[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | ||
United Kingdom Supreme Court |
||
You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Moreno v The Motor Insurers' Bureau [2016] UKSC 52 (3 August 2016) URL: http://www.bailii.org/uk/cases/UKSC/2016/52.html Cite as: [2017] 4 All ER 28, [2016] UKSC 52, [2016] 1 WLR 3194, [2017] PIQR P3, [2016] RTR 26, [2016] WLR(D) 453 |
[New search] [Context] [View without highlighting] [Printable PDF version] [Buy ICLR report: [2016] 1 WLR 3194] [View ICLR summary: [2016] WLR(D) 453] [Help]
[2016] UKSC 52
On appeal from: [2015] EWHC 1002 (QB)
JUDGMENT
Moreno (Respondent) v The Motor Insurers’ Bureau (Appellant)
before
Lord Mance
Lord Clarke
Lord Sumption
Lord Toulson
Lord Hodge
JUDGMENT GIVEN ON
3 August 2016
Heard on 12 and 13 July 2016
Appellant Hugh Mercer QC Marie Louise Kinsler Alistair Mackenzie (Instructed by Weightmans (Liverpool)) |
|
Respondent Daniel Beard QC Sarah Crowther (Instructed by BL Claims) |
LORD MANCE: (with whom Lord Clarke, Lord Sumption, Lord Toulson and Lord Hodge agree)
1. On 17 May 2011, the respondent, Ms Tiffany Moreno, a United Kingdom resident, was on holiday in Greece. Walking along the verge of a road, she was struck from behind by a vehicle registered in Greece driven by a Ms Kristina Beqiri. Ms Beqiri had neither a valid driving licence nor it appears any insurance and is admitted to have been responsible for the accident. Sadly, Ms Moreno suffered very serious injuries, which included loss of her right leg requiring her to use a wheelchair, continuing pain and psychological reaction, as well as loss of earnings. The preliminary issue the subject of this appeal is whether the scope of her claim to damages is to be determined in accordance with English or Greek law.
2. Ms Moreno’s claim is against the Motor Insurers’ Bureau of the United Kingdom (the “UK MIB”). That it can be pursued against the UK MIB is the result of a series of Council Directives of the European Economic Community (now Union) dating back to 1972 and culminating in a codified Sixth Directive 2009/103/EC of 16 September 2009. These Directives are in part transposed into English law by The Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 (SI 2003/37) (“the 2003 Regulations”). The 2003 Regulations were enacted prior to the codifying Sixth Directive and therefore refer to the earlier Directives. The expressed and obviously beneficial purpose of the arrangements introduced by the Directives and Regulations is to ensure that compensation is available for victims of motor accidents occurring anywhere in the Community (now the Union) and to facilitate their recovery of such compensation. With British exit from the Union, this will, no doubt, be one of the many current arrangements requiring thought.
3. In the present case, the effect of the arrangements is that Ms Moreno is entitled to pursue the UK MIB, rather than pursue Ms Beqiri or search for some (evidently non-existent) insurer of Ms Beqiri or pursue the Greek body responsible for providing compensation in respect of uninsured vehicles involved in Greek accidents. Under the Sixth Directive the UK MIB will, once it has compensated Ms Moreno, be able to claim reimbursement from the Greek compensation body, which will in turn be subrogated to Ms Moreno’s rights against Ms Beqiri. The issue is, as stated, whether the scope of the UK MIB’s liability to Ms Moreno is be measured according to English or Greek law. Ms Moreno’s concern is that Greek law would yield a lesser measure of compensation than English law. It is accepted however that in other contexts the reverse might be the case. There is, for example, evidence that Irish personal injuries’ damages can be significantly higher than English, and that Italian law can in fatal accident cases award significantly more (and, if relevant, to a broader range of persons) than English law.
