts in the United States. This is much to be regretted. In the interests of comity, one or other must give way. I wish that we could sit together to discuss it. But, as that is not possible, I propose to put the case forward, as we see it here, in the hope that we may come to an agreed solution.
Let me first give the background. It arises out of the use of drugs in medicine. Doctors prescribe drugs for diseases of all kinds. These drugs are made by pharmaceutical multi-national companies. One of them is the Smith Kline group. The parent company is incorporated in Pennsylvania with its head office in Philadelphia. It has wholly-owned subsidiaries all over the world. One of them is the English subsidiary, Smith Kline & French Laboratories Ltd.
In order to keep ahead, the Smith Kline group are much concerned to promote research and development into new drugs. One of the drugs they developed was called 'Dyazide' in America. Another drug they developed was called 'Tagamet' in England. They have proved very successful in treating stomach ulcers.
Now in England there is a research worker called Dr Maurice Bloch. He has worked in hospitals and for drug companies. From 1971 to 1973 he was employed by the well-known firm of May & Baker on clinical research. After leaving them, he approached the English subsidiary of Smith Kline. He told them that he had a good idea. It was to use
magnesium compounds for treating stomach complaints. The English subsidiary thought he was worth a trial. So they engaged him as a medical adviser. They agreed to treat all his ideas and information as confidential. He showed such promise that he ceased to be their employee and became a consultant. By a written agreement of 10 April 1974 he gave them a licence to use his information worldwide. They agreed to pay him a royalty of 2% on worldwide net sales for 15 years from the date of first marketing of any drugs. They paid him Ł10,000 cash down as an advance against future royalties. The agreement contained this important provision:
'Registration and Marketing All decisions on registration and marketing of products will be the exclusive responsibility of SK&F [the English subsidiary]. (a) If SK&F make a decision not to proceed with further development in the U.K. or not to apply for a product licence under the Medicines Act, they will hand over to M.B. [Dr Bloch] the development work to date, and give up their exclusive rights under this agreement … '
From 1973 to July 1976 Dr Bloch did research work for the English subsidiary. He developed many drugs made of magnesium compounds and arranged for them to be tried out in leading hospitals in London, Bristol, Southampton, Manchester, Salisbury, Glasgow and Dundee. Dr Bloch was himself in control.
In July 1976 there was an important meeting in Philadelphia of a committee which advised the group on the development of various products. They decided that Dr Bloch's products were not likely to be a success. The managing director of the English subsidiary told Dr Bloch that, as he stated—
'the committee had decided that the development of the products should not be supported financially and that the products were not a commercial proposition. After this … I ceased to work for the English subsidiary … '
The English subsidiary did, however, continue the trials in hospitals.
After leaving the English subsidiary, Dr Bloch went back to May & Baker. He worked for them as a senior clinician from October 1976 to November 1979. He was then dismissed by May & Baker because he did not apply himself to the tasks allotted to him. He spent too much time in lengthy argument. He complained to an industrial tribunal that he had been unfairly dismissed by May & Baker. The hearing took nine days. The tribunal rejected his complaint. They held unanimously that 'having given him very great latitude over a long period, his conduct was sufficient to justify his dismissal'.
Meanwhile the English subsidiary had been receiving reports of the trials. They proved disappointing. So on 5 February 1980 the English subsidiary wrote to Dr Bloch:
'I write with reference to the Magnesium containing compounds, the subject of our Agreement dated the 10th April 1974. We have now received a report that the last ongoing trial has been finished, which proved disappointing. In view of the fact that it was not possible for clinical trialists to find enough patients with Magnesium deficiency and the data is not sufficient to justify a further application for a product licence, we have decided not to continue further development work. Accordingly, we are giving up our exclusive rights under the Agreement. This will allow you to enter into other arrangements.'
So here was Dr Bloch dismissed by May & Baker and his products discarded by Smith Kline. What was he to do? He had been in touch with English solicitors as far back as 1976, but they foresaw difficulties in litigation in England. So he turned to American lawyers. They advised him to bring an action in the United States, both against the English subsidiary and the American parent. He instituted it on 16 May 1980. He is quite frank about his reasons:
'… there were financial considerations in that litigation in this Country would undoubtedly involve me in substantial expense; on the other hand, if American lawyers agreed to take on my case, they would be prepared to do so in accordance with American legal practice for a contingency fee so that they would be remunerated out of any damages which I might recover.'
