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Lauren B & Others v Mark B, High Court, 29 July 2008

8 October 2008
The issues

Applicable law – road traffic claim – whether claim for personal injuries should be dealt with under Spanish or English law – Private International Law (Miscellaneous Provisions) Act 1995

The facts

In January 2006 the First Claimant and her husband, the Defendant, went on holiday with the Second and Third Claimants, their children. They lived as a family together in Barrow and were British Nationals. They went for a week’s holiday in Spain, intending to live in an apartment. As part of the holiday they arranged to have a hire car for their use. Arrangements were made for the hire car to be provided through a company used Economy Car Hire, a company based in the United Kingdom. The booking form contained a set of terms and conditions, including:-

Clients should note that the contract for vehicle hire is between the hirer and the local car rental company and is subject to the law of the country in which it is supplied to you. For this reason, you will be required to sign a rental contract with the rental company which supply the vehicle.”

On the 26th January the family flew to Alicante where they picked up the car. The company that supplied the vehicle locally was Auriga Rent A Car SA. For the purposes of the action it was accepted that the contract was between the Defendant and Auriga and was subject to Spanish law.

The car was insured by an insurance policy issued to Auriga by Spanish insurance company, CASER, in Spain. The insurance contract was subject to Spanish law. Shortly after leaving the airport the Defendant, in the mistaken belief that he was on a dual carriageway, and / or he forgot which side of the road the traffic drove on, drove on the wrong side of the road and was involved in a head on collision. The First, Second and Third Claimants were all injured. Of the Claimants, the Second Claimant’s injuries were the most serious. The Second Claimant was born on the 29th March 2003 and suffered serious spinal injury leaving him with significant neurological deficit, affecting his mobility and rendering him doubly incontinent. The deficit would be permanent. The claim was made in the Manchester District Registry in October 2007 on behalf of all three Claimants. The Defendant pleaded that the accident had occurred in Spain and the pursuant to the Private International Law (Miscellaneous Provisions) Act 1995 the law applicable to all issues was the law of Spain. The significance of the issue was that there was a question as to whether a minor could claim damages for future loss of earnings as a head of loss under Spanish law.

The matter came before the Judge on a preliminary issue as to whether English or Spanish law was applicable.

The decision

Section 1(11) of the Private International Law (Miscellaneous Provisions) Act 1995 provides that the general rule is that the applicable law in such cases is the law of the country in which the events constituting the tort occurred. In this case the general rule would mean that the law of Spain would apply.

Section 12 sets out the circumstances in which the general rule can be displaced.

If in all the circumstances, and comparing the significance of the factors connecting the tort with the country whose law would be the applicable law, as against the significance of any factors connecting the tort with another country, then, it seemed more appropriate for the applicable law to be the law of the other country in respect of issues or any of the issues arising then the general rule would be displaced. The factors that could be taken into account included factors relating to the parties, to any of the events constituting the tort, or to any of the circumstances or consequences of those events.

The burden was on the Claimant to show that the general rule should be displaced. The displacement could only take place if it was “substantially more appropriate for the applicable law for determining the issues arising in the case…. to be the law of the other country.”

The Court would also bear in mind the decision in Harding v Wealands and, in particular, the comments of Sir William Alder in that case, to the effect that sympathy for a particular Claimant was irrelevant because the issues before the Court were issues of law “and any decision could have lasting consequences in a society where the compensation culture has become, or is becoming endemic, and there is a tendency for forum shopping”. Harding v Wealands [2004 EWCA civ 1735 at para 74].

Equally irrelevant was the fact that any Spanish insurer might have to pay more if the matter was dealt with under English law.

Some guidance had been given by the Court of Appeal in Oroerig v Valiant Trawlers Ltd where Lord Justice Waller had set out three stages which the Court had to go through when applying Sections 11 and 12 of the Act.

First, the Court had to identify the issue to which it might be suggested that the general law should not be applicable. Secondly, the Court had to identify the factors that connected the tort with the respective country involved. Thirdly, the Court had to ask itself what the significance of the factors in respect of the one country were when compared to the significance of the factors in respect of the other country in terms of which made it more appropriate for one law or the other to determine the issue.

In this case the relevant factors were:-

Firstly, that the accident took place in Spain, which was a very significant one.

Secondly, the First and the Third Claimants suffered their immediate losses in Spain.

Thirdly, the other vehicle involved in the accident was a Spanish vehicle. Although that was a consequence of the first and main point, that the accident took place in Spain, it was not a particular consequence insofar as the issues in the case were concerned, although it would be taken into account.

The contract of hire in respect of the vehicle was with a Spanish company and governed by Spanish law. That as a factor however was not immediately connected to the tort, in that it was not a cause of injury but was merely a background circumstance.

The next issue was that the insurers were Spanish. It was important to the parties to that contract that they should know the basis of any claim that may be made against them under it, and which law should be applicable, and therefore they should be able to anticipate confidently that were a claim made under the policy it would be governed by Spanish law.

However, in terms of matters connecting the tort with a particular country, the immediate consequence of the tort was injury and damage. Who was to pay for that, through a contract of insurance, was one step removed. Whilst it was of significance as a factor, it was not something which was of overwhelming importance.

The factors linking it to England were as follows:-

All the parties were English Nationals and resident in England. The tortuous act was the act of the Defendant, an English National, and the consequences of it were visited upon English Nationals.

As far as the Second Claimant was concerned, the consequence of that tort would be felt for a significantly longer period in England than in Spain. It was not relevant that the arrangements for the hire were made in England, through an English broker, and were paid for in England.

Weighing those factors in the balance the Court had no hesitation in concluding that the general rule should be displaced. It was apparent from the circumstances of the accident that the English law was the law that should be applicable and that it was substantially more appropriate for that to be the case than Spanish law.

Preliminary issue decided in favour of the Claimants.

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