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Articles | Fri 23rd Oct, 2020
THE ROME II REGULATION AND THE EXERCISE OF DISCRETION BY THE ENGLISH COURT
Among the principal tenets of the Rome II Regulation (No 864/2007) are legal certainty and predictability of outcome (as to the law applicable to the tort). These aims find repeated expression in the recitals to the Regulation: see, for example, Recitals (6), (14), (16) and (31). There is, however, a countervailing rule and it is found at the start of the Regulation: in Article 1.3 which, as every travel lawyer will know, provides that, “This Regulation shall not apply to evidence and procedure.” The fact that the forum Court is required to apply its own rules of evidence and procedure to the foreign law tort dispute means that true legal certainty and predictability of outcome will always prove elusive: the English Court applying, say, Spanish law will not be able to mimic with exactitude the decision that might have been reached by a Spanish Court applying Spanish law (see, Wall v Mutuelle de Poitiers Assurances  1 WLR 4263 (CA) where, at 4269F, Longmore LJ said this, “In these circumstances [that is, circumstances where the English forum Court applied substantive French law as the proper law of the tort, but used its own rules of evidence and procedure] it is indeed inevitable that the same facts tried in different countries may result in different outcomes and I am unable to accept [the Defendant’s] starting point that the English court must strive to reach the same result as a French court would, let alone his finishing point that evidence must be given to the English court in the form of a French-style expert report.”)
This paper discusses some of the recent English case law in which tensions between the application of a substantive foreign law and the use of English procedure/evidence has been explored in the context of judicial discretion. If the applicable and substantive foreign law requires the exercise of a judicial discretion as to any issue of substance (that is, limitation; breach of duty; causation; contributory negligence; and, the assessment of damages), then how should the English forum Court undertake the task of exercising such discretion? This question arises most commonly (‘though not exclusively) in connection with the assessment of damages (see, Article 15(c) of Rome II). In this context, Professor Dickinson has written (in his monograph, The Rome II Regulation: the Law Applicable to Non-contractual Obligations (2008), paragraph 3.39), “… the direction to ‘apply’ the ‘law’ of a particular country must not be understood as requiring the Member State court to put itself in the position of a court of that country and to decide the case as that court would have decided it. Instead, it requires the Member State court to take from the legal order of the country whose law applies rules of the kinds specified, in particular, in Art 15 (scope of the law applicable) and to import those rules into its own legal order.” This suggestion as to the proper approach for the forum Court was enthusiastically adopted by the Court in Wall v Mutuelle de Poitiers Assurances: a case which concerned the extent to which the English Court applying French law to the assessment of damages should or should not make use of French procedural and evidential practices relating to the use of expert evidence. In Wall v Mutuelle de Poitiers Assurances the Court did not regard the passage from Professor Dickinson’s work (cited above) to be inconsistent with a passage later in the same text (at paragraph 14.19 where the following appears, “…’the law applicable’ should be understood in a broad sense to include judicial conventions and practices which will facilitate the assessment of damages by the court seised of the dispute in a manner which reflects, as closely as possible, the result that would be achieved in a court of the country whose law applies. Thus, for example, the court seised should look to particular tariffs, guidelines, or formulae which are used in practice by foreign judges in the calculation of damages, as well as the approach in calculating awards in individual cases.”) It is in such tariffs, guidelines and formulae that judicial discretion can often be found.
