Maher v Groupama Grand Est [QBD]
| Jurisdiction | England & Wales |
| Judge | Blair J. |
| Judgment Date | 23 January 2009 |
| Neutral Citation | [2009] EWHC 38 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ08X03351 |
| Date | 23 January 2009 |
[2009] EWHC 38 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Hon Mr Justice Blair
Case No: HQ08X03351
Mr Bernard Doherty (instructed by Beachcroft LLP) for the Claimants
Mr Pierre Janusz (instructed by Pierre Thomas & Partners) for the Defendant
Hearing dates: 15 th, 16 th December 2008
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Blair:
The question in this case is as to the law which governs two issues. They both arise in connection with a direct claim brought by injured parties against the insurers of the driver who caused a road accident. The issues are as to (1) the assessment of damages, and (2) pre-judgment interest on those damages. Are these issues governed by the law of France, where the accident occurred and the driver was domiciled, as the defendant insurers submit? Or are they governed by the law of England, where the claim is brought, as the Claimants submit? There is a body of well-known authorities on the answers to these questions as they arise in proceedings by the injured party against the tortfeasor. But there appears to be none as regards proceedings such as the present based on the injured party's direct claim against the insurer of the tortfeasor.
The facts are not in dispute. On 29 July 2005, Mr Maher was driving his Range Rover on the RN5 road in the area of Mont Sous Vaudrey, France. His wife was a passenger. A van was being driven by M. Marc Kress in the opposite direction. He lost control of the van, and it collided with the Maher's Range Rover. Unfortunately, M. Kress was killed in the collision, and Mr and Mrs Maher suffered injuries for which they have brought this claim for damages in the English Courts.
The Defendant is the French insurance company which insured M. Kress against third party claims arising out of the use of his vehicle under a contract of insurance, the applicable law of which is French law. Neither liability nor the jurisdiction of the English Court is in dispute, and judgment on the issue of liability was entered on 24 September 2008. However I am told that it makes a practical difference whether damages and interest are calculated under English or French Law, and for that reason, Master Fontaine ordered the trial of preliminary issues as follows:
(1) Are damages to be assessed by reference to English Law or French Law?
(2) Should the question of the award of pre-judgment interest on those damages be determined in accordance with English law or French law?
The words “pre-judgment” have been inserted by consent into Master Fontaine's order, because there is no dispute that after judgment has been given by the English Court, interest on the damages awarded must be determined in accordance with English law. There was originally a third question, it being argued by the Defendant that the question of the recoverability of costs inter partes should also be determined according to French law, but that argument has (in my view rightly) been abandoned.
The jurisdictional basis for the direct claim against the Defendant insurer
Though it is not in dispute, I should explain the jurisdictional basis for this claim which is brought, as I have said, in the English Court against a French insurer in respect of an accident that took place in France where the insured tortfeasor was French. In this respect, I am indebted to the written argument of Mr Bernard Doherty, counsel for the Claimant. A direct right of action against insurers in road traffic accident cases was required to be introduced into the laws of all Member States of the European Community (in so far as it did not already exist) by Directive 2000/26/EC of the European Parliament and Council of 16 May 2000. This is the directive on the approximation of the laws of the Member States against civil liability in respect of the use of motor vehicles, usually known as the Fourth Motor Insurance Directive. Article 3 states that:
“Each Member State shall ensure that injured parties referred to in Article 1 in accidents within the meaning of that provision enjoy a direct right of action against the insurance undertaking covering the responsible person against civil liability.”
In the United Kingdom, the direct claim was provided for by the European Communities (Rights against Insurers) Regulations 2002, which applies to road accidents in this country, and which can be invoked by residents of any Member State. There is no dispute that an equivalent right exists under French law, and the claim against the Defendant is brought pursuant to such right.
In its original form, the Fourth Motor Insurance Directive merely referred to a right of action. It did not deal with the possibility of bringing a claim of this kind in the State in which the injured party is domiciled. The jurisdictional question is governed by Council Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “Judgments Regulation”). Articles 9(1)(b) and 11(2) contain special rules of jurisdiction for matters relating to insurance. These are intended to be more favourable to the interests of the “weaker party” (recital (13)). Article 9(1) states that:
“An insurer domiciled in a Member State may be sued:
(a) in the courts of the Member State where he is domiciled, or
(b) in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, in the courts for the place where the plaintiff is domiciled.”
Article 11(2) states that:
“Articles 8, 9 and 10 shall apply to actions brought by the injured party directly against the insurer, where such direct actions are permitted.”
The effect of these provisions was considered by the European Court of Justice in FBTO Schadeverzekeringen NV v Jack Odenbreit ( C-463/06), 13 December 2007, in a preliminary ruling from Germany. After referring to various instruments including the Fourth Motor Insurance Directive and the Fifth directive which amended it, the Court held that:
“… the reference in Article 11(2) of Regulation No 44/2001 [the Judgments Regulation] to Article 9(1)(b) of that regulation is to be interpreted as meaning that the injured party may bring an action directly against the insurer before the courts for the place in a Member State where that injured party is domiciled, provided that such a direct action is permitted and the insurer is domiciled in a Member State.” (paragraph 31)
The upshot is that after the Odenbreit case, an injured party can bring a direct claim against the tortfeasor's insurer in the courts of his own domicile, so long as the insurer is domiciled in a Member State where a direct action is permitted (as is the case here). This can be a more attractive option for the injured party than suing the tortfeasor in the courts of his domicile (in which most such claims would otherwise have to be brought in accordance with Article 2 of the Judgments Regulation). I am told that the right is now being exercised quite frequently in respect of road accidents in Europe involving injured parties from England.
The parties' submissions
As refined in oral argument, the parties' respective submissions can be summarised as follows. The Claimants submit that since the liability of the Defendant flows from that of its insured, the assessment of damages should be treated as an issue in tort. Under English conflicts rules, it is well established that the assessment of damages in tort is a procedural matter, and governed therefore in this case by English law. So far as the second question is concerned, interest is claimed under section 35A Supreme Court Act 1981. This, it is submitted, is a procedural provision, and thus applicable as part of the law of the forum.
The Defendant's case is equally straight forward. It is submitted that the Claimants' direct claim against the insurer is to be characterised as a contractual claim, because the insurer becomes involved only on the basis that it is contractually obliged to indemnify the policy holder against the claim which the injured parties have against him. For the same reason, the availability of interest is a substantive rather than a procedural matter, and therefore governed by French law as the law applicable to the contract of insurance, and not English law as the law of the forum.
In oral argument, Mr Pierre Janusz, counsel for the Defendant insurer, summarised his case as follows. The question for the court is not what it would award against the tortfeasor (here M. Kress or to be precise his estate). The question is as to the extent of the indemnity to which the tortfeasor is entitled under his policy. That cannot exceed the sum that he would be held liable for in an action against him. And that must mean an action in a Court that has jurisdiction over him. The only court, Mr Janusz submits, with jurisdiction over the tortfeasor in the present case is the French court. It is therefore the amount that the Claimants would be awarded by a French court that the English court has to value for the purposes of the direct claim against the insurer.
The Claimants dispute the proposition that the English court would have no jurisdiction in respect of the claim against the tortfeasor himself (or his estate), pointing to Article 11(3) of the Judgments Regulation. Article 11(3) says that if the law governing the direct action provides that the insured may be joined as a party to the action, the same court shall have jurisdiction over him. The Defendant counters that this provision only...
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