Donkers & Anor v Storm Aviation Ltd

Under section 12 of the Private International Law (Miscellaneous Provisions) Act 1995, displacement of the law of the place where a tort occurred requires a case-specific comparison of all connecting factors. Foreign residence, employment and social-security arrangements do not, without more, make foreign law substantially more appropriate where the accident and defendant are in England.

European social-security coordination provisions require recognition of a foreign institution’s subrogation rights. They do not export the institution’s law to determine the tortfeasor’s substantive liability or damages. Employer-liability exclusions do not assist an alleged independent tortfeasor. A contractual indemnity forming an integral part of a wider agreement is not ordinarily a severable part governed by a different law.

The first claimant, a German aircraft technician employed by Lufthansa, was injured at Manchester Airport when a defective nitrogen rig supplied by Storm Aviation Ltd caused an aircraft tyre to explode. The second claimant, a German statutory social-insurance institution, sought recovery of benefits paid and payable to him.

Four preliminary issues arose: the law governing the first claimant’s tort claim; the law governing the second claimant’s recovery claim; whether German social-accident-insurance exclusions could be relied upon; and the law governing Storm’s contractual indemnity claim against Lufthansa under an IATA ground-handling agreement. The parties agreed that the tort and contract issues were governed by the Private International Law (Miscellaneous Provisions) Act 1995 and the Contracts (Applicable Law) Act 1990, respectively.

1. The first claimant’s tort claim was governed by English law. Section 11(1) of the Private International Law (Miscellaneous Provisions) Act 1995 established the general rule that the applicable law was that of the country where the events constituting the tort occurred. Section 12 required comparison of the significance of the connecting factors with England and Germany, considering all the circumstances and the particular issues in dispute.

   The accident occurred in England and the defendant was an English company operating at Manchester Airport. Those factors strongly connected the tort with England. The claimant’s German residence, employment and social-insurance arrangements did not make German law substantially more appropriate. The approach was consistent with Roerig v Valiant Trawlers Ltd [2002] 1 WLR 2304, Harding v Wealands [2005] 1 WLR 1539 and Edmunds v Simmonds [2001] 1 WLR 1003.

2. The second claimant’s right to recover benefits depended on German law only so far as the existence and extent of subrogation were concerned. Article 85(1) of Regulation (EC) 883/2004 and article 93(1) of EEC Regulation 1408/71 required other Member States to recognise the institution’s subrogation or direct right. They did not alter the substantive rules governing the tortfeasor’s non-contractual liability or the assessment of damages, which remained governed by English law.

   The court applied the reasoning in Deutsche Angestellten-Krankenkasse v Laerersandens Brandforsikring G/S Case 428/92 and Caisse de Pension des Employes Prives v Kordel Case C-397/96.

3. Article 85(2) did not permit Lufthansa to rely on German employer-liability exclusions. That provision concerned legislation determining the civil liability of employers or employees. The present claim concerned an independent tortfeasor, not an employer.

4. The contractual indemnity claim was governed by English law. Under article 4 of the Rome Convention, the agreement was most closely connected with England. The indemnity was integral to the parties’ overall allocation of risk and was not an objectively independent severable part. Treating such clauses as independent obligations would make severance the norm rather than the exception.

5. The preliminary issues were determined accordingly: the first claimant’s claim and Storm’s claim against Lufthansa were governed by English law; the second claimant’s subrogation issues were governed by German law but its substantive claim by English law; and the German employer-liability exclusions were unavailable.