A TALE OF TWO CASES

‘...it was the age of wisdom, it was the age of foolishness...’ 

                                                                            Charles Dickens, A Tale of Two Cities

Nemeti and others v Sabre Insurance Co. Ltd [2013] EWCA Civ 1555 and Vann and others v Ocidental-Companhia De Seguros SA [2014] EWHC 545 (QB)

The direct right of action

The Nemeti and Vann cases both featured claims initiated on behalf of road accident victims who were English residents but where the accidents happened abroad in a foreign European Union country (Romania and Portugal respectively).  In both cases the legal representatives sought to exercise the direct right of action conferred under article 18 of the Sixth Motor Insurance Directive and articles 9 and 11 of Brussels I so they could issue the claims in this country. 

In Nemeti, rather than referring to the correct Community and local applicable law provisions, the claimants’ solicitors relied exclusively on the UK’s implementation of this Community law: citing the European Community Rights Against Insurance Regulations 2002.

Unfortunately they were looking in the wrong place.

As my earlier blog indicates, the Nemeti claim was effectively non suited as Regulation 3  confines the victim’s entitlement under the direct right to the contractual cover conferred by the driver’s motor insurance policy (in my opinion wrongly so).  Furthermore, the definition of accident in regulation 2 restricts the direct right to accidents in the UK.  Their driver was not authorised to drive by either the vehicle owner or the insurer and, of course, the accident did not take place in the UK.  The claim in Nemeti was dismissed as a result.  An attempt to substitute the claim with an entirely new one, after the limitation period had expired, failed.

Compare that unfortunate outcome with the Vann case, in which the claimant representatives correctly founded the cause of action on the Community and local applicable law provisions that confer the direct right, in accordance with the decision in FBTO Schadeverzekeringen NV -v- Jack Odenbreit, CJEU 2007 Case 0463/06.  The result was that in Vann the issue that proved to so fatal in the Nemeti case did not even rear its head as a contentious issue.  The Vann decision is useful as it demonstrates the correct approach to applying  foreign applicable law (under Rome II) in an English court concerning the assessment of liability and contributory negligence.  See my commentary on Wall v Mutuelle for the correct approach to quantifying damages conferred under foreign applicable law in an English court.

One of the reasons Nemeti failed was that the solicitor seemed to think our UK domestic provision provided a complete solution; it wasn't even relevant. 

The importance of European Law

Far too many road traffic accident PI specialists still labour under the mistaken impression that this area of practice remains relatively unaffected by the rising tide of European Community law; nothing could be further from the truth. Community law provides the primary source of law governing the requirement for compulsory third party motor insurance and the additional guarantees provided by the compensatory body - this applies equally - whether the accident occurs on the French Riviera or outside your local takeaway.

Unfortunately the widespread misconception that our domestic provision is complete and fit for purpose is one that appears to be shared by the Department for Transport.  It continues to ignore warnings that its statutory and extra-statutory provision to guarantee the compensatory entitlement of victims fails to meet the minimum standards imposed under the Sixth Motor Insurance Directive (2009/103/EU).  On this point, it is perhaps worth noting that the UK’s transposition of this particular directive is currently under investigation by the European Commission.  

I have argued in the New Law Journal and elsewhere that Part VI of the Road Traffic Act 1988, The European Community Rights Against Insurers Regulations 2002 and both MIB Agreements (2003 and 1999) as well as certain Court of Appeal rulings on their interpretation are defective in this respect; more about this anon.

When a solicitor takes on a case that involves a client who is injured abroad in a foreign European Union country, the basic competence needed just to issue the claim requires a working knowledge of the relevant Community law.  This includes but is by no means limited to an appreciation of the following: (i) Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (aka Brussels I) which determines which country’s court has jurisdiction to deal with the claim; (ii) Council Regulation (EC) No 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations (aka Rome II) which governs which country’s law applies to the substantive and procedural aspects of the claim for accidents on or after 11 January 2009, (iii) the Sixth Directive (2009/103/EC), (iv) the various rulings by Court of Justice of the European Union and our own courts interpreting this Community law, as well as (v) the correct approach to interpreting our national law provision in the light of relevant superior Community law. 

Lord Justice Aikens gives a helpful summary of the correct approach for interpreting our law in the light of EU Directives at para 46 and following of his judgment in Churchill v Wilkinson and Evans v Equity Claims [2012] EWCA Civ 1166.  The judgment confirms that ordinary English meaning of the words used in s151 (8) of the Road Traffic Act 1988 fails to fully implement Community law.  This begs the question: where else is our national law provision for accident victims deficient?  The answer seems to be ‘in quite a lot of places’ as my earlier blogs and my four part series of articles in the New Law Journal explain.

The contrasting first instance decisions in the Wilkinson / Evans appeal provide another useful illustration of the right and wrong approach to interpreting and applying our national law.  As with Nemeti and Vann, both claims featured similar facts on the salient issues to which identical Community and national law applied; it was in the application of that law that the different outcomes resulted.

The New Law Journal will publish my PI update on accidents abroad shortly.