If Dr Bloch had attempted to sue the English subsidiary alone in America, the United States courts would not have entertained it for one moment. So he had to bring in the American parent as a defendant to the American proceedings. He alleged that:
(1) The American parent was the principal in his contract with the English subsidiary and liable for a breach of contract by the English subsidiary. For this he claimed damages of $US40,000,000.
(2) The American parent and English subsidiary had been guilty of false representation in saying that they intended to market the plaintiff's product whereas they never intended to do so. They intended to keep it out of the market so that it should not be in competition with their own existing product, 'Dyazide'. For this he claimed another $US40,000,000 damages.
(3) The American parent had improperly interfered with the contract by the English subsidiary with Dr Bloch. More damages of $US40,000,000.
(4) The American parent and the English subsidiary had intentionally inflicted emotional distress on Dr Bloch for which he was entitled to punitive damages of another $US40,000,000.
If you consider each of those four claims, you will see at once that if Dr Bloch had any cause of action at all he could perfectly well have started it in England against the English subsidiary alone and got all the damages to which he was justly entitled. If he had sought to sue the American parent in England, he would not have got leave to serve it out of the jurisdiction, because he had no semblance of a cause of action against them. At any rate he would not have a good arguable case for these reasons:
(1) The contract was made by Dr Bloch with the English subsidiary in its own name. That is a factor showing that it was intended that the English subsidiary should be the party to the contract. When that is coupled with the additional factor that 'all decisions on registration and marketing of products will be the exclusive responsibility of SK&F' (that is of the English subsidiary), it is plain that only the English subsidiary is liable for the breach, if any, of the contract. The American parent is not liable. The latest case on this subject here is Teheran-Europe Co Ltd v S T Belton (Tractors) Ltd  2 All ER 886,  2 QB 545.
(2) There is nothing to warrant the suggestion that the English subsidiary and the American parent were from 1974 guilty of conspiracy and fraud, or that they intentionally duped Dr Bloch with the belief that they would develop his project, when they intended never to do so. That is a suggestion made without any evidence to support it. It is decisively refuted by the fact that from 1974 onwards Dr Bloch was himself in control of the research and development of his product at the many hospitals and so forth. No doubt he developed it to the best of his ability.
(3) and (4) The claims for inducing breach of contract and emotional distress have no substance whatever.
To my mind this claim of Dr Bloch against the American parent is a device, adopted by American lawyers, so as to get the case into the United States courts, where they will get contingency fees and force a settlement. Such a device ought not to be allowed to succeed. I trust that our courts on both sides of the Atlantic will not allow it.
It often happens that a plaintiff is entitled to bring proceedings in two or more jurisdictions. Sometimes it is said that the choice is his. He can choose whichever of them suits him best. If he can get more damages in one than he can in the other, then good luck to him. Let him go there. If he will be met by a time bar in one and not in the other, let him go to the one where he is not barred. If it is more convenient for the plaintiff in one than it is for the defendant, then the plaintiff can choose. You need not spin a coin between the two contestants. It always comes down in favour of the plaintiff, so it is said, unless the defendant can prove that it would work an injustice to him. That was the way the English Court of Appeal approached the problem in St Pierre v South American Stores (Gath & Chaves) Ltd  1 KB 382,  All ER Rep 408 and the Supreme Court of Illinois approached it in James v Grand Trunk Western Railroad Co (1958) 152 NE 2d 858. Once a plaintiff institutes an action in accordance with this prior
claim of his, then no court in a rival jurisdiction should grant an injunction to prevent the plaintiff from exercising and pursuing his action to its determination. This is the only way, it is said, to avoid unseemly conflict and to ensure comity.
