A Practical Guide of the International Practice Group 2005/2006
I
NTERNATIONAL
A PRACTICAL GUIDE TO DEALING
WITH ACCIDENTS ABROAD
Howard Palmer Q.C. and Charles Dougherty consider some of
the problems that arise from personal injury accidents abroad.
Introduction
With the growth of travel and holiday opportunities, and the increase in awareness of recourse through litigation, the incidence of personal injury actions relating to accidents abroad has mushroomed in recent years.Whilst the details of a particular incident may appear depressingly familiar to the prospective Claimant’s solicitor (a road traffic accident, an accident whilst working abroad or an injury suffered in the grounds or swimming pool of a foreign hotel), the fact that the accident has occurred in a foreign jurisdiction may create a number of difficulties for which he is unprepared. It is the intention of this short guide to examine questions which might arise in the purely tortious arena and ignoring claims in contract (including contracts of insurance), under the Fourth Motor Insurance Directive, or to enforce rights under the Package Travel, Package Holidays and Package Tours Regulations 1992.
As English personal injury awards are generally higher than in continental Europe and (leaving aside the special features of the U.S.A. systems) higher than in most foreign jurisdictions, there may be substantive advantages for Claimants in bringing their claims in England and to apply English law, in particular in relation to the assessment of damages. It is also procedurally more attractive for an English resident Claimant to bring his claim through English solicitors in the domestic arena.
The immediate questions which need to be considered in relation to such accidents fall under four heads:
1. Does the English court have jurisdiction to determine the claim?
2. What is the applicable law of the tort in relation to liability? In other words, by reference to which body of national law is the conduct of the proposed Defendant to be considered, in order to determine whether such conduct gives rise to a right to damages or other remedy?
3. By what law is quantum of damages to be determined? 4. What are the insurance implications?
These will be considered in turn.
Jurisdiction of the English Courts
The first question, which should be considered when dealing with a claim relating to an accident abroad, is whether the English court has jurisdiction to hear the claim.
There are two regimes which need to be considered when looking at the question whether the English Courts have jurisdiction over a dispute: first, the Brussels-Lugano Regime relating to most European countries; second, the rules for remaining foreign countries laid down by Section III of CPR Part 6. The Brussels-Lugano Regime refers collectively to the Brussels Convention, Lugano Convention and Council Regulation 44/2001. A modified version of the Brussels-Lugano Regime applies in relation to intra-UK cases.
Where the Defendant is domiciled in England
If the Defendant is domiciled in England, an English court will normally have jurisdiction to determine a claim in tort even though it occurred overseas. This is true under the Brussels-Lugano Regime and under the common law regime. The primary rule laid down by the Brussels-Lugano Regime (article 2) is that a Defendant should be sued in the courts of the country in which he is domiciled and all the other rules are an exception to that primary rule. Thus a Defendant domiciled in England may be sued in England and served with proceedings wherever he may (temporarily) be. A Defendant domiciled in another European state may not (under the general rule) be sued in England, even if he is temporarily in England and available to be served with process. The common law regime works slightly differently. If a Defendant is domiciled in England and is within the jurisdiction for the purpose of service, he may be served and sued in England. If he is domiciled in England but temporarily abroad, CPR 6.20(1) permits service upon him out of the jurisdiction, and he may be sued in England. However, if the Defendant is domiciled in a non-European state, but
is temporarily within the jurisdiction, he may be served with process whilst in England and (subject to an application to have the matter tried elsewhere under the doctrine of forum non
conveniens) the courts of England have
jurisdiction by reason of the valid service of process in England. Thus a person present in England, and who is not domiciled in a Brussels-Lugano Regime State, is subject to the jurisdiction of the English Courts regardless of nationality.
Exceptions to the general proposition do exist. So for example, in a Brussels-Lugano Regime case, if the court of another Member state has assumed jurisdiction in relation to the same claim, the English court has to decline jurisdiction, even if the Defendant is domiciled in England. Under the common law regime, a claim may be stayed on the grounds of forum non
conveniens if it can be shown that it
would clearly be more appropriate for the claim to be tried abroad – see below.
Where the Defendant is domiciled outside England
If the proposed Defendant is not domiciled in England then suit in this country is more difficult. Both the Brussels-Lugano Regime and the rules of CPR Part 6.20 permit suit either in the country where the tortious act occurred or in the place where damage was sustained – see Art 5(3) and CPR 6.20(8). In a personal injury action of the type being considered here, the damage will be sustained at the point of the accident. Generally speaking, therefore, accidents abroad will be associated with torts committed abroad.
However, in the case of foreign domiciliaries not otherwise amenable to the jurisdiction of the English courts it may be possible to sue them here if it is appropriate for them to be joined as a second or subsequent defendant, when proceedings are commenced against a Defendant who is domiciled, or properly sued, in this country – see Article 6(1) and CPR 6.20(3). So, for instance, a claim against a foreign Defendant who
Jurisdiction of the English Courts
The first question, which should be considered when dealing with a claim relating to an accident abroad, is whether the English court has jurisdiction to hear the claim.
There are two regimes which need to be considered when looking at the question whether the English Court has jurisdiction over a dispute: first, the Brussels-Lugano Regime relating to most European countries; second, the rules for remaining foreign countries laid down by Section III of CPR Part 6. The “Brussels-Lugano Regime” refers collectively to the Brussels Convention, Lugano Convention and Council Regulation 44/2001. A modified version of the Brussels-Lugano Regime applies in relation to intra-UK cases.
