piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

A Tale of Two Countries: applicable law in a claim against a foreign (French) insurer

Kira Middleton v Allianz IARD SA v Erika Lee Middleton [2012] EWHC 2287 (QB)     This matter arose out of a road traffic accident in France on 6 February 2002. The Claimant was a child born on 28 September 1999. The Defendant was an insurance company registered in France. The Third Party was the Claimant’s mother and became a party to the proceedings when a Part 20 (additional) claim was brought against her by the Defendant. The Claimant and the Third Party were British nationals. On 6 February 2002 they were in France; the Claimant lived there with her mother at the time (in the house of her grandmother near Bergerac, France).  A family friend (also a British national), was visiting the home of the Claimant’s grandmother. The friend was driving a Renault Espace vehicle and reversed at a time when the Claimant was behind her. The Claimant was struck and knocked to the ground by the reversing vehicle. The Claimant suffered a very significant brain injury, together with other injuries of the utmost seriousness. The Claimant was in a coma for 4 weeks. She was left with very significant care, medical, physiotherapy and accommodation/equipment needs. In the period since the accident the Claimant and her mother had returned to England where the Claimant was, by the time she issued proceedings, domiciled. It was common ground that the Claimant was entitled to bring proceedings directly against the French-registered insurer in the English Courts (being the Courts of the Claimant’s domicile) by virtue of section 3 of EU (Council) Regulation 44/2001 and the decision of the European Court of Justice in FBTO Schadeverzekeringen NV v Jack Odenbreit ECJ 13 December 2007 [2007] EUECJ C-463/06. The issue in the case concerned applicable law. The parties agreed that this issue was to be determined by reference to Part III of the Private International Law (Miscellaneous Provisions) Act 1995. The starting point was that French law – the lex loci delicti (the law of the place where the events constituting the tort occurred) – should be applied. However, the presumption that French law applied could be displaced where the Court was satisfied that it was, by reference to section 12 of the 1995 Act, “substantially more appropriate” to apply the law of another country in preference to the lex loci delicti.  The Claimant’s case was that French law, as the law of the place where the accident occurred, was applicable to the substantive issues in the claim and, by virtue of the same and the application of the French Loi Badinter, the liability of the tortfeasor (for which the Defendant was obliged to provide insurance indemnity) was strict. The effect of this would be that contribution from the Claimant’s mother would not be available. Unsurprisingly, the Third Party made common cause with the Claimant on this issue. The Defendant’s case was that it was substantially more appropriate that English law should be applied (in preference to French law). The question of the law applicable to the claim was tried as a preliminary issue by Griffith Williams J and a reserved judgment was handed down on 1 August 2012. The Claimant’s arguments prevailed and it was held that it was not substantially more appropriate to apply English law to the substantive issues in the case, including liability. Accordingly, French law applied (with the result that the Claimant would be able to rely on the Loi Badinter). The Judge applied the conventional three-stage process to the section 11/section 12 exercise in which stage one involves identifying the issue to which it is suggested the general (section 11) rule is not to be applied (for example, the issue of liability); stage two involves identifying the factors which connect the tort to the place where it happened (France) and the factors which connect the tort to the forum (England); and, stage three requires an assessment of the significance of these factors (as they connect the tort to each jurisdiction) to determine whether section 12 should be applied (see, Roerig v Valiant [2002] 1 WLR 2304 (CA)). The Claimant, her mother (the Third Party) and their wider family had a longstanding and significant connection with France (where they were living when the accident occurred) and, although they had moved back to England in the period since the accident, it is not surprising that their connection with France persuaded the Judge that it was not substantially more appropriate to apply English law. The significance of the decision lies in the Judge’s rejection of the following (somewhat novel) arguments advanced by the Defendant at trial. First, the Judge was not persuaded that the coincidence in the nationality of the Claimant, her Mother (Third Party) and tortfeasor should be given greater weight than the domicile of these parties – and the French insurer – at the time that the accident occurred (ie. they were all domiciled in France). It had been argued for the Defendant that nationality was a more stable feature than domicile (which could, as here, change over time) and so should be given proportionately greater weight. This argument did not succeed and represents, perhaps, a more or less subtle change of emphasis from the approach taken in Edmunds v Simmonds [2001] 1 WLR 1003 (QBD) (where the country of registration of the insurer was accorded less weight) and Harding v Wealands [2005] 1 WLR 1539 (CA) where, in the Court of Appeal (before the case was appealed on a different issue to the House of Lords), nationality of the tortfeasor was given considerable weight as a material factor. Second, the Judge was similarly unpersuaded that it was more appropriate for English law to be applied because, as a result of English authority (Harding Wealands [2007] 2 AC 1 (HL(E)), the Claimant’s damages would be assessed according to English law in any event because such assessment is governed by the law of the forum even where foreign law applies to the substantive issues (the Defendant had pointed out that, at odds with the conventional approach in continental legal systems, the English common law permitted different issues to be determined by the law of different jurisdictions and also recognised a distinction between the substantive issues (determined by the applicable law of the tort) and the procedural (determined by the law of the forum)). It was held, rejecting the Defendant’s argument, that the accident occurred in France where the Loi Badinter would apply and, by implication, the injured party (and insurer) would have a reasonable expectation that the Claimant would take advantage of this – a view that was consistent with interim payments and correspondence from the Defendant insurer which, contrary to its stance in the preliminary issue, had initially proceeded on the basis that the French Loi Badinter would apply (the Judge’s conclusions in this regard represent a departure from the approach taken in Dawson & Dawson v Broughton (2007) 151 Sol J 1167). This is, perhaps, one of the last cases where applicable law will be determined by reference to Part III of the Private International Law (Miscellaneous Provisions) Act 1995. Accidents which post-date 11 January 2009 are now dealt with by reference to the rather different considerations of the Rome II Regulation on applicable law (see, European Parliament and Council Regulation (864/2007) on the Law Applicable to Non-contractual Obligations).