The basis of all this reasoning has now been removed. In England by the House of Lords in MacShannon v Rockware Glass Ltd  1 All ER 625,  AC 795. In the United States by the Supreme Court in Piper Aircraft Co v Reyno (1981) 454 US 235. The plaintiff has no longer an inborn right to choose his own forum. He no longer wins the toss on every throw. The decision rests with the courts. No matter which jurisdiction is invoked, the court must hold the balance between the plaintiff and the defendant. It must take into account the relative advantages and disadvantages to each of them: not only the juridical advantages and disadvantages, but also the personal conveniences and inconveniences: not only the private interests of the parties but also the public interests involved. The court decides according to which way the balance comes down. This was the approach of the House of Lords in MacShannon v Rockware Glass Ltd, where it was much to the juridical advantage of the plaintiff to bring his action in England, where he would get higher damages, but the natural forum was Scotland. It was in the public interest that a Scottish case should be tried in Scotland. So he was bound to go to Scotland. His action in England was stayed. It was also the approach of the Supreme Court of the United States in Piper Aircraft Co v Reyno, where it was much to the juridical advantage of the plaintiffs that they should sue in Pennsylvania, where they would get higher damages and the lawyers would get contingency fees. But the public interest was against trial in the United States. If claims such as these aircraft claims were all to be brought in the United States, it would involve far too great a commitment of judicial time and resources. Scotland was the natural forum. The public interest favoured Scotland. So the trial should take place there.
By contrast, in Castanho v Brown & Root (UK) Ltd  1 All ER 143,  AC 557 the plaintiff had an undisputed claim for damages against a Texan-based group of companies. The only question at issue was quantum. The plaintiff had a legitimate advantage in suing in Texas where he could get such damages as a Texan court thought appropriate. Although I took the other view, the House of Lords held that the balance came down clearly in the plaintiff's favour (see  1 All ER 143 at 152,  AC 557 at 577).
Holding the balance
In our present case Dr Bloch is resident in England. He works in England. He sues on a contract with an English company which was made in England and is governed by English law. The witnesses are mostly in England. The natural forum is England beyond any doubt. The public interest requires that so English a dispute should be tried in England, to which it belongs rather than in the United States.
It would, no doubt, be an advantage to Dr Bloch to sue in the United States, because he would there get higher damages, trial by jury and lawyers on contingency fees. But that is not a legitimate advantage. It is an illegitimate advantage. Even putting it into the scale, the balance comes down clearly in favour of England.
Once the English court decides that the dispute should be tried in England and not in the United States, then it is open to the court to issue an injunction against Dr Bloch restraining him from continuing his proceedings in the courts of the United States. No doubt this jurisdiction should be exercised with caution, but that it can be done there is no doubt. It was affirmed by the House of Lords in the Castanho case  1 All ER 143 at 149,  AC 557 at 572–573.
I have no doubt that this is a case where the court should grant an injunction against Dr Bloch so as to restrain him from continuing with the proceedings in the United States courts. He will, of course, be able to make his claim in the English courts, either by a fresh action, or by a counterclaim in the present action. He has the benefit of legal aid; so he can get justice in this country beyond all doubt. That is the right way of it.
It now appears that as long ago as 21 July 1975 Dr Bloch assigned his rights under the agreement of 10 April 1974 to a trust of which the trustees were domiciled in England and resident in England. This assignment was made in England and was governed by English law. Due notice of it was given to the English subsidiary. As a result of this twist, it is quite clear that Dr Maurice Bloch had no right himself whatever to sue for breach of the agreement.
On this assignment being discovered, the American lawyers sought to rectify the error. They started a second action in the United States courts, but this time in the name of the trustees, making the same claims that Dr Maurice Bloch had done against the American parent and the English subsidiary.
The American lawyers also started in the United States courts an anti-trust suit in the names of the trustees and Dr Bloch against the American parent, the English subsidiary and an American subsidiary.
In answer, the American parent, the English subsidiary and an American subsidiary started in the English courts a second English action. This time it was against the trustees, claiming an injunction to stop them going on with the second American action.
All these writs and proceedings disclose a very regrettable state of affairs, financed on the Bloch side in the United States by contingency fees and in England by legal aid. In one country or another it is an abuse of the process of the courts. To my mind it is high time that all this litigation should be brought to an end, save that Dr Bloch and his trustees should be permitted to make a claim in England against the English subsidiary if so advised. Everything else should be stopped.
Seeing that England is the natural and proper forum for any proceedings that Dr Maurice Bloch is advised to bring, I would grant an injunction against him personally to stop him from going on with any proceedings in the United States. I would grant it at the instance not only of the English subsidiary but also of the American parent. Seeing that both are being harassed in the United States courts, both should be able to come to these courts to stop it. The like is the position with regard to the trustees.
I would thus uphold the decision of Sir Douglas Frank and dismiss the appeal.