Jurisdiction: consumers, insurance, direct claims & the Brussels I regulation (again)

This piece is an update about yesterday’s judgment on the cross-border jurisdiction points at issue in the claim we outlined previously on the blog on 21 January 2020. One key question was stayed – that being jurisdiction in non-contractual claims featuring joinder of the foreign insured to a direct claim against the foreign insurer – given that the point is already before the CJEU in a different case. Although the remaining live jurisdictional arguments went against us, there is much in the 24 page judgment that is worth closer review.

The facts were that the claimant, who was a resident in England, suffered an accident during a ticketed visit to a Spanish business insured in Spain. He issued proceedings in England against the insurer and sought to bring in the Spanish insured. He framed his claim in both contract and in tort and it was common ground that Spanish law applied to both.  The insurance policy included a clause seeking to restrict the insurer’s indemnity to the insured to claims pursued in Spain. Jurisdiction, which it was agreed depended upon the proper interpretation of the Brussels I regulation, was heard as a preliminary issue before Mrs Justice Andrews.

On the contractual claim against the insured, the judge found quite easily that it fell within the regulation’s special rules on jurisdiction for consumer contracts. These provide the consumer (as defined) with an option to sue “in the courts for the place where the consumer is domiciled” (article 18.1). English jurisdiction was therefore established.

The position was more complex for the non-contractual / tort claim against the insured, for which there are different special rules. Article 13(3) provides that if the law governing the direct claim against the insurer allows for the insured to be joined, then the same court will have jurisdiction. It was not disputed that Spanish law featured such a direct claim (although the existence of a direct claim on these facts was disputed). Given that the meaning and application of article 13 in non-contractual direct claims is already under consideration by the CJEU in another case, Andrews J stayed this aspect pending resolution by that forum. The reference to the CJEU is relatively recent and therefore it might not be until some time into 2021 before a decision is reached (assuming the referred case is not compromised in the interim).

The remaining issue was jurisdiction in the direct claim against the insurer, which would be subject to the rules in articles 11, 12 & 13. Article 11 permits “the policyholder, the insured or a beneficiary” to sue an insurer in the place where he or she is domiciled and article 13(2) confirms that 11 & 12 shall apply to direct claims brought against the insurer “by the injured party” (noting that 13(3) mentioned above relates to the joinder of the insured to the direct claim, where the same is permitted).

On first sight, therefore, the facts would appear to ground jurisdiction in England against the insurer as regards the direct claim. There was, however, a dispute about the existence of the direct right on the facts because of the policy’s purported restriction to covering only claims made in Spain. The insurer and the insured argued that the direct claim being brought in England was outside the terms of cover ie uninsured. The claimant’s direct claim was limited to the same rights the insured would have had. Because there would be no policy cover for a claim (by the insured) in respect of proceedings in England there could be no direct claim.

The judge was not attracted to this argument and found that “If a clause which has that effect can be relied on against [a claimant] it would drive a coach and horses through the special rules on insurance [and] would provide every liability insurer (not just Spanish insurers) with the simplest means of depriving the injured party of the choice of additional jurisdictions conferred upon him by articles 11 to 13”.

Furthermore, she was distinctly unimpressed by Mapfre v Williams, a 2015 decision in the Chester County Court which seemed to favour the insurer’s argument. While not needing to overrule it, she noted its very limited consideration of CJEU authorities and that in any event it has been superseded by a shipping decision of the CJEU on article 11 – Assens Havn – which held that an exclusive jurisdiction clause in a policy could not be relied on as against a third party.

“It is plain from reading the judgment (which is not, of course, binding on this Court) that the judge was not shown any relevant EU authorities apart from Odenbreit. Axa Belgium was not cited to him and the decision pre-dates Assens Havn.  I also regret to say that I do not find his reasoning persuasive.”

She therefore found that the restriction in the policy, in this case to claims made in Spain, “cannot be relied on against [the claimant] … that aspect of the clause falls foul of EU Law [and] is enough to establish that this Court has jurisdiction in respect of the direct claim [against the insurer] under Article 13(2)”.

So much for the academic analysis. What does the decision mean in practice?

It must be borne in mind that this is a decision about jurisdiction as a preliminary point. As such, it has nothing to do with the merits or otherwise of the claim or the possible defences.

On jurisdiction, it seems to show a clear purposive approach to the interpretation of the rules in Brussels I, which is entirely in line with how the CJEU has considered the regulation in case law since its seminal Odenbreit decision in 2007.

Other than for motor claims – where direct rights of action are mandated by the Motor Insurance Directive – it tends to suggest that English consumers generally may bring contractual claims (which arise in the same circumstances as tort / non-contractual rights) here against European businesses and their insurers where they have suffered loss in an EU member state. But clarity on jurisdiction in pure tort claims in similar circumstances will have to wait the decision of the CJEU in the matter presently referred to it.

Finally, it should be noted that the rules in the Brussels regulation will, despite the UK leaving the EU on 31 January 2020, continue to apply to claims in which proceedings are issued before the end of the transition period on 31 December 2020.


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Alistair Kinley, Director of Policy & Government Affairs alistair.kinley@blmlaw.com

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David Thompson, Associate, BLM david.thompson@blmlaw.com

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