Definitely a good walk spoiled: Hammersley-Gonsalves (A child by his litigation friend T Gonsalves) v Redcar & Cleveland BC

Some things simply make one feel old: the 90s revival, being older than your doctor, complaining about people playing music on public transport.  To this (abridged) list I can now add school games lessons.  Back in my day (a phrase that can be added to the aforementioned list) school sport largely consisted of being cold and taking part in team games in the winter (good character building stuff no doubt) or in the summer, a bit of cricket and then pretending that anyone cared about athletics.    What wasn’t contemplated was teaching the pupils how to play golf, and if Hammersley-Gonsalves (A child by his litigation friend T Gonsalves) v Redcar & Cleveland BC is anything to go by, a very wise policy that was indeed.  The decision in Hammersley-Gonsalves has just been handed down by the Court of Appeal.  The Claimant, who at the time of the accident was almost twelve years old, was being taught golf at his secondary school.  The school had given 22 boys six indoor golf lessons.  For the seventh lesson, the enterprising PE teacher had created a golf course in the school grounds. Quite properly, the teacher taking the lesson had told the pupils, who each had one club and one ball, not to use their club or hit anything until instructed to do so.  The pupils walked out onto the school grounds in single file.  However, boys being boys, one of the children decided to disregard the instruction and when having reached the school field, put his ball down and took a swing. Unfortunately, this resulted in C being hit in the face by the golf club.  Equally unfortunately, this not being a proper golf club, there wasn’t a collection of doctors in the club house bar. The Claimant succeed at first instance, with the judge finding that  the teacher could not see what the pupils were doing, and that he did not see the pupil swing the club that hit the Claimant.  As such, it was held that the lesson had not been adequately supervised and consequently that the Defendant local authority had not met the appropriate standard of care. The Court of Appeal had no trouble with the judge’s finding that the teacher could not see every pupil at every moment.  However, it was difficult to see how the Claimant could succeed absent an allegation relating to staffing ratios.  It was obvious to the Court of Appeal that one teacher could not be expected to see every action of 22 boys when walking in single file, however, on the judge’s finding a lack of adequate supervision was not made out. There had been no history of bad behaviour and the action of the careless young golfer was unexpected. Although the question of appropriate staffing ratios had not been argued, in the cricumstances closer and additional supervision was not required given the age of the children and the nature of the activity.  Also, even if the teacher had been negligent in not observing the boy swinging the club, it also had to be established that that failure was causative of the Claimant’s injuries.  The judge had not dealt with this and there was no finding that on a balance of probabilities any action by the teacher would have prevented the accident.All in all it would have been far better to stick with football.

