Maher & Anor v Groupama Grand Est

The Court of Appeal dismissed Groupama’s appeal. The court held that the determination of the quantum of damages payable to claimants suing an insurer directly is characterised, for choice of law purposes, by reference to the particular issue to be decided: the assessment of damages for personal injury is a matter of tort and is therefore governed by the lex fori, here English law. The court also held that the power to award pre-judgment interest under section 35A of the Senior Courts Act 1981 is primarily remedial in nature and falls to be treated as procedural (governed by the lex fori), though whether a substantive right to interest exists is a matter for the lex causae (French law) and relevant foreign law may inform the court’s discretion.

Background and facts:

• In July 2005 Mr and Mrs Maher, domiciled in the United Kingdom, were injured in France when their vehicle was struck by a van driven by M. Marc Kress, who was insured by Groupama Grand Est and was killed in the accident.
• Pursuant to the right to sue the insurer directly, derived from EU law and subsequent case-law, the Mahers commenced proceedings in England against Groupama for damages; liability was not contested and only quantum and pre-judgment interest remained in issue.

Nature of the application and procedural history: The issues were transferred from the Mayor’s and City of London Court to the Queen’s Bench Division, Master Fontaine directed trial on two issues (choice of law for assessment of damages and for pre-judgment interest). Blair J decided both issues in favour of the Mahers; Groupama appealed to the Court of Appeal.

Issues framed by the court:

• Whether the assessment of damages against an insurer sued directly is to be governed by English law or by French law (i.e. whether the issue is contractual or tortious).
• Whether an award of pre-judgment interest under section 35A of the Senior Courts Act 1981 is substantive (governed by the lex causae) or remedial/procedural (governed by the lex fori), and therefore whether English or French law should determine entitlement and rate.

Reasoning and decision:

• The court emphasised the accepted conflicts principle of characterising the particular issue in dispute rather than the claim as a whole, applying authorities such as Macmillan Ltd v Bishopsgate and Through Transport. The assessment of damages for personal injury is an issue arising in tort and therefore, as a remedial matter, is governed by the lex fori; accordingly damages are to be assessed by reference to English law.
• The court considered (but found unnecessary to decide finally) whether the insured could have been joined to proceedings in England under Article 11(3) of Regulation 44/2001; it expressed the view that joinder would be permissible where necessary to avoid irreconcilable judgments.
• On interest, the court concluded that section 35A of the Senior Courts Act 1981 is a remedial, discretionary power exercisable in connection with litigation and therefore governed as procedural law by the lex fori. However, whether a substantive right to interest exists is governed by the lex causae (French law) and relevant foreign rules may be a factor in the court’s exercise of discretion.

Relief sought: Determination of choice of law for damages and for pre-judgment interest; the appellant sought to have both governed by French law (and sought to amend grounds to rely on Rome Convention Article 10(1)(c)).

Disposition: The appeal was dismissed; the judge’s conclusions that damages are assessed under English law and that both English and French law may be relevant to interest were upheld.

This was an appeal which the Court of Appeal dismissed. The court held that (i) the assessment of damages for personal injury in a direct action against a foreign insurer is an issue of tort to be determined by the lex fori (English law) and (ii) section 35A of the Senior Courts Act 1981 is a remedial, discretionary power (procedural) and so the court’s power to award interest is governed by the lex fori, although whether a substantive right to interest exists is governed by the lex causae and foreign law may inform the exercise of the court’s discretion.

On appeal from the High Court of Justice, Queen’s Bench Division (Blair J) [2009] EWHC 38 (QB). The claim had earlier been issued in the Mayor’s and City of London Court where Master Fontaine entered judgment on liability and directed trial of the choice-of-law issues.