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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >>Moreno v The Motor Insurers' Bureau [2015] EWHC 1002 (QB) (17 April 2015)URL: http://www.bailii.org/ew/cases/EWHC/QB/2015/1002.htmlCite as: [2015] WLR(D) 177, [2015] EWHC 1002 (QB)

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Neutral Citation Number: [2015] EWHC 1002 (QB)Case No: HQ14X03591

IN THE HIGH COURT OF JUSTICEQUEEN'S BENCH DIVISION

Royal Courts of JusticeStrand, London, WC2A 2LL

17 April 2015

B e f o r e :

MR JUSTICE GILBART____________________

Between:TIFFANY MORENO

Claimant- and -

THE MOTOR INSURERS' BUREAU Defendant

____________________

Daniel Beard QC and Sarah Crowther (instructed by BL Claims, Eastleigh) for theClaimant

Hugh Mercer QC and Marie Louise Kinsler (instructed by Weightmans, Liverpool) for theDefendant

Hearing dates: 19-20 March 2015____________________

HTML VERSION OF JUDGMENT____________________

Moreno v The Motor Insurers' Bureau [2015] EWHC 1002 (... http://www.bailii.org/ew/cases/EWHC/QB/2015/1002.html

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Crown Copyright ©

MR JUSTICE GILBART :

Introduction

This is a trial of a preliminary issue:1.

"Whether the scope of (the Defendant's) liability to the Claimant is to be determined inaccordance with the law of England or the law of Greece."

The order for a trial of that issue was made by consent by Master Yoxall on10th November 2014.

On 17th May 2011 the Claimant, who was then aged 25, and who lives in England andWales, was on holiday on the island of Zakynthos in Greece. She was on the verge of a roadon that island when a car left the road and struck her. She suffered grievous injury to herlegs. She has since received extensive surgical and other medical and therapeutic treatment.Her right leg has been amputated through the tibia, and her left leg required extensivesurgery to repair the knee ligaments. She has had repeated surgery to her legs. She mustwear a prosthesis, and also has to use a wheelchair. She continues to suffer from pain anddisability. She has also endured a psychological reaction, and an exacerbation ofpre-existing depression. She has suffered losses of earnings, and it is claimed that she willbe at a disadvantage on the open labour market.

2.

The car in question was registered in Greece. The Claimant's solicitors wrote to theDefendant Motor Insurers' Bureau ("MIB") to obtain insurer details for the vehicle. Uponenquiry, its Greek equivalent considered that the vehicle was uninsured, and that the driver(who was of Albanian extraction and perhaps nationality) was responsible for the accident.

3.

The Claimant has made a claim against the MIB under Regulation 13(2) of the MotorVehicles (Compulsory Insurance)(Information Centre and Compensation Body Regulations)2003 (SI 2003/37) ("The 2003 Regulations").

4.

In the Defence, it is admitted that the driver was liable under the law of Greece for theaccident. It is admitted that, under the law of Greece, the Greek Guarantee Fund for thepurposes of the relevant EU Motor Insurance Directives (of which more below) would beliable to compensate the Claimant. Liability is therefore admitted under Regulation 13, but itis contended that the measure of compensation payable should be assessed in accordancewith the law of Greece. This is a case where the level of damages available to a claimant forpersonal injuries would be higher if assessed according to the laws applying in England andWales than in Greece. (Although as will become apparent it cannot be assumed that the levelof provision is more generous in England and Wales than in all other EU jurisdictions.)

5.

Judgment has been entered for the Claimant by consent on 9th July 2014, and an interimpayment made under CPR 25. That was without prejudice to the Defendant's arguments onthe applicable law.

6.

The Court of Appeal in Jacobs v MIB [2010] EWCA Civ 1208 [2011] 1 WLR 2609 has heldthat in a Regulation 13 claim (i.e. the case of a person from England and Wales sufferinginjury in another EU state at the hands of a culpable but uninsured or unidentified driver, but

7.


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claiming in England and Wales), the law by which the assessment of compensation is to bemade is that of England and Wales. It held that the right to compensation arose under theRegulations. In the judgment of Moore-Bick LJ, he addressed the effect of the coming intoforce of Regulation (EC) No 864/2007 of the European Parliament and Council on the lawapplicable to non-contractual obligations ("Rome II") on this issue. Moore-Bick LJ theresaid that the law applying to the existence of tortious liability has, since Rome II, been thelaw of the country where the injury was caused, but that the law by which the court makesthe assessment of compensation under the 2003 Regulations remains the law of England andWales. That approach was endorsed in Bloy and Ireson v MIB [2013] EWCA 1543 [2014]PIQR P9. While the comments in the judgment of the Chancellor (Etherton LJ) in that caseare obiter on the effect of Rome II, its ratio adopted the interpretation of Regulation 13(2)given in Jacobs.

European Union Directives are not shy of using the traditional Latin names for the conceptsinvolved. Those tags also have the advantage of being succinct and precise, and I shall useone or two. By lex fori is meant the law of the state in which the court dealing with theclaim is situated, whereas lex loci delicti is the law of the state where the injury occurred,and in this case refers to Greece. (There are questions that can arise about the location of therelevant damage, but they are addressed in Rome II, and need not detain us here). Rome IIapplies the lex loci delicti to the issues of both liability and quantum, save in exceptionalcases. The Court of Appeal has thus held in Jacobs that the lex fori applies to the assessmentof compensation in claims under Regulation 13. However the Court of Appeal has sinceapplied Rome II to actions in tort against the tortfeasor's insurer, including the rule that theassessment of compensation is made according to the lex loci delicti (see Wall v Mutuelle dePoitiers Assurances [2014] EWCA Civ 138 per Longmore, Jackson and Christopher ClarkeLJJ)). The Court of Appeal there applied the lex loci delicti to the two issues of liability andthe assessment of damages, while matters of procedure - such as the way in which expertevidence would be adduced – was held to be a matter for the lex fori.

8.

The MIB contended in Jacobs and before me that since Rome II, Regulation 13 of the 2003Regulations cannot be applied so as to provide for a level of compensation different fromthat obtainable in the country where the accident occurred – i.e. the application of lex locidelicti. The MIB obtained permission to appeal from the Supreme Court in Jacobs v MIBbut before the appeal could be made and heard, the Court of Justice of the European Union(CJEU) gave judgment in Homawoo v GF Assurances C-412/10 [2011] ECR 1-11603. Thatheld that Rome II was not in force at the relevant date in Jacobs, so that the appeal wouldhave served no purpose and was not proceeded with. Bloy, which was decided after Jacobs,related to an accident which occurred before Rome II came into effect.

9.

In this case, the MIB argues that this is a case where there can be an appeal straight from theHigh Court to the United Kingdom Supreme Court. It does so without demur from theClaimant, whose consent to an appeal direct to the Supreme Court under section 12 of theAdministration of Justice Act 1969 is recorded in the order of Master Yoxall already referredto. As I indicated to the parties at the hearing, I shall consider whether to make such anorder having received submissions in the light of my judgment.

10.

The issue before the Court is twofold:11.

(a) Does Regulation 13, on its true construction, state that the assessment ofclaims made under it must be assessed according to the law applying in


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DEFINIZIONE DI REGULATION 13 CLAIM =INCIDENTE ALL'ESTERO DA AUTO NON ASSICURATA. AZIONE NEL FORO DI RESIDENZA DEL DANNEGGIATO NEI CONFRONTI DEL NATIONAL BODY

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England and Wales ?

(b) Given that Rome II is an EU regulation and is part of the law of the UnitedKingdom without the need for any domestic legislative steps to bring it intoeffect, is the effect of Rome II such that in a case falling within the MotorInsurance Directives, and therefore the 2003 Regulations, the court must nowassess compensation in accordance with the law where the accident happened(lex loci delicti) and not that of England and Wales (lex fori)?

Given the existence of what is agreed to be authority binding on me (Jacobs) I can only findfor the Claimant on the merits of these arguments. But given the fact that this matter maywell be the subject of subsequent appeal, it is right that I should set out the respectivearguments of the parties.

12.

To do so, I shall approach the matter under the following heads:13.

A Levels of damages for personal injury in England and Wales compared toother EU states;

B The law of England and Wales on choice of law until Rome II;

C The relevant Motor Insurance Directives, and the roles of the nationalcompensation bodies such as the MIB;

D Agreement Between Compensation Bodies and Guarantee Funds of 29thApril 2002;

E The 2003 Regulations;

F Rome II: Regulation 864/2007 of the European Parliament and of the Councilon the law applicable to non-contractual obligations;

G The approaches in Jacobs and Bloy;

H Submissions for the Defendant MIB;

I Submissions for the Claimant;

J Discussion and conclusions.

A Levels of damages for personal injury in England and Wales compared to other EUstates

It was common ground before me that there may be situations where the level of damagesawarded by a court under the applicable laws of states other than the United Kingdom maybe higher. I was presented with a report prepared for the European Commission in 2009which considered levels of compensation. It shows that in most respects the UK is one ofthe more generous systems, but not the most generous. Unfortunately, the example chosenfor comparison in the report was a case where there is a claim after a death in a roadaccident. That raises potential problems, as the existence of a claim for wrongful death isundoubtedly a matter for the lex loci delicti - see Cox v Ergo Versicherung AG [2014]

14.


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UKSC 22 [2014] AC 1379.

I was also provided with some details of the level of general damages for pain, suffering,and loss of amenity set out in the Book of Quantum used in the Republic of Ireland, firstintroduced in 2004 as part of the move to abolish jury trial in personal injury actions.Comparison with the Judicial College equivalent reveals that some suggested figures arehigher, and some lower, than their English and Welsh equivalents. It of course relates onlyto one aspect of damages. As Mr Beard QC pointed out, claims, and especially those for themore serious injuries, may well involve claims for past loss of earnings, continuing andfuture losses of earnings, the costs of care and so on. There may also be arguments about thedeductibility of benefits paid to an injured person in the form of pensions, disability benefitsetc etc.

15.

No firm conclusions can be drawn from the material placed before me. The safest course,and one accepted by both parties, is that one is unable to say whether English/Welshassessments are more or less generous, either generally or in a particular type of case. Bothparties agree that in this case the level of compensation assessed according to Greek lawwould be lower than that assessed according to the law of England and Wales. But in myjudgment one cannot approach matters of interpretation of legislation (whether of EuropeanRegulations or Directives, or a domestic statutory instrument) on the basis of the facts ofone case, or of a comparison between levels of compensation between two particularcountries, or of comparisons in one class of case (say compensation for loss of earnings, orcompensation for pain suffering and loss of amenity).

16.

I have referred to this topic because one of the criticisms made by Mr Mercer QC of Bloy isthat the Court of Appeal relied on an assumption that the levels of compensation awarded inthe United Kingdom would be more generous than those awarded in other EU states. Thesame matter was addressed in Jacobs albeit rather more diffidently.

17.

B The law of England and Wales on choice of law until Rome II

In Harding v Wealands [2006] UKHL 32 [2007] 2 AC 1 the House of Lords considered therule in the context of a claim brought in England against an Australian national in respect ofinjuries sustained in a motor accident in Australia. It affirmed the traditional approach thatthe assessment of damages was for the lex fori- see Lord Hoffman at [51]-[53].

18.

The United Kingdom is not a signatory to the Hague Convention on the Law Applicable toRoad Traffic Accidents 1971, which set some choice of law rules to which I shall refer indue course.

19.

It is to be noted also that the approach in England and Wales was by no means shared byother EU states. Many applied the lex loci delicti to both the issue of liability for the injury,and to the assessment of compensation. When Rome II was undergoing consideration andpreparation, the difference between the approaches in various states was noted, but the finalversion of Rome II reflected the position of the states who apply the lex loci delicti, as Ishall refer to in due course.

20.

C The relevant Motor Insurance Directives, and the roles of the national compensationbodies such as the MIB


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Between 1972 and 2005 five Motor Insurance Directives were adopted. In October 2009 theSixth Directive codified those that had preceded it. As Directives (by virtue of Article 288 ofthe Treaty establishing the European Community as amended by the Lisbon Treaty) they are

21.

