The Fourth Motor Insurance Directive (“Motor Directive”) was of great benefit to individuals, residents and domiciled in the UK, but who had been involved in a road traffic accident in a European member state. The legislation strengthened the rights of injured parties and simplified their route to compensation.
The Motor Directive conferred a direct right of action and thereby allowed UK nationals, living outside of the home country of the at-fault motorist, to sue the at-fault motor insurer directly in the UK. The Motor Directive required each motor insurer in the European Union to have a claim handling representative in each Member State in order to deal with injured person’s claims and made it possible for an injured person to enforce a judgement against an at-fault motor insurer.
Pre-December 2020, if, for example, an individual was resident and domiciled in the UK but had been involved in a road traffic accident in Spain, proceedings in English could be served, in the UK, on the nominated UK based claims handling agent of the Spanish defendant’s motor insurer, as opposed to in Spanish and served on the foreign motor insurer in Spain.
Brexit marked a fundamental shift in the rights of individuals, injured by negligent foreign third parties. For those that failed to issue their claim before the 31st December 2020, they now face a much bumpier route to recovering compensation. Of course, those claims that were seized by the UK court before 31st December 2020 will continue as before.
If an individual now wishes to pursue a claim, they will no longer be able to serve the UK claims handling agent with proceedings. The claim will now have to be brought in the Member State where the accident occurred; either against the at-fault driver directly, if they have been identified, or the at fault motor insurer in the Member State where the accident took place (if a direct right of action is permitted, which will be determined by the applicable law of that jurisdiction.)
As with most things there are exceptions. In some instances, it may still now be possible for an injured individual to bring a claim against a foreign insurer within the jurisdiction of England and Wales. However, any such claim will now be subject to common law rules; meaning that the claim must “get through” the tort gateway of damage being sustained in England and Wales. This can include costs of treatment and care etc. If they are successful, the claimant must then show that England and Wales is the appropriate forum in which to hear the claim. If liability is denied, it will hardly ever be deemed to be the appropriate forum. However, if liability is admitted, and/or any witnesses are located in England and Wales, then the English courts may accept jurisdiction. The difficulty is that we do not know how the courts will approach this as there haven’t been any higher court decisions on this point, as of yet.
An injured party also will need to incur the additional rigmarole, costs, time and uncertainty of doing so, so that other parties/their representatives are aware of the courts approach. If you were an injured party, would you risk it?
The final option is to bring the claim against the Member State’s Motor Insurers’ Bureau (“MIB”) equivalent (if the other driver is uninsured or unidentified.) The difficulty here is that each member state MIB equivalent pays compensation in different and sometimes only limited circumstances. For example, only to their own residents or where the at-fault driver is uninsured. In an attempt to ensure that UK citizens can still be compensated following a no-fault accident in a European member state, the MIB in the UK is working to sign agreements with member states. The fundamental success of these agreements, however, depends upon the reciprocal agreements between Compensation Bodies and Guarantee Funds. Although the MIB is making good process, a reciprocal agreement may not be possible with each and every member state. France is one such country: so, potentially, a UK national injured by an uninsured vehicle in France will now find that they would not be able to pursue a compensation claim at all.
Until the reciprocal agreements are finalised, a UK citizen injured in a road traffic accident abroad, will now need to sue the foreign at-fault driver, directly, in the Member State where the accident occurred. Any compensation will be assessed under the law and regulation of that country.
Inevitably, this will create many challenges, such as, an increase in costs of pursuing the claim as the input of foreign lawyers will be required, even more so than before, injured parties may need to return to the country where the accident happened for medical examinations and for reports to be prepared, the recovery of legal costs may either be limited or non-existent in other jurisdictions, coupled with, delays generally in the resolution of claims, as well as the potential that the majority of claims will now not succeed, let alone “get off the ground” if an at-fault driver cannot be identified.
The position may also potentially change again depending upon whether the EU agree for the UK to accede to the Lugano Convention. Prior to Brexit, reports were positive that the EU would agree for the UK to accede to Lugano, which would, in effect, put the UK back in the position it was in prior to Recast Brussels (please see our earlier article: “Brexit: Uncertainty over cross-border disputes” for more detail) and would be quite similar to the UK’s pre-Brexit position. However, it has been reported more recently that some key EU members firmly object to the UK’s accession to Lugano. It remains to be seen whether the European countries will co-operate, in time, and allow accession or not. If so, we remain in the position, as is, which is much more complicated, unclear and cumbersome on injured individuals compared to before.
If you’d like to discuss your cross border dispute, get in touch:
Yvonne Firth
Solicitor, Travel Law Team
Crawford Legal Services UK
E: yvonne.firth@crawco.co.uk
