Moreno v The Motor Insurers’ Bureau

Under the European motor insurance scheme, compensation for a victim of an accident in another member state is measured by the law of the state where the accident occurred. The same measure applies whichever route to recovery the victim uses, including a claim against the compensation body in the victim’s state of residence.

Regulation 13(2)(b) of the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 gives the statutory fiction a mechanical function. It extends the domestic compensation body’s responsibility to foreign accidents; it does not substitute domestic law as the measure of damages.

While resident in the United Kingdom, the respondent was seriously injured in Greece by the negligent driver of a Greek-registered, apparently uninsured vehicle. She claimed compensation from the United Kingdom Motor Insurers’ Bureau under the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003.

Gilbart J, bound by Jacobs v Motor Insurers’ Bureau [2010] EWCA Civ 1208, held that English law governed the measure of compensation, although he considered the contrary conclusion persuasive. He granted a leapfrog certificate under section 12 of the Administration of Justice Act 1969.

The issue before the Supreme Court was whether the scope of the Bureau’s liability was governed by English law or by the law of Greece, where the accident occurred.

1. The appeal was allowed unanimously. Lord Mance gave the judgment, with which Lord Clarke, Lord Sumption, Lord Toulson and Lord Hodge agreed. The scope of the United Kingdom Motor Insurers’ Bureau’s liability was to be determined under Greek law.

2. The motor insurance Directives and their associated agreements formed a coherent scheme. Their constant aim was to enable injured persons to recover the compensation to which they were entitled, while improving the routes through which they could obtain it. A victim’s entitlement therefore remained the same whether recovery was sought from the responsible driver, the insurer, the guarantee fund in the state of the accident, or the compensation body in the victim’s state of residence.

3. That compensation was measured by the law of the state where the accident occurred. This conclusion was supported by the predecessor Green Card arrangements, the national guarantee-fund provisions, the Agreement between Compensation Bodies and Guarantee Funds, and the reimbursement and subrogation structure of articles 6 and 7 of the Fourth Motor Insurance Directive. Applying a different measure according to the chosen route could produce both over-compensation and under-compensation, impair reimbursement, and require the victim to pursue a supplementary claim abroad.

4. The Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 were to be construed consistently with the Directives. Regulation 13(2)(b), which treated the Bureau as the relevant guarantee body and the foreign accident as occurring in Great Britain, had a mechanical or functional purpose. It extended the Bureau’s obligation to foreign accidents. It did not make domestic law govern the assessment of damages.

5. The Court of Appeal had correctly held that the claimant must establish the driver’s liability under the applicable law. It had erred by using the former common-law distinction between liability and heads of damage, on one hand, and assessment of damages, on the other. That distinction had in any event been removed by Rome II.

6. Jacobs v Motor Insurers’ Bureau [2010] EWCA Civ 1208 and Bloy v Motor Insurers’ Bureau [2013] EWCA Civ 1543 were overruled on the meaning of regulation 13(2)(b). European Union law was clear, so no reference to the Court of Justice was required.

1. United Kingdom Supreme Court: The appeal was allowed unanimously. Jacobs v Motor Insurers’ Bureau [2010] EWCA Civ 1208 and Bloy v Motor Insurers’ Bureau [2013] EWCA Civ 1543 were overruled concerning regulation 13(2)(b). Greek law governed the Bureau’s liability.

2. High Court, Queen’s Bench Division: Gilbart J, in [2015] EWHC 1002 (QB), held himself bound by Jacobs and decided that English law governed the measure of compensation. He granted a leapfrog certificate.