" ……. binding as to the result to be achieved, upon each member State towhich it is addressed, but shall leave to the national authorities the choice ofform and methods"

The First Directive (1972/166/EC) dealt with the provision of motor insurance whichcovered drivers for accidents anywhere within what was then the EEC. It also provided for anational body (such as the MIB) to guarantee settlement of claims arising in its own statearising from the use of a car normally based in another state.

22.

The Second Directive (84/5/EC) of 30th December 1983 required each member state to setup or authorise a body to provide compensation to those injured by uninsured orunidentified drivers. The MIB is the guarantee body for the purposes of the UK. Given theterms of the 2003 Regulations, it is necessary to set out parts of Article 1[1]

23.

"Article 1

1. The insurance referred to in Article 3 (1) of Directive 72/166/EEC shallcover compulsorily both damage to property and personal injuries.

2. Without prejudice to any higher guarantees which Member States may laydown, each Member State shall require that the amounts for which suchinsurance is compulsory are at least:

……………………………………………………………………… …

3. …………………………………………………………………………

4. Each Member State shall set up or authorize a body with the task ofproviding compensation, at least up to the limits of the insurance obligation fordamage to property or personal injuries caused by an unidentified vehicle or avehicle for which the insurance obligation provided for in paragraph 1 has notbeen satisfied.

The first sub-paragraph shall be without prejudice to the right of the MemberStates to regard compensation by that body as subsidiary or non-subsidiary andthe right to make provision for the settlement of claims between that body andthe person or persons responsible for the accident and other insurers or socialsecurity bodies required to compensate the victim in respect of the sameaccident. ………………………………..

5. The victim may in any case apply directly to the body which, on the basis ofinformation provided at its request by the victim, shall be obliged to give him areasoned reply regarding the payment of any compensation.

………………………………………………………………………..

6. ………………………………………………………………………..


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7. Furthermore, each Member State shall apply its laws, regulations andadministrative provisions to the payment of compensation by this body, withoutprejudice to any other practice which is more favourable to the victim."

Up to now, the Directives did not enable someone injured by an uninsured or unidentifieddriver to seek compensation anywhere other than the state where the accident had happened.However the Fourth Directive (Directive 2000/26/EC) of 16th May 2000 made substantialchanges. One of its main purposes was to enable an EU resident to be able to obtaincompensation in respect of injury sustained in a motor accident in another EU state.

24.

Articles 1 and 3 set the scene for the Directive:25.

"Article 1

Scope

1. The objective of this Directive is to lay down special provisions applicable toinjured parties entitled to compensation in respect of any loss or injury resultingfrom accidents occurring in a Member State other than the Member State ofresidence of the injured party which are caused by the use of vehicles insuredand normally based in a Member State.

……………………………………………………………………………..

2. Articles 4 and 6 shall apply only in the case of accidents caused by the use ofa vehicle

(a) insured through an establishment in a Member State other thanthe State of residence of the injured party, and

(b) normally based in a Member State other than the State ofresidence of the injured party.

3. ……………………………………………………………….

Article 3

Direct right of action

Each Member State shall ensure that injured parties referred to in Article 1 inaccidents within the meaning of that provision enjoy a direct right of actionagainst the insurance undertaking covering the responsible person against civilliability."

By Article 4, each insurer is to identify claims representatives in each member state. Article5 deals with the establishment of Information Centres. By Articles 6 and 7:

26.

"Article 6

Compensation bodies

1. Each Member State shall establish or approve a compensation body


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responsible for providing compensation to injured parties in the cases referredto in Article 1.

Such injured parties may present a claim to the compensation body in theirMember State of residence:

(a) if, within three months of the date when the injured partypresented his claim for compensation to the insurance undertakingof the vehicle the use of which caused the accident or to its claimsrepresentative, the insurance undertaking or its claimsrepresentative has not provided a reasoned reply to the points madein the claim; or

(b) if the insurance undertaking has failed to appoint a claimsrepresentative in the State of residence of the injured party inaccordance with Article 4(1). In this case, injured parties may notpresent a claim to the compensation body if they have presented aclaim for compensation directly to the insurance undertaking of thevehicle the use of which caused the accident and if they havereceived a reasoned reply within three months of presenting theclaim.

Injured parties may not however present a claim to the compensation body ifthey have taken legal action directly against the insurance undertaking.

The compensation body shall take action within two months of the date whenthe injured party presents a claim for compensation to it but shall terminate itsaction if the insurance undertaking, or its claims representative, subsequentlymakes a reasoned reply to the claim.

The compensation body shall immediately inform:

(a) the insurance undertaking of the vehicle the use of whichcaused the accident or the claims representative;

(b) the compensation body in the Member State of the insuranceundertaking's establishment which issued the policy;

(c) if known, the person who caused the accident,

that it has received a claim from the injured party and that it will respond to thatclaim within two months of the presentation of that claim.

This provision shall be without prejudice to the right of the Member States toregard compensation by that body as subsidiary or non-subsidiary and the rightto make provision for the settlement of claims between that body and the personor persons who caused the accident and other insurance undertakings or socialsecurity bodies required to compensate the injured party in respect of the sameaccident. However, Member States may not allow the body to make thepayment of compensation subject to any conditions other than those laid downin this Directive, in particular the injured party's establishing in any way that


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the person liable is unable or refuses to pay.

2. The compensation body which has compensated the injured party in hisMember State of residence shall be entitled to claim reimbursement of the sumpaid by way of compensation from the compensation body in the Member Stateof the insurance undertaking's establishment which issued the policy.

The latter body shall then be subrogated to the injured party in his rights againstthe person who caused the accident or his insurance undertaking in so far as thecompensation body in the Member State of residence of the injured party hasprovided compensation for the loss or injury suffered. Each Member State isobliged to acknowledge this subrogation as provided for by any other MemberState.

3. This Article shall take effect:

(a) after an agreement has been concluded between thecompensation bodies established or approved by the MemberStates relating to their functions and obligations and the proceduresfor reimbursement;

(b) from the date fixed by the Commission upon its havingascertained in close cooperation with the Member States that suchan agreement has been concluded.

The Commission shall report to the European Parliament and the Council on theimplementation of this Article and on its effectiveness before 20 July 2005 andshall submit proposals if necessary.

Article 7

If it is impossible to identify the vehicle or if, within two months following theaccident, it is impossible to identify the insurance undertaking, the injured partymay apply for compensation from the compensation body in the Member Statewhere he resides. The compensation shall be provided in accordance with theprovisions of Article 1 of Directive 84/5/EEC. The compensation body shallthen have a claim, on the conditions laid down in Article 6(2) of this Directive:

(a) where the insurance undertaking cannot be identified: againstthe guarantee fund provided for in Article 1(4) of Directive84/5/EEC in the Member State where the vehicle is normallybased;

(b) in the case of an unidentified vehicle: against the guaranteefund in the Member State in which the accident took place;

(c) in the case of third-country vehicles: against the guarantee fundof the Member State in which the accident took place."

Thus, for an injured person in the Claimant's position (resident in England and Wales butwho had suffered injury in another country at the hands of an uninsured driver) the Directive

27.


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provided a straightforward and timely route to obtaining compensation within her owncountry. The 2003 Regulations were passed to implement the Fourth Directive in the UnitedKingdom. I shall return to their terms in due course.

The travaux préparatoires for the Fourth Directive ( see the proposal dated 10th October1997 by the European Commission for the Fourth Directive) state that:

28.

(Re Article 1 (Scope)) "In line with the principle of subsidiarity, the victim'sposition may be improved by providing an intermediary. This can be donewithout changing the rules on liability and jurisdiction that currently apply inthe Member States" (page 3 para 3)

(Re Article 2 Direct right of action) "The Directive does not establish new rulesof law or amend conventions in the field of international law conferring privatejurisdiction on courts. Both the definition of the applicable law and theestablishment of the jurisdiction of the courts are determined by reference to therules of private international law applicable in most of the member states……."(page 6)

(Re Article 3 (Claims Representatives)) "The paragraph does not contain anyprovisions on the law applicable to accidents suffered by visitors. In most casesthe rules of private international law applicable in the various Member Statesmake this the law of the State where the accident occurs. As in the case of thedirect right of action, the law applicable is always determined by reference tothe generally applicable rules of private international law. This Directive doesnot provide any criteria for the choice of the applicable law (for example, lexloci or the law of the State of Residence of the victim, etc.)" (page 7) (Myitalics)

As written, the words from the proposal in relation to Article 2 can be read as saying that thechoice of law is determined by the rules of private international law applicable in mostmember states. However the words I have italicised in the proposal relating to Article 3,having started by echoing that approach, are then quite specific that it sets no criteria fordetermining choice of law. As I shall describe when I come to deal with the travauxpréparatoires for Rome II, there was no desire to retain those differences.

29.

A codifying Directive (the Sixth) (2009/103/EC) was made on 16th September 2009.Amongst its recitals are the following:

30.

"(20) Motor vehicle accident victims should be guaranteed comparabletreatment irrespective of where in the Community accidents occur.

(30) The right to invoke the insurance contract and to claim against theinsurance undertaking directly is of great importance for the protection ofvictims of motor vehicle accidents. In order to facilitate an efficient and speedysettlement of claims and to avoid as far as possible costly legal proceedings, aright of direct action against the insurance undertaking covering the personresponsible against civil liability should be provided for victims of any motorvehicle accident.


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(34) Parties injured as a result of a motor vehicle accident falling within thescope of this Directive and occurring in a State other than that of their residenceshould be entitled to claim in their Member State of residence against a claimsrepresentative appointed there by the insurance undertaking of the responsibleparty. This solution would enable damage suffered by injured parties outsidetheir Member State of residence to be dealt with under procedures which arefamiliar to them.

(35) This system of having claims representatives in the injured party's MemberState of residence affects neither the substantive law to be applied in eachindividual case nor the matter of jurisdiction.

(36) The existence of a direct right of action for the injured party against theinsurance undertaking is a logical supplement to the appointment of suchrepresentatives and moreover improves the legal position of parties injured as aresult of motor vehicle accidents occurring outside their Member State ofresidence.

(48) The role played by the compensation body is that of settling the claim inrespect of any loss or injury suffered by the injured party only in cases whichare capable of objective determination and therefore the compensation bodyshould limit its activity to verifying that an offer of compensation has beenmade in accordance with the time limits and procedures laid down, without anyassessment of the merits.

(50) The compensation body should have a right of subrogation in so far as it hascompensated the injured party. In order to facilitate enforcement of the compensation body'sclaim against the insurance undertaking where the latter has failed to appoint a claimsrepresentative or is manifestly dilatory in settling a claim, the body providing compensationin the injured party's State should also enjoy an automatic right of reimbursement withsubrogation to the rights of the injured party on the part of the corresponding body in theState where the insurance undertaking is established. This body is the best placed to instituteproceedings for recourse against the Insurance undertaking.

(51) Even though Member States may provide that the claim against the compensation bodyis to be subsidiary, the injured person should not be obliged to present his claim to theperson responsible for the accident before presenting it to the compensation body. In such acase the injured party should be in at least the same position as in the case of a claim againstthe guarantee fund.

(52) This system can be made to function by means of an agreement between thecompensation bodies established or approved by the Member States, defining their functionsand obligations and the procedures for reimbursement.

(53) Where it is impossible to identify the insurer of a vehicle, it should be provided that theultimate debtor in respect of the damages to be paid to the injured party is the guaranteefund provided for this purpose situated in the Member State where the uninsured vehicle,the use of which has caused the accident, is normally based. Where it is impossible toidentify the vehicle, it should be provided that the ultimate debtor is the guarantee fundprovided for this purpose situated in the Member State in which the accident occurred."


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The Articles of the codifying Sixth Directive contain the following:31.

Article 3

Compulsory insurance of vehicles

Each Member State shall, subject to Article 5, take all appropriate measures toensure that civil liability in respect of the use of vehicles normally based in itsterritory is covered by insurance.