Where the Defendant is domiciled in England
If the Defendant is domiciled in England, an English court will normally have jurisdiction to determine a claim in tort even though it occurred overseas. This is true under the Brussels-Lugano Regime and under the common law regime.
The primary rule laid down by the Brussels-Lugano Regime (article 2) is that a Defendant should be sued in the courts of the country in which he is domiciled and all the other rules are an exception to that primary rule. Thus a Defendant domiciled in England may be sued in England and served with proceedings wherever he may (temporarily) be. A Defendant domiciled in another European state may not (under the general rule) be sued in England, even if he is temporarily in England and available to be served with process. The common law regime works slightly differently. If a Defendant is domiciled in England and is within the jurisdiction for the purpose of service, he may be served and sued in England. If he is domiciled in England but temporarily abroad, CPR 6.20(1) permits service upon him out of the jurisdiction, and he may be sued in England. However, if the Defendant is domiciled in a non-European state, but is temporarily within the jurisdiction, he may be served with process whilst in England and (subject to an application to have the matter tried elsewhere under the doctrine of forum non conveniens) the courts of England have jurisdiction by reason of the valid service of process in England.Thus a person present in England, and who is not domiciled in a Brussels-Lugano Regime State, is subject to the jurisdiction of the English Courts regardless of nationality.
Exceptions to the general proposition do exist. So for example, in a Brussels-Lugano Regime case, if the court of another Member state has assumed jurisdiction in relation to the same claim, the English court has to
decline jurisdiction, even if the Defendant is domiciled in England. Under the common law regime, a claim may be stayed on the grounds of forum non conveniens if it can be shown that it would clearly be more appropriate for the claim to be tried abroad – see below.
Where the Defendant is domiciled outside England If the proposed Defendant is not domiciled in England then suit in this country is more difficult. Both the Brussels-Lugano Regime and the rules of CPR Part 6.20 permit suit either in the country where the tortious act occurred or in the place where damage was sustained – see Art 5(3) and CPR 6.20(8). In a personal injury action of the type being considered here, the damage will be sustained at the point of the accident. Generally speaking, therefore, accidents abroad will be associated with torts committed abroad. However, in the case of foreign domiciliaries not otherwise amenable to the jurisdiction of the English courts it may be possible to sue them here if it is appropriate for them to be joined as a second or subsequent defendant, when proceedings are commenced against a Defendant who is domiciled, or properly sued, in this country – see Article 6(1) and CPR 6.20(3). So, for instance, a claim against a foreign Defendant who is alleged to have dropped a scaffold clip onto the Claimant’s head on a building site in France may be joined with a claim commenced in England against the victim’s English employer, for failing to provide a proper hard hat on the building site in question. The key difference between the common law and the Brussels-Lugano Regime is that under the common law it is only necessary that the court has jurisdiction over the original Defendant, whereas under the Brussels-Lugano Regime it is necessary that the original Defendant is domiciled in England.
Both the Brussels-Lugano Regime and the common law permit third parties to be joined to a claim by a Defendant even though they are domiciled outside the jurisdiction – Article 6(3) and CPR 6.20(3A).
Forum Conveniens
Perhaps the most important distinction between the Brussels-Lugano Regime and the common law for present purposes is that under the common law an English Court can stay a claim if the English Court is not the most convenient forum for the dispute to be heard (forum non conveniens). This, for example, allows the court to intervene to prevent forum shopping where the case would more appropriately be heard elsewhere. Relevant factors include the location of witnesses, convenience and expense and the applicable law. Under the Brussels-Lugano Regime, however, the court, if it has jurisdiction, does not have any discretion to stay its proceedings on the grounds of forum non conveniens, even in favour of a
is alleged to have dropped a scaffold clip onto the Claimant’s head on a building site in France may be joined with a claim commenced in England against the victim’s English employer, for failing to provide a proper hard hat on the building site in question. The key difference between the common law and the Brussels-Lugano Regime is that under the common law it is only necessary that the court has jurisdiction over the original Defendant, whereas under the Brussels-Lugano Regime it is necessary that the original Defendant is domiciled in England.
Both the Brussels-Lugano Regime and the common law permit third parties to be joined to a claim by a Defendant even though they are domiciled outside the jurisdiction – Article 6(3) and CPR 6.20(3A).
Forum Conveniens
Perhaps the most important distinction between the Brussels-Lugano Regime and the common law for present purposes is that under the common law an English Court can stay a claim if the English Court is not the most convenient forum for the dispute to be heard (forum non conveniens). This, for example, allows the court to intervene to prevent forum shopping where the case would more appropriately be heard elsewhere. Relevant factors include the location of witnesses, convenience and expense and the applicable law. Under the Brussels-Lugano Regime, however, the court, if it has jurisdiction, does not have any discretion to stay its proceedings on the grounds of forum
non conveniens, even in favour of a
non- Brussels-Lugano Regime State –
Owusu v Jackson [2005] 2 WLR 942.
