In Cox v Ergo Verscherung AG  EWCA Civ 854, the Court of Appeal considered whether, in a claim for damages recoverable from a German insurer, damages should be assessed under English or German law.
The Court of Appeal considered two issues: first, the head of damages recoverable by the appellant; and secondly, the assessment or quantification of those damages. The Court held that the heads of damage must be quantified under the law of the forum (English law), but by a majority, also found that where there is no equivalent head of damage under English law, damages should be assessed on principles and in a manner consistent with that applicable under German law.
The husband of the appellant, Cox, died in a car accident in Germany. The driver of the car was a German national, resident and domiciled in Germany and insured by the respondents, Ergo. There was no dispute as to the liability of the driver. The appellant argued that the quantification of damages recoverable from the respondent insurer was governed by English law, and in particular, the Fatal Accidents Act 1976 (FAA). The respondent argued that the principles of the German Civil Code applied.
The FAA contains provisions for the quantification of damages recoverable in respect of fatal accidents. The FAA provides for loss of dependency, as at the time of death, with no duty to mitigate. The German Civil Code also contains provisions for the quantification of such damages; s.844 provides for the loss of the right to maintenance on condition that the deceased was statutorily obliged to maintain the claimant, calculated on a net basis.
At first instance, the High Court held that German law governed the assessment of damages and that the appellant could not rely on the FAA. The appellant appealed.
The Court of Appeal allowed the appeal, unanimously finding that the judge at first instance was mistaken in finding that the assessment of damages was governed by German law. The general rule set out in s.9(4) Private International International Law (Miscellaneous Provisions) Act 1995 (the 1995 Act) provides that the head of damages recoverable by a claimant was a matter of substantive law and therefore governed by German law, as the law of the forum where the tort occurred. However, s.14(3)(b) of the 1995 Act provides that the assessment of those damages was a procedural matter and therefore governed by the law of the forum, English law.
Therefore, the Court held that the judge at first instance was mistaken to hold that German law governed the assessment of damages recoverable by the claimant. However, by a majority (Dame Janet Smith dissenting) the Court held that the claimant could not rely on the FAA because the head of damage under German law, the loss of the right to maintenance, did not correspond to compensation for loss of dependency, the head of damage under English law. The Court held that it would be wrong to interpret s.844 of the German Civil Code so widely as to include loss of dependency.
The case shows that although the English Court must assess damages under the law of the forum, in the event that there is no equivalent head of damage under English law, the court may rely on the foreign law governing the substance of the claim.