Katerina Cox (Widow and Sole Dependant of Major Christopher Cedric Cox, Deceased) v Ergo Versicherung Ag (Formerly Known as Victoria) ( a Company Incorporated in Accordance with the Laws of the Federal Republic of Germany)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Etherton,Dame Janet Smith,Lord Justice Maurice Kay |
| Judgment Date | 25 June 2012 |
| Neutral Citation | [2012] EWCA Civ 854 |
| Docket Number | Case No: B3/2011/2973 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 June 2012 |
[2012] EWCA Civ 854
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
Sir Christopher Holland sitting as a Deputy Judge
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Maurice Kay
Vice President of the Court of Appeal, Civil Division
Lord Justice Etherton
and
Dame Janet Smith
Case No: B3/2011/2973
Mr Alexander Layton QC and Ms Marie Louise Kinsler (instructed by Leigh Day & Co) for the Appellants
Mr Hugh Mercer QC and Ms Sarah Crowther (instructed by Fishburns LLP) for the Respondents
Hearing dates : 22nd and 23rd May 2012
Introduction
The central issue on this appeal is the choice of law which determines the scope and amount of damages recoverable in these proceedings by the widow of a member of HM Forces, stationed in Germany at the date of his death, against the German insurer of the German driver, whose negligence caused an accident in Germany resulting in the deceased's death there.
It is not in dispute that German law governs the liability of the driver. The appellant says, however, that the quantification of damages recoverable from the respondent insurer is governed entirely by English law, and, in particular, by the provisions of the Fatal Accidents Act 1976 ("FAA"). The respondent, on the other hand, says that the principles for quantifying the damages are those applicable to a claim under section 844 of the Bürgerliches Gesetzbuch ("BGB"), that is the German Civil Code. The FAA provisions would produce a much more generous result for the appellant.
There is another issue on this appeal concerning the validity, meaning and effect of a document signed by the claimant, which purported to assign to the Ministry of Defence part of the claimant's claims arising out of the accident. We have adjourned that issue and so it will not be addressed in this judgment.
The appeal is from the order dated 7 November 2011 of Sir Christopher Holland, sitting as a Deputy Judge of the High Court, and arises out of his reserved judgment of the same date. In that judgment he determined a number of issues ordered to be tried as preliminary issues by Foskett J. The Judge held and ordered that the appellant cannot rely on FAA, and that German law applies to limit the respondent's liability by requiring that there be taken into account the obligation under German law to mitigate, maintenance from the appellant's new partner, and the possibility or prospect of the appellant re-marrying or cohabiting with a new partner. The Judge gave permission to appeal.
The facts
This claim arises out of an accident which occurred in Germany in May 2004. At the time of the accident the appellant, Katerina Cox, and her husband, Major Christopher Cox, were living in Germany where Major Cox was stationed with HM Forces. On 21 May 2004 Major Cox was riding his bicycle on the verge of a road near his barracks when he was knocked off his bicycle by a car which had left the road, mounted the verge and collided with him. As a result of the accident Major Cox suffered injuries from which he died. The driver of the car was a German national, Herr Günter Kretschmer, who was resident and domiciled in Germany and was insured by the respondent, a company registered in Germany. The appellant was living with her husband in Germany at the date of his death. She returned to live in England in April 2005 and has lived here since that time. She was his sole dependant.
The Law
The provisions of the Private International Law (Miscellaneous Provisions) Act 1995 ("PILA") are relevant to the choice of law issue. The relevant provisions of PILA, FAA and section 844 BGB ("section 844") are set out in the Appendix to this judgment.
The legal analysis in the present case is unaffected by Regulation EC No 864/2007 ("Rome II"), which only applies to accidents occurring abroad after 10 January 2009.
There is no dispute as to the liability of Herr Kretschmer or that, as I have said, his liability is to be determined according to German law. It is also not in dispute that the appellant has a direct right of action against the respondent under German law by virtue of paragraph 3(1) of Pflichtversicherungsgesetz, giving effect to Article 3 of Directive 2000/26/EC of 16 May 2000, subsequently superseded by Directive 2009/103/EC of 16 September 2009.