This encourages forum shopping as it allows a Claimant to bring a claim in a jurisdiction which has only an incidental connection with the accident without fear of the claim being stayed in favour of the most appropriate jurisdiction. It is perhaps an interesting question whether a Claimant who chooses to bring a claim here when England is an inconvenient forum, but where the
Brussels-Lugano Regime applies, can nevertheless be penalised in costs.
As far as Defendants are concerned, the rules stated above must be considered in a converse sense – it may be undesirable from the Defendant’s point of view to be sued in England and the circumstances need to be examined to determine whether the court can be persuaded that it has no jurisdiction to continue to be seised of a matter, whether because of the application of the Brussels-Lugano Regime or the rules of common law.
The procedure for objecting to jurisdiction is set out in CPR Part 11. The key point to bear in mind in relation to CPR 11 is that there is only a limited time in which to raise an objection as to jurisdiction. CPR 11(4) provides that an application under CPR 11(4) must be made within 14 days after serving an acknowledgement of service. It is important to note that extending the time for the defence (whether by agreement or court order) does not extend the time for objecting to jurisdiction. If a Defendant does not make an application within the period specified by CPR 11(4) he is to be treated as having accepted jurisdiction – CPR 11(5).
It frequently happens that the Defendant’s solicitor files an acknowledgement of service and obtains an extension of time for serving a defence, and then puts the papers to one side whilst the merits are investigated. It may then not be realised, until too late, that the jurisdiction of the court to try the case should have been challenged by an application under Part 11.
Law of the Tort
The law applicable to an issue in tort is governed by the Private International Law (Miscellaneous Provisions) Act 1995 (“the Act”). Section 11(1) provides that:
The general rule is that the applicable law is the law of the
Brussels-Lugano Regime State – Owusu v Jackson [2005] 2 WLR 942.This encourages forum shopping as it allows a Claimant to bring a claim in a jurisdiction which has only an incidental connection with the accident without fear of the claim being stayed in favour of the most appropriate jurisdiction. It is perhaps an interesting question whether a Claimant who chooses to bring a claim here when England is an inconvenient forum, but where the Brussels-Lugano Regime applies, can nevertheless be penalised in costs. Objecting to Jurisdiction
As far as Defendants are concerned, the rules stated above must be considered in a converse sense – it may be undesirable from the Defendant’s point of view to be sued in England and the circumstances need to be examined to determine whether the court can be persuaded that it has no jurisdiction to continue to be seised of a matter, whether because of the application of the Brussels-Lugano Regime or the rules of common law.
The procedure for objecting to jurisdiction is set out in CPR Part 11.The key point to bear in mind in relation to CPR 11 is that there is only a limited time in which to raise an objection as to jurisdiction. CPR 11(4) provides that an application under CPR 11(4) must be made within 14 days after serving an acknowledgement of service. It is important to note that extending the time for the defence (whether by agreement or court order) does not extend the time for objecting to jurisdiction. If a Defendant does not make an application within the period specified by CPR 11(4) he is to be treated as having accepted jurisdiction – CPR 11(5).
It frequently happens that the Defendant’s solicitor files an acknowledgement of service and obtains an extension of time for serving a defence, and then puts the papers to one side whilst the merits are investigated. It may then not be realised, until too late, that the jurisdiction of the court to try the case should have been challenged by an application under Part 11.
Law of the Tort
The law applicable to an issue in tort is governed by the Private International Law (Miscellaneous Provisions) Act 1995 (“the Act”). Section 11(1) provides that:
The general rule is that the applicable law is the law of the country in which the events constituting the tort or delict occur.
Section 11(2) goes on to provide:
Where elements of those events occur in different countries, the applicable law under the general rule is to be taken as being –
(a) for a cause of action in respect of personal injury caused to an individual or death resulting from personal injury, the law of the country where the individual was when he sustained the injury;
(b) for a cause of action in respect of damage to property, the law of the country where the property was when it was damaged
Prima facie, therefore, in the case of a typical accident abroad the applicable law will be the law of the place where the accident occurred. This is so even where the tortious act (e.g. the negligent servicing of the car) has occurred in a different country.
However, the general rule may be displaced in certain circumstances so as to make the applicable law the law of some other country. Section 12 of the Act provides:
(1) If it appears in all the circumstances from a comparison of
(a) the significance of the factors which connect a tort or delict with the country whose law would be applicable under the general rule
(b) the significance of any factors which connect the tort or delict with another country,
that it is substantially more appropriate for the applicable law for determining the issues arising in the case, or any issue, to be the law of the other country, the general rule is displaced and the applicable law for determining those issues or that issue (as the case may be) is the law of that other country.
(2) The factors that may be taken into account as connecting a tort or delict with a country for the purposes of this section include in particular factors relating to the parties, to any of the events that constitute the tort or delict in question or to any of the circumstances or consequences of those events.
In other words, if it can be shown that it is substantially more appropriate for another law to
country in which the events constituting the tort or delict occur.
Section 11(2) goes on to provide:
Where elements of those events occur in different countries, the applicable law under the general rule is to be taken as being – (a) for a cause of action in respect of personal injury caused to an individual or death resulting from personal injury, the law of the country where the individual was when he sustained the injury; (b) for a cause of action in respect of damage to property, the law of the country where the property was when it was damaged
Prima facie, therefore, in the case of a typical accident abroad the applicable law will be the law of the place where the accident occurred. This is so even where the tortious act (e.g. the negligent servicing of the car) has occurred in a different country.
