Tag: insurance

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Sedgwick v Mapfre Espana. On subrogation in Rome II, and yet again on its procedural carve-out (re: interest rates).

Sedgwick v Mapfre Espana Compania De Seguros Y Reaseguros Sa [2022] EWHC 2704 (KB) discusses the application of Article 19 Rome II on direct actions against insurers, and the procedural carve-out of the Regulation.

Claimant lives in Wales. At the time of the accident she was on her honeymoon, staying at the Hotel Blue Sea Callao Garden in Santa Cruz which was owned and operated by a company registered and incorporated in Spain. She was descending an inadequately lit concrete staircase when she fell and sustained severe fracture injuries to her left knee and to her right heel.

Spanish law is the governing law of the insurance contract/policy which provides the tortfeasor with the right of indemnity within the terms of the policy and that the claimant has, under Spanish law, a direct right of action against the insurer. Parties also agree that Spanish law applies per A4(1) Rome II.

The scope of the law applicable is set out in A15 Rome II, which reads in relevant part: “…the law applicable to non-contractual obligations under this Regulation shall govern in particular: (a) the basis and extent of liability including the determination of persons who may be held liable for acts performed by them; (b) the grounds for exemption from liability, any limitation of liability and any division of liability; (c) the existence, the nature and the assessment of damage or the remedy claimed;…”

A1(3) Rome II carves out all matters of procedure and evidence to the law of the forum court: “This Regulation shall not apply to evidence and procedure “. I have reported on the carve-out frequently (see eg here and linked postings there, or use search tag ‘evidence and procedure’).

On a technical side-note, Matthew Hoyle here (he also has a general excellent note on proving foreign law here) correctly notes a confusion with the judge [11] on the issue of proving foreign law, seeing as she conflates assumption of English law as the lex causae when the content of a suggested foreign law is not proven and pleaded (it was so in the case at issue), and assumption in certain circumstances, of the foreign law as being identical to English law.

Issues for determination, are:

i) the resolution of a series of questions relevant to the award of general damages (for non-pecuniary loss) under Spanish law; these are purely issues of Spanish law and of no interest to the blog.

ii) whether the claimant is able to pursue a claim for subrogated losses on behalf of her travel insurer. The contentious issue is whether the claimant herself is able to bring a claim for subrogated losses or whether the claim must be brought in a separate action by the insurer.

[60] if the claim is to be brought separately, it can no longer so be brought because it is now time-barred.

Defendant submits that the claim for those losses incurred by the travel insurer must be brought in accordance with Spanish law and that the proper person entitled to bring a claim against the defendant insurer under A43 Spanish Insurance Contract Act 50/1980 is the third party insurer, not the claimant, as those subrogated losses are losses of the third party payer.

Claimant submits that Spanish law is relevant only to the extent that, as the applicable law of the tort, it provides for recovery of expenses. Spanish law does not govern the relationship between the claimant and the travel insurer, nor the travel insurer’s rights of subrogation by means of the claimant’s claim under those policies. Those matters are regulated, it is argued, by the law governing the insurance policy, in this case, English law, consequential to A19 Rome II (“where a person (the creditor) has a non-contractual claim upon another (the debtor) and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person’s duty to satisfy the creditor shall determine whether and the extent to which the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship.”)

The issue therefore is whether the question of whether the insurer may bring a claim in the name of the insured (rather than by other means) a question of “whether, and the extent to which” the insurer is entitled to exercise the rights of the insured against the third party? Lambert J [73] says it is, as a matter of language and construction, and she also expresses it (less immediately convincing to my mind) as an issue of common sense:

‘Putting the matter another way, it would be distinctly odd if English law determined the right of subrogation and limits upon that right (e.g. the legal principle that there must be full indemnity before subrogated rights attach) but an important aspect of the English law of subrogation (namely that the claim may and must be brought in the name of the insured) may not apply depending on where loss is caused which is to be indemnified.’

