Have you been involved in a foreign accident that wasn’t your fault? Issue now!
December 10, 2020
This article was originally published in The MASS Insight Magazine, November 2020.
Have you been involved in a foreign accident that wasn’t your fault? Issue now!
- Two years ago, I wrote an article for The MASS Insight Magazine entitled “Which law: which country?”. The article provided an overview of the key issues relating to the choice of law and jurisdiction in foreign accident claims. At that time, I wrote confidently that the United Kingdom would leave the European Union on 29 March 2019. I was ultimately disabused of that idea but on 31 January 2020 the UK did leave the EU under the terms of the European Union (Withdrawal Agreement) Act 2020 (“Withdrawal Agreement”). We now find ourselves (just) in the post-Brexit transition period, which will end on New Year’s Eve.
- This article will seek to provide an overview of the rules that apply during this transition period and what might happen afterwards.
UK-EU Transition Period: 31 January 2020 – 31 December 2020
- During the transition period most EU law (including Brussels I (recast), which determines which court will have jurisdiction over a dispute, and Rome II, which ascertains the law that applies to non-contractual obligations and disputes) will continue to apply as it had done prior to 31 January 2020. In addition, although the UK’s last judicial member of the European Court of Justice, Eleanor Sharpston, QC, was removed from her position as Advocate General in September 2020, the Court in Luxembourg continues to have jurisdiction in the UK.
- Article 66 of the Withdrawal Agreement provides that Rome II shall continue to apply in the UK in respect of events giving rise to damage, where such events occurred before the end of the transition period. As such, the choice of English law to govern events giving rise to damage before 31 December 2020 should continue to be respected across the EU.
- Article 67(1)(a) of the Withdrawal Agreement provides that Brussels I (recast) shall apply in the UK in respect of legal proceedings instituted before 31 December 2020. This is reinforced by Regulation 92 of Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019. As such, provided proceedings are issued before the end of the transition period, the general rule under Article 4 of Brussels I (recast), namely that “persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State”, will continue to apply.
Post-UK-EU Transition Period: 1 January 2021 –
- The provisions of Rome II will be retained at the end of the transition period. The substantive rules in Rome II will continue to apply as domestic law to determine the law applicable to non-contractual obligations. Section 3 of the European Union (Withdrawal) Act 2018 provides that “direct EU legislation [which includes Rome II] so far as operative immediately before exit day [transition period completion day], forms part of domestic law on and after exit day [transition period completion day]”. As such, there will no material change to the relevant rules for designating the applicable law in non-contractual cases.
- However, Brussels I (recast) will cease to apply at the end of the transition period. Section 89 Civil Jurisdiction and Judgments (Amendment) (EU Exit) Regulations 2019, which comes into force at the end of the transition period, specifically revokes Brussels I (recast). So, what, if anything, will replace it?
- On 22 August 2017, the Government published a “Future Partnership Paper” entitled “Providing a cross-border civil judicial cooperation framework”. The paper sets out the Government’s intentions regarding the future relationship with the EU. This includes the intention to “seek an agreement with the EU that allows for close and comprehensive cross-border civil judicial cooperation on a reciprocal basis, which reflects closely the substantive principles of cooperation under the current EU framework”, including Brussels I (recast). There is a chance that the UK will be able to reach a specific agreement with the EU as to how jurisdictional matters will be dealt with, but it seems improbable that the EU will negotiate anything as beneficial as the existing regime.
- The Government also set out that it intended to “seek to continue to participate in the Lugano Convention that, by virtue of our membership of the EU, forms the basis for the UK’s civil judicial cooperation with Norway, Iceland and Switzerland”. The UK applied to join the Lugano Convention 2007, which contains rules on jurisdiction and enforcement of judgments, on 8 April 2020. Iceland, Norward and Switzerland have supported this but the same cannot be said of the EU27. Even if the EU27 indicated that they were in favour of the UK acceding to the Lugano Convention, it is now too late for the accession process to conclude prior to 1 January 2021.