In Syred v PZU  1 WLR 3211 (QB) the English forum Court applied Polish law to a claim pursued by an English Claimant against a Polish insurance company Defendant: an “Odenbreit” claim. The case is reported for its treatment of Article 16 of the Rome II Regulation and, more specifically, the question whether section 17 of the Social Security (Recovery of Benefits) Act 1997 constitutes an “overriding mandatory provision” of domestic law in the Rome II sense. However, for present purposes, this decision is interesting in its treatment of judicial discretion (in Poland) with respect to awards of (what we might call) general damages for pain and suffering. In this regard, the dilemma facing the English forum Court (Soole J) was as follows:
a. The Polish law experts agreed that (i) Polish law did not provide fixed scales or guidelines to assist the Judge; instead, (ii) a Polish Judge assessing damages for pain and suffering would have a wide discretion “to assess a reasonable sum taking into account the injuries suffered by the claimant and all the circumstances of the case.” (Judgment, 3218E);
b. One of the Polish law experts stated that the common practice of the Polish Civil Courts – assessing such damages – was to make use of a table contained in an Ordinance published by the Polish Government. The problem was that the use of the Ordinance in this way had been criticised by the Polish Supreme Court (despite the fact that the Supreme Court had provided no alternative guidance in its place);
c. The dilemma that this presented to Soole J was articulated in the following way. He referred to Wall v Mutuelle de Poitiers Assurances and the Court of Appeal’s reference to practice, conventions and guidelines and then said this, “I think it must be inferred that this [in Wall v Mutuelle de Poitiers Assurances] means lawful practice, conventions and guidelines. That leaves the question of what the English court should do if the evidence shows that the foreign courts continue to follow a particular practice despite criticism from the Supreme Court of that country. The difficulty becomes more acute when the case falls within a civil law system without the doctrine of precedent and in circumstances when the criticism is not supported by further guidance on the task of assessment. Nor in the present case did the experts provide any guidance as to how, if the Ordinance were applied, Mr Syred’s injuries would be rated … ” (Judgment, 3219C);
d. The Claimant’s response to this dilemma was that the burden of proving that the applicable Polish law differed (in its material respects) from English law (in the approach to assessment of damages for pain and suffering) fell on the Defendant’s shoulders and that this burden had not been discharged such that English law (the use of the Judicial College guidelines and Kemp etc) should be used in this Polish law case;
e. Soole J disagreed with the Claimant’s suggestion in this regard, “In my view, this argument confuses the proof of the relevant law with the difficulty, at least for an English judge, of its application in the particular case. In my judgment the defendants have established the relevant Polish law, which evidently differs from English law in these circumstances. On the evidence Polish law (and article 445in particular) gives the judge a broad discretion to assess the “relevant amount” in all the circumstances of the particular case. I consider that it would be wrong to take account of the evidence that courts continue to follow the practice of determining damages solely by reference to the Ordinance. In the light of the criticisms from the Supreme Court and Courts of Appeal that practice is not lawful. However, I am satisfied that it remains part of the lawful practice of Polish civil courts to have regard to the Ordinance as part of the overall process of assessment”. (Judgment, 3219F). Soole J exercised his discretion “simply doing the best that he could” in this regard. It may be thought that, in exercising his discretion in this way, he resolved a contested issue of Polish law that the Polish Courts had – at that time – failed to resolve (in the course of his judgment Soole J made explicit reference to a stand-off between the Courts of Appeal in Poland and the Polish Supreme Court with respect to the assessment of damages for pain and suffering).
A synthesis of the approach to judicial discretion taken from Wall v Mutuelle de Poitiers Assurances and Syred v PZU might look something like this:
a. The English forum Court is required to apply foreign law to the substantive issues of the tort and, subject to any overriding provisions, “law” for these purposes includes the (lawful) practices and conventions adopted by the relevant foreign Courts for the resolution of the relevant substantive issue (see, Wall v Mutuelle de Poitiers Assurances  1 WLR 4263 (CA) at paragraphs 24, 34 and 49, cited with approval in Syred v PZU & Others  1 WLR 3211 (QB), paragraph 44);
b. Where such foreign law conventions and practices recognise (i) a starting point to the resolution of the substantive issue; and, (ii) in appropriate cases, a discretion to depart from such starting point, then the English Court is empowered (indeed, is required) to adopt the same course as the foreign Court and, therefore, to exercise a discretion (see, Syred v PZU & Others  1 WLR 3211 (QB), paragraphs 47 and 103);
c. The fact that it may be difficult to discern a clear and consistent approach by the relevant foreign Courts (particularly in a field of developing jurisprudence) does not mean either (i) that the English Court should revert to the application of English law; or, (ii) that the English Court should not continue to attempt to reflect the law (including the lawful conventions and practices) of the relevant foreign country. Instead, the English Court must do the best that it can on the basis of such foreign law expert opinion as is available (see, Syred v PZU & Others  1 WLR 3211 (QB), paragraphs 41 – 49).
These issues were most recently considered in Martin Scales v MIB  EWHC 1747 (QB). This was a claim against the UK Motor Insurers’ Bureau in respect of a road traffic accident in Spain in which the tortfeasor driver was unidentified (see, regulation 13 of the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 (SI 37/2003). Following Moreno v MIB  1 WLR 3194 (SC), the English Court applied Spanish law to the assessment of the Claimant’s damages. Spanish law required application of the old “Baremo” or tariff rules (for accidents prior to 1 January 2016) to the assessment of the Claimant’s damages and, while the Baremo was highly prescriptive of the categories within which the Claimant’s damages were to be assessed, it afforded the Judge a high measure of discretion as to the financial award that might be made within each category or head of loss (to the extent of permitting a Court to reflect under-compensation under one heading by “bumping up” the damages that might be awarded under a different heading). In the course of judgment, Cavanagh J adopted and endorsed (as a matter of principle) the guidance on the exercise of discretion that is set out above (Judgment, paragraphs 28 – 30). In this context, Cavanagh J observed that, “As I have said, all I can do is to do the best that I can. Both of the Spanish law experts have emphasised that the Baremo leaves the judge with a wide discretion.” (Judgment, paragraph 16). It remains to be seen whether the practice that English Judges have been constrained (by Rome II) to adopt – “simply doing their best” to exercise a foreign law discretion – will result in the resolution (in the English Courts) of contested issues of the applicable foreign law. If this is the inevitable result of what Rome II requires then it may be wondered how this can be reconciled with the goals of legal certainty and predictability of outcome that are found in the recitals.