Finally, iii) the appropriate rate of interest to apply to the damages award, whether the Spanish (penalty) rate of interest applies or a rate applied under s 35A [E&W] Senior Courts Act 1981. Clearly the issue is whether penalty interest rules are substantive rather than procedural: in the latter case, they are carved out from Rome II, and English law as the lex causae applies.

Troke v Amgen is referred to, and the judge in Swedgwick decides [101]

Whether the decision in Troke is binding upon me or not, I agree with its conclusion and the underlying reasoning which I endorse and follow.

and [102]

the penalty interest provisions are discretionary; they may be excluded if there is a good reason to do so and they are procedural in character.

In my review of Troke I noted its reasoning was unconvincing. Lambert J [101] adds more arguments here, and I find these more convincing, if not conclusive.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 4.8.

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Stait v Cosmos Insurance. A good reminder of the distinct notion of ‘domicile’ for a natural person under the UK’s implementation of Brussels Ia.

Stait v Cosmos Insurance Ltd Cyprus [2022] EWCA Civ 1429  is a ‘leapfrogged’ appeal direct to the Court of Appeal pursuant to CPR 52.23(1). The issue under appeal is whether Griffith DJ was wrong to decide that Mr Stait, an RAF officer who was at the time of him incurring serious injuries in a cycling accident in Cyprus on 24 October 2017 stationed at the Sovereign Base Area (‘SBA’) at Akrotiri  (Cyprus), was not domiciled in England and Wales.

[16] he SBA has never been part of Cyprus. Nor has it ever been part of the UK. It is not and never has been part of the EU. It is a former colony, now known as a British Overseas Territory. The SBA retains strong connections with the UK, and the UK retains an RAF base on it.

The issue of domicile is relevant to Article 11 Brussels Ia:

1. An insurer domiciled in a Member State may by sued: (a) in the courts of the Member State in which he is domiciled; (b) in another Member State, in the case of actions brought by the policyholder, the insured, or a beneficiary, in the courts for the place where the claimant is domiciled; or (c) if he is a co-insurer, in the courts of the Member State in which proceedings are brought against the leading insurer.”

Article 13.2 provides that

“Articles 10, 11 and 12 shall apply to actions brought by the insured party directly against the insurer, where such direct actions are permitted.”

[22] When read together, the effect of those provisions is to permit a claimant to sue an insurer in another Member State, provided certain conditions are met, in what is called a direct action: CJEU C-463/06 FBTO Schadeverzekeringen NV v Jack Odenbreit is the relevant authority for that.

[22] At [28] in FBTO, the CJEU explained the reason for permitting an injured person to bring a direct action in the courts of the Member State where that injured person was domiciled, namely to afford equivalent protection to that person who was regarded as vulnerable (emphasis added):

“…. To deny the injured party the right to bring an action before the courts for the place of his own domicile would deprive him of the same protection as that afforded by the regulation to other parties regarded as weak in disputes in matters relating to insurance and would thus be contrary to the spirit of the regulation.”

Per A62 BIA of course domicile of natural persons is determined by national law.

[28][29] The UK’s definition of domicile for the application of BIa is unrelated to and narrower than the domestic common law concept of domicile. [35]-[36] parties list their arguments for or against domicile in the UK, with Whipple  LJ [70] concluding

The balance of these factors favours sole residence in the SBA. That was where he was living, with his family. He retained links with England and Wales, certainly, but his life was in the SBA, where he had moved for work purposes, taking his family with him.

and Underhill LJ agreeing in more succinct terms [78] ff.

Geert.

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The CJEU in Allianz. Among others linguistic arguments lead to the Court confirming Brussels Ia identifies territorial jurisdiction in direct action against an insurer.