The extent of the liability covered and the terms and conditions of the covershall be determined on the basis of the measures referred to in the firstparagraph.

Each Member State shall take all appropriate measures to ensure that thecontract of insurance also covers:

(a) according to the law in force in other Member States, any loss or injurywhich is caused in the territory of those States;

(b) ……………………………………………………….

The insurance referred to in the first paragraph shall cover compulsorily bothdamage to property and personal injuries."

Article 6 deals with national insurers' bureaux. Articles 10 and 11 deal with the payment ofcompensation in cases where the accident was caused by an uninsured or unidentifiedvehicle. They read, insofar as is relevant

32.

"Article 10

"1. Each Member State shall set up or authorise a body with the task ofproviding compensation, at least up to the limits of the insurance obligation fordamage to property or personal injuries caused by an unidentified vehicle or avehicle for which the insurance obligation provided for in Article 3 has notbeen satisfied.

The first subparagraph shall be without prejudice to the right of the MemberStates to regard compensation by the body as subsidiary or non-subsidiary andthe right to make provision for the settlement of claims between the body andthe person or persons responsible for the accident and other insurers or socialsecurity bodies required to compensate the victim in respect of the sameaccident. However, Member States may not allow the body to make thepayment of compensation conditional on the victim establishing in any way thatthe person liable is unable or refuses to pay.

2. The victim may in any event apply directly to the body which, on the basisof information provided at its request by the victim, shall be obliged to give hima reasoned reply regarding the payment of any compensation.

……………………………………………………………………….


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3. ………………………………………………………………………

4. Each Member State shall apply its laws, regulations and administrativeprovisions to the payment of compensation by the body, without prejudice toany other practice which is more favourable to the victim.

Article 11

Disputes

In the event of a dispute between the body referred to in Article 10(1) and thecivil liability insurer as to which must compensate the victim, the MemberStates shall take the appropriate measures so that one of those parties isdesignated to be responsible in the first instance for paying compensation to thevictim without delay.

If it is ultimately decided that the other party should have paid all or part of thecompensation, that other party shall reimburse accordingly the party which haspaid."

Article 18 gives an injured person a direct right of action against the insurer of the vehiclewhich caused the accident. Articles 19 ff (Chapter 7) deal with the "settlement of claims" inrespect of vehicles which are covered by insurance. Article 22 sets out a procedure wherebyinsurers are to deal with claims within 3 months of receipt of a claim. Article 24 enablesclaims to be brought against the compensation body in the state of residence of a claimant incases where the insurer has not responded under Article 22. It must respond within 2months. However if the insurer does respond, then the compensation body will terminate itsaction. By Article 24(2):

33.

"The compensation body which has compensated the injured party in hisMember State of residence shall be entitled to claim reimbursement of the sumpaid by way of compensation from the compensation body in the Member Statein which the insurance undertaking which issued the policy is established.

The latter body shall be subrogated to the injured party in his rights against theperson who caused the accident or his insurance undertaking in so far as thecompensation body in the Member State of residence of the injured party hasprovided compensation for the loss or injury suffered."

Article 25 deals with the case where the vehicle or its insurer cannot be identified within 2months of the date of the accident:

34.

Article 25

"Compensation

1. If it is impossible to identify the vehicle or if, within two months of the dateof the accident, it is impossible to identify the insurance undertaking, theinjured party may apply for compensation from the compensation body in theMember State where he resides. The compensation shall be provided inaccordance with the provisions of Articles 9 and 10. The compensation body


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shall then have a claim, on the conditions laid down in Article 24(2):

(a) where the insurance undertaking cannot be identified: against the guaranteefund in the Member State where the vehicle is normally based;

(b) in the case of an unidentified vehicle: against the guarantee fund in theMember State in which the accident took place;

(c) ………………………………………………………………

2. ……………………………………………………………….."

D Agreement Between Compensation Bodies and Guarantee Funds of 29th April 2002

On 29th April 2002, and in pursuit of Article 10 of the Fourth Motor Insurance Directive,the Compensation Bodies of the various states (the MIB and its equivalents) entered into anagreement. In the case of claims under Article 7 of the Fourth Directive (i.e. where acompensation body of the victim's member state pays compensation when the vehiclecannot be identified, or no insurer can be identified within 2 months of the accident) theCompensation Body must inform the relevant Guarantee Fund (Clause 7.1). It thencontinues:

35.

" 7.2 When it makes a compensation payment to an injured party, theCompensation Body shall………apply, in evaluating liability and assessingcompensation, the law of the country in which the accident occurred………"

By Clause 8, reimbursement is due to the Compensation Body from the relevant GuaranteeFund as follows:

36.

"8.1 to the exclusion of everything else, the following:

8.1.1 the amount paid in compensation to the injured party orhis/her beneficiaries; specifying the amounts paid as materialdamage and as bodily injury;

8.1.2 "[Fees such as those of lawyers and experts]"

8.1.3 ……………………………………

8.2 the amount to be reimbursed may only be disputed by the final payingGuarantee Fund if the Compensation Body has ignored objective materialinformation given to it or has not observed the rules of applicable law."

E The 2003 Regulations

The Explanatory Note to the Regulations, while of course not definitive, gives a concise anduseful guide:

37.

"These Regulations give effect to Articles 5, 6 and 7 of the Fourth MotorInsurance Directive.

In order to assist persons to seek compensation in respect of motor vehicle


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accidents occurring in an EEA State other than their State of residence,regulation 3 establishes the MIIC as the information centre. That body shallestablish a means of access to specified information, so as to allow itsdissemination to injured parties in certain circumstances. Further provisionsprovide that in appropriate cases the information centre is obliged to seeksimilar information from organisations with like functions established in otherEEA States.

Regulation 4 describes the specified information. This includes, in the case ofmotor vehicles normally based in the United Kingdom, the name and address ofthe insurer and the number of the insurance policy in respect of any identifiedvehicle.

Regulation 5 …………………………………………………………..

Regulation 7 …………………………………………………………..

Regulation 9 empowers an injured party resident in an EEA State to require theinformation centre to supply him with insurance details in respect of vehiclesnormally based in a Member State or EEA State where:

(i) the accident occurs in the United Kingdom; or

(ii) where the vehicle is usually based in the United Kingdom andthe accident occurs in the EEA or a state subscribing to the GreenCard Scheme; or

(iii) where the injured party resides in the United Kingdom and theaccident occurs in an EEA State or a state subscribing to the GreenCard Scheme.

The right of a person resident in the United Kingdom to obtain this informationin respect of an accident occurring within the United Kingdom is thereforeprovided for, although it is not required pursuant to the Fourth Motor InsuranceDirective.

Regulation 10 approves the Motor Insurers' Bureau as the compensation bodyfor the United Kingdom.

Regulation 11 provides that in certain circumstances a person resident in theUnited Kingdom may claim compensation from the compensation body. Theright to claim arises in respect of loss or injury resulting from an accidentcaused by the use of a motor vehicle in a public place. The accident must haveoccurred in an EEA State other than the United Kingdom, or in a countrysubscribing to the Green Card Scheme. The vehicle the use of which caused thedamage must normally be based and insured, in an EEA State other than theUnited Kingdom. The claimant must have sought compensation from the liableinsurer or his claims representative. That insurer must have failed to make areasoned reply within three months. Further rules apply if no claimsrepresentative has been appointed. The claimant must not have commencedlegal proceedings against the insurer.


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Regulation 12 provides that in the circumstances described in regulation 11, andsubject to certain provisos, if the injured party proves to the compensation bodythat the insured person is liable to him, then to the extent that he can prove lossand damage the compensation body must compensate him.

Regulation 13 provides that in certain circumstances a person who resides in theUnited Kingdom may be able to claim compensation from the compensationbody where either the vehicle the use of which caused the damage, or therequisite insurer, cannot be identified. The accident must have occurred in anEEA State other than the United Kingdom, or in a country subscribing to theGreen Card Scheme. The vehicle must normally be based in, and insured in, anEEA State other than the United Kingdom.

Regulations 14 and 15 set out circumstances in which the compensation bodyor the Motor Insurers' Bureau must indemnify a foreign compensation body."

Turning to the Regulations themselves, it is only necessary for the purposes of thisjudgement to set out Regulations 10 - 13 and 16:

38.

"Compensation body for the United Kingdom

10. MIB is approved as the compensation body for the United Kingdom for thepurposes of the fourth motor insurance directive.

Entitlement to compensation where the insurer is identified

11. (1) This regulation and regulation 12 apply in a case where—

(a) an injured party is resident in the United Kingdom,

(b) that person claims to be entitled to compensation inrespect of an accident occurring in an EEA State otherthan the United Kingdom or in a subscribing state, and

(c) the loss or injury to which the claim relates hasbeen caused by or arises out of the use of a vehiclewhich is—

(i) normally based in an EEA State other than theUnited Kingdom, and

(ii) insured though an establishment in an EEA Stateother than the United Kingdom.

(2) Where this regulation applies, the injured party may make a claim forcompensation from the compensation body if—

(a) he has not commenced legal proceedings againstthe insurer of the vehicle the use of which caused theaccident, and


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(b) either of the conditions set out in paragraph (3) isfulfilled.

(3) The conditions are—

(a) that the injured party has claimed compensationfrom the insurer of the vehicle or the insurer's claimsrepresentative and neither the insurer nor the claimsrepresentative has provided a reasoned reply to theclaim within the period of three months after the dateit was made;

(b) that the insurer has failed to appoint a claimsrepresentative in the United Kingdom, and the injuredparty has not claimed compensation directly from thatinsurer.

Response from the compensation body

12. (1) Upon receipt of a claim for compensation under regulation 11, thecompensation body shall immediately notify—

(a) the insurer of the vehicle the use of which isalleged to have caused the accident, or that insurer'sclaims representative;

(b) the foreign compensation body in the EEA State inwhich that insurer's establishment is situated; and

(c) if known, the person who is alleged to have causedthe accident, that it has received a claim from theinjured party and that it will respond to that claimwithin two months from the date on which the claimwas received.

(2) The compensation body shall respond to a claim for compensation withintwo months of receiving the claim.

(3) If the injured party satisfies the compensation body as to the mattersspecified in paragraph (4), the compensation body shall indemnify the injuredparty in respect of the loss and damage described in paragraph (4)(b).

(4) The matters referred to in paragraph (3) are—

(a) that a person whose liability for the use of thevehicle is insured by the insurer referred to inregulation 11(1)(c) is liable to the injured party inrespect of the accident which is the subject of theclaim, and

(b) the amount of loss and damage (including interest)


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that is properly recoverable in consequence of thataccident by the injured party from that person underthe laws applying in that part of the United Kingdomin which the injured party resided at the date of theaccident.

(5) The compensation body shall cease forthwith to act in respect of a claim assoon as it becomes aware that—

(a) the insurer referred to in regulation 11(1)(c), or theclaims representative of that insurer, has made areasoned response to the claim, or

(b) the injured party has commenced legal proceedingsagainst the insurer.

Entitlement to compensation where vehicle or insurer is not identified

13. (1) This regulation applies where—

(a) an accident, caused by or arising out of the use of a vehicle which isnormally based in an EEA State, occurs on the territory of—

(i) an EEA State other than the United Kingdom, or

(ii) a subscribing State,

and an injured party resides in the United Kingdom,

(b) that injured party has made a request forinformation under regulation 9(2) , and

(c) it has proved impossible—

(i) to identify the vehicle the use of which is alleged tohave been responsible for the accident, or

(ii) within a period of two months after the date of therequest, to identify an insurance undertaking whichinsures the use of the vehicle.

(2) Where this regulation applies—

(a) the injured party may make a claim forcompensation from the compensation body, and

(b) the compensation body shall compensate theinjured party in accordance with the provisions ofArticle 1 of the second motor insurance directive as ifit were the body authorised under paragraph 4 of thatArticle and the accident had occurred in Great Britain.