However, the general rule may be displaced in certain circumstances so as to make the applicable law the law of some other country. Section 12 of the Act provides:
(1) If it appears in all the circumstances from a comparison of
(a) the significance of the factors which connect a tort or delict with the country whose law would be applicable under the general rule
(b) the significance of any factors which connect the tort or delict with another country, that it is substantially more appropriate for the applicable law for determining the issues arising in the case, or any issue, to be the law of the other country, the general rule is displaced and the applicable law for determining
those issues or that issue (as the case may be) is the law of that other country.
(2) The factors that may be taken into account as connecting a tort or delict with a country for the purposes of this section include in particular factors relating to the parties, to any of the events that constitute the tort or delict in question or to any of the circumstances or consequences of those events.
In other words, if it can be shown that it is substantially more appropriate for another law to apply, the general rule under section 11 is displaced in favour of the law of that other country.
What is notable about section 12(1) is that a different decision may be made as to the applicable law for different issues in the case. The most obvious example would probably be one where liability and quantum could be shown to be more appropriately determined by reference to the law of the place where the accident occurred and the law of the place where the victim lived, respectively.
The courts have considered the interplay between sections 11 and 12 in a number of recent decisions. Typically there are 2 ways in which, in simple negligence accident cases abroad, the general rule as to the applicable law may be displaced so as to make English law the applicable law:
(1) where victim and tortfeasor are both English residents, particularly when they are travelling or holidaying together
(2) where the tortfeasor’s acts have been committed in England and it is entirely co-incidental where the personal injury occurs (for instance the negligent pre-holiday servicing of a car whose brakes fail whilst being driven through the Pyrenees).
The former type of incident is particularly common because it occurs
apply, the general rule under section 11 is displaced in favour of the law of that other country.
What is notable about section 12(1) is that a different decision may be made as to the applicable law for different issues in the case. The most obvious example would probably be one where liability and quantum could be shown to be more appropriately determined by reference to the law of the place where the accident occurred and the law of the place where the victim lived, respectively.
The courts have considered the interplay between sections 11 and 12 in a number of recent decisions. Typically there are 2 ways in which, in simple negligence accident cases abroad, the general rule as to the applicable law may be displaced so as to make English law the applicable law:
(1) where victim and tortfeasor are both English residents, particularly when they are travelling or holidaying together
(2) where the tortfeasor’s acts have been committed in England and it is entirely co-incidental where the personal injury occurs (for instance the negligent pre-holiday servicing of a car whose brakes fail whilst being driven through the Pyrenees).
The former type of incident is particularly common because it occurs every time a family or group of holidaymakers have a car accident whilst abroad and the innocent victims wish to sue the driver.
An example of the former type of case is Edmunds v Simmonds [2001] 1 WLR 1003. The Claimant and Defendant were both domiciled in England. They hired a car locally. The Defendant crashed the hire car into a Spanish lorry, injuring the Claimant who was her passenger. Spanish law was prima facie applicable under section 11 of the Act. The question was whether it was substantially more appropriate for English law to apply. Garland J held that it was. He held that the lorry was not responsible for the accident, and thus did not come into play in deciding whether factors pointed to Spain or England, and the fact that the car was hired and insured in Spain was not of ‘overwhelming weight’. The first authoritative case on sections 11 and 12 of the Act was the Court of Appeal decision in Roerig v Valiant Trawlers Ltd [2002] 1 WLR 2304. In that case Waller LJ (with whom the rest of the Cou§rt of Appeal agreed) pointed out that the first task is to identify the issue in relation to which it might be suggested that the general rule under section 11 should not be applicable. The next task is to identify the factors that
connect the tort (not the issue) with England and those that connect the tort with another country.
In Roerig the accident occurred on an English registered vessel and the Defendant was an English company. The deceased, however, was Dutch and the loss of dependency would occur in Holland. Waller LJ held that the fact that the deceased was Dutch and that his dependants would suffer their loss in Holland was not sufficient to displace the general rule under section 11. As he said: (at 2310):
In my view the word “substantially” is the key word. The general rule is not to be dislodged easily. I thus think the judge was right in the view he formed that the defendants had failed in their attempt to do so.
Waller LJ also appeared to approve of the decision in Edmunds (at 2310).
One can entirely understand that, if fortuitously two English persons are in a foreign country on holiday and one tortiously injures the other, the significant factors in favour of England being the place by reference to which the damages should be assessed may make it substantially more appropriate that damages should be assessed by English law.
The approach in Roerig was adopted again by the Court of Appeal in the recent case of Harding v Wealands [2005] 1 WLR 1539. In Harding the Claimant suffered severe injuries when he was a passenger in a car being driven by the Defendant on a dirt track in New South Wales. The Claimant was English and had always been domiciled in England. The Defendant was an Australian national who had moved to England on a working holiday visa to live with the Claimant some 6 months earlier. They were described as being in a settled relationship. The Claimant and Defendant had gone to NSW on holiday and to visit the Defendant’s parents. The Defendant had a NSW driving license and drove her own car (which she had lent to a relation whilst she was away) which was insured by an Australian insurer. At first instance the judge held that English law was substantially more appropriate to be applied to the issues of quantum, principally on the basis that the Claimant and Defendant were living together in a settled relationship in England at the time of the accident. The Court of Appeal reversed the judge. Waller LJ at 1550 stated:
But even acting cautiously I simply cannot accept a conclusion that the defendant’s link at the material time with England and with Mr Harding
every time a family or group of holidaymakers have a car accident whilst abroad and the innocent victims wish to sue the driver.