4. Ms Moreno’s case, advanced on her behalf by Mr Daniel Beard QC, is that the Regulations provide for English law to govern the measure of recovery, and that there is nothing in the Sixth Directive to the contrary or precluding this. Submissions to like effect were accepted in 2010 by the Court of Appeal (Laws, Moore-Bick and Rimer LJJ), overruling Owen J, in Jacobs v Motor Insurers’ Bureau [2010] EWCA Civ 1208; [2011] 1 WLR 2609. The Court of Appeal’s decision in Jacobs was followed in Bloy v Motor Insurers’ Bureau [2013] EWCA Civ 1543; [2014] 1 Lloyd’s Rep IR 75. In the present case, Gilbart J on 17 April 2015 rightly also held himself bound by the decision in Jacobs, but saw very considerable force in a contrary conclusion. On 23 April 2015 he granted the UK MIB’s application for a “leap-frog” certificate under section 12 of the Administration of Justice Act 1969, and the appeal comes before the Supreme Court accordingly, with its permission granted 28 July 2015.
“All claims shall be handled by the bureau with complete autonomy in conformity with legal and regulatory provisions applicable in the country of accident relating to liability, compensation of injured parties and compulsory insurance …”
Article 5(1) provides for the local bureau which has thus settled a claim arising out of an accident to be able to demand reimbursement of the sums paid as compensation, together with costs and a handling fee, from the member of the bureau (ie the relevant insurer) which issued the Green Card or policy of insurance or, if appropriate, from the foreign bureau itself, while under article 6(1) each bureau guarantees the reimbursement by its members (ie the insurers) of any amount so demanded.
“guarantees the settlement, in accordance with the provisions of its own national law on compulsory insurance, of claims in respect of accidents occurring in its territory caused by vehicles normally based in the territory of another member state, whether or not such vehicles are insured.”
The relevant Convention complémentaire entre Bureaux nationaux was entered into on 12 December 1973. Article 3(a) provides that it modifies pro tanto the Inter-Bureaux Agreement, the terms of which otherwise remain in force. Domestic effect is currently given to the requirement in article 1(4) of the Second Directive 84/5/EEC of 30 December 1983 for a guarantee by the Uninsured Drivers’ Agreement dated 3 July 2015 made between the Secretary of State for the Environment, Transport and the Regions and the UK MIB.
“set up or authorize a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 [or article 3 of the Sixth Directive] has not been satisfied.”
Article 1(4) of the Second Directive (now article 10(4) of the Sixth Directive) continued:
“... [E]ach member state shall apply its laws, regulations and administrative provisions to the payment of compensation by this body, without prejudice to any other practice which is more favourable to the victim.”
The intention of the legislature in passing the Second Directive was “to entitle victims of damage or injury caused by unidentified or insufficiently insured vehicles to protection equivalent to, and as effective as, that available to persons injured by identified and insured vehicles”: Evans v Secretary of State for the Environment, Transport and the Regions (Case C-63/01) [2004] RTR 32, para 27.
“The objective of this Directive is to lay down special provisions applicable to injured parties entitled to compensation in respect of any loss or injury resulting from accidents occurring in a member state other than the member state of residence of the injured party which are caused by the use of vehicles insured and normally based in a member state.”
“Injured party” was by article 2(d) defined as stated in article 1(2) of the First Directive, that is as “any person entitled to compensation in respect of any loss or injury caused by vehicles”, a definition repeated in article 1(2) of the Sixth Directive.
9. The special provisions included:
(a) a provision that injured parties should enjoy a direct right of action against the insurer covering the responsible person against civil liability: article 3 (now article 18 of the Sixth Directive);
(b) a requirement on member states to ensure that motor liability insurers “appoint a claims representative in each member state” other than that in which they received their authorisation, to be responsible for handling and settling accident claims: article 4 (now article 21(1) of the Sixth Directive);
(c) a requirement that each member state establish or approve an information centre responsible for keeping a register containing information including the registration numbers of vehicles normally based in that state, the numbers of the insurance policy covering their use and their expiry date, if past: article 5(1) (now article 23(1) of the Sixth Directive);
(d) a requirement that each member state “establish or approve a compensation body responsible for providing compensation to injured parties in the cases referred to in article 1”: article 6(1) (now article 24(1) of the Sixth Directive), coupled with a provision entitling such injured parties to present a claim to the compensation body in their member state of residence if within three months the insurer or its claims representative has not provided a reasoned reply to their claim, or the insurer has not appointed a claims representative in the injured party’s state of residence (unless the injured party has taken legal action directly against the insurer);
(e) a provision entitling an injured party to apply for compensation to the compensation body in the member state if “it is impossible to identify the vehicle or if, within two months following the accident, it is impossible to identify the insurance undertaking”: article 7 (now article 25(1) of the Sixth Directive). Article 7 goes on to provide that “The compensation shall be provided in accordance with the provisions of article 1” of the Second Directive (as to which see para 7 above). Article 25(1) says that it will be provided “in accordance with the provisions of articles 9 and 10” of the Sixth Directive, which relate respectively to the requirements on member states to ensure compulsory insurance in minimum amounts and to set up or authorise a compensation body to cover property damage or personal injuries caused by an unidentified or uninsured vehicle (see para 7 above).