In Case C-652/20 HW, ZF, MZ v Allianz Elementar Versicherungs AG, the CJEU held (no English version of the judgment is as yet available) end of June that A11(1)(b) Brussels Ia, determines jurisdiction not just of ‘the’ courts in a Member State (leaving territorial jurisdiction to be determined by national civil procedure rules) but rather of a specific court within that Member State. The judgment is a bit longer than might have been expected: that is because the referring judge did not qualify one or two elements which, particularly in an insurance context, can be quite convoluted. (Such as the nature and deliniation of ‘beneficiaries’, ‘insureds’, ‘victims’).

In accordance with the Article, ‘An insurer domiciled in a Member State may be sued: …(b) in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, in the courts for the place where the claimant is domiciled’.

[35] The Court observes that in the Romanian (the language of the case) as well as the English and Finnish version of Brussels Ia use the plural ‘courts’ while in the other language versions, the singular is used. (Regular readers of the blog may be familiar with my earlier work on languages and interpretation). Coupled with the indications of territorial jurisdiction in the relevant section of the Report Jenard, and with the similar language in A7(1) and (2) and relevant case-law there (ex multi: Kareda, Volvo), the CJEU concludes that where A11(1)(b) and all its conditions apply, the Article identifies both national and territorial jurisdiction indeed.

Geert.

 

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Clarke v Kalecinski. On rules of safety and conduct under Rome II, but also on the implications of marketing language for duty of care.

Update 20 April 2022 Daniel Clarke reviews the issue of proof of foreign law here.

Clarke v Kalecinski & Ors [2022] EWHC 488 (QB) concerns a claim for damages for personal injury sustained during cosmetic surgery undergone by claimant on 7 January 2015. Claims is against the surgeon (domiciled and habitually resident in Poland; but also registered with the UK General Medical Council) who performed the breast and thigh procedures in Poland, and against the Clinic (a company incorporated in Poland in which  the surgeon and his wife are the sole shareholders and directors), where the operations were carried out and she received pre-and post-operative treatment. Claimant also sues the insurer of the Clinic.

Jurisdiction is not disputed. Both surgeon and clinic are being sued under the consumer title of Brussels Ia. The insurance company is being sued under CJEU Odenbreit: subject to the applicable law of the tort and the existence under same of a direct right of action against an insurer, section 3 BIa gives claimant a right to sue in claimant’s domicile.

Claimant sues both surgeon and clinic, both in contract and in tort. She seeks to hold the clinic either directly or vicariously liable for the failures of the surgeons who treated her – one other Polish surgeon was involved in her care – and the nurses who cared for her at the clinic in Poland. Total potential liability for the insurance company, under the indemnity of the clinic (they do not insure the surgeon) is limited to approximately £38,500.

Proper law of the contract is English law, per A6(1) of the consumer title of Rome I. This is not disputed. It had been anticipated by claimant until trial that it was also a matter of agreement that the proper law of the claim in tort was Polish law, per Rome II. However in its skeleton argument, for the first time, the insurer raised an issue about the adequacy of claimant’s pleading arguing they had failed to plead the Polish law upon which they relied, so the proper law of the tortious claim was by default, English law.  That was rejected by the judge on the basis of the exchange between parties.

At [104] ff Foster J discussed the application of A17 Rome II: the judge must take into account as a matter of fact, the rules of safety and conduct in force at the place and time of the event, i.e. Poland. However [107] the judge insists on the importance of the English standard of care

where it is a term of the contract that the first defendant would operate to the same standard as a UK surgeon, skilled in this specialism, and registered with the GMC, it is that standard, that applied to the activities in issue here. The care offered by the clinic likewise. [emphasis in the original]

Those terms of the contract were deduced by the judge [77]:

[claimant] does not allege that she signed any contract or document, save for a consent form which the court has not seen. However, in my judgement the substance of the representations on the website upon which Ms Clarke clearly relied, were incorporated into the contract between her and the clinic together with Mr Kaleciński. In my judgement this was one contract but involving both parties: the surgeon and all the other care givers at the clinic, by means of the clinic (Noa Clinic Uslugi Sp. z o.o), those incorporated representations were to the following effect. The first defendant would carry out the surgery and he would carry it out to the standard to be expected of a GMC registered surgeon proficient in plastic surgery.