An example of the former type of case is Edmunds v Simmonds [2001] 1 WLR 1003. The Claimant and Defendant were both domiciled in England. They hired a car locally. The Defendant crashed the hire car into a Spanish lorry, injuring the Claimant who was her passenger. Spanish law was prima facie applicable under section 11 of the Act. The question was whether it was substantially more appropriate for English law to apply. Garland J held that it was. He held that the lorry was not responsible for the accident, and thus did not come into play in deciding whether factors pointed to Spain or England, and the fact that the car was hired and insured in Spain was not of ‘overwhelming weight’.
The first authoritative case on sections 11 and 12 of the Act was the Court of Appeal decision in Roerig v
Valiant Trawlers Ltd [2002] 1 WLR
2304. In that case Waller LJ (with whom the rest of the Court of Appeal agreed) pointed out that the first task is to identify the issue in relation to which it might be suggested that the general rule under section 11 should not be applicable. The next task is to identify the factors that connect the tort (not the issue) with England and those that connect the tort with another country.
In Roerig the accident occurred on an English registered vessel and the Defendant was an English company. The deceased, however, was Dutch and the loss of dependency would occur in Holland. Waller LJ held that the fact that the deceased was Dutch and that his dependants would suffer their loss in Holland was not sufficient to displace the general rule under section 11. As he said: (at 2310):
In my view the word “substantially” is the key word. The general rule is not to be dislodged easily. I thus think the judge was right in the view he formed that the defendants had failed in their attempt to do so.
Waller LJ also appeared to approve of the decision in Edmunds (at 2310).
One can entirely understand that, if fortuitously two English persons are in a foreign country on holiday and one tortiously injures the other, the significant factors in favour of England being the place by reference to which the damages should be assessed may make it substantially more appropriate that damages should be assessed by English law.
The approach in Roerig was adopted again by the Court of Appeal in the recent case of Harding v Wealands [2005] 1 WLR 1539. In Harding the Claimant suffered severe injuries when he was a passenger in a car being driven by the Defendant on a dirt track in New South Wales. The Claimant was English and had always been domiciled in England. The Defendant was an Australian national who had moved to England on a working holiday visa to live with the Claimant some 6 months earlier. They were described as being in a settled relationship. The Claimant and Defendant had gone to NSW on holiday and to visit the Defendant’s parents. The Defendant had a NSW driving license and drove her own car (which she had lent to a relation whilst she was away) which was insured by an Australian insurer. At first instance the judge held that English law was substantially more appropriate to be applied to the issues of quantum, principally on the basis that the Claimant and Defendant were living together in a settled relationship in England at the time of the accident. The Court of Appeal reversed the judge. Waller LJ at 1550 stated:
But even acting cautiously I simply cannot accept a conclusion that the defendant’s link at the material time with England and with Mr Harding was far more significant than her Australian connection, or that the strongest factor favouring New South Wales was the fact that
was far more significant than her Australian connection, or that the strongest factor favouring New South Wales was the fact that Ms Wealands was insured there. I would fully understand, having regard to the settled relationship that Mr Harding and Ms Wealands were in, that if they had been on holiday in France when this accident occurred, [the law of] England might have been found to be substantially more appropriate and to have displaced French law. But where the general law, by virtue of section 11 being the law where the tort occurred, is also the national law of one of the parties, it will, I suggest, be very difficult to envisage circumstances that will render it substantially more appropriate that any issue could be tried by reference to some other law. In this case all that the judge relied on, as Mr Haddon-Cave emphasised, was the parties’ “settled relationship”, but however settled that relationship, Ms Wealands had left her car in New South Wales, was still a citizen of Australia driving on a New South Wales driving licence, and the accident occurred in New South Wales. Thus, even though I recognise the need for caution, I am simply unable to accept the judge’s holding that in this case the application of the general rule should be disapplied.
It is clear therefore that the prima facie applicable law will not be displaced easily.
Practicalities of pleading foreign law
Before pleading a foreign law a Claimant’s solicitor whose client has suffered an injury abroad will want to inform himself whether the law of the place of the injury creates a sufficiently generous law for establishing liability – for instance, does negligence have to be proved or is strict liability applied? Is a deduction made for contributory negligence when the Claimant allows himself to be driven by a drunk? Are there statutory regulations which have to be strictly complied with? The Defendant’s solicitor will carry out the same investigation before deciding whether to challenge the Claimant’s case as to the correct applicable law. Unless, a party pleads (and proves) foreign law, the court will simply apply English law.
Standards a matter for local rules?
The applicable law may lay down what the ingredients of the relevant tort comprise – for instance, if strict liability applies, there is no ingredient of proving ‘fault’, but it may be necessary (for instance in a road accident) to establish the occurrence of an impact with
the defendant’s car. Where the applicable law requires proof of fault, typically proof of a lack of reasonable care, it may be more difficult to identify the standard by which proof of fault may be established. One might suggest that the question of the relevant standard will usually be determined by reference to the standards of the place where the accident occurred. Thus, in France one is expected to drive on the right, not the left. In California one is entitled to go through a red light to turn right, provided one gives way to traffic coming from the left. Breach of duty will therefore usually be judged by these standards or rules.