The addition of a late expert: case note

Van Niekerk v Carnival Plc & Anor. [2012] LTL 13/6/12 (QB, HHJ Seymour QC)   This claim concerned further directions for a High Court trial that was listed a little over 2 months after a Pre-trial review in which further permissions for expert evidence were sought. The Claimant’s husband had died on holiday while he had been taking part in a diving excursion arranged by or through the Defendant cruise line operator. Liability, causation and quantum were all in issue. The Claimant brought a substantial claim for damages. The Claimant’s schedule of loss included, among other things, a claim for loss of financial dependency based on pension income. In correspondence, the Defendant had queried the calculation of this head of loss. Approximately, two months before the date fixed for trial of liability and quantum the Claimant applied for permission to obtain and rely on a report from an expert forensic accountant on the investment growth rates relating to the financial dependency claim. Each party had also obtained a medico-legal report on the cause of death. The Claimant's expert was a histopathologist. The Defendant's expert was a cardiologist with experience in the cardiological aspects associated with diving. The issues considered at the Pre-trial review concerned: (i) whether permission should be granted to adduce expert accounting evidence; (ii) whether directions should be given for a joint statement by the cause of death experts; (iii) the appropriate order for costs.HELD: (1) Permission was granted to obtain expert accounting evidence limited to the issue of investment growth rates - while this evidence was being sought at a late stage, it would likely assist in the accurate calculation of loss and would be helpful to the Trial Judge. (2) There was potential value in the cause of death experts producing a joint statement, despite the risk that it would simply repeat their individual reports (and in spite of the fact that they were experts in different disciplines). (3) Although the Claimant had succeeded on her application to admit accounting evidence, it had been necessary because there was a deficiency in her case which the Defendant had pointed out some months earlier, and she had sought to adduce additional evidence close to the trial and in circumstances where it raised serious questions about whether the trial could proceed in the event that permission were granted. The issue about a joint experts' report had been a serious issue. Taking those issues into account, the proximity to trial and the matters on which the parties had argued, it was appropriate to consider the hearing as a pre-trial review. In those circumstances, the appropriate order for costs was costs in the case.

Liability of a Motor Insurer for Criminal Acts

CASE REPORT:-      AXN & Ors v (1) John Worboys (2) Inceptum Insurance Co Ltd (formerly HSBC Insurance (UK) LTD) [2012] EWHC 1730 (QB)   The preliminary issues concerned whether, and to what extent, the claimants had, in addition to their claims against Worboys, valid causes of action against the defendant insurer as the provider of the compulsory motor insurance required by the Road Traffic Act 1988. His insurance policy provided cover for "social, domestic and pleasure purposes and for use for public hire".   The Court was asked to determine whether: (i) the bodily injuries suffered by the claimants "arose out of the use of Worboys’ vehicle on a road or other public place" within the meaning of s145(3)(a) of the 1988 Act; (ii) liability in respect of Worboys’ acts of poisoning and sexual assault was required by s145(3)(a) to be covered by a policy of insurance, and was covered by the policy issued by his insurer; (iii) Worboy's use of the vehicle at the material times was a use insured by the policy; (iv) the insurer was liable pursuant to s151 to pay to the claimants any sum payable pursuant to a judgment obtained against Worboys. Mr Justice Silber determined this preliminary issue in favour of defendant insurer. The Court held: (1) the claimants’ injuries were caused by the criminal acts of Worboys in administering sedatives and then in attempting to or actually assaulting the claimants, and did not arise out of the use of the taxi on a road; (2) as the injuries sustained by the claimants did not arise out of Worboys' use of a vehicle on a road and so they were not required by s145(3)(a) to be covered by insurance;  (3) if the essential character of the journey consisted of use for a criminal purpose then the vehicle would not be covered by its insurance (Caple v Sewell [2011] EWCA Civ 1948). By the time that the claimants were sedated and assaulted, the essential character or purpose of the journey was criminal and the use was not covered by the insurance; and  (4) therefore having regard to the answers to the first three issues, the insurer was not liable, pursuant to s151, to pay to the claimants any sum payable pursuant to a judgment obtained against Worboys.

What is it about Preston County Court?