“The compensation body which has compensated the injured party in his member state of residence shall be entitled to claim reimbursement of the sum paid by way of compensation from the compensation body in the member state of the insurance undertaking’s establishment which issued the policy.
The latter body shall then be subrogated to the injured party in his rights against the person who caused the accident or his insurance undertaking in so far as the compensation body in the member state of residence of the injured party has provided compensation for the loss or injury suffered. Each member state is obliged to acknowledge this subrogation as provided for by any other member state.”
Subject to very minor linguistic differences, article 24(2) of the Sixth Directive is identical.
12. Article 7 (now article 25(1)) read:
“… The compensation body shall then have a claim, on the conditions laid down in article 6(2) of this Directive:
(a) where the insurance undertaking cannot be identified: against the guarantee fund provided for in article 1(4) of [the Second] Directive 84/5/EEC in the member state where the vehicle is normally based;
(b) in the case of an unidentified vehicle: against the guarantee fund in the member state in which the accident took place;
(c) in the case of third-country vehicles: against the guarantee fund of the member state in which the accident took place.”
“(a) after an agreement has been concluded between the compensation bodies established or approved by the member states relating to their functions and obligations and the procedures for reimbursement;
(b) from the date fixed by the Commission upon its having ascertained in close cooperation with the member states that such an agreement has been concluded.”
“7.1. In either of the situations referred to …, the Compensation Body which has received a claim must immediately inform, depending on the circumstances, either the Guarantee Fund defined in article 1 of [the Second] Directive 84/5/EEC of the member state in which the accident took place or the Guarantee Fund of the member state in which the road traffic vehicle which caused the accident is normally based.
7.2. When it makes a compensation payment to an injured party, the Compensation Body shall:
- reply to requests for information enabling the claim to be assessed, which it receives from the final paying body for reimbursement (Guarantee Fund),
- apply, in evaluating liability and assessing compensation, the law of the country in which the accident occurred,
- comply with the provisions of article 1 of Directive 84/5/EEC. …
8.1. When a Compensation Body has compensated upon request an injured party, it is entitled to receive, depending on the circumstances of the accident, either from the Guarantee Fund of the member state in which the accident took place or from the Guarantee Fund of the member state in which the road traffic vehicle which caused the accident is normally based, reimbursement containing, to the exclusion of everything else, the following:
8.1.1. the amount paid in compensation to the injured party or his/her beneficiaries; specifying the amounts paid as material damage and as bodily injury;
8.1.2. the sums paid for external services - such as, for example, experts’, lawyers’ or doctors’ fees - inherent in the instruction and the in or out-of-court settlement of the claim;
8.1.3. the handling fees covering all other costs as defined by clause 8.3 hereof.
8.2. The amount to be reimbursed may only be disputed by the final paying Guarantee Fund if the Compensation Body which settled the injured party’s claim has ignored objective material information given to it or has not observed the rules of applicable law.”
“If the injured party satisfies the compensation body as to the matters specified in paragraph (4), the compensation body shall indemnify the injured party in respect of the loss and damage described in paragraph (4)(b).
The matters referred to in paragraph (3) are -
(a) that a person whose liability for the use of the vehicle is insured by the insurer referred to in regulation 11(1)(c) is liable to the injured party in respect of the accident which is the subject of the claim, and
(b) the amount of loss and damage (including interest) that is properly recoverable in consequence of that accident by the injured party from that person under the laws applying in that part of the United Kingdom in which the injured party resided at the date of the accident.”