However, in the field of industrial accident or disease claims, the position is not so clear. There have recently been claims made against English companies alleging negligence in and about operations in foreign countries where the whole spectrum of industrial safety lags several decades behind that in this country. These claims appear to have proceeded on the basis that the appropriate standard for safeguarding workmen is a universal one applicable worldwide, regardless of the applicable law, rather than a standard tailored to local conditions.
The law applicable to quantum
If proceedings are to be brought in England, the determination of the law, applicable under the 1995 Act to issues of quantum in the case, is only part of the story. The applicable law only governs the substantive law applicable to the case. The law of the country where the proceedings are brought (the lex fori) governs the procedural law. An assessment of quantum involves both substantive and procedural law. One can see that this must be so at the extremes: it is a procedural rule of English law that damages fall to be assessed by judge (or jury), but not by professionally qualified assessors. Therefore, if it be the law of damages of a foreign country that damages are assessed in such a manner, such law will not be applied in a case brought in England, regardless of the applicable law of the tort.
On the other hand, the “heads of damage” recoverable in an action in tort have long been held to be governed by substantive, not procedural, law, i.e. by the applicable law as determined by section 11 or 12 of the Act, not by the lex fori. In the old pre-Act case of Boys v Chaplin [1971] A.C. 356 the tortfeasor and victim were both English servicemen in Malta who were involved in a motor accident. The law of Malta did not permit recovery of general damages for “pain and suffering and loss of amenity”, so that such head of damage was irrecoverable under Maltese, but recoverable under English, law. The House of Lords in deciding that English law was the substantive law governing
Ms Wealands was insured there. I would fully understand, having regard to the settled relationship that Mr Harding and Ms Wealands were in, that if they had been on holiday in France when this accident occurred, [the law of] England might have been found to be substantially more appropriate and to have displaced French law. But where the general law, by virtue of section 11 being the law where the tort occurred, is also the national law of one of the parties, it will, I suggest, be very difficult to envisage circumstances that will render it substantially more appropriate that any issue could be tried by reference to some other law. In this case all that the judge relied on, as Mr Haddon-Cave emphasised, was the parties’ “settled relationship”, but however settled that relationship, Ms Wealands had left her car in New South Wales, was still a citizen of Australia driving on a New South Wales driving licence, and the accident occurred in New South Wales.
Thus, even though I recognise the need for caution, I am simply unable to accept the judge’s holding that in this case the application of the general rule should be disapplied.
It is clear therefore that the prima facie applicable law will not be displaced easily.
Practicalities of pleading foreign law
Before pleading a foreign law a Claimant’s solicitor whose client has suffered an injury abroad will want to inform himself whether the law of the place of the injury creates a sufficiently generous law for establishing liability – for instance, does negligence have to be proved or is strict liability applied? Is a deduction made for contributory negligence when the Claimant allows himself to be driven by a drunk? Are
there statutory regulations which have to be strictly complied with? The Defendant’s solicitor will carry out the same investigation before deciding whether to challenge the Claimant’s case as to the correct applicable law. Unless, a party pleads (and proves) foreign law, the court will simply apply English law.
Standards a matter for local rules?
The applicable law may lay down what the ingredients of the relevant tort comprise – for instance, if strict liability applies, there is no ingredient of proving ‘fault’, but it may be necessary (for instance in a road accident) to establish the occurrence of an impact with the defendant’s car. Where the applicable law requires proof of fault, typically proof of a lack of reasonable care, it may be more difficult to identify the standard by which proof of fault may be established. One might suggest that the question of the relevant standard will usually be determined by reference to the standards of the place where the accident occurred. Thus, in France one is expected to drive on the right, not the left. In California one is entitled to go through a red light to turn right, provided one gives way to traffic coming from the left. Breach of duty will therefore usually be judged by these standards or rules.
However, in the field of industrial accident or disease claims, the position is not so clear. There have recently been claims made against English companies alleging negligence in and about operations in foreign countries where the whole spectrum of industrial safety lags several decades behind that in this country. These claims appear to have proceeded on the basis that the appropriate standard for safeguarding workmen is a universal one applicable worldwide, regardless of the applicable law, rather than a standard tailored to local conditions.
The law applicable to quantum
If proceedings are to be brought in England, the determination of the law,
quantum (because of the links between the parties and England) thereby enabled the Plaintiff to recover general damages which would not have been available had Maltese law been applicable.
Dicey & Morris (13th Ed. 2000) gives examples at paragraph 35-055 of quantum issues which raise questions of substantive law:
[Q]uestions such as whether loss of earning capacity or pain and suffering or (in fatal accident claims) solatium or loss of society are admissible heads of damage; all questions of remoteness of damage; the existence and extent of the claimant’s duty to mitigate damage; whether exemplary damages are recoverable; the existence and extent of financial ceilings on recoverable damages; and whether recovery can be had for any head of damage unknown to English law; are questions of substantive law.
However, there may be debate as to whether a specific issue raises a question of procedural or substantive law.
