EEA claims representative can accept service of proceedings

Spedition Welter GmbH v Avanssur SA Case C-306/12

The facts: A German owned vehicle was damaged in the outskirts of Paris by a vehicle insured by a company based in France.  There was no injury, so article 18 of the Sixth Directive did not apply.  However the role of the claims representatives, as set out in articles 21 and 24, encompass accident damage claims. 

The German civil law code, unlike our 2002 Regulations, extends the direct right of action to accidents in foreign EEA member states. 

The issue before the court (presumably based of the direct right against insurers conferred independently of the Sixth Motor Insurance Directive [1] by article 11 of the Brussels I convention) was whether the French insurer’s claim representative had authority to accept service of the proceedings that had been issued in Germany.  The French insurers disputed this and insisted on being served in France.  This usually involves translation and foreign service costs and delay in putting this into effect.

The decision: The Court of Justice ruled that article 21 (5) of the Sixth Motor Insurance Directive ‘must be interpreted as meaning that the claims representative’s sufficient powers must include authority validly to accept service of judicial documents necessary for proceedings for settlement of a claim to be brought before the court having jurisdiction’ – in other words: yes, they did have power to accept service of the claim form.

Comment: This important ruling appears to have escaped the notice of almost every legal commentator.  It should expedite and simplify many foreign road accident claims within the EEA that are otherwise relatively straightforward on liability.  Henceforth, proceedings can be issued in the UK courts in the usual way and served (without the extra translation costs) on the local claims representative for the foreign insurer or the MIB if the insurer has failed to respond to the claim within three months[2]. 

However, there are a number of caveats:

• The claims representative’s authority is restricted to accepting service of court documents.  Article 21.6 of the Sixth Motor Insurance Directive expressly states that its presence in the claimant’s home jurisdiction does not signify that the insurer is domiciled there. 
• If a settlement cannot be negotiated through the claims representative it may still be necessary to deal with the foreign insurers legal representative abroad, even if that may seem somewhat counter intuitive from an administrative viewpoint.
• In the UK the 2002 Regulations confine the direct right to (i) accidents, (ii) occurring in the United Kingdom and (iii) where the claimant has a cause of action against an insured person and (iv) only to the extent that the insurer is ‘liable to the insured person’[3]. 
• The 2002 Regulations are currently under investigation by the European Commission as they appear to breach the wider scope required under the Directives.
• For accidents that post date 11 January 2009, Rome II governs both the substantive law and procedural rules that are applicable to the accident – this will usually be the law of the place where the accident took occurred[4].
• If liability is contested then there may be only a modest practical benefit to be gained from issuing proceedings in the home court and the defendant may also argue for a different jurisdiction.

Given that liability is not contested in the overwhelming preponderance of motor accident claims, this ruling will benefit RTA practitioners handling claims featuring accidents abroad within the EEA.  Such claims are not just the preserve of UK citizens abroad on holiday or business but, as the next case illustrates, they include a significant number of migrant workers resident (albeit temporarily) in the UK but travelling home or elsewhere in the EEA.

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[1] i.e. independently of article 18 of the Sixth Motor Insurance Directive, op.cit.

[2] See article 24 of the Sixth Motor Insurance Directive.

[3] The 2002 Regulations do not attempt to nullify the effect of any contractual limitation in scope or exclusion clauses, confer s148 and s151 (2) Road Traffic Act 1988.

[4] See article 4.1 of Rome II: ...’ the law of the country in which the damage occurs...’