The case of R (on the application of Sharing) v Preston County Court [EWHC 515] is perhaps a surprising one to comment on in a personal injury blog. It concerns wrongful eviction, rent arrears and judicial review. However it is of wider interest because the claimant, whose claim for damages was dismissed by the district judge and whose application for permission to appeal to the circuit judge was also refused, successfully had the refusal of permission to appeal quashed in the administrative court and remitted to a different circuit judge. Both this case and the case cited below came from Preston County Court and the circuit judge in concern ended up in the judicial stocks...   The facts of Sharing are, in brief, as follows. The claimant brought a claim for damages for unlawful eviction. The defendant relied upon two witnesses: a WPC and another tenant. At trial he said that the WPC had been served with a witness summons but had said she was unavailable - he was a bit cagy about it when pressed. The other witness was held out to be an independent witness. The trial judge found the independent witness to be essentially truthful and that the claimant had lied about a tenancy deposit. He dismissed the claim finding the police evidence favoured the defendant. The claimant then obtained a statement from the WPC to the effect that she had not received a witness summons, she had been available and that when she interviewed the ‘independent’ witness, she had assumed she was in fact the defendant’s partner because of the way they related to one another. The WPC also provided other evidence which undermined some of the defendant’s case. The claimant then sought permission to appeal on the basis of the WPC’s fresh evidence. That permission was refused and hence an application was made to the Administrative Court for judicial review. Wilkie J was troubled by the way the circuit judge had conducted the hearing saying that, from the transcript, it was apparent that he gave counsel for the claimant an ‘extremely rough ride’. He did not permit her to develop the main point she wished to make and he repeatedly said the case had been won or lost because the district judge had not believed the claimant. He found with great hesitation and regret that the circuit judge acted in such a way that a fair-minded and independent bystander would conclude that he had finally and firmly made up his mind from the outset of the application that he was going to refuse it, that he was going to refuse to admit the fresh evidence of the WPC and his repeated interruptions of counsel and the way he focused on the way in which the district judge had decided the case was the clearest possible evidence of apparent bias. The key case on applying for judicial review of the decision of a circuit judge is R (on the application of Strickson) v Preston County Court & Ors [2007] EWCA Civ 1132. There Laws L.J. said that before JR could be granted a defect much more fundamental than an error of law had to be established. He said ‘I think a distinction may be drawn between a case where the judge simply gets it wrong, even extremely wrong (and wrong on the law, or the facts, or both) and a case where… the judicial process itself has been frustrated or corrupted. This, I think, marks the truly exceptional case.’ He gave a number of examples: the court embarking on an enquiry it lacks all power to deal with, failure to enquire or adjudicate upon a matter which was its unequivocal duty to address, a substantial denial of the right to a fair hearing, a court acting ‘incomplete disregard of its duties’. Photo courtesy of Freefoto.com

A catastrophic getaway

  Mr O’Brien and his nephew Mr Joyce must be amongst the most incompetent thieves around. They stole a ladder from the front garden of a house and put it into the back of the van but could not close the door. Mr O’Brien drove the van off to make a speedy getaway whilst Mr Joyce hung onto the back of the van, standing on a footplate with the ladder under or over his right arm. He was holding onto the door or roof whilst a door was flapping around. The van lurched around a bend without reducing speed making Mr Joyce yet more unstable. Finally, on another bend he lost his grip, fell and suffered a severe head injury. Mr O’Brien seemed more concerned about trying to hide the ladders than helping his nephew. His excuses for the accident were inconsistent, ridiculous and not worthy of a schoolboy. He said that he did not know that his nephew was hanging onto the rear of the vehicle by the doors or ladders, that his nephew clambered through the back of the vehicle to secure the doors which had come open, that he was riding on the footplate as a ‘joke’ and that his nephew had got out of the van to secure the doors and was not on it at the material time. The judge commented that it was no surprise that nobody wished to call him as a witness or rely upon his evidence. The case was Joyce v Tradex Insurance Company Limited [2012] EWHC 1324;  the issue was whether Mr Joyce could recover damages for personal injury from Mr O’Brien when the claimant was injured whilst both were engaged in a joint criminal enterprise.   Cooke J found that Mr Joyce’s injuries were caused by the speed of the vehicle (essential to the getaway) and his position on the back of the vehicle (holding the ladders and the van whilst standing on the footplate). What Mr Joyce had done was so unusual as to be as causative of his injuries as Mr O’Brien’s driving. Accordingly the claim failed on causation. The claim also failed as a matter of general public policy: a participant in a joint enterprise theft which involves a speedy getaway in a van with a participant driving and the other clinging dangerously to the stolen items and the van cannot recover for injuries sustained in the course of that enterprise. The driver could not owe a duty to his co-conspirator and it was not possible to set a standard of care. What’s more, risk and danger were inherent in the enterprise. Accordingly Mr Joyce’s own criminal conduct precluded him from recovering. (Image Courtesy of Freefoto.com)  

