Maher & Anor v Groupama Grand Est

English conflict-of-laws rules characterise each issue arising from a claim, rather than the claim as a whole. The assessment of compensation for injuries caused by a tort is a remedial matter governed by the lex fori, even where the claimant proceeds directly against the tortfeasor’s insurer and the direct right of action is governed by foreign law.

A substantive right to interest is governed by the lex causae. However, section 35A of the Senior Courts Act 1981 creates a discretionary remedy rather than a substantive right. An English court may therefore exercise that power as part of the lex fori, while taking relevant foreign interest rules into account.

The claimants were injured in a road accident in France caused by a driver insured by the defendant, a French insurer. They brought a direct action against the insurer in England under the jurisdiction recognised in FBTO Schadeverzekeringen NV v Odenbreit. Liability was admitted, leaving the assessment of damages and pre-judgment interest.

Blair J, in [2009] EWHC 38 (QB), held that damages were governed by English law and that both English and French law could be relevant to interest. The insurer appealed. The central questions were whether damages should be characterised by reference to the insurer’s contractual liability or the underlying tort, and whether section 35A of the Senior Courts Act 1981 created a substantive right or a procedural remedy.

1. Appeal dismissed. Moore-Bick LJ delivered the judgment, with which Etherton and Mummery LJJ agreed.

2. English conflict-of-laws rules require the court to identify and characterise each particular issue, rather than characterising the claim as a whole. A direct claim against an insurer may involve separate questions concerning the tortfeasor’s liability, contributory fault, the insurer’s obligation to indemnify and the claimant’s direct right of action. Different systems of law may govern those questions.

3. The relevant issue was the amount required to compensate the claimants for injuries caused by the insured driver. That issue arose in tort, notwithstanding that the action was brought directly against the insurer and that French law governed the direct right of action. The assessment of damages was a matter of remedy governed by English law as the lex fori, consistently with Harding v Wealands [2006] UKHL 32. The Rome Convention concerned contractual obligations and did not govern damages for the tort.

4. The existence of a substantive right to recover interest as damages was governed by French law as the lex causae. Section 35A of the Senior Courts Act 1981, however, created a remedy available in legal proceedings, not a substantive right. Its discretionary character, including the court’s ability to consider litigation conduct and depart from ordinary compensatory principles, supported that classification. The requirement generally to award interest in personal injury and fatal claims merely constrained the discretion.

5. The English court could therefore exercise its section 35A power as part of the lex fori whether or not French law conferred a substantive right to interest. Relevant French rules could nevertheless inform the judicial exercise of that discretion. Both legal systems were relevant in that limited sense.

6. Obiter, Article 11(3) of Regulation 44 strongly supported jurisdiction to join the insured with the insurer where the governing law permitted joinder. Such a construction promoted harmonious administration of justice and reduced the risk of irreconcilable judgments. It was unnecessary finally to decide the point.

1. Court of Appeal (Civil Division): In [2009] EWCA Civ 1191, unanimously dismissed the insurer’s appeal and affirmed Blair J’s conclusions on damages and interest.

2. High Court, Queen’s Bench Division: Blair J, in [2009] EWHC 38 (QB), held that damages were to be assessed under English law and that English and French law could both be relevant to pre-judgment interest.

3. Mayor’s and City of London Court: The claimants began their direct action there. The proceedings were transferred to the High Court after judgment was entered on liability and the applicable-law issues were directed for trial.