Ben Rodgers writes on ECRAIR 2002 and QOCS – update

On 11 July 2017 we wrote about an argument being deployed in the County Court to the effect that QOCS does not apply to claims under ECRAIR 2002 (the direct right of action against a motor insurer) since these claims are claims for an indemnity due under statute and not claims for damages for personal injury. We mentioned that this argument, if correct, would lead to the conclusion that the limitation period for such a claim is 6 years rather than 3.

In a recent judgment (Karakus v Tradewise Insurance Services Ltd) the County Court had to deal with precisely this limitation point. The Claimant had been injured in a road traffic accident. Five years later she issued a low-value claim against the insurer under ECRAIR 2002. The Defendant insurer said the claim was a claim for damages for personal injury and was statute-barred 3 years from the date of the accident: s.11 Limitation Act 1980. The Claimant’s case was that hers was a claim under an enactment, to which a 6-year limitation period applies by reason of s.9 of that Act.

Grahame Aldous QC of these Chambers, sitting as a recorder, held that the claim under ECRAIR 2002 was a claim in negligence for damages for personal injury, a claim which could be brought against the insurer by reason of ECRAIR 2002. The Recorder rejected the submission that the Court of Appeal decision in Nemeti v. Sabre Insurance Co Ltd [2013] EWCA Civ 1555 prohibited him from reaching that conclusion. The relevant passages were obiter, and reference to them by Stewart J in Howe v MIB (No. 2) [2016] EWHC 884 did not take matters further. Nor was the Recorder persuaded that he was bound by further obiter dicta in Howe v MIB [2017] EWCA Civ 302.

This part of the Recorder’s judgment preceded the handing down, on 6.Jul.17 by the Court of Appeal, of its decision on the QOCS aspect of the aforementioned Howe v. MIB litigation: Howe v MIB [2017] EWCA Civ 932. In our previous article we mentioned that this judgment is of importance. It is not about ECRAIR 2002 but it is on a piece of legislation having similar provenance and purpose, the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003.

Stewart J had decided that the claim against the MIB under those regulations was not a QOCS case but was instead a claim for compensation recoverable by statute. The MIB had not been guilty of any breach of duty. The regulations themselves stated that money due under them could be recovered as a civil debt. So when Mr Howe lost his claim, not only was he paraplegic as a result of no fault of his own, but he also had a liability to pay all the MIB’s costs.

The Court of Appeal allowed Mr Howe’s appeal. If your claimant is bringing an EU-law claim, and if you have to read CPR r.44.13 in connection with that claim, then you must do so with your EU-law sunglasses on. When you read the word ‘damages’ in r.44.13, you have to leave aside your common law taxonomy of legal claims. You have to treat the word ‘damages’ as including ‘compensation’ payable pursuant to UK legislation giving effect to EU law.

The Recorder in Karakus added an addendum after Howe was handed down, holding he did not need to apply that reasoning to interpreting the Limitation Act because it was clear enough what the ECRAIR 2002 claim was: a claim for damages for personal injury. But if need be, Howe plainly justifies such an interpretation of the Limitation Act.