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Civil Liability

16. Any sum due and owing pursuant to these Regulations shall be recoverableas a civil debt."

While it was held in Jacobs that Regulation 13(2)(b) is not a choice of law provision, it willbe observed that the effect of it is to overcome any arguments about which law applies to theclaim. I shall deal with the application and interpretation of the Regulations more generallyat a later stage. I shall also in due course consider the effect of Rome II (if any) on theapplication and interpretation of the Regulations.

39.

F Rome II: Regulation 864/2007 of the European Parliament and of the Council on thelaw applicable to non-contractual obligations

This was enacted as a Regulation within the meaning of the Article 288 of the Treatyestablishing the European Community as amended by the Lisbon Treaty. It follows that it is

40.

"…..binding in its entirety and directly applicable in all Member States."

As a result of its status as a Regulation, Member States, unless otherwise expresslyprovided, are precluded from taking steps for the purposes of applying the regulation ,which are intended to alter its scope or supplement its provisions: see C-40/69 HauptzollamtHamburg-Oberelbe v Bolmann [1970] ECR 69 at [4].

41.

I shall start by citing the relevant Articles. I shall then refer to the Recitals, and then to thetravaux préparatoires, which cast some light on the intended application and interpretation.

42.

"CHAPTER I

SCOPE

Article 1

Scope

1. This Regulation shall apply, in situations involving a conflict of laws, tonon-contractual obligations in civil and commercial matters. It shall not apply,in particular, to revenue, customs or administrative matters or to the liability ofthe State for acts and omissions in the exercise of State authority (acta iureimperii).

2. The following shall be excluded from the scope of this Regulation:

(a)-(g) …………………….

3. This Regulation shall not apply to evidence and procedure, without prejudiceto Articles 21 and 22.

4. ………………………………….

Article 2


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Non-contractual obligations

1. For the purposes of this Regulation, damage shall cover any consequencearising out of tort/delict, unjust enrichment, negotiorum gestio or culpa incontrahendo.

2. This Regulation shall apply also to non-contractual obligations that are likelyto arise.

3. Any reference in this Regulation to:

(a) an event giving rise to damage shall include events giving rise to damagethat are likely to occur; and

(b) damage shall include damage that is likely to occur.

Article 3

Universal application

Any law specified by this Regulation shall be applied whether or not it is thelaw of a Member State.

CHAPTER II

TORTS/DELICTS

Article 4

General rule

1. Unless otherwise provided for in this Regulation, the law applicable to anon-contractual obligation arising out of a tort/delict shall be the law of thecountry in which the damage occurs irrespective of the country in which theevent giving rise to the damage occurred and irrespective of the country orcountries in which the indirect consequences of that event occur.

2. However, where the person claimed to be liable and the person sustainingdamage both have their habitual residence in the same country at the time whenthe damage occurs, the law of that country shall apply.

3. Where it is clear from all the circumstances of the case that the tort/delict ismanifestly more closely connected with a country other than that indicated inparagraphs 1 or 2, the law of that other country shall apply. A manifestly closerconnection with another country might be based in particular on a pre-existingrelationship between the parties, such as a contract, that is closely connectedwith the tort/delict in question.

CHAPTER V

COMMON RULES


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Article 15

Scope of the law applicable

The law applicable to non-contractual obligations under this Regulation shallgovern in particular:

(a) the basis and extent of liability, including the determination of persons whomay be held liable for acts performed by them;

(b) ………………………………………………………………..

(c) the existence, the nature and the assessment of damage or the remedyclaimed;

(d) within the limits of powers conferred on the court by its procedural law, themeasures which a court may take to prevent or terminate injury or damage or toensure the provision of compensation;

(e) ……………………………………………………………………

(f) persons entitled to compensation for damage sustained personally;

(g) …………………………………………………………………..

(h) the manner in which an obligation may be extinguished and rules ofprescription and limitation, including rules relating to the commencement,interruption and suspension of a period of prescription or limitation.

Article 16

Overriding mandatory provisions

Nothing in this Regulation shall restrict the application of the provisions of thelaw of the forum in a situation where they are mandatory irrespective of the lawotherwise applicable to the non-contractual obligation.

Article 17

Rules of safety and conduct

In assessing the conduct of the person claimed to be liable, account shall betaken, as a matter of fact and in so far as is appropriate, of the rules of safetyand conduct which were in force at the place and time of the event giving rise tothe liability.

Article 18

Direct action against the insurer of the person liable

The person having suffered damage may bring his or her claim directly againstthe insurer of the person liable to provide compensation if the law applicable to


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the non-contractual obligation or the law applicable to the insurance contract soprovides."

There can be no doubt that Article 4 prescribes that in claims in tort for personal injury, thelex loci delicti (or strictly, the lex loci damni, being the laws of the state where the damagehas been inflicted) applies to issues of both liability and damages, unless one of theexceptions in Articles 4.2 or 4.3 apply. That was common ground before me, and accordswith the decision in the Court of Appeal in Wall v Mutuelle de Poitiers Assurances [2014]EWCA Civ 138. A distinction must be drawn between the choice of law which informs theassessment of damages (now Article 4) and the rules on evidence and procedure which willapply at the trial- see Longmore LJ at [16-20], Jackson LJ at [34-46 ], Christopher Clarke LJat [47-53].

43.

It is instructive to refer also to the Recitals (as Jackson LJ did in Wall - see [37]):44.

"(1) The Community has set itself the objective of maintaining and developingan area of freedom, security and justice. For the progressive establishment ofsuch an area, the Community is to adopt measures relating to judicialcooperation in civil matters with a cross-border impact to the extent necessaryfor the proper functioning of the internal market.

(2) According to Article 65(b) of the Treaty, these measures are to include thosepromoting the compatibility of the rules applicable in the Member Statesconcerning the conflict of laws and of jurisdiction.

(3) The European Council meeting in Tampere on 15 and 16 October 1999endorsed the principle of mutual recognition of judgments and other decisionsof judicial authorities as the cornerstone of judicial cooperation in civil mattersand invited the Council and the Commission to adopt a programme of measuresto implement the principle of mutual recognition.

(4) On 30 November 2000, the Council adopted a joint Commission andCouncil programme of measures for implementation of the principle of mutualrecognition of decisions in civil and commercial matters (3).The programmeidentifies measures relating to the harmonisation of conflict-of-law rules asthose facilitating the mutual recognition of judgments.

(5) ………………………………………………………………………..

(6) The proper functioning of the internal market creates a need, in order toimprove the predictability of the outcome of litigation, certainty as to the lawapplicable and the free movement of judgments, for the conflict-of-law rules inthe Member States to designate the same national law irrespective of thecountry of the court in which an action is brought.

(7) ………………………………………………………………………

(8) This Regulation should apply irrespective of the nature of the court ortribunal seised.

(9) ………………………………………………………………………


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(10) ……………………………………………………………….

(11) The concept of a non-contractual obligation varies from one Member Stateto another. Therefore for the purposes of this Regulation non-contractualobligation should be understood as an autonomous concept. The conflict-of-lawrules set out in this Regulation should also cover non-contractual obligationsarising out of strict liability.

(12) The law applicable should also govern the question of the capacity to incurliability in tort/delict.

(13) Uniform rules applied irrespective of the law they designate may avert therisk of distortions of competition between Community litigants.

(14) The requirement of legal certainty and the need to do justice in individualcases are essential elements of an area of justice. This Regulation provides forthe connecting factors which are the most appropriate to achieve theseobjectives. Therefore, this Regulation provides for a general rule but also forspecific rules and, in certain provisions, for an 'escape clause' which allows adeparture from these rules where it is clear from all the circumstances of thecase that the tort/delict is manifestly more closely connected with anothercountry. This set of rules thus creates a flexible framework of conflict-of-lawrules. Equally, it enables the court seised to treat individual cases in anappropriate manner.

(15) The principle of the lex loci delicti commissi is the basic solution fornon-contractual obligations in virtually all the Member States, but the practicalapplication of the principle where the component factors of the case are spreadover several countries varies. This situation engenders uncertainty as to the lawapplicable.

(16) Uniform rules should enhance the foreseeability of court decisions andensure a reasonable balance between the interests of the person claimed to beliable and the person who has sustained damage. A connection with the countrywhere the direct damage occurred (lex loci damni) strikes a fair balancebetween the interests of the person claimed to be liable and the personsustaining the damage, and also reflects the modern approach to civil liabilityand the development of systems of strict liability.

(17) The law applicable should be determined on the basis of where the damageoccurs, regardless of the country or countries in which the indirectconsequences could occur. Accordingly, in cases of personal injury or damageto property, the country in which the damage occurs should be the countrywhere the injury was sustained or the property was damaged respectively.

(18) The general rule in this Regulation should be the lex loci damni providedfor in Article 4(1). Article 4(2) should be seen as an exception to this generalprinciple, creating a special connection where the parties have their habitualresidence in the same country. Article 4(3) should be understood as an 'escapeclause' from Article 4(1) and (2), where it is clear from all the circumstances of


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the case that the tort/delict is manifestly more closely connected with anothercountry.

(19)-(32) …………………………………………………………………

(33) According to the current national rules on compensation awarded tovictims of road traffic accidents, when quantifying damages for personal injuryin cases in which the accident takes place in a State other than that of thehabitual residence of the victim, the court seised should take into account all therelevant actual circumstances of the specific victim, including in particular theactual losses and costs of after-care and medical attention.

(34)-(40) ……………………………………………………………."

Lest there be any doubt about the intention to harmonise the rules applying in the variousstates, and to do away with the rule hitherto applying in the different UK jurisdictions, oneobserves the terms of Recitals 15-17. But it is instructive to note also what happened duringthe gestation of that Regulation. In the proposal of the Commission of 22nd July 2003, itwas concerned by the differences which existed between the Member States on rulesrelating to conflicts of laws, which it considered had adverse effects economically. Its aimwas to replace the existing 15 sets of Rules with "a single set of uniform rules" which would"represent considerable progress for economic operators and the general public in terms ofcertainty as to the law"- paragraph 1.2. It called for the harmonisation of the rules onconflict of laws – see paragraph 2.2.

45.

It elected to use the Regulation method because:46.

"it lays down uniform rules for the applicable law. These rules are detailed,precise and unconditional and require no measures by the member States fortheir transposal" (sic) "into national law………The nature of these rules is theobjective set for them, which is to enhance certainty in the law and theforeseeability of the solutions adopted as regards the law applicable to a givenlegal relationship. If the Member States had room for manoeuvre in transposingthese rules, uncertainty would be reintroduced into the law, and that is preciselywhat harmonisation is supposed to abolish. The Regulation is therefore theinstrument that must be chosen to guarantee uniform application in the MemberStates." (My italics)

In the paragraphs relating to what became Article 4, the Commission set out its very firmview that there should be one location, and one only, taken for the point at which the directdamage arose or was likely to arise, being the place where the harmful event occurred. Thatwould thus equate the lex loci damni with the lex loci delicti in a motor accident case. It alsocontended that the solution in Article 4.1 "meets the concern for certainty in the law," andargued that the rules reflected a reasonable balance between the various interests at stake. Itdid not favour the principle of favouring the victim as a basic rule, which would give thevictim the option of choosing the law most favourable to him. That was considered toreintroduce uncertainty in the law. It regarded the exception in what is Article 4.3 as onewhich should be treated as truly exceptional, and emphasised that Articles 4.1 and 4.2 weredrafted in the form of rules and not presumptions.

47.


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The European Parliament considered the proposal in a report (A-0211/2005) of 27th June2005). It proposed at a plenary session on 6th July 2005 that what is now Article 4 (thenArticle 3) should be amended in various ways, including

48.

