Mapfre Mutualidad Compania De Seguros Y Reaseguros SA Hoteles Pinero Canarias SL v Godfrey Keefe1
The Court of Appeal has unanimously upheld the claimant’s right to claim damages in England against a tortfeasor, the Spanish domiciled owner of a hotel (the ) and the insured’s Spanish liability Insurer, under article 11(3) of the 2001 Brussels Regulation on jurisdiction.
The claimant, Mr Keefe, suffered serious injuries whilst at the hotel in Tenerife. Spanish law applied to the claim but, as at 2006, when the injuries were suffered, the law which preceded the 2007 Rome II Regulation meant that English procedural law would apply so as to entitle Mr Keefe to significantly more damages (possibly up to £5 million as compared to €600,000-€800,000 under Spanish law). Thus, in 2011, he commenced proceedings in England against the insurer under article 11(2) of the Brussels Regulation, since Spanish law recognises a direct right of action against liability insurers.
Due to a policy cap on the insurer’s liability which came to light after proceedings were commenced, Mr Keefe sought to join the insured in order to recover the uninsured loss. Article 11 of the 2001 Brussels Regulation is part of the special rules on jurisdiction “in matters relating to insurance” which form exceptions to the general rule that a defendant must be sued in the court of its domicile. Article 11(3) permits the addition of an insured defendant to proceedings if (as is the case under Spanish law) this is permitted by the law governing the direct action against the insurer.
The insured’s challenge to the jurisdiction of the English Court failed before the Judge and was appealed to the Court of Appeal on the basis that:
- Article 11(3) should be given a narrow interpretation - the cause of action against the insured was tortious comprising a claim for the uninsured excess rather than a matter relating to insurance, which in effect required a “policy dispute”.
- The risk of irreconcilable judgments which article 11(3) sought to avoid did not exist because the causes of action against the insured and insurer were entirely different, and so this type of “forum shopping” should not be allowed.
The Court of Appeal held that the 2001 Brussels Regulation had to be interpreted purposively, with a view to guaranteeing the protection of the weaker party and in doing so, there was no justification in limiting the application of article 11 to disputes relating to the meaning or effect of the policy. Further, the insurer’s liability depended on the same legal and factual basis as that of the insured, and so there was a risk of irreconcilable judgments if the insured had to be sued in Spain.
The 2007 Rome II Regulation means that if Mr Keefe’s accident had occurred after 11 January 2009 he would be entitled only to Spanish levels of damages in England, and so the case is of limited interest in this respect. Nevertheless, the judgment is of practical importance as to when an insured and its liability insurer may be joined in the same proceedings in England and will result in cost efficiency for parties by reducing the risk of multiple proceedings. It is envisaged that this judgment will also provide guidance on articles 13(2) and 13(3) of the Recast Brussels Regulation which mirror articles 11(2) and (3) respectively.