This emphasis by the judge imparts once again the relevance of language, no doubt for marketing purposes, for the consequential legal obligations. Foster J moreover holds [108]

That standard applies to the tortious duty also by reason of the  representations made to which reference is made above.

and [109] she holds

the findings of [the expert] are couched in such stringent terms that they cover any surgical and indeed clinical practice whether governed by local Polish customs or not. The conclusions of [the expert] put paid to any subtlety of distinction between local custom and English practice that might … in other circumstances be considered relevant. What took place fell so far below acceptable standards I cannot accept the contention that local standards or practices might have rendered the egregious failings in this case acceptable as a matter of contractual or tortious obligation.

The judge’s findings on A17 Rome II are interesting. Yet I find her conclusions on website representations even more relevant.

Geert.

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Lambert v MIB. On foreign applicable law, and how the motor insurance Directives engage with Rome II for accidents abroad, litigated in England.

It is interesting to imagine the legal position in Lambert v Motor Insurers’ Bureau (Rev1) [2022] EWHC 583 (QB) in a scenario of retained EU law post Brexit, rather than firmly within the scope of the Brussels Ia Regulation and applicable law under Rome II. By the mechanisms of EU consumer law and EU insurance law, mixed with the finest legal machinery in the area of subrogation, a UK resident party injured in a motor accident (here: at a private racing circuit in Spain) abroad is entitled to claim compensation from the Motor Insurers’ Bureau (‘MIB’) in certain circumstances, clarified by the UKSC in Moreno v MIB [2016] UKSC 52. Crowther DJ summarises these circumstances as [6]

broadly speaking, that the guarantee fund of the member State in which the accident occurred would be liable to compensate the injured person on the facts of the individual case, when applying the rules of the local law which govern such actions by injured persons against the local guarantee fund. In other words, if Mr Lambert can show that the Spanish guarantee fund would have been liable to him in respect of the accident, he can claim such compensation from the MIB as would have been payable by the local guarantee fund. It is common ground in this case that the scope of the insurance obligation for use of motor vehicles under Spanish law extended to cover participation in the track event, notwithstanding the fact that it was not on a road or other public place.

The latter element is unlike the UK where seemingly third party motor insurance for motor sport is not commercially available.

The law applicable to the claim is agreed to be English law. While not specified in the judgment, this is presumably because of Article 4(2) Rome II (where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply): both Mr Lambert, claimant, and Mr Prentice, said to be responsible for the accident, were participants in a track event, organised by a UK based track day operating outfit called Track Sense; both travelled to Spain from the UK.

Spanish law however determines the preliminary issue as highlighted by the Supreme Court, Spanish law being the law which would have been applicable to any hypothetical claim which Mr Lambert might have brought against the Spanish guarantee fund. This is where things get interesting. The Motor Insurance Directives support a direct claim against one’s national MIB, subject to the law of the MS where the accident happened, sustaining liability in the circumstances. However Rome II somewhat curtails its action radius by declaring that it does not apply to ‘evidence and procedure’. This is a carve-out which is problematic in specific instances as I explain ia here. On such instance are issues of limitation however these it seems ([14)] were not pursued.

In the case at issue, parties’ agreement ([9]) is that by analogy to A1(3) Rome II, matters of evidence and procedure are outside the scope of the material substantive law and fall to be determined in accordance with English law as the law of the forum (lex fori in principle determines issues of evidence and procedure). Equally, on an analogous basis to A22(1) Rome II, parties agree that Spanish law will apply insofar as it contains rules which raise presumptions of law or determine the burden of proof.

