Jane Nicholls v Mapfre Espana Compania De Seguros Y Reaseguros SA
| Jurisdiction | England & Wales |
| Judge | Mr Justice Martin Spencer |
| Judgment Date | 04 May 2023 |
| Neutral Citation | [2023] EWHC 1031 (KB) |
| Docket Number | Case No: QA-2022-000142 |
| Court | King's Bench Division |
[2023] EWHC 1031 (KB)
THE HONOURABLE Mr Justice Martin Spencer
Case No: QA-2022-000142
KA-2022-000225
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Archer (instructed by Blake Morgan) for Jane Nicholls and other
Mr Chapman KC (instructed by Slater & Gordon) for Sonia Woodward
Mr Audland KC (instructed by Hextalls Law) for the Defendant/Appellant
Hearing date: 19 th April 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on Thursday, 4 th May 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
THE HONOURABLE Mr Justice Martin Spencer
Introduction
In this conjoined appeal, the defendant, Mapfre Espana Compania de Seguros y Reaseguros SA (“Mapfre”) appeals against decisions reached in the courts below, whereby the respective judges exercised their discretion to award interest on damages in accordance with Spanish law and in particular Article 20 of the Spanish 50/1980 Insurance Contract Act (“the Spanish Insurance Act”). It is contended on behalf of the defendant that, the award of interest being a procedural matter governed by section 69 of the County Courts Act 1984, there is no room for the introduction of Spanish law relating to awards of interest, even as a matter of discretion.
Nicholls
In the first case, Nicholls v Mapfre, the claimant, who was born on 8 May 1960, sustained injury on 12 December 2015 when she tripped on a path at La Manga golf course, Spain and twisted her knee, sustaining a fracture to the tibial plateau.
Proceedings were issued on 13 April 2019 and on 7 January 2020, the defendant admitted liability and made an offer of £25,000 which was not accepted: judgment was entered for damages to be assessed.
The trial came before Her Honour Judge Bloom in the Luton County Court who gave judgment for the claimant in the sum of €83,654.28 comprising damages of €42,458.28 and interest of €41,196.71. There is no appeal against the award of damages, which were calculated in accordance with Spanish law, and in particular the “Baremo rules” (an annex to Royal Decree 8/2004 as updated by Act 35/2015).
In relation to the award of interest, the learned judge had a joint statement from experts on Spanish law, which stated:
“MATTERS OF AGREEMENT AND DISAGREEMENT IN RESPECT OF INTEREST
100. We are agreed that article 20.4 of the Spanish Insurance Contract Act 50/1980 of 8 October contemplates specific rules for the calculation of interest in claims against insurers.
101. The interest is calculated as follows:
For the first two years from the date of the accident (or date of knowledge), interest will accrue by reference to the Spanish legal interest increased by 50%, that is an annual 3.5% in the period April 2015 to April 2017.
Two years after the accident (or date of knowledge) interest will accrue at the rate of 20% (annual interest).”
To this, Ms Astigarraga, the Defendant's expert, added the following:
“ 104. Ms Astigarraga would also say that pursuant to Article 20.8 of the Insurance Contract Act such Default Interest will not apply where there is a justified cause for the insurer not to make early payments.
105. Such justified reason would be accepted by the court in cases where the reality of the accident is disputed or so is the existence of a valid cover under the policy as established by the Spanish Supreme Court in its judgment of 29 November 2005. In this sense, I would refer to the Judgment of the Supreme Court of 19 December 2017 where the penalty interest was not imposed upon the insurer until the court proceedings had concluded and the reality of the accident had been established. In this sense, the court referred “There is, without a doubt, a situation of uncertainty or reasonable doubt about the way the events occurred and the consequent obligation to compensate, while the criminal proceedings were active, which disappears when they conclude and the responsibility of the driver of the vehicle is declared. In the same way, the Spanish Supreme Court decided in its judgment of 24 September 2018.”
For the claimant, it was argued that the court should apply the rates of interest under Spanish law referred to in the joint statement pursuant to s69 County Court Act 1984. For the defendant, it was argued that the court should apply United Kingdom interest rates. Counsel for the claimant referred the court to the judgment of Cavanagh J in Scales v Motor Insurer's Bureau [2020] EWHC 1747 (QB) from paragraphs 271–280.
