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Civil claims with a European cross border element have been commonplace for years, whether as a result of accidents involving European drivers in the UK or UK nationals being involved in accidents in Europe. Those involved in the handling of the resultant claims will be well versed in the regime set out by Brussels I Recast Regulation and Rome II. There were some occasional exceptions to keep us on our toes but generally there was a logic as to where claims could be brought, whether an insurer could be sued directly and which law applied.
At 23.00 on 31 December 2020 that all changed and with it went the (relative) certainty of the Brussels/Rome II regime. Here we provide an overview of some of the key changes.
Green cards
‘Green cards’ are back and simply provide evidence that a UK registered vehicle has the necessary minimum compulsory insurance required and will need to be carried by motorists driving in Europe. The practical implications of the green cards for insurers are set out in our article here.
Jurisdiction
Brussels I Recast (Regulation (EU) No 1215/2012) and Lugano Convention 2007 no longer apply except to proceedings already within the English court system. Instead, we fall back on common law principles to determine whether claims involving a party outside of the jurisdiction of the English court can be brought in England. For a more detailed overview please see our article here.
Applicable law
Rome I and Rome II with minor amendments, have been incorporated into UK domestic law. Therefore, the applicable law for the resolution of non-contractual disputes is determined on the basis of where the damage occurs, or is likely to occur, regardless of the country or countries in which the act giving rise to the damage occurs. For most accidents, the law of the country where the accident occurred will be the applicable law, although there are some exceptions. For further information please see here and the other related items listed at the end of this article.
Fourth Motor Insurance Directive/European Communities (Rights against Insurers) Regulations 200
For those handling cross border motor claims, the Directive and 2002 Regulations enabled actions to be brought directly against motor insurers, and also enabled a claimant to bring a claim in their country of residence but serve proceedings on the local appointed claims representative of a foreign insurer.
The Fourth Motor Insurance Directive also ceased to apply at 23.00 on 31 December 2020 to claims where the applicable law is English law, however, its implementation in the UK survives. Regulation 3 permits a direct claim against the insurer but only where the accident occurs in the UK and where the vehicle is generally registered in the UK. Service on local claims representatives can no longer be used. We set out here how this works in practice.
Comment
The ramifications of the Brexit agreement will not be apparent for some time, as the UK looks to reassert its sovereignty and start the process of overhauling the former EU regulation. Insurers will therefore need to closely track developments in order to interpret the potential implications for personal injury quantum and reserves. Insurers may face higher costs claims as opponents spend time exploring the various Brexit repercussions and trying to understand where and how proceedings can be brought. Claims may be delayed as some claimants may choose to wait to see whether the relative certainty of the Lugano Convention can be engaged instead of common law principles.
Whatever the eventual financial balance of the opposing arguments, the uncertainty itself creates many opportunities for commercial solutions. The personal injury market had to show similar ingenuity in the lead-up to the announcement of the discount rate. Brexit could have the same effect. Consequently, a bespoke strategy will be required which our UK and European offices are ready to assist with
Related items:
- Jurisdiction in civil claims post-Brexit
- Green card system for UK-based motorists: implications for insurers
- Court of Appeal decision on jurisdiction: the tort gateway test and presumption of law
- Jurisdiction and governing law
- Jurisdiction and governing law – Rome I
- Jurisdiction and governing law – Rome II
- The Fourth Motor Insurance Directive: areas of post-Brexit uncertainty
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