Direct line

Personal injury practitioners acting for English tourists injured in road traffic accidents occurring in another EU member state are currently facing a legal dilemma concerning issues of jurisdiction and the applicable law arising out of such claims.

The rules of jurisdiction in direct actions against European domiciled insurers were considered by the European Court of Justice in FBTO Schadeverzekeringen NV v Jack Odenbreit (C-463/06) on 13 December 2007. The decision was a major victory for English claimants as it meant that they no longer had to sue the tortfeasor in the court of his or her domicile but could consider whether a direct action against the tortfeasor's insurers in the English courts was an option.

Shortly thereafter, further changes were brought about by what has colloquially been referred to as Rome II, the new regulation on choice of law in tort, which brought about a reversal of fortune for English claimants, as English law would no longer apply to the assessment of damages in cases where the English court had jurisdiction.

Odenbreit paved the way for English claimants injured in another member state to bring a direct action against the European insurer of the tortfeasor in an English court provided that: (i) the insurer is domiciled in a member state; and (ii) the national law permits it.

Interpretation of 'national law'

The first requirement seems unlikely to pose any difficulties for practitioners. However, the second requirement was the subject of litigation in the recently reported English case of Yvonne Helen Jones v Assurances Generales de France (AGF) SA (2009) LTL 25/8/2009 (unreported elsewhere). The issue in this case was as to the correct interpretation of the phrase 'national law' within the meaning of articles 9(1)(b) and 11(2) of Regulation 44/2001. The claim was issued in the Mayors and City of London County Court by an English claimant against a French insurance company in respect of personal injuries sustained as a result of a road traffic accident, which occurred on 21 November 1998 in France. The defendant contested the court's jurisdiction in an Acknowledgment of Service and subsequently applied for an order that the claim be struck out on that basis.

At the hearing of the defendant's application to strike out (which came before Judge Birtles) the argument advanced on behalf of the defendant was that the ECJ in Odenbreit had used the phrase 'national law' as referring to the law of the court determining the dispute and not as the law governing the insurance contract. As the claimant did not have a direct right of action against the defendant insurance company under English law, the defendant submitted that the English court did not have jurisdiction to hear the case.

The application was dismissed and the claimant was able to pursue her claim directly against the defendant insurers.

It was held that the test was whether the direct action was permitted at the time of the accident by the law governing the insurance contract (in this case French law) and the Odenbreit principle was applied.

The decision in Jones clarified that the applicable law was not the law of the national court in which the claim was brought but rather the correct test in cases involving direct actions against insurers was to look at the law governing the contract of insurance. In short, as a direct action against insurers was permitted by French law, Ms Jones was able to bring a claim against the defendant insurer in England.

According to the judgment in Jones, and to the best of counsel for the parties' research, the only reported English decision on the Odenbreit principle was a decision of Mr Justice Blair in Maher v Groupama Grand Est [2009] EWHC 38 (QB) on 23 January 2009. This case involved similar facts.

Pre-judgment interest on damages

The claim arose out of a road traffic accident, which occurred on 29 July 2005 while Mr Maher was driving his car on a road in France with his wife as a passenger. Mr and Mrs Maher were involved in a collision with a van, and sustained personal injuries as a result for which they brought a claim for damages in the English High Court. The claim was brought directly against a French insurance company, the defendant, which insured the driver of the van.

Interestingly, jurisdiction was not an issue in dispute in Maher, it having been agreed by counsel for both parties. The issues that needed to be determined in that case were as to the applicable law for the purposes of the assessment of damages and pre-judgment interest on those damages.

As this was apparently the first reported English decision in a direct action against the insurer following Odenbreit, there were no authorities on those issues. If the claim had been brought against the tortfeasor, there would have been no doubt as to the applicable law and the question was whether the fact that the claim was a direct one against the tortfeasor's insurers made any difference.

The matter came before Mr Justice Blair in a trial of the preliminary issues, which were determined as follows:

(i) damages were to be assessed by reference to English law in accordance with Harding v Wealands (the accident date meant that Rome II did not apply); and

(ii) both French and English law were potentially relevant to the award of pre-judgment interest on those damages.

Although the jurisdictional basis for bringing a direct claim against the defendant insurer was not in dispute in Maher, Mr Justice Blair nevertheless examined the same and commented obiter that the right was apparently being exercised quite frequently in respect of road accidents in Europe involving injured parties from England. According to Mr Justice Blair's obiter comments, English parties injured in road traffic accidents occurring in other member states were opting to sue the tortfeasor's insurers directly and pursue their claims in English courts.

The upshot of the decision in Jones is that the jurisdiction of the English courts to deal with such claims has now been established beyond doubt, so long as the insurer is domiciled in a member state where a direct action is permitted.

It follows, therefore, that the English court's jurisdiction to deal with such claims is unlikely to be a contested issue in future cases. However, the starting point for practitioners acting on behalf of prospective

English claimants will be to obtain a copy of the insurance policy and check whether the law governing the contract of insurance permits a direct claim against the insurer. This may lead to additional costs being incurred by personal injury practitioners having to investigate the relevant insurance policy and apply foreign law to determine issues of jurisdiction and also, in cases where Rome II applies, to quantify damages.