Vicarious Liability for a non-employee - again

XVW & YZA v X School for Girls & Adventure Lifesigns Ltd [2012] EWHC 575 (QB) This action was brought by two Claimants and arose out of a school trip/expedition to Belize in July/August 2005. The Claimants were pupils at the D1 school; they were aged 16 years and 15 years respectively. D2, a UK company, assisted with the planning of the expedition, as well as providing two ex-military adult staff to accompany the same. The expedition was a developmental training experience for the participants; it was not a holiday. The young women who participated were actively involved in the choice, selection, planning and budgeting for the index expedition. A teacher from D1 also accompanied the expedition. During the course of the expedition it was necessary for the planned itinerary to be altered as a result of a hurricane which affected the area (Mexico) to which the group intended to travel. The young women participating in the expedition were actively involved in the change of plan and the arrangements for alternative accommodation. A local Belizean company provided accommodation to members of the expedition party in return for work undertaken by the participants and an agreement to undertake trips with the Belizean company to be paid for by the participants from funds held by them. A local man (A) was the son of the owner of the Belizean accommodation and might have been co-owner of the resort where the group stayed. During the early hours of the morning of 1 August 2005 A raped the Claimants and another of the young women on the expedition who was staying in the same cabana accommodation at the resort. The Claimants alleged that they had sustained psychiatric injury as a result of the sexual assaults. They brought proceedings against the Defendants in respect of the alleged intentional wrongdoing of A. The Claimants’ case was that D1 and/or D2 were vicariously liable for the conduct of A. Alternatively, it was submitted on their behalf that the scope of D1 and/or D2’s duty of care extended to the intervening criminal conduct of A (which was, the Claimants alleged, foreseeable) and that there had been a number of causally relevant breaches of duty by D1 and D2 with respect to the planning of the expedition, the supervision of the expedition, the vetting of A and the security of the Claimants. The Claimants relied on a number of alleged incidents of inappropriate behaviour by A prior to the assaults (although it was denied that these incidents had come to the notice of D1 or D2’s staff). The trial took place before Mackay J on 27 – 29 February and 1 March 2012. The Claimants’ claims were dismissed and it was held: (1) A was not an employee of D1 or D2 and his involvement, such as it was, in the expedition was sufficiently limited that it was not just and fair to describe him as a person for whose actions D1 or D2 were vicariously liable (Lister v Hesley Hall Limited [2002] 1 AC 215 (HL(E), JGE v The English Province of Our Lady of Charity & Anor. [2011] EWHC 2871 (QB) and EL v The Children’s Society [2012] EWHC 365 (QB) considered, among other cases; (2) The scope of the duty of care was to be determined by application of the Caparo test: was it fair, just and reasonable for the duty to extend as far as the Claimants contended; (3) There was no causative breach of duty in this case. It was not alleged that A had a criminal record which went undiscovered or that Belize had a UK-style system of CRB checks. The local police would, if they had been consulted in advance, probably have given A a good character reference. The school party was continuously supervised by 3 experienced adults and, short of placing a guard outside each cabana occupied by the school party at the resort, there was no means by which to defeat A’s assault (he had been careful to keep his conduct towards the young women, prior to the assaults, hidden from the adult staff).  This case is the latest in a number of recent decisions in which vicarious liability is discussed in respect of persons who are not employees (or even deemed or temporary employees) of the Defendant. These cases are discussed in the most recent (March 2012) edition of the Chambers Personal Injury Briefing  and in Lisa Dobie's post  below.

RTA Fraudsters Beware!