Subject to an argument of the appellant about the mandatory application of FAA to claims for loss of dependency before an English Court (which I consider below), it is clear that the appellant is entitled to bring her section 844 proceedings against the respondent in England as a result of Regulation (EC) No. 44/2001. The European Court of Justice held in FBTO Schadeverzekeringen NV v Jack Odenbreit (2007) ECR 1–11321 that Articles 9(1)(b) and 11(2) of that Regulation permit the injured party to bring an action directly against the insurer before the courts in a Member State where the injured party is domiciled provided that a direct action is permitted and the insurer is domiciled in a Member State.
Sir Christopher Holland's judgment
The Judge heard written and oral evidence, including expert evidence on German law.
He contrasted the recoverable loss under FAA, on the one hand, and section 844, on the other hand. As to FAA, he quoted the following passage from the judgment of Smith LJ in Welsh Ambulance Services v Williams [2008] EWCA Civ 81 at [50]:
" … nothing that a dependant (or for that matter anyone else) could do after death could either increase or decrease the dependency. The dependency is fixed at the moment of death; it is what the dependants would probably have received as benefit from the deceased, had the deceased not died. What decisions people make afterwards is irrelevant. The only post death events which are relevant are those which affect the continuance of the dependency (such as the death of a dependant before trial) and the rise (or fall) in earnings to reflect the effects of inflation."
The Judge noted, as consistent with that legal policy, the irrelevance under FAA of a widow's re-marriage or prospects for such (s.3(3)) and the disregard of benefits "which have accrued or will or may accrue" as a result of the death (s.4). Damages for bereavement are recoverable under FAA s.1A.
The Judge summarised his findings on the position under German law in paragraph [17] of his judgment. For the purpose of this appeal, it is necessary only to quote the following from that paragraph:
"(e) Fundamental to an award pursuant to s.844(2) is the aim to restore the claimant to the financial position that he or she would have enjoyed as a dependant of the deceased, but to do so in "nett" terms. It is for the claimant to be compensated, but not knowingly overcompensated. To that end, an award is not made as at the moment of death; it seeks to reflect and react to the subsequent history so far as such impacts upon the loss of dependency – excluding only receipt of the proceeds of an insurance policy. This philosophy and its impact readily appears from a staged approach to the assessment of a widow's s.844(2) claim, that is (as the experts agree), standard for a German court:
(i) Establish the likely prospective lifetime income of the deceased (it being assumed that he would die before the claimant).
(ii) Deduct from (i) any savings that the deceased would have been likely to make.
(iii) Deduct from the foregoing the fixed costs incurred in running the matrimonial household.
(iv) Allot to the claimant 45% of the balance.
(v) Add this latter sum to the fixed costs as per step (iii).
(vi) Deduct any allowance for contributory negligence (if such be proved).
(vii) Deduct from the ongoing balance the income which the claimant has made, or would be likely to make by taking up paid employment.
(viii) Deduct from the still ongoing balance maintenance accruing to the claimant through re-marriage or through a relationship other than marital following the birth of a child.
Fundamental to the foregoing is a substantive requirement of German law: the duty to mitigate, such justifying ongoing reference to her earning capacity and to benefits accruing from re-marriage or from a similar relationship."
As the Judge noted (at paragraph [18]) it is evident that a claim under FAA is potentially more valuable to the appellant than a claim under section 844.
The Judge held that the appellant could not rely on FAA in any respect. He expressed his reasons in paragraphs [29] and [30] of his judgment. It is sufficient to quote the following passage in paragraph [29]:
"In my judgment Part III [of PILA] is for present purposes the source of the material provisions of English conflict of laws. The provisions as cited clearly make selection of the applicable law as the unsurprising starting point. With German law thus identified, its application has to follow, propounding a package of provisions, inter alia so as to address, per s.9(4) of Part III "the question whether an actionable tort … has occurred", that is, whether there is liability and if so … for what by way of heads of damage. The answers as provided by the applicable German law have been summarised in paragraph 17 hereof – they do not include resort to the FAA."
The appeal
The presentation of Mr Layton's attack on the Judge's judgment changed between his opening submissions and his submissions...
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