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Coris News - November 2008

Coris UK wishes everyone a Happy Christmas. This year's final edition focuses on ROME II.

Last Month Michael Zurbrugg spoke in Luxembourg at the annual conference
Organised by the Institute for European Traffic Law in cooperation with the
Academy Of European Law.

In what is inevitably only a very brief consideration of the issues we reproduce extracts from that speech focusing on the advent of Regulation 864/2007 (ROMEII) following the earlier decision last December by the European Court of Justice in the Odenbreit case (see Coris News-February 2008).

If the decision of the European Court of Justice given on 13 December 2007 clarifies the position of individual claimants who have been the victim of accidents in another Member State as to jurisdiction and their ability to bring a direct action in their country of residence against the relevant insurer, this constitutes an answer to but one part of the question facing parties to such litigation.

Those involved also need to know what will be the law applicable to such cases once the Courts in the victims' home countries are seised of their claims. Rules governing the law applicable in such cross-border cases show marked differences across the Community. In the field of road traffic accidents some Member States are signatories to the Hague Convention of 4 May 1971 but others, including the United Kingdom, are not. Rome II makes an attempt to harmonise those divergent approaches.

In the United Kingdom the question of applicable law in such instances was long a question of common law with various principles emerging from decided cases. However the position was codified under Part III of the Private International Law [Miscellaneous Provisions] Act 1995.

Section 11 of this Act provides a general rule that the "applicable law" is the "law of the country in which the events constituting the tort or delict in question occur" [lex loci delicti]. Section 12 provides for the displacement of the general rule in certain cases in which it is "substantially more appropriate "for the applicable law to be different.

In subsequent cases where it was considered that the general rule should be applied distinctions have however been maintained between questions of substantive and procedural law. The leading case on this subject Harding v Wealands is a decision of the House of Lords following a road traffic accident in New South Wales.

Liability for the accident was admitted but the question arose as to whether the English Court should assess the damages according to English law or whether that process was to be regulated by the law of New South Wales, which limited the amount of damages which could be recovered in a number of important respects.

The outcome was that the statutory provision governing damages in New South Wales was held to be procedural and therefore fell to be ignored and the English Court awarded damages for the injuries along conventional domestic principles.

The result for the victim was that substantially greater damages were awarded than would have been the case had the law of New South Wales been followed as this included various caps or limits on damages, all of which were considered procedural in nature.

How will the position be affected by the advent of Regulation 864/2007 (Rome II) which comes into force on 11th January 2009 and is said to apply to accidents occurring after 19/08/2007?

Article 4 of Regulation 864/2007 sets out the general rule namely that the applicable law shall be the law of the country in which the damage occurs. For the purposes of personal injury claims Recital 17 makes clear that this is to be the law of the country where the injury was sustained or the property was damaged.

Article 4 .2 provides a specific exception where the person claimed to be liable and the person who has sustained damage both have their habitual residence in the same country in which event the law of that country should apply.

Article 4.3 provides a more general exception leading to the application of another law where the tort/delict is "manifestly more closely connected" with a country other than that indicated in Article 4.1 or 4 2.

Article 15 provides that the scope of the law applicable is to be very wide. It will govern amongst other issues:
a the basis and extent of liability;
b the grounds for exemption from liability, restriction of liability or any contributory negligence;
c the existence, the nature and the assessment of damage or the remedy claimed. It is also to govern questions of prescription or limitation and, by virtue of Article 22, rules which raise presumptions of law or determine the burden of proof.

Subject to that exception, Article 1.3 stipulates that the Regulation shall not apply to evidence and procedure.

What does this mean in practice?

In a few short months both lawyers and the Judiciary face the increased prospect of dealing with cases before their own Courts but subject to the law of another country. English Judges may find themselves having to pronounce on cases where Greek law is to be applied. Hungarian Judges may have to decide upon points of Portuguese law and Irish Judges apply Italian Law. Except in the rarest of circumstances those dealing with such issues will have little or no experience of the foreign law in question.

English Courts consider that the best evidence is usually oral evidence and we can therefore envisage an increasing number of cases where an English Judge will find himself having to decide between what are very possibly competing interpretations of the law of another country. It is not suggested that this is impossible but it is certainly complicated and can be very time consuming, and extremely expensive.

However the issue of assessment of damages in personal injury cases raises other more delicate issues by reason of the fact that there are frequently overlapping considerations between law and procedure when it comes to the different approaches adopted by Courts across Member States . In France damages for personal injuries are usually assessed by the Courts by reference to the reports of Court-appointed medical experts who are charged with assessing injuries in accordance with pre-determined scales and percentages. French procedure provides rules for the appointment of such experts; how they are to be paid; how their intervention is monitored and the circumstances in which their reports can be challenged. It goes without saying that no corresponding procedure exists in England. How one may ask is an English Judge to proceed in the light of the provision that neither questions of evidence nor procedure are to be regulated by Rome II, but where he is nevertheless required to apply French law?

One example of the sort of difficulty which can arise is illustrated by the recent English case of Dawson v Broughton which resulted from a fatal road traffic accident in France. The learned Judge found under our 'general rule' that French law should apply to the case whilst at the same time he felt it appropriate as a result of the claimants bringing their claim before the English court to reduce the entitlement to compensation by a factor to reflect the position that the deceased passenger had not been wearing a seat belt, thereby disregarding the French legal position, and applying a concept of English law under which the wearing of seatbelts is mandatory and the failure to respect that provision is frequently regarded as constituting a degree of contributory negligence - a strange hybrid of English and French law and a possible foretaste of things to come?
It seems likely that if a similar case were decided following the introduction of Rome II English law would normally be deemed to be the applicable law under Article 4.2 in circumstances where the parties involved both have their habitual residence in the United Kingdom, whereas if the claim were brought following Odenbreit against the insurer of the French driver involved in the accident French law would be considered applicable, being the law of the country where the accident took place. In that case no account would normally be taken of a failure to wear a seatbelt under the 'Loi Badinter'.

This also begs the question of what will be deemed the applicable law in a case where an innocent passenger brings a claim against two defendants one of whom is based in his own country of residence and the other in the territory of another Member State?

One law for one Defendant and another for the other?

Michael Zurbrugg

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