As I expect many will agree, there has been a recent upsurge in the past 12 or so months in cases of alleged fraudulent accidents coming before the courts. Are these sorts of accidents becoming more common? Or are insurer’s simply getting tougher and more bullish in alleging fraud? I think the answer is possibly “both”. There are some typical hallmarks of these sorts of fraud which can often be easily observed on a reading of the papers. Further research into a party’s (and often their relatives’) claim history can be very illuminating.   But of course such fraudulent claimants should be aware, it seems that the High Court also wishes to send a message out to them that they too are getting tougher on ‘this sort of thing’.     The Administrative Court (Sir John Thomas and Silber J) gave judgment yesterday in Liverpool Victoria Insurance Company Limited v Bashir & Ors. This case was a fairly standard sort of fraudulent motor insurance claim – a contrived accident between parties (a husband and wife inviting the involvement of acquaintances) who agreed to share any profits from the multiple claims for personal injuries and special damage. What was slightly more unusual in this case (and from some experience, I stress the “slightly”) was that the parties were prepared to involve their two children, one of whom was only 4 months old.   What perhaps is genuinely more unusual is that in the course of the proceedings, the Respondents admitted the claim was fraudulent.   In a move which could only be welcomed by insurers, the court held that it had no option but to impose an immediate custodial sentence upon the fraudulent (adult) parties, in the interests of the public at large and in deterring such conduct in the future. The court would have imposed a sentence well in excess of 12 months but took into account the fact that the Respondents’ admitted the fraud, and that the husband and wife assisted Liverpool Victoria with the disclosure of documents. On these Respondents, the court imposed a sentence of 6 weeks imprisonment. On the other Respondents the same sentence was imposed, but was however suspended to reflect the fact that the husband and wife had induced them into being involved.

The English Claimant in Spain

  Gallagher v Wright (Manchester CC, Recorder Gregory, 25 November 2011 and 2 February 2012)   The Claimant (G) was a rear seat passenger   in a car travelling to Alicante airport, Spain when the Defendant driver (W) entered a slip road on the wrong side of the road and collided head on with a vehicle approaching in the opposite direction. The Claimant sustained multiple injuries and sued W who promptly admitted liability.   Both G and W were British nationals, domiciled in England. The car had been hired in Spain and was insured under a Spanish insurance policy. The question for the court – at preliminary issue trial – was whether the nature, extent and assessment of the damages to which the Claimant was entitled would be dealt with in accordance with English or Spanish law.   Previous entries on this blog have discussed the temporal scope of the Rome II Regulation. The recent decision of Homawoo v GMF Assurances SA – (ECJ, Case C-412-10) conclusively determines that Rome II does not apply to accidents giving rise to damage which occurred before 11 January 2009. Accordingly, the Private International Law (Miscellaneous Provisions) Act 1995 was the correct instrument for determining applicable law in G’s case.   Section 11 of the 1995 Act establishes the general rule that a claim in tort will be determined according to the law of the country in which the tort occurred (in this case, Spain). Section 12 provides that the party seeking to displace the general rule must demonstrate that it is “substantially more appropriate” to apply the law of a different country. According to Waller LJ in Roerig v Valiant Trawlers [2002] 1 WLR 2304 (CA) “the word ‘substantially’ is the key word. The general rule is not to be dislodged easily”.   In Roerig, Waller LJ went on to provide guidance as to the correct approach to determining the applicable law, using a three stage exercise:   Stage Application to the facts (1) Identify the issue to which the general rule may not be applicable The assessment and quantification of damages (2) Identify the factors connecting the tort with the other country (England) - The nationality and domicile of G - The nationality and domicile of W - W had admitted 100% liability - G and W had been in a relationship in England and had come to Spain for the purposes of a short holiday - The location of G’s treatment and losses, including most of her pain, suffering and loss of amenity (3) Identify the factors connecting the tort with the country (Spain)* - The nationality and domicile of W’s insurer     In the light of the numerous factors connecting the accident with England, it was argued by counsel for W that the nationality of W’s insurer was a “crucial consideration”. The insurer stood behind W and would manage the litigation and satisfy the judgment and so was, in effect, the “real Defendant”. Furthermore, it was entirely fortuitous that G had elected not to proceed against the insurer directly in accordance with the jurisdictional route provided by section 3 of the Judgments Regulation (EU (Council) Regulation 44/2001, as interpreted by the ECJ in Odenbreit (2007)).   HELD:   The mere fact that G could have pursued W’s insurer directly did not require the Court to treat the insurer’s nationality with the same weight as if it was in fact a party to proceedings. Following Garland J in Edmunds v Simmonds [2000] [2001] 1 WLR 1003 (QB), the domicile of the Defendant’s insurer was not a factor of overwhelming weight or importance.   Further, insurers of hire cars in tourist areas had to contemplate that the majority of hirers would be foreign and that accidents involving them might result in damages being quantified according to different systems of law. The weight to be given to the factors connecting the accident with England were sufficient to displace the general rule; it was substantially more appropriate for the applicable law to be the law of England and Wales.   This case raises an interesting strategic dilemma in overseas RTA litigation: pursuing foreign insurers directly, rather than the tortfeasor, has the advantage of simplicity and certainty of recovery, but in doing so the domicile of the insurer may carry greater weight for the purpose of determining applicable law (although HHJ Armitage QC – also sitting in the Manchester County Court – thought otherwise in Kershaw v Carey & Anor. 6 September 2011).   [Case note prepared with the assistance of Thomas Collins, Pupil Barrister.]

