Posts Tagged Case C-350/14
Rome II: A manifestly closer connection overrides common habitual residence. The High Court in Marshall v MIB.
Marshall v MIB  EWHC 3421 (QB) involved a road traffic accident that occurred in France. On 19th August 2012 an uninsured Peugeot motor car registered in France driven by Ms Bivard, a French national, hit Mr Marshall and Mr Pickard, both British nationals, as they were standing behind a Ford Fiesta motor car and its trailer, while it was being attended to by a breakdown recovery truck on the side of a motorway in France. The Ford Fiesta motor car was registered in the UK and insured by Royal & Sun Alliance (“RSA”), and the recovery truck was registered in France and insured by Generali France Assurances (“Generali”). The Peugeot then collided with the trailer shunting it into the Ford Fiesta which in turn was shunted into the vehicle recovery truck. Mr Pickard suffered serious injuries. Mr Marshall died at the scene.
This case raises points about among others (1) the law applicable to an accident involving a number of persons and vehicles; and (2) the application of the French Loi Badinter to the facts of this case, if French law applies: The second main issue is if French law applies, whether the Ford Fiesta motor car and recovery truck are “involved” within the meaning of the Loi Badinter, which it is common ground is the applicable French statute. If those vehicles are “involved” it is common ground that RSA, as insurer of the Ford Fiesta, and Generali, as insurer of the recovery truck, are liable to Mrs Marshall, and that Generali, as insurer of the recovery truck, is liable to Mr Pickard.
Two actions were commenced. The first by Mrs Marshall (Mr Marshall’s widow) against the Motor Insurers’ Bureau (“the MIB”). Mrs Marshall relied on relevant English 2003 Regulations. The 2003 Regulations make the MIB liable in respect of liabilities of compensation bodies in other EEA states for losses caused by uninsured drivers. The relevant compensation body in France responsible for such losses is the Fonds de Garantie (“FdG”). The MIB denied liability, contending that the FdG would not be liable to Mrs Marshall because under the Loi Badinter Mr Pickard and RSA, as driver and insurer of the Ford Fiesta, and Generali, as insurers of the recovery truck, were liable. The second action was brought by Mr Pickard against the Motor Insurers’ Bureau relying on the 2003 Regulations. The MIB deny liability and contend that Generali, as insurers of the recovery truck, are liable to Mr Pickard.
The High Court was asked (1) what law applies per Article 4 Rome II, and (2) whether under the circumstances, Article 4(3) Rome II might have any relevance.
Save for Mrs Marshall’s claim for dependency which if English law applies is under the Fatal Accidents Act 1976 (“FAA 1976”), it is common ground that the direct damage occurred in France for all of the claims, including Mrs Marshall’s claim on behalf of Mr Marshall’s estate. In respect of the FAA 1976 claim, RSA (Mr Marshall’s insurers) submits that the direct damage occurred in the location where Mrs Marshall has suffered her loss of dependency, which is in England and Wales. Dingemans J resolves this issue of ricochet damage with reference to the AG’s Opinion in Lazar: the CJEU’s judgment in same was issued about a month after the High Court’s judgment in Marshall. The Advocate General, having regard to the relevant principles of consistency, foreseeability and certainty, in his opinion considered that “the damage occurs” for the purposes of a claim such as an FAA 1976 claim where the relevant death occurs. The AG noted that different EEA states took different approaches to the characterisation of a dependency claim. For example in both England and Italy it is considered that the damage for a loss of dependency occurs in the country where the dependant is situated, but that this is not a European wide approach. The opinion, Dingemans J notes, shows that the Advocate General was influenced by the need to avoid different Courts in different EEA states adopting different solutions to applicable law in fatal accident cases, which would lead to a diversity of approach in different jurisdictions.
The action between Mrs Marshall and Mr Pickard triggers Article 4(2) of the Rome II Regulation, identifying as applicable law the law of the country were both the ‘person’ claimed to be liable and the ‘person’ sustaining damage, are habitually resident at the time the damage occurs. Dingemans J rightly (at 17) dismisses the suggestion (made in scholarship) that the moment more than two ‘persons’ are involved, Article 4(2) becomes inoperable.
Turning then to Article 4(3), the escape clause of a ‘manifestly closer connection’. Dingemans J entertains the interesting proposition that Article 4(3) has to lead to a law different from the law which would be applicable per Article 4(1) or (2). This in particular would mean that once Article 4(2) is engaged, it cannot be undone by recourse to Article 4(3). Dingemans J insists that Article 4(3) must be employed generally, even if it leads to a resurrection of Article 4(1), and goes on to find French law to be applicable (at 19-20):
In my judgment this case provides an illustration of when French law is provided as the governing law under article 4(1), excluded (for part of the claims) under article 4(2), and then required again under article 4(3).
It is also common ground that article 4(3) imposes a “high hurdle” in the path of a party seeking to displace the law indicated by articles 4(1) or 4(2), and that it is necessary to show that the “centre of gravity” of the case is with the suggested applicable law. In this case there are a number of circumstances which, in my judgment, make it clear that the tort/delict is manifestly more closely connected with France than England and Wales. These are: first that both Mr Marshall and Mr Pickard were hit by the French car driven by Ms Bivard, a national of France, on a French motorway. Any claims made by Mr Marshall and Mr Pickard against Ms Bivard, her insurers (or the FdG as she had no insurers) are governed by the laws of France; secondly the collision by Ms Bivard with Mr Marshall and Mr Pickard was, as a matter of fact and regardless of issues of fault or applicable law, the cause of the accident, the injuries suffered by Mr Marshall and Mr Pickard and the subsequent collisions; and thirdly any claims that Mr Marshall and Mr Pickard have against Generali, as insurers of the vehicle recovery truck, are also governed by the laws of France.