(a) In the absence of agreement or as otherwise provided for in the Regulation,the law applicable in the case of a tort or delict should be that of the law of theplace in which the damage occurs or is likely to occur, irrespective of thecountry in which the event giving rise to the damage occurred, and irrespectiveof the country or countries where the indirect consequences of the event wouldarise (proposed amendment to what is now Art 4.1)

(b) In the case of personal injuries arising out of traffic accidents, and with aview to the motor insurance directive, the court seised and the liable driver'sinsurer should, for the purposes of determining the type of claim for damagesand calculating the quantum of the claim, apply the rules of the individualvictim's place of habitual residence unless it would be inequitable to the victimto do so, but that with regard to liability, the applicable law should be the law ofthe place where the accident occurred. There were then further amendmentsproposed to the then proposed wording of what are now Articles 4.2 and 4.3.

In its justification for the proposed amendment, it was argued that the effect of the Fourthand Fifth Motor Insurance Directives enabled a victim to bring an action in his/her owncountry against the other party's insurer, and that it would be more equitable to apply the lawof the victim's state of habitual residence. It referred also to the fact that it was important tohave regard not only to differences in levels of compensation, but also to the heads ofdamage recoverable, such as the entitlements to damages for pain and suffering, nursing andattendance allowances and certain pensions.

49.

The Commission rejected the proposed amendments, save for that relating to the location ofthe damage. It objected to having different rules for traffic accidents, and stated that it wouldcause a sharp divergence from the law in force in the Member States. The Council endorsedthat approach on 25th September 2006.

50.

G The approaches in Jacobs v MIB [2010] EWCA Civ 1208 [2011] 1 All ER 844, andBloy and Ireson v MIB [2013] EWCA Civ 1543.

In Jacobs a UK resident was in Spain when he was struck by a car driven by a German inDecember 2007. No insurer was identified. The claimant issued proceedings underRegulation 13 of the 2003 Regulations. A preliminary issue was ordered as to whether theassessment of compensation should follow Spanish or UK law. The case was conducted inthe belief that Rome II was in force at the relevant date (as noted above at paragraph 9above, the CJEU subsequently held that it was not then in force). At first instance, theClaimant argued that Rome II did not apply, because this was not a situation where therewas a conflict of laws. It was argued that once the pre-conditions in Regulation 13 of the2003 Regulations were met, there was a free standing obligation to pay compensation, as ifthe accident had happened in Great Britain. It was also argued that the damage had occurredin Great Britain. It was held by Owen J ([2010] EWHC 231 [2011] 1 All ER (Comm) 128)that:

51.

(a) Regulation 13(2)(b) could not be interpreted and applied in a manner


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consistent with Rome II, and Rome II must prevail [28-29];

(b) Article 4 of Rome II applied because the obligations, whether of the driverB or of the Defendant as compensating body, both arose from a tort or delict,namely the culpable want of care of B. The liability of the MIB arose from histort or delict, and was secondary to that of B as the tortfeasors [30];

(c) Recital 17 (set out above) showed that the relevant location was that wherethe injury was sustained. That was also consistent with the Fourth Directive'sprovisions on reimbursement and subrogation [35];

(d) If the Spanish Guarantee Fund brought the subrogated claim against B in theSpanish Courts, the compensation issues would be determined under Spanishlaw. It would be wholly inconsistent with Rome II to have the application ofdifferent laws depending on which country's courts were seised of the matter[37];

(e) If a UK citizen and a Spanish citizen had been standing together whenstruck by B's car, the Claimant's argument required one to conclude that the twoclaimants would have their claims for damages assessed under two differentsets of laws, which would be inconsistent with the objective of Rome II [38];

(f) The Claimant's approach would enable the injured party's state of residenceto determine the law to be applied to the computation of the claim, contrary tothe objective of Rome II [39]

(g) The relevant law to be applied to the assessment of damages was that ofSpain.

There was an appeal to the Court of Appeal (Laws, Moore-Bick and Rimer LJJ).Moore-Bick LJ gave the first judgment, with which the other Lords Justices agreed. Aftersetting out the nature of the Directives he referred to the parties' arguments. Both parties aresaid [38] to have agreed that Regulation 13 did not involve a choice of law, although MrMercer QC submitted to me that the MIB had not in fact made such a concession. TheDefendant argued that before the Claimant could be compensated, it had to be establishedthat the claimant was entitled to receive any compensation at all, and that since the accidenthad occurred in Spain, Article 4 applied, and that in the absence of either 4.2 or 4.3applying, Article 4 required that the issue had to be decided in accordance with the law ofSpain, where the accident had occurred.

52.

It is necessary to set out some parts of the judgment in detail. Moore-Bick LJ addressed thescheme of the Fourth Directive at [21- 23], where he concluded that the right tocompensation arose from the Regulations themselves:

53.

"The scheme of the Directive

21 The scheme of the compensation arrangements established by the FourthDirective appears clearly from Articles 6 and 7, to which I have alreadyreferred. In essence, the compensation bodies are intended to provide a safetynet which will be called upon only in rare cases where the tortfeasor isunidentified or uninsured or where for some reason the insurer fails to respond


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to a claim within the prescribed time. Even then, however, the compensationbodies do not ultimately bear the burden of the claim, because the body that haspaid compensation to an injured party has the right to obtain reimbursementfrom the corresponding body in the state where the insurer is established (thatbody in turn being subrogated to the driver's rights against the insurer) or has aclaim against one of the guarantee funds: see Articles 6(2) and 7. The schemeappears to proceed on the assumption that the existence of the driver's liabilityand the determination of the amount of compensation payable to the injuredparty will be governed by the same principles at all stages of the process, butthe Directive does not go so far as to provide that such questions are to bedetermined by reference to the law of the country in which the accidentoccurred.

22 When the Directive was published in May 2000 Rome II had not beenintroduced and complete harmony between the conflicts of laws rules applied inthe Member States was lacking. It appears that under the law of some states allquestions relating to liability and damages were determined in accordance withthe law of the country in which the accident occurred, whereas in othersdifferent principles applied. In England, for example, issues of liability andheads of recoverable damage were normally determined by reference to the lawof the place where the accident occurred, but the assessment of damages wasdetermined by English law as the lex fori, as subsequently confirmed by thedecision of the House of Lords in Harding v Wealands [2006] UKHL 32,[2007] 2 AC 1. The position was the same in Scotland. The Directive did notaddress that difficulty, which may explain why the parties to the Agreementconsidered it necessary to do so in express terms: see clauses 3.4 and 7.2.However, the fact remains that at the time the Regulations were made there wasno universal rule of law governing the question and the Regulations themselvesare silent on the point.

23 Mr. Layton submitted that the right of an injured person to make a claimagainst the compensation body derives from the 2003 Regulations themselves.That, in my view, is correct. The Fourth Directive obliges Member States to putin place legislation to achieve the effects for which it provides. In the absenceof the 2003 Regulations there would be no compensation body and no right foran injured person to recover compensation from it. It is for Member States todecide how to achieve that end and they are entitled, if they wish, to put inplace legislation that goes beyond the minimum requirements, provided itseffect does not conflict with the object of the Directive. When interpreting theRegulations, however, it must be borne in mind that the scheme established bythe Fourth Directive provides that liabilities imposed on the compensation bodyin the state where the injured person resides will be passed back, usually to thedriver's insurer by way of the compensation body in the state where the insureris established, but in the case of an uninsured or unidentified vehicle to therelevant guarantee fund. The guarantee fund might have a right of recourseagainst the driver himself (in the case of an uninsured driver) under local law.The central concept behind the scheme, therefore, is to provide the claimantwith easy access to a defendant in his own country while ensuring that theliability ultimately comes to rest with the person or body with whom it ought to


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reside. Moreover, the scheme does not detract from the claimant's rights againstthe driver himself or against the driver's insurer. An interpretation of theRegulations which allowed a claimant to recover from the compensation bodyin his own country more than he could have recovered from the driver's insureror the driver himself might therefore be regarded as anomalous."

He then addressed Regulations 11 and 12, which deal with the case of the identified driverwith an identified insurer. He said this at [24-25]:

54.

"Regulation 12 – the assessment of compensation

24 Since the paradigm case with which the Regulations deal is that in which thedriver of the vehicle involved in the accident is capable of being identified andis insured, it is helpful to begin by considering regulations 11 and 12.Regulations 11 and 12 oblige the MIB to indemnify an injured person who livesin England if he can satisfy it that the insured driver is liable to him in respectof the accident: regulation 12(4)(a). If he can do that, the MIB must indemnifyhim in respect of "the amount of loss and damage (including interest) that isproperly recoverable . . . by the injured party from that person under the lawsapplying in [England]": regulation 12(4)(b). Since the accident must have takenplace abroad, the need to demonstrate liability on the part of the driver clearlyrequires the court to consider what law governs that issue. In most cases Article4(1) of Rome II will apply and the issue will be determined by reference to thelaw of the country in which the accident occurred.

25 It is less easy, however, to identify the law which governs the assessment ofdamages because of the reference in regulation 12(4)(b) to the laws applying inEngland. If that had not been included, so that the paragraph referred simply tothe amount of loss and damage properly recoverable by the injured party fromthe person liable, the position would have been straightforward. Whatever theposition in 2003, Article 4 of Rome II would now apply and the issue wouldnormally have to be determined by reference to the law of the country wherethe accident occurred. On the face of it, however, the inclusion of the referenceto the laws applying in England and Wales obliges the MIB to paycompensation assessed in accordance with English law."

It will be noted that Moore-Bick LJ has therefore recognised the effect of Article 4 of RomeII, but has relied on the terms of the 2003 Regulations to say that the obligation on the MIBto compensate in accordance with English law remains. At [27] he rejected the argumentthat the reference to the laws applying in England was a reference to English rules onconflict of laws. He went on to say:

55.

"27 ………..At the time when the Regulations were made Englishconflicts of laws rules would not have referred the issue of theassessment of damages to the law of the country where the accidentoccurred; on the contrary, they would normally have been assessedby reference to the lex fori. If the draftsman had wished to providethat recoverable loss and damage was to be assessed in accordancewith the law of the country where the accident occurred, he couldeasily have said so. In fact, however, he used words which broadly


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reflect what was then generally understood to be the position inEnglish law. The reference to "the laws applying in that part of theUnited Kingdom in which the injured party resided at the date ofthe accident" clearly recognises that different principles may applyto determine the amount of loss and damage properly recoverableby the injured party, depending on whether he resided in Englandand Wales, Scotland or Northern Ireland."

He then addressed the argument of the Defendant MIB that the logic of the Fourth Directivescheme called for loss and damage to be calculated under Regulation 12 by reference to thelex loci delicti. He said at [29-30]:

56.

29 …………I find myself driven to the conclusion that in the case of theinsured driver the MIB is obliged to pay compensation assessed in accordancewith English, Scots or Northern Irish law, as the case may be. That may reflectthe fact that prior to Rome II conflicts of laws rules relating to non-contractualobligations differed as between Member States or it may, as Mr. Laytonsubmitted, reflect a policy decision to ensure that compensation paid to aresident of the United Kingdom by the domestic compensation body is no lessgenerous than would be payable under domestic law. (The position is mirroredin regulation 14 under which the MIB is obliged to indemnify a foreigncompensation body against compensation paid to a foreign resident withoutregard to the law by reference to which it was assessed.) For present purposes itmatters not. In fact, however, under the Agreement the compensation bodiesagreed among themselves to apply the law of the country in which the accidentoccurred when assessing compensation, thus providing a measure of protectionagainst more generous provision under the injured person's domesticlegislation. The practical effect in a case such as the present is that an Englishvictim of a road traffic accident can recover compensation from the MIBassessed by reference to English law and that the payment will be funded by theMIB itself insofar as it exceeds the amount recoverable in accordance with thelaw of the country in which the accident occurred. Conversely, where the law ofthe country in which the accident occurred provides more generouscompensation, the injured person resident in the United Kingdom can recoverfrom the MIB no more than the amount he would have been able to recoverunder English law. That reflects a broad measure of common sense andalthough it may at first sight appear to be inconsistent with the scheme of theFourth Directive, the Directive itself does in fact contemplate the existence ofsuch arrangements, since Article 10(4) provides as follows:

"Member States may, in accordance with the Treaty, maintain orbring into force provisions which are more favourable to theinjured party than the provisions necessary to comply with thisDirective."