The common law treating foreign law as fact, means the content of that foreign law is established often with the help of parties (if need be cross-examined) experts however [17] is for the English judge to determine. The remainder of the case therefore is spent discussing the expert evidence (with the judge doing some fine distinguishing of the case-law both experts referred to) together with the factual elements, to conclude [94]

Mr Lambert’s actions were 25% causative of the accident and Mr Prentice’s 75%. It follows that Mr Lambert’s claim for damages against MIB succeeds to the extent of 75% of his loss or damage.

Lest my understanding of the insurance Directives fails me (which it could well do), this means that claim on 75% of the damage remains to be judged under English  tort law. With presumably a repeat of the causation test, this time under English law.

A clearly written judgment which no doubt benefitted from the considerable practice experience of the judge on the matters at hand.

Geert.

 

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Hill v Generali. Assigned and /or subrogated claims continue to cast doubt on the application of Brussels Ia’s insurance title.

Hill v Generali Zrt [2021] EWHC 3381 (QB) is an appeal from the County Court and discussed whether a subrogated claim by an insurer (Admiral) can be brought in the name of an English motorist in an English court together with his claim for uninsured losses against a Hungarian insurer (Generali) in respect of a pre-Brexit accident in Germany. The county court judge held that it could not but acknowledged that the question was not free from doubt and granted the motorist permission to appeal. Upon appeal the opposite conclusion was reached.

The case once again therefore concerns Brussels Ia’s insurance title which was recently at play at the CJEU in Betty Tattersal aka Seguros Catalana Occidente. Pepperall J summarises the ordinary application of the insurance title as follows [8]

Re the insured losses (the repair costs): __Generali can be sued in Hungary, being its place of domicile, or Germany, being the place of the accident: A4(1), 7(2), 11(1)(a) and 12 BIa___As the insured, Mr Hill can also sue Generali in England & Wales, being his place of domicile: A11(1)(b).___ As the insurer, and subject to being permitted to join an action already proceeding in another jurisdiction, Admiral cannot take advantage of the more favourable rules as to jurisdiction available to the policyholder, the insured and beneficiaries. 

There is therefore no dispute as to Mr Hill’s right to sue for his uninsured losses (the devaluation of the car) in England & Wales. The issue is whether Admiral’s subrogated claim:  is a claim brought by the insured such that it may be pursued in England & Wales under Article 11(1)(b); or is a claim that must be treated as brought by the insurer such that it cannot, subject to questions of joinder, be pursued in E&W.

Relevant recitals echo the general principles with which the CJEU approaches the issue: [10]:

“15 The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject-matter of the dispute or the autonomy of the parties warrants a different connecting factor …

16 In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen …

18 In relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules.

21 In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in different Member States. There should be a clear and effective mechanism for resolving cases of lis pendens and related actions …”

Part of the challenge is the different way in which claims are assigned /and or subrogated across jurisdictions [23]. In many European legal systems insurers take an assignment of the insured’s claim and sue to recover their outlay in their own names. In the common law’s approach the claim for insured losses remains vested in the insured.

CJEU Sovag is discussed for the joinder elements of the case and CJEU Kabeg is said not to be a right fit for in that case the insurer was the assignee of the claim for insured losses and able to sue in its own name.

The judge reaches his conclusion that the subrogated claim may be brought in E&W on the echo of SOVAG, hence underlining [34] the policy of minimising multiple proceedings and ensuring that irreconcilable judgments are not given but also in demonstrating practicality. The CJEU arguably in Betty Tattersal (the judge did not have the benefit of that judgment) took a different direction  on related issues and I find them both equally persuasive. It is time the insurance section be sorted out and the current EC evaluation of BIa would be a good trigger for same.

Geert.

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Chowdhury v PZU SA. Domicile for the purposes of the insurance title.

Chowdhury v PZU SA [2021] EWHC 3037 (QB) is worth a brief post on the determination of ‘domicile’ for the purposes of the insurance title of Brussels Ia (the very same Title and provisions which I discuss in Betty Tattersal). Ritchie J discusses whether the claimant was ‘resident’ in England and Wales for despite the insurance section talking of ‘domicile’, the Regulation refers for that notion to the residual rules of the Member States; and in England and Wales, domicile for natural persons, for private international law purposes, is determined by their ‘residence’.

