Where a tort takes place abroad, the quantum of the award of damages made by the English court is affected by complex choice of law issues. Generally a tortious act abroad is actionable in England only if it would have been actionable here, and, is actionable under the law of the foreign country. This is the rule of “double actionability”. The court here will adopt English law but can adopt foreign principles to quantify compensation.
An English court has to approach it in two stages. First, what heads of damage are recoverable by the claimant (the substantive law issue); and, second, how should they be quantified (the procedural law issue).
The substantive law, found in Part III of the Private International Law Act 1995 (PILA), says that matters of procedure are governed by English law. However, where substantive legal matters are prevalent issues, the court must adopt the “general principle” under s11 PILA 1995. This principle deems the applicable law will be that of the country where the event occurred. In other words, the English court can deal with the case, but may need to apply principles adopted in a foreign jurisdiction to quantify the loss.
Cox v Ergo Versicherung AG
In Cox v Ergo Versicherung AG the widow of an English serviceman, killed in a road traffic accident by a German driver, sought to show that damages recoverable from the defendant were governed by English law. However, the general principle applied as analysis of heads of loss under German statute were deemed matters of substance and not procedural. This created a dilemma as there is no head of loss similar to s844 of the Bürgerliches Gesetzbuch (BGB), the German Civil Code, recoverable either at common law or under English statute.
The differing provisions under English and German law are as follows:
The dependency rule under the Fatal Accidents Act 1976 (FAA):
- This rule entitles dependants of the deceased, as defined, to claim damages. This would include damages for bereavement.
The maintenance rule under s844 of the BGB:
- Whenever a tortious conduct results in the victim’s death, accordingly the tortfeasor shall compensate a third party to whom the deceased at the time of injury stood in a relationship by virtue of which he was legally bound to furnish maintenance.
- The payment of a money annuity must be made, insofar as the deceased would have been bound to furnish maintenance during the presumable duration of his life.
Clearly the English law head of loss is not the same as under German law. The dependency approach would favour the claimant. Also clear is the substantive nature of the maintenance approach.
The Court of Appeal asked itself: “Were the differences between the German approach and the FAA approach so fundamental that an English court, would be compelled as a matter of English law, to decide the case by analogy with the approach adopted by the German courts?”
The answer was yes. Damages were assessed as a matter of English law as though the case was being decided in Germany, with the outcome that they were not as large as they might otherwise have been.
Harding v Wealands revisited
In contrast, in Harding v Wealands the defendant sought to rely on the New South Wales Motor Accident Compensation Act 1999 (MACA) to limit his liability. A number of Australian states have these laws which limit compensation. In this case, the limitation was deemed by the House of Lords to relate only to quantification. Therefore, the provisions in MACA were procedural rather than substantive and were ignored by the English court. This resulted in considerably more compensation than if Australian principles and the cap on recovery of compensation had been adopted.
The main difference between this case and a recent unreported matter, dealt with by Mills & Reeve, was a subtle discrepancy in the federal laws of New South Wales and Queensland. Queensland’s Motor Accident Insurance Act 1994 places a cap on the liability for damages. Section 57A(2)(b) of that Act instructs that the provisions should be read as substantive, both inside and beyond Queensland. The intention was to ensure the cap would be applied as substantive law, limiting awards assessed in other jurisdictions.
But as Dicey, Morris & Collins: The Conflict of Laws states:
“Thus the English court will always apply its own rules of procedure, and will, moreover, refuse to apply any foreign rule which in its view is procedural”.
Current thinking as to what amounts to procedure or substance is that the English court will decide and will not be swayed by artificial provisions in a statute.
The choice of law in these cases was determined by the substantive or procedural nature of the matters involved. A limitation or cap on liability for damages could only be deemed substantive if embodied in a contractual term (Hoffmann LJ in Harding v Wealands). In such a case, the term would amount to a qualification of the parties’ substantive obligations.