Just over a year ago, the High Court delivered its decision in Pickard and Marshall v Generali and others. The case involved a road traffic accident in France in which two English residents, Marshall and Pickard, were injured (Mr Marshall died from his injuries) in a collision caused by an uninsured French driver colliding with Mr Pickard’s stationary car (insured with RSA) and forcing it against another French vehicle (insured with Generali). The question of the applicable law was appealed and a decision on the point was given on 19 January 2017.
The first instance judge found that the claim by Mr Marshall’s widow against Mr Pickard – and hence RSA – should be governed by French law. The consequence was that RSA should meet her claims arising from his death. We reported the decision on the policy blog here.
From an English law perspective, the outcome does seem strange in so far as the insurer (here, RSA) was required to meet a claim despite a lack of negligent driving by its insured. The result, however, is inevitable at French law because of its near-strict liability regime under which the insurer of a vehicle ‘involved’ in an accident must compensate an injured non-driver. This concept of ‘involvement’ is far wider than that of negligent driving causing harm.
RSA appealed and argued that English law should apply. If their argument was correct, they would not be liable for the widow’s losses because, at English law, there was no negligence.
The case turned on the application of the Rome II Regulation on the applicable law. Its general rule (article 4(1)) is that the law of the place where the damage occurs should apply, i.e. French law. However, there is a mandatory exception (article 4.(2)) in favour of the law of common habitual residence of the person suffering loss and the person claimed to be liable. If made out, this provision would designate English law in respect of Mrs Marshall’s claim against Mr Pickard and, as already noted, under English law there would be no liability. A second exception (article 4(3)) allows for the law of the country which is “manifestly more closely connected” with “all the circumstances of the tort” to be applied. The judge held that France was ‘manifestly more closely’ connected with the claim and therefore French law should apply.
Sitting in the Court of Appeal, Cranston J has now dismissed the appeal by RSA for essentially the same reasons as the judge at first instance. He also decided that France was “manifestly more closely connected” with the claim and its law should apply. Thus in this case, both judges were content to apply French law under article 4(3) of the Rome II Regulation, even though it was the law reached by following article 4(1).
So although we now have a decision of the Court of Appeal to that effect, it still seems a strange conclusion because of the apparently clear language of the provision, which is set out below with added emphasis in bold.
“3. Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.”
In a similar vein, recital 18 to the Rome II Regulation seems to invite the same conclusion, explaining that “Article 4(3) should be understood as an ‘escape clause’ from Article 4(1) and (2)”. [Note that the French and German language versions of recital 18 make express reference to another country, using the phrases “un autre pays” and “einem anderen Staat” in the text of the recital.]
It seems to me that the phrases in bold in the provision and in the recital – particularly in the first sentence of 4(3) – point reasonably clearly to the applicable law under 4(3) being neither of the legal systems designated by 4(1) or 4(2). It really is quite difficult to see how or why 4(3) would have been described by the European legislators as an ‘escape clause’ if – as both judges in this case have now held – its proper interpretation allows not for ‘escape’ but for reversion to one of the laws designated by 4(1) or 4(2).
That, however, was not the decision on appeal in this case and Cranston J has now upheld the reversion, by operation of 4(3), to the law designated by 4(1). Whether this is the end of the argument on the point remains to be seem, but perhaps there may be limited appetite among UK-based compensators to take the point further given that the Rome II Regulation is definitely among those elements of European law that need to be fully reviewed as the country prepares to leave the EU in the next two or three years.
Written by Alistair Kinley, director of policy and government affairs