Susan Sedgwick v Mapfre Espana Compania de Seguros y Reaseguros SA

Under Rome II, Spanish law governed the substantive assessment of damages for an accident in Spain, while English law governed procedure and evidence. The Spanish Baremo could be used as an indicative framework for non-traffic personal injury claims, while retaining judicial discretion in its application.

Article 19 of Rome II made English law, as the law governing the travel insurance contract, applicable to whether and how subrogated rights could be exercised. The claimant could therefore pursue the insurer-funded losses in her own name.

Spanish penalty interest was procedural because it operated as a sanction encouraging early interim payment. It was therefore not automatically applicable as the lex causae. Nevertheless, the court exercised its discretion under section 35A of the Senior Courts Act 1981 to award interest at the Spanish penalty rate.

The claimant suffered serious fractures in a fall on a hotel staircase in Tenerife. Liability was admitted, leaving the High Court to determine quantum under Spanish substantive law.

The issues concerned the assessment of non-pecuniary loss under the Spanish Baremo, the claimant’s entitlement to recover sums paid by her UK travel insurer, and the applicable interest rate. The parties agreed that Spanish law governed the tort and insurance contract issues, while English law governed procedure and evidence.

The court therefore had to determine whether the claimant could pursue the subrogated losses and whether Spanish penalty interest was substantive or procedural for the purposes of Rome II.

1. Applicable law and damages. Spanish law governed the existence, nature and assessment of the claimant’s losses. The Baremo was binding for road traffic claims but could properly be used as an indicative guideline for this non-traffic personal injury claim. The court retained discretion in assessing the appropriate tariffs and points.
2. General damages. The claimant suffered severe temporary loss of quality of life from the accident until 17 May 2016, allowing 115 days. Moderate loss continued until 13 June 2016, allowing 27 days. The date of consolidation was 25 September 2017, when treatment had reached the point at which no further significant improvement was expected. The court assessed the permanent sequelae, cosmetic defect and permanent loss of quality of life by reference to the evidence and the Baremo.
3. Subrogated losses. Article 19 of Rome II made the law governing the travel insurance contract applicable to whether, and to what extent, the insurer could exercise the insured’s rights. The manner of pursuing the claim, including the requirement that the action be brought in the insured’s name, was an integral substantive aspect of English subrogation law. The claimant could therefore recover the agreed £35,498.69.
4. Penalty interest. The Spanish penalty interest provisions were procedural rather than substantive. Their purpose was to incentivise an early conservative payment and discourage delay, and Article 20(8) permitted exclusion for a justified cause. The court followed Troke v Amgen Seguros Generales Compania de Seguros y Reaseguros in treating the provisions as procedural, notwithstanding the contrary or more tentative observations in other authorities.
5. Discretionary interest. Although Spanish penalty interest did not apply automatically as the lex causae, the court exercised its discretion under section 35A of the Senior Courts Act 1981 to award interest at the Spanish penalty rate from September 2017. The parties were directed to calculate the final figures and draw up the order.