Court of Appeal considers whether English claimant could bring a claim against a Spanish insurer and Spanish insured in England
The English claimant was injured while staying at the second defendant's hotel in Spain. He claimed against the second defendant's Spanish insurer in English proceedings. The insurer did not challenge jurisdiction. However, the policy limit was lower than the level of damages being claimed and so the claimant joined the second defendant (a Spanish company) to the proceedings too. This issue was of importance to the claimant because damages will be higher if assessed under English, rather than Spanish, law.
The Rome II Regulation did not apply to this case, the accident having taken place before 11 January 2009.
The second defendant argued that the English court did not have jurisdiction to hear either the claim against it or the insurer. Jurisdiction was governed by Regulation 44/2001, Article 11 of which provides that an injured party can bring a direct action in his own country against an insurer domiciled in a Member State "where such direct actions are permitted" (Article 11(2)). It also provides that "if the law governing such direct action provides that the…insured may be joined as a party to the action, the same court shall have jurisdiction over them" (Article 11(3)).
In the CJEU decision of Odenbreit , it was held that the direct action against the insurer had to be permitted in accordance with the law where the claimant (and not the insurer) is domiciled. That was thought to be important here because direct actions against insurers in the circumstances of this case are not permitted under English law. However, Odenbreit was a motor insurance case, and the relevant EU Directive provides that all Member States are obliged to ensure that an injured party in a motor accident has a direct action against the tortfeasor's insurer. The issue in this case was whether the same principle applies outside of motor insurance.
The Court of Appeal concluded that it does not. The relevant law under Article 11(2) which determines whether a direct action is allowed is the law of the court where the action is to be brought. Although that meant English law here, that was not limited to English procedural law but included the private international law rules in operation before Rome II. As a result, a direct action against the insurer was permitted under English law, because English law would regard that issue as one to be determined by reference to Spanish law (which does allow a direct action to be brought against an insurer).
Although not required to decide the point, the Court of Appeal also held that an insurer cannot force an insured tortfeasor to be sued in the victim's home court just by consenting to jurisdiction (where that court would not otherwise have had jurisdiction over the tortfeasor).
The Court of Appeal then went on to consider whether the English court also had jurisdiction over the insured.
The insured sought to argue that since the claimant's claim against it was "for the uninsured excess", it could not be characterised as being one made "in matters relating to insurance" and so Article 11 did not apply at all – instead the rules for tort claims should be applied. That argument was rejected by the Court of Appeal. The Regulation should be construed purposively and there was no requirement that there should be a policy dispute for Article 11 to apply. There was also no need for the claimant to satisfy a test that the claim against the insured is "closely connected" to the claim against the insurer.
Finally, the Court of Appeal also held that the English court, as the court seised of the direct action against the insurer, was bound to accept jurisdiction against the insured too if the claimant wished to join him, and had no discretion to decline jurisdiction under Article 11(3).
COMMENT: As noted by Gloster LJ in this decision, cases like these are likely to decline in future, given that Rome II will apply to accidents occurring on or after 11 January 2009. Rome II provides that the quantification of damage in a tort claim must be determined by the law of the country in which the damage occurs, and not the procedural law of the court hearing the dispute. Accordingly, in this case, there would have been no advantage to the claimant in bringing his claim in England, notwithstanding the jurisdictional rules under Regulation 44/2001 (now recast as Regulation 1215/2012).