The judge held, having summarised all relevant authority, that the earlier finding of residence absolutely stands [72]:

Claimant was a British citizen, with a British passport, who grew up in Worthing and was educated in England, worked in England, had his parents and family in England, had his friends in England, had rented flats in London, in Earls Court and in Putney, had his benefits paid in England, had his property by way of clothes and personal items in England and kept some of those at his parents’ house in Worthing, in his own room there.

That he gave up his rental accommodation in England was entirely due to him seeking medical treatment in Germany on account of the very tort he is suing for. Clearly that could not dislodge his English residence, despite the most likely temporary impact on physical stays in England.

Geert.

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The CJEU holds back on vis attractiva securalia in Betty Tattersal aka Seguros Catalana Occidente (re: the insurance Section).

Update 25 02 2022 see further analysis by Matthias Lehmann here.

I cross-referred to the pending preliminary review in C-708/20 Betty Tattersall aka Seguros Catalana Occidente  in my review of Flowers v Centro Medico. The CJEU held this morning in Betty Tattersall (which also means the Flowers case may now continue). I call the issue ‘vis attractiva securalia’ which is a term I made up but hopefully usefully summarises the issue. Domicile of the claimant, as readers of the blog will know, is generally of no consequence in EU jurisdictional rules. There are a few exceptions, in particular for the protected category of consumers (for employees, it is the place of habitual performance of the employment contract which is relevant, which often co-incides with their domicile), and for insurance contracts – but in the latter case, it turns out, not of benefit for the injured party.

Ms Tattersall argues that , in relation to EB, who is domiciled at Ireland and owns the holiday home which Ms Tattersall rented and in which she suffered a fall, that a claimant may bring an action against an insurer domiciled abroad under A13(3) BIa. A13 effectively piggy-backs claims of the injured party viz liability insurance, unto the by virtue of A11-12 extended forum possibilities for the insured, the policyholder or beneficiary of the insurance policy. In her view, the existence of a ‘dispute’ between the insurer and the insured regarding the validity or effect of the insurance policy is not necessary in that regard. The only requirement under A13(3), she suggests, is that such an action against the insured is provided for by the law governing direct actions against the insurer, in this case Spanish law. EB by contrast argues that Ms Tattersall’s claim is not an insurance claim and cannot become one merely because it was brought in the same action as the direct action against the insurer.

One can see why Ms Tattersall attempted to join EB into the English procedural bath: the insurer is an interesting defendant of course for it has deeper pockets; however EB’s insurer argue that the limitations and restrictions in the insurance policy meant that the policy did not extend to EB’s use of the property for the purpose of accommodating third parties on holiday against payment. Should that argument hold on the merits, Ms Tattersall’s claim will fall flat and she would have to sue EB separately, in Ireland.

The CJEU insists on the need to read the insurance Section with its specific purpose in mind: the protective effect intended by the Section is aimed at those considered to be in a weaker position vis á vis the insurer: the insured and the injured person are considered to be the weaker party in the contractual relationship, not the third party who is in a non-contractual relationship to both. Therefore [30]

to justify the application of the special rules of jurisdiction laid down in Section 3 of that regulation, the action before the court must necessarily raise a question relating to rights and obligations arising out of an insurance relationship between the parties to that action.

The Court does [35-36] acknowledge recital 16 BIa which refers to the objective of facilitating the proper administration of justice. It concedes that the involvement, by the injured person, of the insured, as a third party to the proceedings before the court seised, would make it possible to avoid the risk of the coexistence of two parallel sets of proceedings. Nevertheless, the emphasis must fall on the effet utile of A7(2): allowing the injured person to bring an action against the insured on the basis of A13(3) would amount to circumventing the forum delicti rules of A7(2). Each injured person could then bring an action against the insurer on the basis of A13(2), to benefit from the more favourable provisions of A10 to 12 in order, subsequently, to bring an action against the insured, as a third party to those proceedings, on the basis of A13(3).