Matthew Chapman QC
THE DECISION IN SCALES V MIB  EWHC 1747 (QB): AN EXAMPLE OF THE EXERCISE OF JUDICIAL DISCRETION
As indicated, in Scales v MIB  EWHC 1747 (QB) the English Court applied the old “Baremo” tariff relating to accidents occurring prior to 1 January 2016. In doing his best to assess damages using the tables, Cavanagh J commented in passing that they were ‘somewhat ungenerous to Claimants’, their provisions ‘confusing and difficult to follow (even for Spanish lawyers)’, and ‘not drafted with a view to providing full compensation for what would be called in England ‘special damages’’. The Spanish lawyer instructed on behalf of the Claimant had described them as ‘bizarre’. As a result, the judge was confronted with two diametrically opposed opinions from the Spanish lawyers instructed by the parties regarding a number of important issues, framed by him as follows:
a. Whether I am required to apply the letter of the Baremo, or whether I have flexibility to award compensation for some heads of damage which are not specifically covered by the express language of the Baremo;
b. Alternatively, is a court entitled to take account of the costs which are not otherwise covered when assessing the award for permanent injuries (the corrective factors)?;
c. What is the date of Consolidation?;
d. The award of compensation for temporary incapacity prior to the Consolidation date. This will be determined by reference to my decision on the Consolidation date and also as to whether all of the days before it were “impeded” days, or whether some were “non-impeded” days;
e. The award of compensation for Mr Scales’s permanent on-going symptoms;
f. The award of compensation for aesthetic damage;
g. Is Mr Scales a gran invalido within the meaning of the tables?
h. Compensation for financial losses and expenditure prior to, and after, Consolidation (including which types of loss are recoverable);
i. The appropriate category for permanent injuries or corrective factors and the appropriate award of compensation under this head;
Clearly Cavanagh J’s task was an unenviable one. However, in summary, insofar as general guidance is concerned, he determined that:
a. He did not have flexibility to award compensation for some heads of damage which are not specifically covered by the express language of the Baremo, and it was not possible to go beyond the tables in order to provide full restitution for a victim by compensating for losses not expressly provided for in the tables;
b. However, he could take account of the damages which are not otherwise covered when assessing the award for permanent injuries, since a Spanish court could do so;
c. Mr Scales was not a gran invalido within the meaning of the tables, with the effect that he would be significantly under-compensated; but the court could not stretch the definition of that term beyond what would be understood to be its meaning by the Spanish courts;
d. The existence of a right to claim interest is a matter of substantive law to be determined by the foreign applicable law;
e. Notwithstanding this, the English courts have a discretionary power to decide whether to award interest, and if so, in what sum;
f. In exercising the court’s discretion, the English court might well take into account the provisions of the foreign applicable law;
g. Mr Scales would be awarded interest in accordance with Spanish principles, and in this case that involved the payment of penalty interest which amounted to more than five times the sum awarded in respect of special damage.
Because Mr Scales was found not to fall within the meaning of gran invalido provided in the tables, he did not recover a good deal of his special damages, including a significant claim for care and assistance, beyond the date at which his injuries had plateaued. Cavanagh J acknowledged that this was ‘a harsh and unfair outcome’, but held that he was bound so to find in Spanish law. He nevertheless went on to award Mr Scales the maximum possible sum in respect of general damages, holding that it was right in determining the general damages figure to take into account the fact that he had not been able to make any award in respect of some of the special damage claimed.
The decision in Scales v MIB demonstrates that even where an English judge might consider that the operation of foreign law significantly under-compensates a Claimant, he or she cannot depart from it, but can only exercise his or her discretion in a manner consonant with the applicable law, taking into account that under-compensation only insofar as it is permissible to do so. It also underscores the importance of claiming penalty interest, where it is available, as a means of enabling the judge to increase the total figure awarded in order to ameliorate the harsher consequences of some foreign applicable law.
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