A Tale of Two Defences: Drugs, Ex Turpi Causa and the Uninsured Drivers Agreement

What’s the scope of the “criminal conduct” exception in the Uninsured Drivers Agreement and how does it relate to the principle formally known as ex turpi causa? This was the issue before the Court of Appeal in Delaney v (1) Pickett (2) Tradewise Insurance Services Ltd [2011] EWCA Civ 1532. C was a passenger in D’s vehicle and was badly injured because of D’s negligent driving. Substantial quantities of cannabis were found on the parties after the accident, and the judge found that C and D had travelled together to buy and then transport cannabis for subsequent resale. D defended the claim, relying on ex turpi causa. In the mean time, D had confessed habitual drug use to the police. His insurers discovered this and successfully took proceedings to avoid his insurance policy for material non-disclosure. Under the Uninsured Drivers Agreement the insurer was potentially liable to satisfy the judgment as road traffic accident insurers. But the general duty to indemnify is subject to a number of exceptions, notably Paragraph 6(e)(ii), where “a claim which is made… by a claimant who… was voluntarily allowing himself to be carried in the vehicle and… knew or ought to know that… the vehicle was being used in the course of or furtherance of a crime”. Insurers argued that this clause should be given a literal construction: the vehicle was being used in the process of committing the crime and as part of the carrying out of criminal activity. Both defences succeeded at first instance, and C appealed. The Court of Appeal disagreed with the judge’s conclusion on ex turpi causa. Following Gray v Thames Trains [2009] 1 AC 1339 and Pitts v Hunt [1991] 2 QB 24: This was not a case where the Court could not determine a standard of care for D’s driving, unlike (say) a getaway car.       This was not a case where liability would be an affront to the public conscience.  The crime provided the occasion for the accident rather than actually being the cause of it. The immediate cause was D’s negligent driving, and not the crime. The illegal acts were incidental.    Given the size of this claim, success against D would be cold comfort unless the insurers were also liable. So where did this leave the insurer’s argument? Was the exclusion under Paragraph 6(e)(ii) wider than the ex turpi causa defence?   Their Lordships were all agreed that, taking a literal reading of the clause, (on the judge’s findings) to C’s knowledge, the vehicle was indeed being used “in the furtherance of crime”. But this would mean a very wide exception, and potentially prevent recovery even where the crime in question was very minor – for example speeding, or possession of a small amount of a controlled drug.    Ward LJ’s answer was that the exception should be “proportionate” and was limited to “serious” crime of the sort that would give the driver a defence of illegality: this crime was not “serious” enough and the exception should not apply.   The majority (Richards and Tomlinson LJJ) did not agree. Their reasoning is not consistent, however:- Richards LJ considered there was a de minimis exception, but that possession with intent to supply was certainly serious enough. The use of the vehicle did not have to constitute an ingredient of the offence for the exception to apply.   Tomlinson LJ took a firmer line. Use of the vehicle was not incidental to the crime, it was an integral part of it. Whilst the literal reading of the clause could lead to recovery being denied where the crime was minor, it was not appropriate for the court to make a value judgment about the seriousness of the offence, which was irrelevant to the criteria for liability under the agreement. Tomlinson LJ did not endorse the de minimis exception. This case underlines that the ex turpi causa defence will rarely succeed. But exceptions to liability under the Uninsured Drivers Agreement will succeed far more often. When these succeed, the cause of the accident may well be nothing to do with the circumstance prohibiting recovery – for example that C knew (or ought to know) the vehicle was stolen, or that D was not insured. In those cases, blameworthiness on C’s part is not “the touchstone of recovery”. However, if insurers use this decision to argue more frequently that there should be no recovery by reason of very minor crimes, it is likely that pressure will mount for a change to the 1999 Agreement.