The CJEU’s’ formal reply therefore is that

Article 13(3) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that, in the event of a direct action brought by the injured person against an insurer in accordance with Article 13(2) thereof, the court of the Member State in which that person is domiciled cannot also assume jurisdiction, on the basis of Article 13(3) thereof, to rule on a claim for compensation brought at the same time by that person against the policyholder or the insured who is domiciled in another Member State and who has not been challenged by the insurer.

Readers may enjoy the strategic off the cuff claim engineering possibilities which I entertained with Sarah Crowter QC.

Geert.

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Flowers v Centro Medico. Brussels Ia’s insurance issues stayed pending CJEU authority, and disputable conclusions on the consumer section.

Flowers & Ors v Centro Medico Salus Baleares SL & Anor [2021] EWHC 2437 (QB) is a case packed with jurisdictional complication under Brussels Ia. In early February 2020, Mrs Yvonne Flowers, then 67 years of age, was admitted on an emergency basis to a private hospital facility in Benidorm, Spain, with significant back discomfort and pain arising from spinal disc herniation. Nine days later she died in the same hospital from multiple organ failure having contracted sepsis. T

The principal issues at stake concern the level of proof required for a jurisdictional challenge; determination of domicile; the existence of a consumer contract and who can all avail themselves of the consequential jurisdictional rules; and when a matter ‘relates to’ insurance’.

Starting with the latter, Wood J stayed judgment on much of the issues until the CJEU will have ruled in C-708/20 Betty Tattersall,  on which James Beeton reports here and which engages similar issues as CJEU Cole, settled before judgment, and Hutchinson. Betty Tattersall will be a crucial judgment.

The level of proof for jurisdictional challenges was discussed at an extraordinary length in Brownlie, and the SC’s ruling is applied here as detailed in the judgment.

The claimants’ domicile is not ordinarily relevant under BIa but it is for the consumer and insurance title and its determination is subject to national law. Seeing as the judge finds a good arguable case that domicile is indeed established in England, no consideration of Spanish domicile rules is necessary.

The ‘newer’ elements of the case are first of all the existence of a consumer contract. There are 3 issues [67]: (i) Was there a contract between the late Mrs Flowers and Centro Medico? (ii) If there was, was it a consumer contract within the meaning of section 4 BIa? (iii) Does the Claimant’s claim against Centro Medico fall outside the scope of the consumer contracts section because it has not been brought by the “consumer” within the meaning of the section?

Ia Committeri is relied on and the judge has little hesitation [115] to find the existence of a contract. (Much about that has been written in German scholarship in the specific area of medical services).

Surprisingly though, the question whether there is a contract which meets with the A17 requirements is brushed over when it comes to the question whether the hospital directs its activities to England and Wales, which the court established as the relevant  domicile. Particularly in the context of emergency care, this does not seem to be a given.

The judge does enquire as to whether the claim which can no longer be pursued because the contracting (and thus weaker) party is now deceased, can be picked up by heirs in the same jurisdictional gateway and pursued on the basis of the domicile of either the deceased or the heirs. Schrems and KABEG are discussed, however unlike the first instance judge in Bonnie Lackey, Justice Wood [126] adopts a much less wide approach. There must be scope for a lot more discussion on this, for the scenario in Bonnie Lackey, of which I was critical, is quite different from that of the heirs who step in the  litigation shoes of the deceased.

Geert.

EU Private international law, 3rd ed. 2021, big chunks of Chapter 2.

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CNP v Gefion. The CJEU on (not) applying Brussels Ia’s insurance section to insurance professionals, and on branch jurisdiction.

I reported on the AG’s Opinion in C-913/19 CNP here. The CJEU held on 20 May.