In Hulse v Chambers [2001] 1 WLR 2386, another case of English victims and tortfeasor involved in a hire car accident in a foreign country (Greece) (but one where, perhaps surprisingly, the Claimants conceded that Greek law was the applicable law), Holland J. determined that the assessment of general damages for pain and suffering and loss of amenity was a matter of procedural, rather than substantive, (Greek) law. Therefore, the fact that Greek awards for such damages were far lower than those made by the English courts would not avail the Defendant.
The dividing line between substance and procedure was considered recently by the Court of Appeal in Harding v Wealands [2005] 1 WLR 1539. The majority held that rules which govern the extent to which damages may be recoverable are prima facie substantive and fall to be determined in accordance with the applicable law – in doing so they refused to follow dicta to the contrary in Roerig. They held that provisions, amongst other things, capping the level of damages, and setting the rate of multiplier and interest were substantive. The decision in Hulse may now need to be reconsidered. What are required, however, are rules – the mere fact that courts in certain jurisdictions tend to award more or less (insofar as this is not reflected in rules) is irrelevant. So if juries in a certain US State conventionally award higher damages than the court would in England that is irrelevant unless the juries are applying a different legal rule. Harding is now on its way to the House of Lords.
Another area of doubt concerns the deductibility of benefits from financial compensatory awards. For instance, should a rule such as that enunciated in Parry v Cleaver [1970] AC 1, (that proceeds of insurance and pension benefits arising out of an injury at work should be ignored in the computation of damages for loss of earnings), be treated as being substantive or procedural? The Court of Appeal decision in Roerig, approving as it does the approach of Hodgson J in a pre-Act decision, Coupland v. Arabian Gulf Petroleum [1983] 1 WLR 1136, comes down firmly, if strictly obiter, in favour of such a rule being procedural in nature. To some extent, each case must depend on its consideration of the foreign law in question.
The Impact of Insurance
Under a number of foreign systems of law the liability insurers of the tortfeasor are made directly liable to the victim of an accident caused tortiously by their insured, and accordingly the insurers can be sued directly by the victim. Under English law there is a limited right of action direct against Insurers provided by the European Communities (Rights against Insurers) Regulations 2002, but this only applies with respect to causes of action for accidents in the U.K. In respect of accidents abroad which are governed by English law there is no direct cause of action against Insurers and the tortfeasor alone must be sued.
If a direct action is available against an insurer arising out of an accident abroad, the question whether any advantage will accrue from such course of action will depend upon the applicable foreign law. This will require advice from a suitably qualified foreign lawyer. In most cases of tortious conduct, particularly that committed by individuals, the existence and extent of insurance cover is a paramount consideration. In the case of road traffic accidents the expectation is that there will be insurance available. The Road Traffic Act 1988, after all, requires compulsory insurance and effectively insists upon unlimited liability insurance, by the requirement that the relevant insurer must satisfy without limit any judgment obtained against its insured. Then there is the MIB scheme to cover uninsured drivers. But the Road Traffic Act does not apply to regulate insurance arrangements outside the U.K. and there is no guarantee in foreign jurisdictions:
(a) that insurance is compulsory;
(b) that insurance, if compulsory, is set at an adequate minimum limit of indemnity;
(c) that there is any effective compensatory mechanism to deal with the lack of insurance where such insurance is compulsory.
applicable under the 1995 Act to issues of quantum in the case, is only part of the story. The applicable law only governs the substantive law applicable to the case. The law of the country where the proceedings are brought (the
lex fori) governs the procedural law. An
assessment of quantum involves both substantive and procedural law. One can see that this must be so at the extremes: it is a procedural rule of English law that damages fall to be assessed by judge (or jury), but not by professionally qualified assessors. Therefore, if it be the law of damages of a foreign country that damages are assessed in such a manner, such law will not be applied in a case brought in England, regardless of the applicable law of the tort.
On the other hand, the “heads of damage” recoverable in an action in tort have long been held to be governed by substantive, not procedural, law, i.e. by the applicable law as determined by section 11 or 12 of the Act, not by the
lex fori. In the old pre-Act case of Boys v Chaplin [1971] A.C. 356 the tortfeasor
and victim were both English servicemen in Malta who were involved in a motor accident. The law of Malta did not permit recovery of general damages for “pain and suffering and loss of amenity”, so that such head of damage was irrecoverable under Maltese, but recoverable under English, law. The House of Lords, in deciding that English law was the substantive law governing quantum (because of the links between the parties and England) thereby enabled the Plaintiff to recover general damages which would not have been available had Maltese law been applicable.
Dicey & Morris (13th Ed. 2000) gives examples at paragraph 35-055 of quantum issues which raise questions of substantive law:
[Q]uestions such as whether loss of earning capacity or pain and suffering or (in fatal accident claims) solatium or loss of society are admissible heads of damage; all questions of remoteness of
damage; the existence and extent of the claimant’s duty to mitigate damage; whether exemplary damages are recoverable; the existence and extent of financial ceilings on recoverable damages; and whether recovery can be had for any head of damage unknown to English law; are questions of substantive law.
However, there may be debate as to whether a specific issue raises a question of procedural or substantive law.
In Hulse v Chambers [2001] 1 WLR 2386, another case of English victims and tortfeasor involved in a hire car accident in a foreign country (Greece) (but one where, perhaps surprisingly, the Claimants conceded that Greek law was the applicable law), Holland J. determined that the assessment of general damages for pain and suffering and loss of amenity was a matter of procedural, rather than substantive (Greek) law. Therefore, the fact that Greek awards for such damages were far lower than those made by the English courts would not avail the Defendant.
