Cox v Ergo Versicherung AG

In a foreign-element fatal accident claim, the law governing the recoverable head of loss is substantive law governed by the lex causae, while quantification is ordinarily governed by the lex fori. A claim under section 844 of the Bürgerliches Gesetzbuch for loss of a deceased’s legal maintenance obligation is fundamentally different from loss of factual dependency under the Fatal Accidents Act 1976. Where English law has no equivalent head of loss, the English court should assess damages under English law by reference, at least initially, to the foreign methodology. The FAA is not an exclusive route where foreign law supplies the cause of action. The general choice of German law was not displaced.

The appellant’s husband, a British Army officer stationed in Germany, died there after being struck by a negligently driven car. The driver was insured by the respondent, a German insurer. Liability was governed by German law, and the appellant brought proceedings in England under German law and/or the Fatal Accidents Act 1976.

The High Court held that the appellant could not rely on the FAA and that German law governed the relevant limits on recovery, including mitigation, support from a new partner and prospects of remarriage or cohabitation. The appeal concerned whether the claim could proceed under German law, whether FAA principles governed quantification, and whether the general choice of German law should be displaced. A separate assignment issue was adjourned.

Appeal allowed in part. The majority upheld the conclusion that the appellant could not rely on the Fatal Accidents Act 1976, but held that the High Court had wrongly treated German law as governing the assessment or quantification of damages.

1. Under the Private International Law (Miscellaneous Provisions) Act 1995, the court must identify and characterise the particular issue. The recoverable head of loss is substantive and governed by the lex causae. Assessment or quantification is procedural and governed by the lex fori.
2. The German claim was for loss of the deceased’s legal obligation to provide maintenance. It was therefore a claim for net maintenance, subject to matters including mitigation, earning capacity and support from a new relationship. That was not the same head of loss as FAA dependency, which concerns factual financial dependency at death, does not depend on a legal obligation to maintain, and disregards relevant post-death benefits and remarriage. Bereavement damages were also distinct.
3. Because English law had no equivalent head of loss, the English court should assess the claim under English law by using the German method as a starting point. The court was not bound by German methodology and could depart from it where experience or precedent required, but no sufficient reason had been shown to substitute the FAA scheme.
4. The FAA’s assessment provisions were not mandatory for a claim brought under German law. Nor did public policy require their application. The general rule selecting German law was not displaced under section 12 of PILA: the German connections were substantial, while the appellant’s British military and pension-related connections did not make English law substantially more appropriate.

Etherton LJ delivered the leading judgment, and Maurice Kay LJ agreed that the FAA and section 844 were fundamentally different. Dame Janet Smith dissented on the central quantification issue. She considered the two heads sufficiently comparable because both compensated loss of financial support, and would have applied FAA dependency rules.

1. Court of Appeal (Civil Division) — By judgment dated 25 June 2012, the majority held that the appellant could not rely on the FAA, but that quantification was governed by English law using principles analogous to German section 844 methodology. The appeal was allowed in part.
2. Queen’s Bench Division — On 7 November 2011, Sir Christopher Holland, sitting as a Deputy Judge, held that the appellant could not rely on the FAA and that German law applied to the relevant limitations on recovery. Permission to appeal was granted.