should damages be assessed in accordance with the claimant's
home jurisdiction or those of the place where the accident
happened?
We have been at the forefront of a very
important argument for insurers and claimants in the UK and
throughout Europe, which is affecting the amount of damages payable
where an accident happens outside of the claimant's home
jurisdiction. There are a lot of cases on hold whilst we
await the decision from the European Court of Justice on the point.
The Advocate General has just given a preliminary view, which
is not binding, but provides an indication of which way the
European Court of Justice may go.
By way of background, the amount of damages
payable can vary substantially following an accident – the same
claim if assessed in England could be worth £4 million, and in
Spain €750,000. In this short article, I shall give a brief
synopsis of the opposing arguments before going on to confirm the
law as clarified by the Advocate General in Homawoo and
its consequence.
One of the intentions of Rome II is
to clarify the damages payable to a claimant following an accident
in a foreign jurisdiction. For English insurers this is
important as if a Spaniard (for example) were injured in England,
should they be compensated the higher English or lower Spanish
damages? The answer according to Rome II is that
only Spanish damages are payable for accidents before Rome
II and English damages after Rome II.
Conversely, an English person injured in Spain would be able
to recover English damages before the application of Rome
II and Spanish damages after.
Homawoo follows an accident in France
on 29 August 2007. Simply - if damages are assessed in
accordance with French law the insurers pay out less to the
claimant than if the claim was decided in accordance with English
law.
The opposing arguments are that Rome
II only applies to accidents after 20 August 2007, or only to
accidents that happen after 11 January 2009. The High Court
in England has been asked to decide on the point on a couple of
occasions including Bacon v Nacional Suiza, and
Homawoo. Both claims involve accidents that happened
in between these two dates.
The arguments come about due to the wording
within Rome II. Should it be 20 days from the date
of publication of Rome II in accordance with Article 254
(1) EC ie 20 August 2007? Alternatively it should be 11
January 2009 in accordance with Article 31 of Rome
II. The difference in opinion comes from a lack of
clarity within Rome II as different wording is used.
At Article 31 it is 'entry into force' and at Article 32 it
is 'date of application'.
Mr Justice Tomlinson (now Lord Justice
Tomlinson) gave a clear opinion in Bacon that Rome
II applied to accidents that happened after 27 August 2007.
That judgement was appealed. The parties were able to
reach terms of settlement during the course of the appeal.
Consequently the legal and insurance community has been
awaiting the outcome of Homawoo to clarify the accidents
to which Rome II apply. Rather than give an opinion
on the point, Mrs Justice Slade in Homawoo referred the
argument to Europe.
The point is of such importance that the Greek
Government, the UK Government and the Commission all expressed
their views on the proceedings. The Greek Government
submitted its view that Rome II applies for all accidents after 20
August 2007. This was favoured by the insurers in the claim.
The alternative view espoused by the claimant, the UK
Government and the Commission, was that Rome II only
applied to accidents that happened on or after 11 January 2009.
The Advocate General has now given a very
clear and conclusive decision that Rome II only applies to
accidents on or after 11 January 2009. If the European Court
of Justice follows this decision, the claimants in Bacon
and Homawoo were correct in their interpretation.
There are exceptions where Rome II does not apply
and an expert should always be consulted wherever an accident
happens in a jurisdiction foreign to the insurer or claimant.
This may leave some insurers in difficulty
where they may not have underwritten claims properly and have to
pay out higher damages in their own jurisdiction for accidents up
to 11 January 2009. However the same insurers have the
protection of having damages assessed in accordance with the
location of the accident in the majority of cases where the
accident happened after 11 January 2009. If the Court follows the
Advocate General's opinion it will be good news for English
claimants and insurers where an accident has occurred before 11
January 2009. After this date Rome II favours
insurers in many jurisdictions. Rome II does not
favour insurers in jurisdictions such as England (following the
injury of an EU citizen from elsewhere in the EU) where damages are
higher or English claimants who can only recover lower damages
where they have been injured elsewhere in the EU.
This is a simplification of the law and, should you be faced with
an issue following an accident out of your home jurisdiction,
always make sure you have good advice from someone experienced in
this area of law. For further information, please contact
Christopher
Deacon in the
Travel team in
Southampton at
christopher.deacon@bllaw.co.uk or
call him on 023 8085 7399.