“(2) Where this regulation applies -
(a) the injured party may make a claim for compensation from the compensation body, and
(b) 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 authorised under paragraph 4 of that article and the accident had occurred in Great Britain.”
18. Moore-Bick LJ, giving the sole reasoned judgment in Jacobs, expressed the view at para 21 that:
“The scheme [of articles 6 and 7 of the Fourth Directive] appears to proceed on the assumption that the existence of the driver's liability and the determination of the amount of compensation payable to the injured party will be governed by the same principles at all stages of the process, but the Fourth Directive does not go so far as to provide that such questions are to be determined by reference to the law of the country in which the accident occurred.”
He noted (para 22) that, at the date of the Fourth Directive, there was no universal rule governing the question what law should govern liability and damages in tort, and that at that date the position in English law was that:
“issues of liability and heads of recoverable damages were normally determined by reference to the law of the place where the accident occurred, but the assessment of damages was determined by English law as the lex fori, as subsequently confirmed by the decision of the House of Lords in Harding v Wealands [2007] 2 AC 1.”
He also noted (para 23) that, if a victim could recover from the compensation body in his or her own country more than he or she could have recovered from the driver responsible for the accident or the driver’s insurer, that might be regarded as anomalous, but did not ultimately think (para 30) that “this anomaly, such as it is, provides sufficient grounds” for giving a domestic regulation “a meaning it does not naturally bear”.
“may at first sight appear to be inconsistent with the scheme of the Fourth Directive, the Directive itself does in fact contemplate the existence of such arrangements, since article 10(4) provides:
‘Member states may, in accordance with the Treaty, maintain or bring into force provisions which are more favourable to the injured party than the provisions necessary to comply with this Directive.’”
Article 10(4) is now article 28(1) of the Sixth Directive. A problem about Moore-Bick LJ’s observation in this connection is that it overlooks the previously mentioned possibility that the level of compensation under English law can be less favourable than that provided under the law of the state of the accident.
“I think it is reasonably clear from the recitals to the Second Directive that its purpose was to assimilate the position of the victim of an unidentified or uninsured driver or vehicle to that of the victim of an identified and insured driver or vehicle; it is not its purpose to require the establishment of a system of no-fault compensation. It is, therefore, implicit in the scheme of the Second Directive that the victim must be able to establish that the driver is liable to him in respect of his injuries, but whether that requires proof of fault will depend on the law of the country in which the accident occurred. The reference in regulation 13(1)(c)(ii) to an insurance undertaking which insures the use of the vehicle assumes the existence of a liability on the part of the driver which ought to be, but is not, covered by insurance. It follows, in my view, that the obligation imposed on the bureau by regulation 13(2)(b) to compensate the injured party in accordance with the provisions of article 1 of the Second Directive carries with it the implicit proviso that the injured party must be able to show that the driver is liable to him. As in the case of a claim under regulation 12, that is a question to be determined by reference to the applicable law identified in accordance with the appropriate conflicts of laws rules. At the time the 2003 Regulations were made the applicable rules were those of the Private International Law (Miscellaneous Provisions) Act 1995, but since the introduction of Rome II, the rules set out in that Regulation will apply and will normally lead to the application of the law of the country in which the accident occurred.”
22. However, Moore-Bick LJ continued at the end of para 34 and in para 35:
“34. … It does not necessarily follow, however, that it does not have the effect for which Mr Layton contended. A legal fiction may have consequences beyond its immediate purpose.
35. The mechanism by which the bureau’s obligation to compensate persons injured in accidents occurring abroad involving uninsured or unidentified drivers is established is to treat the accident as having occurred in Great Britain, but in the absence of any provision limiting its scope it is difficult to see why it should not also affect the principles governing the assessment of damages, particularly in the absence at the time of complete harmonisation throughout the EEA of the conflicts of laws rules governing that issue.”
25. Before the Supreme Court Mr Beard representing Ms Moreno supports the reasoning and conclusions of the Court of Appeal in Jacobs. He accepts, as did Moore-Bick LJ, that this may lead to some apparent anomalies, but submits that they are either capable of satisfactory resolution or insignificant and that the domestic legislator can be taken in the 2003 Regulations to have adopted a measure of recovery which reflected the basis of recovery under English law in respect of a foreign tort at the relevant times, and would have been seen as both convenient and favourable to the claimant.
