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Clinton Jacobs v. Motor Insurers Bureau


Court of Appeal

The Court of Appeal has today handed down a landmark judgment which provides a high degree of protection for Claimants who have been the victims of a road traffic accident whilst abroad caused by an uninsured driver.

Clint Jacobs was standing in a car park in Fuengirola, Spain when an uninsured vehicle collided with him, causing Mr Jacobs to suffer significant personal injury. The vehicle was driven by a Herr Bartsch (a German national understood to have a residence in Spain), who had no policy of insurance for the vehicle.

In such a case, the normal course would have been to bring proceedings against the Spanish Guarantee Fund. That would have required the Claimant to sue in Spain, requiring Spanish lawyers to conduct the case, which would have been governed by Spanish levels of compensation (substantially lower than English levels of compensation) and Spanish costs.

Mr Jacobs took a novel route available as a result of rules introduced into English law to implement the Fourth Motor Insurance Directive (2000/26/EC): he chose to sue the Motor Insurers Bureau (MIB), acting in its capacity as Compensation Body. In its defence, the MIB accepted that the Claimant was entitled to sue the MIB in the English courts and that it was liable to compensate the Claimant, however the MIB disputed that English law governed the assessment and quantification of the amount of compensation due to Mr Jacobs; MIB argued that Spanish law should apply, being the law of the place of the accident.

Before Owen J, the MIB successfully argued that Spanish law applied. Today, the Court of Appeal (Laws, Moore-Bick and Rimer LJJ) have upheld the Claimant’s appeal that English law applies to the assessment and quantification of Mr Jacobs’ losses. The result of the ruling of the Court of Appeal is that Claimants have a straight forward remedy available from the MIB, assessed on the basis of English principles of compensation, irrespective of the country where the accident occurred (provided the accident occurred in Europe). There is no need to retain foreign lawyers nor apply a foreign system of law to quantification of loss. There is no necessity to instruct foreign medical experts familiar with the requirements of the foreign applicable law. Injured Claimants are likely to obtain much improved levels of compensation in accidents involving uninsured drivers in particular when compared with the southern European jurisdictions (Spain, Portugal, Greece).

The rules permitting a claim against the MIB acting in its capacity of Compensation Body are to be found in the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003. Regulation 13(1) describes the necessary preconditions for proceedings, namely that the Claimant reside in the United Kingdom; he or she must have been the victim of an accident in an EEA State caused by a vehicle normally based in an EEA State; and that it has proved impossible to identify the vehicle the use of which is alleged to have been responsible for the accident or to identify an insurance undertaking which insures the use of the vehicle. Regulation 13(2)(a) allows a claim for compensation from the compensation body (defined as the MIB by regulation 10). Regulation 13(2)(b) then provides: “the compensation body shall compensate the injured party in accordance with the provisions of Article 1 of the [Second Motor Insurance Directive] as if it were the body authorized under paragraph 4 of that Article and the accident had occurred in Great Britain.”

At first instance ([2010] EWHC 231 (QB)), Owen J. found the meaning of regulation 13 to be clear. However, he also found that the English regulations were subject to the doctrine of supremacy arising from European law, and in particular the application of the Rome II Regulation, namely Regulation 864/2007 on the law applicable to non-contractual obligations, which in effect trumped the English regulations. Owen J. therefore found that the proper law of the tort was Spanish law, and that the right of compensation against the MIB was also governed by Spanish law, applying Article 4(1) of the Rome II Regulation. (It is believed that the High Court was the first court of record of first instance throughout the European Union to make a determination under the Rome II Regulation).

The Claimant appealed on the principal basis that the cause of action against the MIB did not involve a choice of law but implemented the provisions of the Fourth Directive without reference to Rome II. The Claimant also argued if there was a choice of law provision, then the 2003 regulations specified what that choice was, alternatively if Rome II applied, then properly analysed Article 4(2) rather than Article 4(1) was the correct provision of Rome II to assess the Claimant’s claim. The MIB argued that the 2003 regulations needed to be looked at in the context of the underlying liability of the uninsured driver and the fact that the ultimate liability would pass to the Spanish guarantee fund under an Agreement negotiated by the respective bureaux to implement the Fourth Directive.

The Court of Appeal found the Claimant’s principal argument to be well-founded and that it was accordingly not necessary to address the alternative arguments under Rome II. The Court of Appeal found support for the conclusion that English law applied when analyzing the parallel regime involving the Compensation Body in cases where an insurer had failed timeously to respond, permitting a claim against the MIB under regulation 12. The Court of Appeal treated as separate any issue in respect of the underlying civil liability of the driver, which matter had not been the subject of harmonization by Europe in the motor insurance directives. The Court of Appeal rejected an argument that awarding compensation according to English principles would be wrong because it was anomalous since such amount of compensation would differ from the liability of the driver or an insurer of the driver. Rome II did not apply because regulation 13(2)(b) was not a choice of law clause. The Court of Appeal therefore ruled that the MIB is obliged to pay compensation to the Claimant assessed in accordance with the law of England.
Alex Layton QC and Philip Mead appeared for the Claimant, instructed by Kimberley Owen at Russell Jones & Walker, London.

[2010] EWCA Civ 1208

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