clarification on whether damages should be assessed in
accordance with the claimant's home jurisdiction or those of the
place where the accident happened
an update the European Court of Justice decision
in Homawoo v GMF Assurances SA
Insurers, lawyers, claimants and
defendants can now proceed with certainty following the decision of
the European Court of Justice in Homawoo v GMF Assurances
SA (Case C-412/10). (2010/C 301/12). If the accident
happened after the 11 January 2009 then the law of the country
where the event occurred will apply in assessing the claimant's
entitlement to damages. Before that date, for a claimant
resident in England, English law will apply when assessing the
amount of damages to be awarded.
We have been at the forefront
of this very important
argument for insurers and claimants in the UK and throughout
Europe, which has
affected the amount of damages payable where an accident
happens outside of the claimant's home
jurisdiction. The ECJ
has now followed the Advocate General's Opinion and offered useful
clarification as to how Regulation (EC) No 864/2007 (namely
Rome II) should be interpreted and applied. The
decision is significant because 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.
One of the intentions of Rome II is
to clarify the damages payable to a claimant following an accident
in a foreign jurisdiction. The Regulation also attempts to harmonise the
position across the EU. For English insurers this is
important because, 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 were 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
involved 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'.
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 applies. Rather than give an opinion
on the point, Mrs Justice Slade in Homawoo referred the
argument to Europe and the ECJ has
now cleared up the long-standing confusion.
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 ECJ has now given a very clear and
conclusive decision that Rome II only applies to accidents
on or after 11 January 2009. This means the claimants in
Bacon and Homawoo were both 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. The decision brings 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.