Giving her judgment, the learned Judge said.
“ 59. The starting point in consideration is that Article 20 provides for a penalty, and as is made clear in the Scales case at paragraph 264, it is “agreed that penalty interest under Article 20 is aimed at discouraging delays in litigation and, in particular, at discouraging insurers from deliberately delaying payment where they are aware of their payment duties under the insurance policy. Article 20(8) provides that the penalty interest will not apply where there is a justified delay or the delay in payment is not attributable to the defendant.”
60. I have not been referred to any authorities or seen any Supreme Court decisions in Spain where it is suggested that the fact that there have been some sort of offers or something of the like is a reason to justify delay in payment. This is a case where liability has been admitted from the outset, and yet no payments have been made. There is no reason under Article 20(8) that the delay of payment is due to issues around liability, or whether or not the policy was applicable. There is nothing about this case, which, in my view, makes it exceptional. The fact that it was raised by the expert in evidence that it might lead to double recovery was not a matter that was ever put to Ms Carbonell or was raised in joint reports, and it seems to me that the court should not start, on the basis of something that was said in cross-examination that was never put to the other expert or in the joint reports.
61. The view that this court takes is that the court has proceeded under the Spanish law and the Spanish law has specific provisions in relation to interest whereby there is a penalty of 3.5% for the first two years and thereafter 20%. In exercising my discretion, my view is that I should follow that same principle, the Article 20 interest principles and adopt them and apply them in this case. I've been given no reason why Article 20 (8) would apply in this case. I have looked at the authorities and none of them are applicable. I can see that there are cases where the court has refused to impose the penalty rate, but the court has made it very clear. It is restricted in the way it should approach those sort of arguments and it will be in cases where there is a good reason and there is no good reason that I can see in this case, and in my discretion I therefore apply the interest rate that would apply under Article 20.”
Woodward
In Woodward v Mapfre, the claimant was injured on 13 October 2015 in Tenerife when she crashed into a signpost whilst riding a motorised mobility scooter. Proceedings were issued on 22 January 2020. Again, liability was admitted and judgment was entered on 11 May 2021 for damages to be assessed. The assessment came before Her Honour Judge Walden-Smith sitting in the Norwich County Court. On 21 October 2022 the learned judge gave judgment in the sum of £112,620 comprising damages of £54,205.63 and interest of £58,414.37. An additional sum of £11,260 was ordered to be paid pursuant to CPR 36.17 (4) (d). These orders were made pursuant to the learned judge's written judgments dated 12 October 2022 and 21 October 2022. Again, there is no appeal against the award of substantive damages, made in accordance with Spanish law and the Baremo rules, only against the award of interest.
As with Judge Bloom, so too Judge Walden-Smith had a joint statement from experts in Spanish law which provided, among other things, as follows:
“ 73. We are agreed that Spanish law provides for specific rules for the calculation of interest in claims against insurers. We are agreed that the relevant regulation for the calculation of interest in claims against insurers is Article 20 of the Spanish 50/1980 Insurance Contract Act of 8 October (“Article 20”).
74. We are agreed that a judgment of 1 March 2007 [RJ 2007/798] the Spanish Supreme Court laid down the general principle that interest under Article 20 is calculated as follows:
i) For the first two years from the date of the accident (or date of knowledge), interest will accrue by reference to the Spanish legal interest increased by 50%, that is, an annual 5.25% in 2015, 4.5% in 2016, 4.5% in 2017, 4.5% in 2018, 4.5% in 2019, 4.5% in 2020, 4.5% in 2021 and 4.5% in 2022.
ii) Two years after the accident (or date of knowledge) interest will accrue at a rate of 20% (annual interest).
75. We are agreed that special interest under Article 20 does not apply automatically.
76. We are agreed that such penalty interest under Article 20 is aimed at discouraging delay in litigation and in particular to discourage insurers to deliberately protract payment where they are aware of their payment duties under the insurance policy.
77. We are agreed that paragraph (8) of Article 20 provides that the penalty interest under Article 20 will not apply where there is a justified cause for the delay or the delay in payment is not attributable to the defendant.
78. We...
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