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The New Normal: The Post-Brexit Landscape

Articles | Fri 12th Nov, 2021

Now that the dust has settled following the end of the transition period and Exit Day on 31st December 2020, it is a timely moment for insurers and their representatives to consider the post-Brexit landscape. The anticipated glut of pre-Exit Day cases did materialise as expected, but has, largely, been dealt with; some claims were issued incorrectly, some were not validly served within the lifetime of the claim form, and a significant minority are now subject to jurisdictional and service challenges. But by and large the pre-Brexit claims are making their way through the courts of England and Wales in the usual way; and the terms of the Withdrawal Agreement, and in particular Article 67(2)(a), ought to ensure that recognition and enforcement of any judgment in these claims will be as straightforward as it would have been before Exit Day.

The time has come, therefore, to turn our thoughts to the claims still to be issued; those claims governed by the post-Brexit regime. First, what hasn’t changed; due to the continuing applicability of Regulation (EC) No.864/2007 (‘Rome II’), the rules on applicable law continue to apply. Under Article 18 of Rome II a claimant has a right to sue an insurer directly if either the law of the tort or the law applicable to the insurance contract so provide. In practice, almost all European road traffic insurers, and a significant number of European public liability insurers, can still be sued directly pursuant to the terms of this provision, because the law of the insurance contract allows for this. However, now that the UK has Brexited Europe, foreign insurers cannot be served by way of their UK handling agents, but must be served at their registered office abroad, and this means that claimants must seek and obtain the permission of the court to serve proceedings outside the jurisdiction pursuant to CPR Part 6.36. The court will only give permission for service of proceedings outside the jurisdiction where it is convinced that the claim comes within the gateways set out at CPR6 PD6B 3.1; where the claim has a reasonable prospect of success; and where England and Wales is the proper place to bring the claim.

This is the new jurisdictional regime, following the end of the transition period and with it the disapplication of Regulation (EU) No.1215/2012 (‘recast Brussels’). Recast Brussels provided for an almost completely predictable jurisdictional framework; practitioners were able to advise clients with a good degree of certainty about whether or not any particular claim would be heard by any particular European court. This is no longer the case; although it is relatively easy to determine whether most claims come within one of the CPR6 PD6B 3.1 gateways (and most claims brought by English Claimants against road traffic and public liability insurers will fall within the tort gateway, some damage being sustained within this jurisdiction), assessing whether a claim should be brought in the courts of England and Wales or elsewhere is a less clear-cut exercise.

Notwithstanding initial hopes that the recast Brussels regime would be replaced in early course by the similarly user-friendly provisions of the Lugano Convention, the EU’s objection to the UK acceding to the Convention means that practitioners will be left to grapple with the current common law jurisdictional rules, at least for the foreseeable future. It would seem overwhelmingly likely that the English courts will accept jurisdiction over those accidents occurring within the jurisdiction and involving English claimants and foreign driver or insurer defendants. It is somewhat less clear whether they will accept jurisdiction over accidents involving foreign claimants and defendants occurring within the jurisdiction; but they might well, as long as the parties are not both domiciled within the same foreign jurisdiction (in which case it could well be arguable that the courts of that jurisdiction would be the more appropriate forum). Greater uncertainty arises, however, where an English claimant brings a claim against a foreign driver or insurer arising out of an accident occurring abroad. Such a claim would pass through the tort gateway if the claimant sustained damage within the jurisdiction of England and Wales, for example by way of paying for medical treatment, receiving care or incurring loss of earnings; but would England and Wales be the appropriate forum for it? It may be that the court would accept jurisdiction if quantum only is in dispute, since all the witnesses would be based in England; but that where liability is also contested, jurisdiction might well be declined on the basis that the courts of the place where the accident took place would be the more appropriate forum.

There are no hard and fast rules, and naturally every case will turn on its own facts, but we can be sure of one thing: practitioners advising insurers in claims with a foreign element will need to grapple with these thorny jurisdictional issues – and soon.

This article first appeared in The Voice, the monthly newsletter of the Forum of Insurance Lawyers (FOIL).

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