Does QOCS apply to a claim against a road traffic insurer under ECRAIR 2002?

CPR r.44.13(1) defines the scope of the QOCS regime. In broad terms it applies QOCS to proceedings which include a claim for damages for personal injuries or death.

The European Communities (Rights Against Insurers) Regulations 2002 creates a cause of action against an insurer. Regulation 3 is in the following terms:

“3. Right of action

1) Paragraph (2) of this regulation applies where an entitled party has a cause of action against an insured person in tort, and that cause of action arises out of an accident.

(2) Where this paragraph applies, the entitled party may, without prejudice to his right to issue proceedings against the insured person, issue proceedings against the insurer which issued the policy of insurance relating to the insured vehicle, and that insurer shall be directly liable to the entitled party to the extent that he is liable to the insured person.”

Is the claim for damages against the road traffic insurer under r.3 ECRAIR 2002 a claim for damages for personal injuries or death within the meaning of CPR r.44.13(1)? Most practitioners would say without hesitation that it is. 

However there is an argument being advanced in the County Court that in fact it is not; it is instead (so the argument goes) an indemnity under statute.  The argument is that r.3 creates an unusual sort of statutory liability: it makes the insurer liable to the victim to the same extent the insurer would have been liable to their insured in claim against the insured; but what the insurer is liable to pay is not “damages for personal injury”. Not every claim under ECRAIR 2002 is a claim for personal injury. Instead what the insurer is liable for is just a sum of money due according to the 2002 Regulations. If this is an unwanted and surprising result, the blame lies with the drafting of r.44.13(1).

In developing this argument, the insurer will place reliance on paragraph 42 of the judgment of Hallett LJ in Nemeti v Sabre Insurance [2013] EWCA Civ 1555: “The original claim was not, therefore, a claim for damages for personal injury against [the insurer]. It was not a claim in negligence. It was effectively a claim for an indemnity under statute (as the Claim Form made clear) limited to the Respondents’ liability to their insured.” At paragraph 44 the Court stated, “Thus, although [the driver’s] alleged negligence underlies both claims, the claims are not the same. It is not simply a matter of form.  In substance these are two different causes of action.”

Obviously the Court of Appeal did not have CPR r.44.13(1) in mind when delivering this judgment.  It is quite an extension of this reasoning, to say that the claim for damages for injury advanced under ECRAIR 2002 is not covered by QOCS. If this argument is correct then a claim pursued under ECRAIR 2002 is not a claim for damages for personal injury at all. This would have implications for limitation (is it to be 6 years if the claim is pursued under the 2002 Regulations?) and other aspects of civil procedure, including the pre-action protocols. It cannot be right. It would cause disruption and confusion.

However there may have to be a published judgment directly on the issue – or an amendment to CPR r.44.13(1) – before this goes away entirely.

It is difficult to see how the insurer’s argument could survive the reasoning in Howe v MIB [2017] EWCA Civ 932 in which it was held that QOCS applied to a claim under the Motor Vehicles (Compulsory Insurace) (Information Centre and Compensation Body) Regulations 2003.

The judgment can be found here