On 19 December 2007 Mr Jacobs, a British national resident in the UK, was seriously injured in a road traffic accident in Fuengirola, Spain, when he was struck by an uninsured car driven by Mr Winfred Bartsch, a German national who was then resident in Spain.
Mr Jacobs claimed compensation/damages from the Motor Insurers’ Bureau (MIB) in England under the fourth motor insurance directive. That directive had been implemented in England by regulations brought into force in 2003. Regulation 13(2)(b) provided that the MIB would compensate the injured party as if “the accident had occurred in Great Britain.”
MIB contended that, applying Article 4(1) of Rome II (European Regulation 864/2007, which came into force in England on 11 January 2009), the applicable law was that of the country in which the damage occurred, i.e. Spain. However, Mr Jacobs disputed the application of Rome II. Alternatively, he argued that, even if it did apply, when properly interpreted the applicable law was that of England and Wales.
This conflict of law issue was significant, not least because awards of damages under Spanish law are often considerably less than those under English law. Accordingly, it was ordered to be tried as a preliminary issue.
Decision
The High Court held that the approach to the interpretation and application of Rome II should be broad and purposive, and that the purpose of Rome II was achieved in the case of a tort by the application of the general rule in Article 4(1), which meant the applicable law would be that of the country where the damage occurred.
As for whether regulation 13(2)(b) could be interpreted in a manner consistent with Rome II, the Judge found that it could not and, therefore, held that European law would prevail over English law. Consequently, it was held that Rome II applied to determine the applicable law, which was held to be that of Spain.
Comment
This decision provides clear support for the principles set out in Rome II, and it follows that claimants can now expect to be compensated by reference to the law of the country where their accident occurred.
Although Rome II effectively overrules the House of Lords’ decision in Harding v Wealands [2006] (in which it was held that the assessment of damages in tort was for the law of the forum) numerous issues remain unanswered. These include the fact that Rome II only provides which State’s law or rules will apply. Since the assessment of damages in each State will also continue to be determined by that country’s practice and procedure (which is to be distinguished from substantive law), it is possible that, even when applying the same applicable law, Member States’ courts can still come to different outcomes on quantum.
Furthermore, in other types of cases, Rome II has special choice of law rules, and where the damage occurred will not be the test for deciding the applicable law. For example, in product liability cases, the law of the country in which the person sustaining the damage has their habitual residence will be applied under Rome II or, failing that, the law of the country in which the product was acquired, and only failing that does the law of the country in which the damage occurred apply.
We understand the decision in Jacobs is being appealed.
From a Spanish perspective (Kennedys Madrid)
In Jacobs, the court found that damages should be assessed in accordance with Spanish law. Spanish law provides that courts and insurance companies must calculate damage awards for bodily injuries in accordance with a predetermined valuation scale known as Baremo, which was originally enacted in 1995 to eradicate the problem of courts within Spain granting different awards for identical injuries.
Besides unifying awards for the whole of Spain, the Baremo has also provided a greater degree of certainty for reserve calculations needed by insurers when facing personal injury claims. Whilst initially envisaged for motor accidents only, at the discretion of the court, the Baremo can be applied by analogy to personal injury claims in any other setting, and this is often the case.
Victims and surviving relatives, as defined, are compensated under the Baremo for all of their loss — bodily injury/death, loss of income, and moral damage — with the exception of medical/hospital/funeral expenses. Payments due under the Social Security (pensions) scheme are independent from the Baremo as well. The Baremo is often criticised for being overgenerous with smaller injuries and mean with serious conditions. Our experience shows that it is a helpful tool for insurers to settle claims for reasonable amounts.