30 Perhaps the strongest argument against interpreting the regulation in thatway is that the injured person may be able to recover more (or less) from theMIB in its capacity as compensation body than he could have recovered fromthe insurer, or, for that matter, the driver responsible for the accident. However,since a right to obtain compensation from the MIB arises only if the insurer


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fails to respond, it may have been thought that domestic arrangements forproviding compensation should not be affected by the scope of the recovery thatcould have been made from the foreign insurer or driver. At all events, I do notthink that this anomaly, such as it is, provides sufficient grounds for givingregulation 12 a meaning it does not naturally bear."

He then turned to Regulation 13:57.

"Regulation 13 – the assessment of compensation

31 Regulation 13(1) defines the circumstances in which a right to compensationarises, but it says nothing about how compensation is to be assessed. Regulation12 provides an important part of the context in which Regulation 13 is to beconstrued, however, since one would expect the amount of compensation thatcan be recovered by the victim of an unidentified or uninsured driver to beneither more nor less generous that that available to the victim of an insureddriver. Indeed, in Evans v Secretary of State for the Environment, Transport andthe Regions & Motor Insurers' Bureau (Case C- 63/01) [2003] ECR I-14447 theEuropean Court held that the legislature's intention was to entitle victims ofdamage or injury caused by unidentified or insufficiently insured vehicles toprotection equivalent to, and as effective as, that available to persons injured byidentified and insured vehicles. One of the curious features of regulation 13 isthat, unlike regulation 12, it does not expressly require the injured person tosatisfy the compensation body that the driver is liable to him in respect of hisinjury. It would be surprising, however, if that were not necessary, not onlybecause the basis of compensation would be fundamentally different in nature,but also because, by introducing a form of no-fault compensation, it wouldrepresent a radical departure from the scheme of the Directive which providesfor the liability to be borne by one of the guarantee funds. Accordingly,although for reasons given earlier I think Mr. Layton was right in saying thatthe claim against the MIB arises under the Regulations and to that extent maybe said to be free-standing, it does not follow that the right to recovercompensation is wholly independent of the existence of liability on the part ofthe driver said to have caused the accident. That depends on the correctinterpretation of regulation 13. Nor, however, does it necessarily follow that ifthe right to claim compensation depends on the existence of liability on the partof the driver responsible for the accident the measure of compensation mustequate to what could be recovered from him. Again, that depends on the correctinterpretation of regulation 13.

32 In my view the answer to this particular question lies in the words "shallcompensate the injured party in accordance with the provisions of Article 1 ofthe [Second Directive]". Article 1(4) of that Directive obliges each MemberState to set up a body to provide compensation for damage to property orpersonal injuries caused by unidentified or uninsured vehicles. I think it isreasonably clear from the recitals to the Directive that its purpose was toassimilate the position of the victim of an unidentified or uninsured driver orvehicle to that of the victim of an identified and insured driver or vehicle; it isnot its purpose to require the establishment of a system of no-faultcompensation. It is, therefore, implicit in the scheme of the Directive that the


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victim must be able to establish that the driver is liable to him in respect of hisinjuries, but whether that requires proof of fault will depend on the law of thecountry 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 theexistence 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 theMIB by regulation 13(2)(b) to compensate the injured party in accordance withthe provisions of Article 1 of the Second Directive carries with it the implicitproviso that the injured party must be able to show that the driver is liable tohim. As in the case of a claim under regulation 12, that is a question to bedetermined by reference to the applicable law identified in accordance with theappropriate conflicts of laws rules. At the time the Regulations were made theapplicable rules were those of the Private International Law (MiscellaneousProvisions) Act 1995, but since the introduction of Rome II, the rules set out inthat Regulation will apply and will normally lead to the application of the lawof the country in which the accident occurred.

33 The judge approached the matter on the basis that the claim against the MIB,being based on a non-contractual obligation arising out of a tort, must begoverned in all respects by a single system of law. However, it is wellestablished that different systems of law may govern different questions raisedby the same claim (see, for example, Macmillan Ltd v Bishopsgate InvestmentTrust Plc (No. 3) [1996] 1 W.L.R. 387, 418A-B per Aldous L.J.) and underEnglish conflicts of laws rules the assessment of damages gives rise to aseparate issue. The difficulty in the present case lies in the words "as if it werethe body authorised under paragraph 4 of that Article and the accident hadoccurred in Great Britain". Mr. Layton submitted that those words oblige theMIB to pay compensation assessed on the basis that the accident had occurredin Great Britain, that is, assessed in accordance with English law, and he alsorelied on Article1(7) of the Second Directive which provides for each MemberState to apply its own laws, regulations and administrative provisions to thepayment of compensation by the guarantee fund for which it provides. Mr.O'Brien, on the other hand, submitted that the whole of the expression "as if itwere the body authorised under paragraph 4 of that Article and the accident hadoccurred in Great Britain" simply reflects the fact that the MIB, which acts asthe guarantee fund for Great Britain pursuant to Article 1(4) of the SecondDirective under the terms of the Untraced Drivers Agreement and theUninsured Drivers Agreement, has also been designated by the UnitedKingdom as the compensation body required by the Fourth Directive. Thosewords were, he said, necessary to impose on the MIB in its capacity ascompensation body an obligation of the kind that it already bore as guaranteefund, including a liability in respect of accidents occurring abroad.

34 Sections 143-145 of the Road Traffic Act 1988 apply to the use of a vehiclein Great Britain and the EEA and the Uninsured Drivers Agreement is ofcorresponding scope. The Untraced Drivers Agreement, however, is limited inits scope to accidents occurring in Great Britain. (Separate arrangements existfor Northern Ireland.) However, not only do the Regulations designate the MIBas the compensation body for the whole of the United Kingdom, they impose


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on it an obligation relating to accidents occurring abroad. Accordingly, if theUntraced Drivers Agreement were to be retained for this purpose, it wasnecessary for the Regulations to bring a wider range of cases within its scope.In my view, therefore, Mr O'Brien was right in saying that the somewhatcomplicated language of regulation 13(2)(b) was designed to achieve thatresult. It does not necessarily follow, however, that it does not have the effectfor which Mr. Layton contended. A legal fiction may have consequencesbeyond its immediate purpose.

35 The mechanism by which the MIB's obligation to compensate personsinjured in accidents occurring abroad involving uninsured or unidentifieddrivers 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 itshould not also affect the principles governing the assessment of damages,particularly in the absence at the time of complete harmonisation throughout theEEA of the conflicts of laws rules governing that issue. Nonetheless, the matteris not free from difficulty. As I have already observed, at the time theRegulations were made damages recoverable as a result of an accidentoccurring in Great Britain would normally have been assessed by reference tothe lex fori, yet regulation 13(2)(b) does not make any provision for theapplication of English or Scots law as such, presumably leaving it to the courtseised of any claim to apply its own law.

36 At this point it is necessary to return to the recitals to the Fourth Directive inorder to see whether they point to a conclusion different from that which thelanguage of the Regulations suggests. It is apparent from the recitals thatalthough the European Parliament and the Council of Ministers were concernedwith equality of treatment between persons injured in road accidents across theEEA, their concern was primarily directed to the ability of injured parties toobtain compensation, not to the amount of that compensation. That concern ledto the introduction of a right to make a claim directly against the wrongdoer'sinsurer (regarded as a logical development of the victim's right to make a claimagainst a representative of the insurer located in his home state), theestablishment of information centres and compensation bodies. The emphasis isvery much on access to information, the provision of a convenient claimsprocedure and the ability to obtain compensation rather than on the amount ofthat compensation, to which the recitals make no reference beyond recognisingthat it must not fall below the prescribed minimum in respect of whichinsurance is required. In my view nothing in the recitals lends any additionalsupport to either party's case.

37 Having regard to the language of regulation 13(2)(b), I am persuaded thatMr. Layton is right and that compensation is to be assessed on the basis that theaccident occurred in Great Britain. That has the incidental merit of ensuring thatthe measure of compensation recoverable under regulation 13 is likely to bebroadly the same as that recoverable under regulation 12.

38 The judge considered that regulation 13(2)(b) contained a choice of properlaw that was inconsistent with the provisions of Rome II. That led him toconsider the doctrine of supremacy as developed in decisions such as


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Amministrazione delle Finanz dello Stato v Simmenthal S.p.A. (Case 106/77)[1978] E.C.R. 629 and thence to the conclusion that the rules of Rome II mustprevail. However, as I have said, the parties agreed that regulation 13(2)(b) isnot a choice of law clause, rightly, in my view, because it is concerned withdefining the existence and extent of the MIB's obligation as the body appointedto provide compensation for injury suffered in road traffic accidents rather thanwith determining the liability of the wrongdoer. That being so, Rome II has noapplication to the assessment of the compensation payable by the MIB underregulation 13 and it is therefore unnecessary to consider the issues relating tothe construction of Article 4 that would arise if it did so.

39 For these reasons I would allow the appeal and answer the questions posedby the preliminary issues compendiously by stating that the MIB is obliged topay compensation to the claimant assessed in accordance with the law ofEngland."

As recorded above, the Supreme Court had granted the Defendant leave to appeal, but it wasnot pursued because of a subsequent CJEU decision on the date when Rome II came intoforce. As I shall set out in due course, Mr Mercer QC, while accepting some parts of Jacobs,makes trenchant criticisms of others.

58.

I turn now to Bloy & Ireson v Motor Insurers' Bureau [2013] EWCA Civ 1543. In that casethe two claimants (a mother and her baby son) were injured in Lithuania in September 2007.The infant claimant suffered catastrophic injuries, including brain damage, which willrequire lifelong care. Rome II was not in force then. The driver was subsequently convictedof driving under the influence of alcohol and careless driving, as well as driving withoutinsurance. In Lithuania there was a limit of € 500,000 in respect of all claims arising out ofany one accident. The MIB contended that the compensation payable under the 2003Regulations should be limited to the maximum payable under Lithuanian law. TheDefendants appealed on four grounds. The appeal was heard by the Chancellor (EthertonLJ), Hallett and Sharp LJJ. The Chancellor gave the judgement with which Hallett andSharp LJJ agreed.

59.

The first ground was that the trial judge (HH Judge Platts in Manchester) had been wrong toapply Jacobs when the issue of a cap of the kind in that case had not been addressed there.The Chancellor said [43] that the trial judge had been right to apply and follow Jacobs andthen went on at [44]:

60.

" It is true that the arguments in the two cases have been presenteddifferently and the MIB accepts that Rome II, which featuredprominently in Jacobs, has no application to the present case. Thearguments in Jacobs and in the present case, however, are alldeployed in respect of the same critical question, that is whetherthe law applicable to the assessment of compensation underRegulation 13(2)(b) is to be assessed by reference to the law of thepart of Great Britain where the injured party resides or the law ofthe place where the accident took place. The decision in Jacobswas that, subject to establishing the tortious liability of the culpabledriver under the applicable law for the tort (in the present case,Lithuanian law, and admitted), Regulation 13(2)(b) is a deeming


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provision with all the consequences that follow, including that theassessment of compensation is governed entirely by the law of therelevant part of Great Britain: see Jacobs at [35] and the analogousprovisions of Regulation 12(4)(b). That precisely answers thepreliminary issue in the present case. Moreover, Moore-Bick LJconsidered the issue against the background of all the relevant EUlegislation and the 2002 Agreement, taking due note of theconsequence that the MIB will only be able to obtain limitedreimbursement from those Member States guaranteeing a lowerlevel of compensation pursuant to the Motor Insurance Directives."

Ground 2 concerned an argument on whether the cap on compensation was a rulecategorised as lex causae (i.e. lex loci delicti) or lex fori. Given the fact that Rome II nowapplies to such issues, it is unnecessary to rehearse it. Ground 3 was concerned with whatwas said by the MIB to be the departure from the principle of comparative treatment. Onecan pick up the judgment at paragraph 58:

61.