This judgment to my knowledge, with Winrow v Hemphill is one of few discussing Article 4(3)’s escape clause in such detail. (The add-on being that in Marshall Article 4(3) was found as being able to override Article 4(2). A judgment which, like Winrow, does justice to both the exceptional nature of the provision, and the need to consider all relevant factors.
Ps very soon the Supreme Court will hear further argument on the application of the Rome II Regulation in Moreno v MIB.
European private international law, second ed. 2016, Chapter 4, Headings 4.5.1 and 4.5.2
Lazar v Allianz, Case C-350/14, was held on 10 December last. It addressed the issue of ‘ricochet’ damage in the Rome II Regulation on the law applicable to non-contractual obligations. Ricochet or ‘reflective’ or ‘indirect’ losses occur when someone suffers losses as a result of a tort directly causing damage to someone else.
The request has been made in a dispute between Mr Lazar, who resides in Romania, and the Italian insurance company Allianz SpA regarding compensation for material and non-material damage which Mr Lazar claims to have suffered in jure proprio by reason of the death of his daughter, a Romanian national who was resident in Italy, which occurred in Italy as a result of a road traffic accident caused by an unidentified vehicle. For Mr Lazar, it is more interesting for Italian law to be considered the lex causae.
The Opinion of Wahl AG neatly summarised the two opposing views: (at 40-41 of his Opinion):
According to the first view, (…) material and non-material damage suffered by the family members of a person who has died in another Member State does not necessarily constitute indirect consequences of the tort/delict for the purposes of Article 4(1) of the Rome II Regulation. It would follow in particular that, because it is based on an obligation that is distinct from the obligation as between the opposing party and the person who died in the accident, a claim for compensation in respect of material rights claimed by the close relatives of a person who has died as a result of a traffic accident which occurred in the State of the court seised must be assessed by reference to the law of the place in which the damage sustained by those relatives occurred, namely the place of their habitual residence, unless it can be demonstrated that, in accordance with Article 4(3) of the Rome II Regulation, it is clear from all the circumstances of the case that there are manifestly closer connections with another country.
According to the second view (…) the damage sustained, in their country of residence, by the close relatives of a person who has died in a road accident which occurred in the State of the court seised must be regarded as constituting indirect consequences of the damage suffered by the immediate victim of the accident. The term ‘country in which the damage occurs’ must be interpreted as referring to the place which caused the damage, which, in the main proceedings, is the place of the road accident.
He eventually opined in favour of the second view, taking inspiration ia from CJEU case-law on Article 7(2) of the Brussels I Recast (previously Article 5(3) Brussels I)- even though at 51 he cautioned against lifting interpretation from the jurisdictional Regulation for use in the applicable law Regulation. His main arguments were as follows:
(at 74) the interpretation whereby the general rule under which the expression ‘country in which the damage occurs’ in Article 4(1) of the Rome II Regulation extends to the place of the direct damage — in this case the place of the fatal collision — has the benefit of simplicity and objectivity where all the damage alleged actually originates from the same source.
(at 75) this is consistent with the foreseeability pursued by the drafting of the Rome II Regulation. In most cases, the person liable is able to anticipate the consequences in other countries of his conduct or of the conduct of persons for whom he is responsible. Similarly, the victim is generally informed of the legal context to which he was exposed or exposed his property. In other words, both the person liable and the victim were informed and took the necessary steps, in particular with regard to insurance, in connection with the applicable law in the country or countries in which damage might potentially occur.
(at 76) the general rule for determining the applicable law in the Rome II Regulation is characterised by neutrality. Taking the example of the material damage suffered by the survivors of a person who has died as a result of a traffic accident, it may be considered that the neutrality of the law would be jeopardised in so far as that damage is still located in the victim’s place of residence. (The AG notes that in other instances Rome II is not neutral: he refers in particular to Articles 6 (on acts of competition) and 7 (on environmental damage).
(at 77) such an interpretation is also consistent with the other idea underlying connecting factors in private international law, namely the idea of proximity, which is intended, as far as possible, to connect a situation to the law of the country with which it is most closely connected. Whilst the place of the accident is undeniably related to the other components of the liability, the domicile of the indirect victim is not necessarily so related.
(at 79) the Rome II Regulation introduces corrective mechanisms which make it possible, in several respects, to avoid the apparent rigidity of the rule of the place in which the damage occurs.
Conclusion (at 83) ‘The term ‘place in which the damage occurs’ must, further to the case-law on the Brussels Convention and the Brussels I Regulation, be understood as meaning the place of the occurrence of the event, in this case the road accident, which directly produced its harmful effects upon the person who is the immediate victim of that event.’
The Court itself, much more succinctly, agrees.
A singular event, therefore, leads to one applicable law, even if its ricochet effect causes damage elsewhere. That such damage is actionable separately (for it may create multiple obligations in tort) or even iure proprio does not impact that analysis.
A word of caution, however: the judgment only holds for singular events. More complex events, especially of a continuing kind, are much more likely to create direct harmful effects in a multitude of persons, potentially therefore also leading to more loci damni. The ricochet effect therefore is highly likely to echo again at Kirchberg.