The dividing line between substance and procedure was considered recently by the Court of Appeal in Harding v
Wealands [2005] 1 WLR 1539. The
majority held that rules which govern the extent to which damages may be recoverable are prima facie substantive and fall to be determined in accordance with the applicable law – in doing so they refused to follow dicta to the contrary in Roerig. They held that provisions, amongst other things, capping the level of damages, and setting the rate of multiplier and interest were substantive. The decision in Hulse may now need to be reconsidered. What are required, however, are rules – the mere fact that courts in certain jurisdictions tend to aware more or less (insofar as this is not reflected in rules) is irrelevant. So if juries in a certain US State conventionally award higher damages than the court would in England that is irrelevant unless the
Even in EU states, where road traffic liability insurance is compulsory and there is a mechanism for providing compensation where such insurance has not been taken out, the minimum required cover is inadequate to cover awards in the U.K. for injuries of maximum severity.The Second Council Directive of 30th
September 1983 on Motor Insurance (84/5/EEC) fixed the requirement at only 350,000 Euros (less than £250,000); the Fifth Motor Insurance Directive, passed in April 2005, but effective only from 2007 (and then subject to a transitional period) will increase minimum permitted insurance limits to 1 million euros per victim or 5 million euros per accident.
From the Insured’s point of view, his contractual right to indemnity under any insurance policy will be determined in accordance with the proper law of the insurance contract. Where a car is hired abroad and insurance obtained at the point of hire, this law will almost undoubtedly be the law of the place of hiring.
There is a very real problem here for tourists who hire cars, since it is simply not practicable to take out additional insurance for third party liability when one is finalising the car hire arrangements in a foreign tourist resort. Even where insurance is provided well above the EU required minimum (as in the Hulse case) it may be capped at a figure referable to the maximum conceivable award in the foreign country, a figure which is still woefully inadequate to cover large quantum claims assessed in accordance with English law or assessment of damage. There may be an opening here for holiday insurers to offer an extension to their product which would be of real value to their clients.
Conclusion
The most important advice to anyone dealing with a claim arising out of an accident overseas is to seek to identify any jurisdiction or choice of law issue as soon as possible. As seen above, any jurisdictional challenge must be made swiftly, and foreign law needs to be pleaded. Further if a party is considering taking a jurisdictional point or relying on foreign law it is important to obtain the advice of a foreign lawyer at an early stage to help determine whether there is any practical advantage in disputing jurisdiction or relying on a foreign law. There is little point in disputing jurisdiction or relying on a foreign law if the foreign jurisdiction or law is likely to be less favourable to the client.
Disclaimer:
No liability is accepted by the authors for any errors or omissions (whether negligent or not) that this article may contain. The article is for information purposes only and is not intended as legal advice. Professional advice should always be obtained before applying any information to particular circumstances.
About the authors
Howard Palmer Q.C.
MA (Oxon)
Call 1977
Howard has wide experience in national and international litigation and arbitration, including conflicts of laws, insurance and reinsurance, construction and engineering contracts, fire and flood recoveries, professional and clinical negligence and personal injury. He is presently involved in preparation for two House of Lords appeals in the field of professional negligence and conflicts of laws (Haward v Fawcetts; Harding v Wealands).
He has been involved in other high profile Conflicts of Laws cases in the recent past. These include Knauf UK GmbH v Fritz Peters KG (C.A.) – attempt to bring suit in U.K. forum rather than Germany; Hamill v Hamill – Spanish Insurers of British driver in Spain); W. Moore (a patient) v HCI (Kent) Ltd.-Employer suing third party over scaffold accident in the Netherlands. Harding v Wealands is at present the leading authority on the applicable law in tort and the proper application of the
foreign law of quantum.
He has appeared in arbitration and litigation overseas. He has been called ad hoc to the Bar of Brunei.
Direct line +44(0)20 7822 1249 E-mail [email protected]
Charles Dougherty
BA (Oxon)
BCL (Oxon)
Call 1997
Charles specialises in commercial law, in particular conflict of laws, insurance and reinsurance work and commercial fraud. He is a former law lecturer and management consultant. Charles has extensive experience of dealing with disputes as to jurisdiction and applicable law. Notable reported cases in the area include Hulse v Chambers [2001] 1 WLR 2386 and Harding v Wealands [2005] 1 ALL ER 415 (CA). He is a contributor to, and assistant editor of, European Civil Practice (Sweet & Maxwell, 2004, 2nd ed).
He also has wide experience of insurance/reinsurance disputes arising out of a range of types of covers, including property, life, fidelity, professional indemnity, jewellers, employer’s liability, public liability, personal accident and business interruption. Recent policy dispute cases in the Commercial Court include Pedley v Avon Insurance (2003) and Flintlease Ltd v Markel Capital Ltd (2004). He has also acted in a large number of cases for and against brokers, including the recent case of AIG v Whiteleys Insurance Consultants (2003). He recently appeared (with Colin Edelman QC) for reinsurers in an 8 week £14m claim against its former brokers for conspiracy to defraud - R+V Versicherung AG v Risk. He has lectured extensively on commercial fraud, insurance and the conflict of laws.
Direct line +44(0)20 7822 1262 E-mail [email protected]