The case essentially queries the application of Section 3 BIa (‘matters relating to insurance’) and Section 2 (the ‘special jurisdictional rules’, in particular contract and tort) in the event of assignment and /or subrogation of claims from the natural person to a professional party. As many of us may have experienced, filing an insurance claim particularly in the automotive sector immediately engages 2, 3 or more distinct businesses: insurance agents, insurers, towing trucks and garages…. The case also discusses whether some of those business may be considered a ‘branch’ of the insurance company on account of their close relationship as experienced by repairers and insureds.

In the case at hand, a road traffic accident occurred in Poland, in which two vehicles collided. The person responsible for the accident had, before that time, taken out a contract for motor liability insurance with Gefion, domiciled at Denmark. The injured party paid to lease a replacement vehicle from the repair workshop to which his damaged vehicle had been entrusted. By way of payment for that lease service arrangement, that person transferred the claim against Gefion to the repair workshop pursuant to a contract for assignment of the claim. Slightly later, pursuant to a new contract for the assignment of claims, the repair workshop assigned that claim to CNP. CNP requested Gefion to pay it the amount invoiced for the lease of the replacement vehicle. That request was sent to the address of Polins, a limited liability company established in Poland,  which represented Gefion’s interests in Poland. Crawford Polska, a company established in Poland and entrusted by Gefion with loss adjustment, then validated the invoice relating to the leasing of the replacement vehicle in part and granted CNP part of the amount invoiced for such lease. In its correspondence, Crawford Polska referred to the possibility of making a claim against it as the entity authorised by Gefion, or directly against Gefion, ‘either under the general provisions on jurisdiction or before the court with jurisdiction for the place where the policyholder, the insured person, the beneficiary or any other person entitled under the insurance contract is resident or established’. CNP then brought an action against Gefion in Poland, citing the information published by Gefion according to which Polins was its principal representative in Poland.  Gefion opposes the subsequent payment order, arguing inter alia that the Polish courts do not have jurisdiction.

Gefion rely in large part on CJEU Hofsoe, which as I noted in my review of UKSC Aspen Underwriting, is not as clear as one might hope. The Court in CNP v Gefion refers again to Hofsoe and Voralberger and zooms in on the professional activities of the corporations involved: [40] no special protection is justified where the parties concerned are ‘professionals in the insurance sector’; [43] CNP recovers claims from insurance undertakings. This precludes  it from being regarded as a party in a weaker position than the other party.

This finding as such arguably has no impact on the authority of Aspen Underwriting, in which the professional party, the Bank, is the named loss payee under the Policy and therefore the “beneficiary” of that Policy.

[46] The Court then confirms that Section 2’s special jurisdictional rules do open up in such circumstances.

As to whether Crawford may be considered a Gefion branch, the Court employs the criteria suggested by the AG (see my review of the opinion) and notes [56] that Crawford has every power to carry out activities involving the loss adjustment and settlement of claims which are binding on the insurer, meaning that Crawford Polska must be regarded as a centre of operations which has the appearance of permanency, such as the extension of a parent body. [57] Whether that centre is materially equipped to negotiate business with third parties, so that they do not have to deal directly with the parent body, is something which the referring court has to verify (and which will therefore determine branch jurisdiction).

Per CJEU Ryanair, [59] Crawford’s role here seems to have been more than just a data hatch: it was an active contributor (in deciding, upon having given such overall authority by Gefion,  only half of the amount claimed would be settled) to the legal situation that led to the dispute in the main proceedings. Therefore provided the aforementioned ‘material equipment’ criterion is met, the dispute is to be regarded as ‘arising out of the operation of the branch’.

All in all a bit more follow-up work to be done by the referring court and, as I noted in my review of the AG’s Opinion, not great publicity for the predictability of jurisdictional rules.

Geert.

EU Private International Law, 3rd ed. 2021, para 2.293 ff, para 2.73 ff.

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