- The paper also indicated the Government’s intention to accede to the Hague Convention on Choice of Court Agreements (2005) in its own right after the transition period. The UK deposited its instrument of accession to the Hague Convention on 28 December 2018 but withdrew it on 31 January 2020. On 28 September 2020, the UK deposited a new instrument of accession, which will take effect when the transition period comes to an end on 31 December 2020. At present, the Hague Convention is largely inapplicable between the EU member states because Brussels I (recast) takes priority on matters of jurisdiction and enforcement of judgments and it does not contain any rules relating to jurisdiction in situations other than exclusive choice of court agreements; however, as of 1 January 2021 it may play an important role with respect to jurisdiction and enforcement of judgments as between the UK and the remaining EU member states in cases where the parties to the dispute have agreed an exclusive jurisdiction clause.
- Despite the Government’s indications as to the future relationship with the EU, there remains much uncertainty. The precise terms of the future relationship will depend on what, if any, arrangements can be agreed between the UK and the EU in the short time left until the transition period ends. Until a jurisdictional deal is put in place to replace Brussels I (recast), the lacuna left will be dealt with through the common law rules and CPR6 and CPR PD 6B.
Road Traffic Accidents: MIB
- The Protection of Visitors system was introduced by the Fourth Motor Insurance Directive, implemented in the UK by the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003, to strengthen the rights of visiting victims of cross-border collisions and simplify their route to compensation. This allowed, for example, a British person injured by a foreign registered vehicle in France to pursue a claim in the UK either through the foreign insurer’s representative, or through the Motor Insurers Bureau (“MIB”); the MIB then has a right of recovery.
- The Motor Vehicles (Compulsory Insurance) (Amendment etc) (EU Exit) Regulations 2019 remove obligations on the MIB to compensate UK residents who are injured in road traffic accidents in the EEA where there is no insurer or the insurer fails to respond, unless proceedings have been commenced prior to 31 December 2020.
- If proceedings are commenced after the transition period, claimants will have to bring their claims against the foreign insurer directly or, in the case of an accident with an uninsured or untraced driver, against the foreign equivalent of the MIB. It must be borne in mind that in some EEA countries the MIB equivalent body only pays compensation to their own residents and to residents of other EEA countries in the event of an accident involving an uninsured or hit and run driver. The UK will cease to be a member of the EEA after the transition period has ended.
- The MIB has indicated that “to enable continued access to compensation for UK victims, MIB is working to sign reciprocal agreements with its equivalents in such countries, under which both sides commit to continuing compensation for victims of accidents involving uninsured or hit-and-run drivers in their own country. Claims will have to be brought in the country where the accident occurred and any compensation will be assessed under the law and regulations of that country. If MIB’s equivalent in any of the affected countries does not sign a reciprocal agreement by the end of the transition period, there will be no compensation available for UK visitors to that country”. The MIB has entered into bilateral Protection of Visitors agreements with a number its EEA counterparts to facilitate the exchange of information, which would enable the MIB and its EEA counterparts to assist victims in obtaining the information they need to make claims in the country where the accident occurred. There are two agreements: one covering victims of insured drivers and one covering victims of uninsured or untraced drivers. Bulgaria, Czech Republic, Italy, Liechtenstein, Lithuania, Malta, Netherlands, Portugal, Slovakia and Spain have not signed the agreement (uninsured / untraced) but have nevertheless confirmed that they will continue to compensate UK-resident victims. The MIB does not appear to have succeeded in securing agreements with France or Romania to ensure the continuation of compensation, on a reciprocal basis, of visitors who become victims of accidents involving uninsured or untraced drivers.
- To conclude, in order that claimants can benefit from the current rules, and avoid the inevitable future uncertainty, it is advisable that any ongoing claims with a foreign element be issued and, if possible, served prior to 31 December 2020.