26. In construing the 2003 Regulations, the starting point is that they should, so far as possible, be interpreted in a sense which is not in any way inconsistent with the Directives: Marleasing SA v La Comercial Internacional de Alimentación SA (Case C-106/89) [1990] ECR I-4135. It was however open to the domestic legislator, as Moore-Bick LJ noted (para 19 above), to introduce provisions “more favourable” to the injured party. But it is unlikely that it would do so by including a provision which could in some circumstances also prove less favourable to the injured party, and so put the United Kingdom in breach of the Directives.
“(a) for the purpose of implementing any EU obligation of the United Kingdom, or enabling any such obligation to be implemented …; or
(b) for the purpose of dealing with matters arising out of or related to any such obligation …”
No question of vires has been raised in this case, and the 2003 Regulations must be approached on the basis that they implement or enable the implementation of the United Kingdom’s EU obligations or deal with matters arising out of or related thereto. In so far as any of the Directives is:
“in general terms leaving member states freedom to decide on the precise means for its implementation, provisions which the United Kingdom makes within the scope of such freedom will on the face of it fall within section 2(2)(a), as being for the purpose of implementing or enabling the implementation of the Directive.”
See United States of America v Nolan [2015] UKSC 63; [2016] AC 463, para 63. But, in so far as the Directives prescribe a particular approach, the interpretive presumption, based on Marleasing (above), is that this was what the domestic legislator intended to be achieved.
“The Guarantee Fund of the member state in which the accident took place, even though it is not responsible for the reimbursement described in Section III below, shall provide, upon request, to the Compensation Body to which a claim for compensation has been made, all necessary advice assistance and information - in particular on the content of the applicable law - and all documents it has available relating to the accident which this body wishes to obtain.”
Section III deals with reimbursement procedures, from the Guarantee Fund either of the member state in which the accident took place or of the member state in which the road traffic vehicle which caused the accident is normally based. The rationale behind clause 7.3 is clearly that the Guarantee Fund of the member state of the accident will be able to provide the necessary information about the applicable law of that state to enable the Compensation Body in the victim’s state to be able to settle the victim’s claim in accordance with that law.
41. As I have already indicated (para 21 above), the Court of Appeal in Jacobs was in my opinion correct in its identification of the basic reasoning behind the expression in regulation 13(2)(b) “as if it were the body authorised under paragraph 4 of that article and the accident had occurred in Great Britain”. Where it went wrong, in my opinion, was in concluding (paras 22-23 above) that this did not exhaust the rationale of that expression. Regulation 13(2)(b) can and should in my opinion be read as having a purely mechanical or functional operation. Once it is concluded that the scheme of the Directives is to provide a consistent measure of compensation, whatever the route to recovery taken by the victim, there is certainly no need to regard regulation 13(2)(b) as having any further purpose or effect. The Court of Appeal in Jacobs was right to conclude that regulation 13(2)(b) carried with it “the implicit proviso” that the injured party must be able to show that the driver is liable to him (para 32: see para 20 above). But it was wrong to draw on the old common law distinction - recognised (not uncontroversially) in Harding v Wealands and now removed from our law by Rome II (see eg Cox v Ergo Versicherung AG [2014] UKSC 22; [2014] AC 1379) - between liability and heads of damage on the one hand and measure of compensation on the other; and it was wrong to find this distinction reflected in regulation 13(2)(b).
43. It follows from the above that it is unnecessary to address further submissions that were, briefly, addressed to the Supreme Court on the Rome II Regulation. The decisions in Jacobs v Motor Insurers’ Bureau [2010] EWCA Civ 1208; [2011] 1 WLR 2609 and Bloy v Motor Insurers’ Bureau [2013] EWCA Civ 1543; [2014] 1 Lloyd’s Rep IR 75 should be overruled in relation to the meaning of regulation 13(2)(b). The UK MIB’s present appeal should be allowed and the answer to the preliminary issue declared to be that the scope of the UK MIB’s liability to Ms Moreno is to be determined in accordance with the law of Greece.