"58 The second European strand relied upon by the MIB is that both the 2002Agreement and the 2003 Regulations were made pursuant to the provisions ofthe Fourth Motor Insurance Directive. It is not disputed that the 2002Agreement was the agreement contemplated in what is now Article 24.3 of theConsolidated Directive (formerly Article 6.3 of the Fourth Motor InsuranceDirective). Clause 5 of the 2002 Agreement expressly ties its aims to theobligations imposed by Article 7 of the Fourth Motor Insurance Directive. MrRandolph also emphasised that clause 11 of the 2002 Agreement provided thatthe date of entry into force of the 2002 Agreement was to be fixed by theEuropean Commission. The 2003 Regulations were brought into force pursuantto the obligation of the United Kingdom in the Fourth Motor InsuranceDirective. Accordingly, it is argued by the MIB, the Motor InsuranceDirectives, the 2002 Agreement and the Regulations must be read together so asto produce a coherent scheme compliant with European law.

59 I agree with the Judge that MIB's approach is flawed. Mr Randolph is correctto say that the 2002 Agreement was entered into pursuant to the Fourth MotorInsurance Directive and, in particular, was the agreement contemplated byArticle 6.3 of that Directive. The parties to it, however, are purely privatebodies. They are insurance industry bodies in the different Member States. As Ihave already said, the MIB itself is a company limited by guarantee, whosemembership is made up of insurance companies. The Comité Européen DesAssurances, whose name appears at the head of the 2002 Agreement, is arepresentative industry body. The 2002 Agreement is, therefore, neitherlegislation nor an agreement between Member States. It is a purely privateagreement between insurance industry bodies. The Motor Insurance Directiveshave not empowered such bodies or such an agreement to impose on thegovernments of Member States limitations on the liability of insurers, andhence Member States, where such governments wish to provide for greatercompensation for victims of traffic accidents than the minimum amountsspecified in the Motor Insurance Directives. Nor did the Fourth MotorInsurance Directive confer on the European Commission any power to dictate


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the terms of the 2002 Agreement. Furthermore, as Mr Alexander Layton QC,for the claimants, cogently observed, the 2002 Agreement post-dated the FourthMotor Insurance Directive and cannot determine its meaning.

60 Mr Randolph submitted that the Member States do not have a completelyfree hand in the light of, for example, the European legal principle ofeffectiveness. I do not see, however, how that principle can have any relevanceto the facts of the present case or Jacobs.

61 Furthermore, if the MIB is correct in its submission that Regulation 13(2)(b)imports English conflict of laws principles, it must follow, if the limitation onthe amount of compensation recoverable under Lithuanian law is properlycharacterised as procedural, that the 2002 Agreement cannot have had the effectfor which the MIB contends.

62 In contrast to the 2002 Agreement, the 2003 Regulations represent the willand intention of Parliament. For the reasons I have given, Regulation 13(2) (b)has the meaning determined in Jacobs. Even if Jacobs is, contrary to my view,not binding in the present case, I would come to the same conclusion as theCourt of Appeal in that case. Giving the words in Regulation 13(2) (b) theirnatural meaning, it clearly provides for compensation to be assessed inaccordance with English law (or the law of Scotland or Northern Ireland as thecase may be). That is consistent with Regulation 12. Regulation 12 provides theclearest possible indication that Parliament did not intend to limit compensationin the way stipulated in the 2002 Agreement. The wording of Regulation13(2)(b) is different from Regulation 12(4)(b) but, as Moore-Bick LJ observedin Jacobs (at [34]), that is because its purpose was to bring a wider range ofcases within the scope of the Untraced Drivers Agreement, which is limited toaccidents in Great Britain.

63 Mr Randolph accepted that there was nothing in the Motor InsuranceDirectives preceding the 2003 Regulations which required Member States, in acase such as the present or in Jacobs, to limit the compensation payable to theinjured party to the amount which could have been recovered by a victim fromthe guarantee fund in the Member State in which the accident took place andthe uninsured vehicle was normally kept. In his oral submissions, however, MrRandolph sought to recast the issue as being whether what are now Articles24.2 and 25.1 of the Consolidated Directive require the reimbursement of acompensation fund in the position of the MIB in the present case to be acomplete reimbursement rather than a partial one. On the other hand, he alsoacknowledged that the Motor Insurance Directives do not expressly address thepresent issue. I understood his contention to be, at least at one point in hissubmissions, that it was left to the agreement contemplated in Article 24.3 ofthe Consolidated Directive to determine the reimbursement arrangements.

64 What is perfectly clear is that the Motor Insurance Directives expresslystipulate that Member States can provide for their residents payment of morecompensation than the specified minimum amounts. Regulation 13(2)(b) of the2003 Regulations represents, therefore, a perfectly coherent policy ofParliament to provide residents in the United Kingdom, whose losses will


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accordingly be suffered here, with a more generous level of compensation thanwould have been recoverable in the foreign Member State where the accidenttook place and so putting them on a par with the victim of an accident takingplace in the United Kingdom itself.

65 Finally, on this aspect, it seems to me that there is at the least, a strongargument that the Fourth Motor Insurance Directive actually did provide forprecisely the policy to be found in Regulation 13(2)(b) of the 2003 Regulations.What is now Article 25 of the 2009 Consolidated Directive provides that, whereit is impossible to identify the insurance undertaking within two months of thedate of the accident, the injured party may apply for compensation from thecompensation body in the Member State where he resides and the compensationshall be provided in accordance with the provisions of Articles 9 and 10. Whatis now Article 10.4 provides that each Member State shall apply its laws,regulations and administrative provisions to the payment of compensation bythe compensation body without prejudice to any other practice which is morefavourable to the victim. Mr Randolph submitted that Article 10.4 is notrelevant to the present case and that it does not address how to deal with a "capon liability" (as he put it). I am inclined to think, however, that Article 10.4 is,on the contrary, directly in point. This issue was raised by the claimant inJacobs but Moore-Bick LJ did not address it because he did not need to.Similarly it is not strictly necessary for us to decide it in the present casebecause of all the other reasons that I have given supporting the claimants' andthe Judge's interpretation of Regulation 13(2)(b) on the facts of the presentcase."

It is not necessary to deal with the fourth ground, which relates to the refusal of the trialjudge to refer the matter to the CJEU.

62.

H Submissions for the Defendant MIB

By agreement between the parties, Mr Mercer QC addressed me first, followed by Mr BeardQC in response.

63.

Mr Mercer's submissions were wide ranging. Few if any stones within the legislativeedifices were left unturned, but that provided the court with a full picture. I hope I do hissubstantial submissions no injustice by condensing them. His case had two strands:

64.

i. The effect of the Directives, and the properinterpretation and application of Regulation 13 of the2003 Regulations;

ii. The effect of Rome II.

He argued the following65.

(a) The purpose of the Motor Insurance Directives is to enable the victim of anunidentified or uninsured driver to obtain compensation from the MIB on behalfthe guarantee body in the state where the accident occurred. That explains thereference in the Regulations to the Second Directive. The words of Regulation


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13 follow the Fourth Directive, with the addition of the words "as if it were thebody authorised under paragraph 4 of that Article and the accident had occurredin Great Britain" so as to impose an additional liability on MIB to compensatein respect of accidents abroad, as Moore-Bick LJ said in Jacobs at [33-34]. Itwas required to do that, as MIB otherwise had no power to compensate UKvictims for torts committed against them abroad. Where he departs from Jacobsis that he says that the Regulation, properly interpreted in the light of theDirectives, does not create a mechanism to have the compensation assessedunder UK law, and certainly not since Rome II;

(b) Since Cox v Ergo Versicherung AG [2014] UKSC 22 [2014] AC 1379 onecannot separate the issues of liability for an accident from the scope of liability;

(c) It is speculative to assume, as was assumed in Jacobs at the foot of [29] thatthere was a policy decision to be more generous to UK claimants than theDirectives required. Reference was made to the French, Irish and Italian headsand measure of damages;

(d) The interpretation and application of Regulation 13 puts a victim who hassustained injury at the hands of a culpable driver who is unidentified oruninsured, in a different position from one who sustained injury at the hands ofan identified insured driver. If the UK victim has found the insurer, who hasresponded timeously, and sued the insurer direct (under Article 3 of the FourthDirective) in the state where the accident occurred, that victim will get damagesassessed according to its law. Since Rome II, it would make no difference if thevictim sued the insurer by action in the UK courts - see Wall v Mutuelle dePoitiers Assurances [2014] EWCA Civ 138. Such an action is possible underEU law- see Odenbreit v FBTO [2007] ECR 1-11321 [30].

(e) The principle of equivalence is fundamental: see the CJEU judgment inC-63/01 Evans v MIB and Secretary of State for Transport [2003] ECR 1-14447[24-28}, and especially [27]. Reference was also made to the AdvocateGeneral's Opinion in that case at [30-39] and especially [36] which emphasisesthat it is

"……in principle a civil-law claim to compensationthat underlies compulsory insurance cover in respectof motor vehicles. The statutorily prescribed duty tohave insurance cover is linked to this civil-law claimand serves as the economic safeguard for awell-founded claim to compensation."

(f) Both the judgment and the Opinion were relied on in Byrne v MIB [2008]EWCA 574 [2009] QB 66 at [99] per Carnwath LJ, where paragraph [27} ofEvans on equivalence was applied [21].

(g) The anomaly created by the Jacobs and Bloy approach is well illustrated byconsidering Regulations 11 and 12 of the 2003 regulations. If the interpretationis correct, the claim under Regulation 12(3) will reflect UK law on theassessment of compensation, but if the hitherto unresponsive insurer responds,


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then the claim will revert under Regulation 12 (5)(a) to being assessedaccording to the law of the state where the accident occurred.

(h) Whatever the position before Rome II, there can be no doubt that in theevent of a claim, exceptions in Arts 4.2 and 4.3 apart, the lex loci delicti appliesto issues of both liability and damages. That means that when a victim hassuffered injury in an EU country as the result of another's tort or delict, there isone claim, to be determined according to the law of the state where the eventoccurred. The maintenance of Regulations 12 and 13 as interpreted and appliedin Jacobs cannot be sustained. While there was variation before Rome II on thechoice of law for the assessment of compensation, and the jurisdictions in theUK were among those that treated those two aspects of a claim differently, thatis no longer the case. The distinction has been removed across the EU in theinterests of uniformity, and can no longer be justified.

(i) As Rome II is a Regulation, it is to be applied directly. States are directlyforbidden from altering or supplementing its scope: see Art 288 of the LisbonTreaty and the Bolmann case (see section F above). The travaux préparatoiresshow that the idea of maintaining the different rules on choice of law was firmlyrejected, both generally, and specifically in the case of motor accident cases.

(j) If there is an inconsistency between a directly applicable EU law and aprovision of UK legislation, the latter must be read and take effect as though thestatute had enacted that it was to be without prejudice to the directlyenforceable EU rights: see Lord Nicholls of Birkenhead in Autologic plc v IRC[2005] UKHL 54 [2006] 1 AC 118, 126 at [16].

(k) There are four significant legal errors in Jacobs:

i. At [25] it is accepted that Rome II applies"normally", but then the UK regulation is preferred tothe EU Regulation so far as one aspect of the claim isconcerned. That involves a fundamental departurefrom the provisions of Art 288 of the Lisbon Treatyrequiring that an EU Regulation has direct bindingeffect, and that no alteration to its extent or scope ispermitted.

ii. At paragraph [32] it is said that it is implicit in thescheme that the victim must show that the driver wasresponsible for his injuries. Moore-Bick LJ said thatthat issue was to be determined under Rome II, andwould normally lead to the application of the lex locidelicti. It is not possible, says Mr Mercer, to hold thatpart of Art 4 of Rome II applies, but not the other part.The Lord Justice's reference [33] to Macmillan vBishopsgate Investment Trust Plc [1996] 1 WLR387,418 and its holding that different systems of lawmay govern different questions raised in the sameclaim overlooks the fact that binding law in the form


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of Rome II is quite explicit that there should not bedifferent systems dealing with the issues of liabilityand damages in any case to which it applies.

iii. At paragraph [29] it is suggested that there can bedifferences between what a victim would get ,depending on whether the law of England and Wales ismore generous than the other state's law.

iv. The reference in paragraph [35] that Regulation 13of the 2003 Regulations (treating the accident as if ithad occurred in Great Britain) should apply in theabsence of any provision limiting its scope was toadopt the wrong approach. What the Court of Appealshould have done was to interpret the words of theRegulation in line with the scheme in the Directives.

