Troke & Anor v Amgen Seguros Generales Compania De Seguros Y Reaseguros SAU (Formerly RACC Seguros Compania De Seguros Y Resaseguros SA)

For a tort governed by foreign law, the English court’s discretionary power to award interest under its own procedural law is governed by the lex fori. It is not displaced merely because the foreign law contains a provision contemplating interest.

Under Article 1(3) of Rome II, procedural matters are excluded from the Regulation. A foreign interest provision described as penalty interest and subject to judicial discretion is procedural, rather than a substantive right forming part of the lex causae. The court may therefore award interest under section 69 of the County Courts Act 1984 at English rates, although it retains discretion to take foreign rates into account.

The claim arose from a road traffic accident in Spain. Liability and damages were agreed, and the claimants were entitled to sue the defendant insurer in England and Wales. The only live issue was whether interest should be awarded at rates said to be available under Spanish law or under English law.

The County Court at Plymouth awarded interest under section 69 of the County Courts Act 1984, applying English rates. The claimants appealed. The defendant brought a conditional cross-appeal concerning the applicability and proof of the Spanish rates. The High Court considered whether the Spanish interest provision was substantive and governed by the lex causae, or procedural and governed by the lex fori.

1. Appeal dismissed. The defendant’s cross-appeal did not require determination.
2. Rome II applied to the tort claim. Article 1(3), which excludes evidence and procedure, reflected the general principle that procedural questions are governed by the lex fori. The classification of a rule as substantive or procedural under Rome II is a matter of EU law.
3. The existence of an absolute legal right to interest under the applicable foreign law would be substantive and governed by the lex causae. By contrast, an English court’s discretionary power to award interest under section 69 of the County Courts Act 1984 is procedural and remains available whether or not such a substantive foreign right exists.
4. The expert evidence did not establish a mandatory Spanish right to interest at the stated rates. The word “contemplates”, together with the description of the interest as a penalty arising from failure to make an interim payment, indicated a discretionary procedural sanction rather than an automatic substantive entitlement.
5. The Judge was therefore entitled to award interest under the forum law at English rates. He was not bound to exercise his discretion by applying the Spanish rates, although the court could have taken them into account as a matter of discretion.
6. The later decision in Scales v Motor Insurers’ Bureau was treated as confirmation that the Spanish penalty-interest regime was discretionary, including exceptions for justified delay or delay not attributable to the defendant. That issue did not need to be decided on the appeal.

• High Court (Queen’s Bench Division): appeal from the County Court at Plymouth. The claimants’ appeal was dismissed; the defendant’s conditional cross-appeal was not decided.
• County Court at Plymouth: Mr Recorder McLoughlin awarded interest under section 69 of the County Courts Act 1984 at 0.5% on special damages and 2% on general damages.