A UK resident injured on holiday in Greece could seek compensation at home through the Motor Insurers’ Bureau. Did that also entitle her to have her compensation assessed under English law? The Supreme Court held that Greek law governed the Bureau’s liability. Where Ms Moreno could bring her claim and which law fixed the extent of her recovery were separate questions.
The accident and the question for the court
On 17 May 2011, a Greek-registered vehicle struck Tiffany Moreno from behind as she walked along a road in Greece. The driver had no valid licence and apparently no insurance. Her responsibility for the accident was admitted. Ms Moreno lost her right leg and suffered continuing pain and loss of earnings.
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Under the European motor insurance arrangements then in force, Ms Moreno could claim through the UK Bureau instead of pursuing the driver or the guarantee fund in Greece. She believed she would receive less under Greek law. Neither side suggested that English awards would always be higher. The question was which law determined what she could recover.
A scheme meant to give the same compensation by an easier route
Lord Mance, giving the judgment of all five justices, read the UK’s 2003 Regulations alongside the European motor insurance directives they implemented. The scheme gave someone injured abroad a way to obtain compensation in their country of residence.
Depending on the circumstances, the injured person could pursue the responsible driver, claim directly from an insurer or apply to a compensation body. For Lord Mance, each route led back to the same entitlement. Someone who sought help from their home compensation body should recover what they could have claimed from the driver, insurer or guarantee fund in the country of the accident.
The agreements that made that system work supported this reading. Under the earlier Green Card arrangements, the bureau handling a claim applied the law of the country of the accident. A 2002 agreement between compensation bodies and guarantee funds carried that approach through to the assessment of liability and compensation. The body ultimately meeting the cost could dispute reimbursement if the wrong law had been applied.
The reimbursement and subrogation provisions pointed the same way. The home compensation body is intended to recover what it has paid, and the body in the insurer’s or vehicle’s state is then substituted to the victim’s rights only so far as compensation has been provided. A person cannot be substituted to a claim which the victim could not have brought. If English law required a larger payment than the law of the accident, the Bureau might not recover the difference. If English law were less favourable, the victim would be left short and might have to make a further claim abroad. Avoiding proceedings abroad was the point of the home-state route.
Why the earlier English cases were not followed
In Jacobs v Motor Insurers’ Bureau, the Court of Appeal had read the 2003 Regulations as making the measure of recovery depend on the law of the injured person’s part of the UK. Bloy v Motor Insurers’ Bureau followed Jacobs. In April 2015, Gilbart J held that Jacobs bound him, although he saw force in the contrary view. He subsequently granted a leapfrog certificate. With the Supreme Court’s permission, the Bureau appealed directly to it.
In Jacobs, Moore-Bick LJ had focused on regulation 13(2)(b), the provision also in issue here. It requires the Bureau to compensate the injured person in accordance with the Second Directive as if the Bureau were the authorised guarantee body and the accident had occurred in Great Britain. He treated that deeming language as affecting the assessment of damages as well as the existence of the Bureau’s obligation. He accepted that this could produce more or less than the victim could have recovered from the driver, insurer or foreign fund, but did not think that consequence justified departing from the regulation’s natural meaning.
Lord Mance agreed with part of that analysis. Regulation 13 assumes that the victim must establish the driver’s liability; it does not create no-fault compensation. He also agreed why the deeming words were needed. The domestic agreement for untraced drivers was limited to accidents in Great Britain, so specific language was required before the Bureau, already the United Kingdom guarantee fund, had to compensate United Kingdom residents injured abroad by unidentified or uninsured vehicles. The fiction of treating the accident as having occurred in Great Britain performed that mechanical function. It did not also require damages to be assessed under English principles.
The Court of Appeal had drawn on the former English distinction between liability and heads of damage, governed by the law of the place of the accident, and assessment of damages, governed by English law as the law of the court. Lord Mance held that this distinction should not be read into regulation 13(2)(b). Rome II has in any event removed it.
The Regulations had to be read, so far as possible, consistently with the Directives. They were made under the European Communities Act 1972 to implement European obligations, and nothing suggested an intention to do more than implement them faithfully. A member state may make rules more favourable to a victim, but a rule which could sometimes be less favourable would risk putting the United Kingdom in breach. Once the Directives require a consistent measure, there is no need to give regulation 13(2)(b) any wider effect.
Regulation 12, which deals with an identified insurer’s failure to handle a claim, uses different wording. Lord Mance suggested that its reference to the law of the injured person’s part of the UK served to select among the UK’s three legal systems. That provision did not govern Ms Moreno’s claim.
Verdict: The Supreme Court unanimously allowed the Bureau’s appeal. Greek law governed the scope of its liability to Ms Moreno. The Court overruled Jacobs and Bloy on the meaning of regulation 13(2)(b). Its declaration settled the preliminary issue only. It did not assess damages.
