Maher & Anor v Groupama Grand EST

In a direct claim by an injured road-accident victim against the tortfeasor’s insurer, characterisation depends on the particular issue, not on whether the claim is generally described as contractual or tortious.

The right to bring the direct action is governed by the law applicable to the insurance contract. Once liability under the policy is established, assessment of damages arising from the underlying tort is a procedural issue governed by the law of the forum. A claim for interest on damages is characterised as an issue in tort: entitlement to interest depends on the applicable tort law, while the rate is governed by the forum’s law and its procedural discretion.

The claim arose from a road accident in France in which Gerard and Daniela Maher were injured. They brought a direct claim in England against the French insurer of the driver who caused the accident. Liability had been admitted and judgment entered by consent.

Master Fontaine directed preliminary issues concerning whether damages and pre-judgment interest were governed by English or French law. The insurer argued that the direct claim was contractual and that both issues were governed by French law. The claimants argued that damages and interest were procedural or tortious issues governed by English law.

1. Direct claim and characterisation. Whether an injured party may sue an insurer directly is a contractual question governed by the law applicable to the insurance contract. However, conflicts analysis must identify the particular issue in dispute rather than characterise the claim in the abstract. The approach in Through Transport Mutual Insurance v New India Assurance Co Ltd [2005] 1 Lloyd’s Rep 67 was consistent with that analysis.
2. Assessment of damages. The insurer’s liability was admitted and no relevant policy limitation was relied upon. The insurer therefore had to meet the wrongdoer’s underlying tortious liability. Assessment of damages was consequently an issue arising in tort and, under Harding v Wealands [2007] 2 AC 1, a procedural matter governed by English law as the law of the forum.
3. Jurisdictional point. The court expressed a preliminary view that article 11(3) of Regulation No 44/2001 might concern third-party proceedings by an insurer against the insured rather than provide an independent route for joining the tortfeasor. That point did not affect the conclusion on damages.
4. Pre-judgment interest. The claim for interest on damages was characterised as an issue in tort. Whether there was a right to recover interest by way of damages therefore depended on French law under section 11 of the Private International Law (Miscellaneous Provisions) Act 1995. If interest was recoverable, its rate was governed by English law as the law of the forum. The discretion under section 35A of the Supreme Court Act 1981 could permit an appropriate English or French rate.
5. The insurer bore the burden of raising and proving any French law or practice said to justify departing from the ordinary approach.

The preliminary issues were answered accordingly: damages were to be assessed by reference to English law, while both French and English law were potentially relevant to pre-judgment interest, depending on the facts.