The Fourth Motor Insurance Directive: areas of post-Brexit uncertainty

The Fourth Motor Insurance Directive required European Community nationals living outside the home country of the defendant motorist to have the right to sue the motor insurer directly. The benefits for the claimant were that is was often much easier to identify and serve proceedings on the insurer than to find the driver; and a judgment can be enforced directly against the insurer.

Post-Brexit it’s perhaps no surprise that there are areas of uncertainty as the transition period from the Withdrawal Agreement has come to an end.

Claims issued before 31 December 2020

Claims where proceedings have been issued in the UK before 31 December 2020 will continue as before – the court being seised of proceedings (note though that arguably includes service of proceedings too, practitioners should check the requirements of other jurisdictions). But what if a new defendant is to be joined to the proceedings? As before, or do common law rules apply – we anticipate we will see satellite litigation.

To avoid uncertainty, claimants may have issued claims without medical evidence and schedules of loss - again appropriate applications ought to have been made. Defendants may choose to consider applications to strike out since they are entitled to know the nature and extent of the claim in order to respond appropriately.

Claims issued after 1 January 2021

From 1 January 2021 for claims not yet issued, and for accidents happening after that date Rome II will be incorporated into UK domestic law by virtue of the Civil Jurisdiction and Judgment (Amendment) EU Exit Regulations 2019. UK courts will interpret, no longer being bound by decisions of the European Court of Justice, and in time we are likely to see differences. Once the appropriate applicable law is selected (for liability and quantum issues), matters relating to evidence and procedure remain for the law of the forum.

There will be a period before the UK accedes to the Lugano Convention (if it does) where jurisdiction will be determined on common law rules.


The Fourth Motor Insurance Directive required each motor insurer in the European Union to have a claim handling representative in each Member State. Where a claim was being brought against a foreign motor insurer, proceedings could be served on the nominated UK claims handling agent. Service of proceedings changes now as it will not be possible to serve the UK agent. It is likely that claimants will need to make an application for permission to serve out of the jurisdiction (Civil Procedure Rule 6.37) adding to cost and risking delay, particularly in prevailing COVID-19 circumstances, such that an application for an extension should be made too. The Foreign Process Section of the Royal Courts of Justice had been suspended because of the COVID-19 pandemic – creating an added difficulty.

Recognition and enforcement of UK judgments will now depend on each jurisdiction, again adding to cost and delay.

Uncertainty may result in claimants being more keen to settle without issuing and serving where limitation is not an issue. That uncertainty may also mean claims stall whilst we await some much needed clarity, including some amendment to the Civil Procedure Rules.

Will there still be a direct right of action against insurers?

The direct right of action conferred by the Fourth Motor Insurance Directive was brought into English law by statute and statutory instrument and so will not fall away automatically. The direct right of action pursuant to the Fourth Motor Insurance Directive will still exist – for now – to accidents happening in the UK where the defendant vehicle is normally based (registered) in the UK. That will not include vehicles with a foreign registration plate. UK legislation continues the spirit of the Fourth Motor Insurance Directive, as whilst the Directive is no longer applicable, its requirements remain intact to the extent referred to above under the European Communities (Rights Against Insurers) Regulations 2002.

In other jurisdictions, whether a claimant has a direct right of action will be determined by the applicable law of that jurisdiction. In Ireland, for example there are very few instances where claims can be brought directly against motor insurers.

If a UK resident has an accident in a Member State and wishes to pursue a claim, this will generally have to be brought in the Member State where the accident occurred, against the Member State's Motor Insurers’ Bureau (MIB) equivalent (if the other driver is uninsured or unidentified), the relevant insurer in the Member State (if direct action is permitted) or the driver directly. It must be borne in mind that in some European Economic Area (EEA) countries the MIB equivalent body only pays compensation to their own residents and to residents of other EEA countries in the event of an accident involving an uninsured or hit and run driver. The MIB is therefore trying to enter into reciprocal arrangements to facilitate the exchange of information. A number of European countries have signed up. France has not.

It is likely that for accidents and claims after 1 January 2021 claimants will need to sue the foreign driver directly, bringing with it all the challenges discussed above, and more.

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