(l) So far as Bloy is concerned, Mr Mercer says that the Court made the error at[64] of assuming that the effect of the 2003 Regulations was to provide moregenerous compensation to UK citizens injured abroad than was required underthe Directives.

(m) For completeness, Mr Mercer says that the concession recorded byMoore-Bick LJ at paragraph [38] was not made.

I Submissions for the Claimant

Mr Beard QC made the following submissions:66.

(a) Claims against unidentified or uninsured drivers are the exception and notthe rule.

(b) The 2003 Regulations implemented the Fourth Directive. The system is onewhere a victim and his/her advisers can go to the local compensation body andbe dealt with locally, and where everyone involved knows and understands thelaw.

(c) The arguments of the MIB stem from the fact that it signed up to anagreement which will leave it with losses when it cannot get full reimbursementbecause the level of compensation (as in this case) would be higher in the UKthan in the country where the accident occurred.

(d) The obligation to compensate the Claimant in this case is statutory, beingderived from the Regulations 13 and 16. There is nothing in the Directives tosay that the approach in the Regulations is wrong. Indeed the Directivesnowhere state that compensation must be assessed in any particular way bycompensation bodies.

(e) Equivalence is to be found in the fact that victims are to be dealt withthrough the system of information being available locally. The principle ofequivalence is not designed to achieve equivalence in compensation, but in


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procedure, as set out by Moore-Bick LJ in Jacobs.

(f) The claim against a guarantee fund in one's home state, and a claim from acompensation body in the state of residence are not, nor intended to be, directlycomparable.

(g) Evans v MIB is of limited relevance. It addresses the Second Directive. Itdid not consider the overall intention of the legislature.

(h) It is wrong to look at the case on the basis that the MIB is standing in theshoes of another insurer. It has a specific role under Regulations 12 and 13.

(i) The scheme in Regulation 12 and 13 is an easy scheme for a victim to use togain recourse. For that reason it is misleading to consider whether there areanomalies between claims against an insured driver, and claims against anuninsured driver.

(j) Article 28 of the consolidating (Sixth) directive permits member states tomake provisions which are more generous to injured parties. It is noted also thatthe Hague Convention of 1971 on the Law Applicable to Road TrafficAccidents still applies and is unaffected by Rome II- see Rome II Art 28. TheUK is not a signatory but some EU states are signatories. It applies a code basedon where a vehicle is registered to determine the relevant law.

(k) Jacobs addressed both the Directives and Rome II. It should be followed.As to Mr Mercer's four points:

i. The use of the word "normally" in paragraph [25] isappropriate. That is what Article 4 of Rome II says.

ii. This was simply the Lord Justice dealing with anargument that had been raised.

iii. This is a question of statutory interpretation. It wasdealt with at paragraph [36].

iv. In truth, the Court of Appeal was not applyingRome II, but the 2003 Regulations, which are aseparate scheme.

(l) Rome II is not a "steamroller" crushing all in its path. There is a margin ofappreciation, as shown for example in Evans at [70] , on the choice of how theeffluxion of time is to be compensated for.

J Discussion and Conclusions

In my judgment the starting point is to consider the effect of Regulation 13 of the 2003Regulations before Rome II came into effect, and then to consider whether Rome II hasmade any difference.

67.

As noted earlier, and recognised in the travaux préparatoires for the Fourth Motor Insurance68.


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Directive, there were different rules on the choice of law for determining the level ofcompensation. It follows that at the time of the Second and Fourth Directives, a tortfeasorbeing sued would be required to pay compensation in accordance with the law applied in thecourt in question. In some Member States that would be the law of the lex loci delicti, and inothers the lex fori. Until the Fourth Directive, there was no right in EU law to sue the insurerof a tortfeasor direct, and such an action was not recognised in the law of England andWales. A foreign tortfeasor from another EU state would in most circumstances not be suedin an English/Welsh court. So the reality was that most, or at the very least significantnumbers, of such claims against insured tortfeasors would not involve any dispute on thechoice of law for the assessment of compensation. In most cases - i.e. where the accidentoccurred within the domicile of the tortfeasor - the law would be that applied by the courtwhere the accident occurred.

The Fourth Directive, as is shown by the extracts from its travaux préparatoires citedabove, did not seek to achieve uniformity in the application of rules on the choice of law.That being so, it must be taken that the Fourth Directive, in its provisions for passing onclaims and for reimbursement, must be assumed to permit claims to be made, and thecompensation to be assessed, in one country and then passed to another even though theclaimant's national compensation body would have applied the lex fori and the guaranteebody of the lex loci delicti would not have done so. The same approach appears from Article1 paragraph 7 of the Second Directive.

69.

I therefore consider that there is considerable force in the Defendant's argument that thewords in Regulation 13 "as if it were the body authorised under paragraph 4 of that Articleand the accident had occurred in Great Britain" were intended to enable the MIB to fulfil theobjective of the Fourth Directive and accept claims which related to accidents in otherstates, but related to UK citizens.

70.

Further, the terms of Regulation 13 did no more than state what was the accepted UKposition as at 2003 - i.e. that compensation would be assessed in a UK court according tothe relevant UK law. The fact that the Regulation included the words it did may be seen as astrong supporting argument for the MIB case. After all if any dispute between the claimantand the MIB on a claim under Regulation 13 related to the measure of compensation, onedid not need the critical words in Regulation 13 to apply the lex fori. That would haveapplied anyway as it was a matter (the claim under Regulation 13) which could only belitigated in the UK. If the words were intended to have the effect of applying the lex fori tothe assessment of compensation, the words would thus have been surplusage. In myjudgment they must have been included to serve some other purpose. However, as wasobserved in both Jacobs and Bloy it was a consequence of what the Chancellor described asa deeming clause that it had the effect of determining which rule applied on the assessmentof compensation.

71.

It is true of course that the MIB had entered into an agreement with a provision whichlimited reimbursement to that available in the country where the accident occurred, but thatprivate agreement cannot be used to interpret the Directives or the Regulations. It was anagreement which the MIB must be taken to have gone into with its eyes open, knowing whatthe then approach of the English and Welsh courts was to the assessment of compensation.

72.

As a matter of interpretation, and bound as I am to follow Jacobs and Bloy on theinterpretation of the Regulations, I conclude that the effect of Regulations 13 and 16 was to

73.


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create a cause of action enforceable as a civil debt, in which compensation would beassessed on the basis of the law of England and Wales.

One now comes to Rome II. Whether wrongly described as a steamroller, it has undoubtedlyaltered the landscape. In the simplest terms, no claimant making a claim against a tortfeasor,or the insurer of a tortfeasor, can now expect that any law will apply other than the law ofthe state where the damage occurred as determined by Article 4, irrespective of anyconsequential losses. As recognised in Jacobs in motor accident cases, that will inevitablymean the law of the state where the accident occurred which caused the injuries, unless oneof the exceptions in Art 4.2 or 4.3 apply.

74.

It must also be observed that its effect will apply not just to national laws, but also toDirectives. When the Second Directive referred to Member States applying their own lawsto the payment of compensation, it meant the laws which have force. In the United Kingdom(and elsewhere) that law is now that contained in Article 4 of Rome II. The saving fordifferent approaches to this issue is no longer germane (although of course the saving forother matters may well still be so - see for example the discussion in Wall v Mutuelle dePoitiers SA [2014] EWCA Civ 138 (supra) about case management and the admission ofexpert evidence).

75.

So, unless one of the exceptions in Articles 4.2 or 4.3 apply, if a UK claimant is injured in amotor accident in Greece by an insured driver, and sues the driver in Greece, or sues thedriver's insurer in the UK direct under the Fourth Directive, the law by which compensationwill be calculated will be the law of Greece, as the decision in Wall v Mutuelle de PoitiersSA demonstrates. That is confirmed also by the clear intention of Rome II to achieveuniformity.

76.

Given the effect of the 2003 Regulations, it means that if the Claimant is correct, the onlycircumstances in which an injured claimant in such a case (absent an exception being madeunder Article 4.2 or 4.3) is able to ask that compensation be assessed according to UK law isif the driver is uninsured, or if the insurer has been dilatory (and not responded) underRegulation 12.

77.

I have referred to the arguments raised before me about equivalence. On any view, while theprinciple remains intact, the application of it must have been affected by the enactment ofRome II. Its objective was, and its effect is, that those UK residents injured in another EUstate by insured and identified drivers will now always have their damages assessedaccording to the laws of the country where the accident occurred (save for a case within oneof the exceptions in Articles 4.2 and 4.3), whereas if Jacobs is correctly decided thoseinjured by uninsured and unidentified drivers will not.

78.

Mr Beard's point that there is an important equivalence to be found in the provision of localprocedures, conducted by people familiar with the local rules on compensation, is a point ofsubstance. But perhaps some of its force is lost when one considers that since Rome II, aperson injured by an insured driver abroad can deal locally with the claim, and indeed issueit here, but must adduce evidence on the relevant law of the country where the accidentoccurs.

79.

Moore-Bick LJ said that there was nothing in the Motor Insurance Directives requiringequivalence of compensation. But now, if the approach in Jacobs is correct that Rome II

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does not affect the interpretation and application of Regulation 13, there will also be noequivalence relating to the rules that apply to the making of a claim. There will beequivalence between claimants injured by insured drivers, but not as between all claimants,once one includes those injured by uninsured or unidentified drivers. It means that if theClaimant's arguments are correct, the victim of the uninsured driver is treated in a differentway from the victim of the insured driver, and one which, if the level of compensationthereby obtained is greater is to his or her advantage. Conversely, if it is lower, it will be tohis or her disadvantage. The question of whether that advantage or disadvantage is onewhich is determinative must essentially be a matter of policy. The Recitals and the travauxpréparatoires for Rome II can leave one in little doubt that the policy of Rome II was toachieve more uniformity, and to avoid the anomalies generated by the different sets of ruleson choice of law, including in particular those arising in motor accident claims. It was apolicy objective of the relevant political body with the power to legislate to enactRegulations so as to achieve that end. I do not consider that a court can seek to apply adifferent policy objective.

The Defendant says, with some force, that given the fundamental change in the landscape,what is required is the interpretation of the 2003 Regulations so that Rome II is given effect.If that argument were accepted, the words in Regulation 13 would not provide a provision ineffective conflict with Rome II. The Defendant also has force in its argument that in Jacobsthe Court of Appeal has accepted that Rome II Art 4 dictates the choice of law on the issueof liability, but then has not applied it to the issue of compensation.

81.

As I indicated at the outset of this judgment, I am bound by the two Court of Appealauthorities of Jacobs and Bloy. I would not consider that there is force in the Defendant'scase that the Regulations were misinterpreted as they stood. However I am of the view thatthe effect of Rome II on the correct interpretation required to bring Regulation 13 intoconformity with Article 4 gives the Defendant's arguments that Jacobs was wronglydecided, and that the approach of Owen J at first instance in Jacobs should be endorsed,very considerable force. Whether they are of sufficient force to achieve a different result willbe for others to determine.

82.

Given that the only issue remaining between the parties is the assessment of thecompensation payable, I am therefore bound to answer the issue question thus: it is to beassessed in accordance with the law of England and Wales.

83.

I could not leave this judgment without paying tribute to the immense amount of assistance Ireceived from all counsel in this matter.

84.

This judgment has been sent out in draft in the usual way. I have adopted some, but not all,of the amendments suggested to me by Counsel in their prompt and helpful submissions.

85.

Note 1 The Defendant has suggested that I have not used the correct wording (or spelling). I have takenthe text from http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:31984L0005&rid=2

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