Schrödinger’s Fact

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This article is co-written by Jack Harding of Deka Chambers and Michael Hagan of Fletchers Solicitors.

1. The authors have both recently had experience of a situation which, we suspect, arises more commonly than may be expected and which, for Claimant solicitors may be resulting in needless claims to their professional indemnity insurers, because they are (wrongly) convinced that they have committed irreparable damage to a pleaded claim.

2. This situation arises in the context of road traffic accident cases in England and Wales in which the defendant is the driver/insurer of a foreign registered vehicle, and almost always when the Claimant’s solicitor is not used to dealing with conflict of laws issues and is faced with a situation in which they are required to issue and serve against that foreign defendant

3. By contrast, the solicitor on the other side will often be a practitioner of cross border work and the imbalance in the nature of their experience and knowledge of this niche area can create a great deal of trouble for claimants.

This sad story normally goes something like this…

4. An English Claimant claims damages for injuries and other losses sustained as a result of a road traffic accident that occurred in England involving a foreign registered car.

5. The foreign vehicle is insured by a foreign insurance company and was being driven by a foreign national.

6. The Claimant’s solicitors establish the identity of the foreign insurer and enter into correspondence with a UK representative or solicitor for the foreign insurer. Often, although not always, liability is admitted.

7. Limitation is fast approaching and the Claimant’s solicitors request the tortfeasor’s details for the purpose of issuing proceedings.

8. The UK representatives suggest that, rather that the Claimant going to the trouble of suing the tortfeasor (who is normally domiciled out of the jurisdiction) that they instead issue against the foreign insurer and, even better, if they do this there are friendly solicitors within the jurisdiction ready to accept service.

9. This approach appeals to our claimant’s solicitors, who are concerned about the logistics of issuing against a foreign domiciled individual and are used, in their domestic RTA cases, to routinely issuing proceedings against insurers.

10. The Claimant’s solicitors duly issue the claim a few days before primary limitation, naming the insurer as the defendant and seeking to rely on the provisions of s151 of the Road Traffic Act 1988 and the European Communities (Rights against insurers) Regulations 2002. Proceedings are served within service limitation, and the Claimant’s solicitors sit back and await the defence.

 Hitting the rocks – the wrong cause of action…

11. This is the point at which matters start to go wrong. A defence is served, informing the Claimant that, unfortunately, neither the 1988 Act nor the 2002 regulations provide a cause of action against the foreign insurer. This is because the foreign registered vehicle is not ‘normally based’ in the UK and therefore cannot fulfil one of the conditions for relying upon the statutory cause of action.

12. The Claimant finds themselves facing a strike out application on the basis that they haven’t pleaded the correct cause of action and primary limitation has expired so, even if there was a cause of action they could plead, it is too late to now do so.

13. As bleak as this picture is, it is not, as international practitioners will know, the end of the story, and there are options for firms who find themselves seemingly shipwrecked on the rocks, having been lured in by the sweet siren song of a friendly Defendant.

Rescuing the claim – the legal framework

14. In order to see why there is hope, it is first necessary, by way of explanation, to consider the relevant legal framework which governs disputes of this nature;

15. In respect of a road traffic accident that happens in England, involving an English Claimant (domiciled in England for jurisdictional purposes) and a foreign domiciled defendant, the laws applicable to the Claimant’s case are determined  with reference to EC Regulation 864/2007 on the law applicable to non-contractual obligations (‘Rome II Regulation’) as enacted into UK law by The Law Applicable to Contractual Obligations and Non-Contractual Obligations (Amendment etc) (UK Exit) Regulations 2019 (SI 2019/834) (hereafter ‘Rome II’).

16. Article 4 of Rome II deals with the general position in respect of the law applicable to claims in tort, and states as follows;

(1) Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.

(2) However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.

(3) Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a preexisting relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.

17. On the facts of our case, it will almost always be the case that article 4(1) will apply and the applicable law will be English law, given that is the law of the country in which the damage occurred.

18. Article 15 of Rome II then sets out the scope of the applicable law (i.e. what matters shall be subject to determination by reference to it):

(a) the basis and extent of liability, including the determination of persons who may be held liable for acts performed by them;

(b) the grounds for exemption from liability, any limitation of liability and any division of liability;

(c) the existence, the nature and the assessment of damage or the remedy claimed;

(d) within the limits of powers conferred on the court by its procedural law, the measures which a court may take to prevent or terminate injury or damage or to ensure the provision of compensation;

(e) the question whether a right to claim damages or a remedy may be transferred, including by inheritance;

(f) persons entitled to compensation for damage sustained personally;

(g) liability for the acts of another person;

(h) the manner in which an obligation may be extinguished and

rules of prescription and limitation, including rules relating

to the commencement, interruption and suspension of a period of prescription or limitation.

19. Therefore, in our case, matters of liability, quantum and limitation stand to be determined in accordance with English law. English law, as the Law of the Forum, will also governs matters of evidence and procedure, as per Article 1(3) of Rome II.

Identifying the correct cause of action under foreign law

20. Critically, whilst English Law is the applicable law, Rome II also contains a provision which permits a Claimant, in the context of establishing a direct right of action against a liability insurer, to exercise a freedom of choice in respect of the applicable law on that narrow issue.

21. Article 18 of Rome II says, in terms;

The person having suffered damage may bring his or her claim directly against the insurer of  the person liable to provide compensation if the law applicable to the non-contractual obligation or the law applicable to the insurance contract so provides (emphasis added).

22. In Pruller-Frrey v Brodnig (C-240/14) the Court of Justice of the European Union held that Article 18 is not a conflict of laws rule per se. Instead, it is straightforward provision which, in the words of the CJEU “merely makes it possible to bring a direct action where one of the laws to which it refers provides for such a possibility”

23. Therefore, returning to our case, whilst there might not be a cause of action, against a foreign insurer in English law, if there is one under the law of the insurance contract under which the vehicle is insured, then the Claimant has the choice to avail themselves of that law.

24. It will almost always be the case (although this should always be checked) that the law of the insurance contract will be the same as the place where the vehicle is registered. If that is an EU country then it is also almost certain to be the case that the law of that country will permit a direct right of action against RTA insurers because the EU mandated that member states enact such provisions into their domestic law. Finally, the author’s experience (although again this must be checked) is that such provisions will have no inherent territorial limitation.

25. Even in those cases where the vehicle is normally based/registered in a non-EU country, there may still be a direct right of action provision under the law of the insurance contract, and appropriate advice should be sort in every case from a lawyer practicing in the relevant country (whether EU or not).

26. It follows that a Claimant can rely on the provision of the foreign law giving rise to the direct right of action (and thus ground a viable claim against the foreign insurer) even though the foreign law will only apply to that narrow discrete issue, and the remainder of the claim (liability, causation, quantum) will stand to be determined in accordance with English law.

27. If claimant practitioners are aware of the provision in Article 18 they should (depending on what the foreign law says) be able to side step this pitfall entirely when preparing their pleadings.

The final hurdle – limitation

28. In the example above, by the time that the Defence has been filed, the primary limitation period (itself governed by English law) has expired.  Even then, the claim is capable of rescue.

29. Firstly, the claimant will need to make an application for permission to amend the pleadings, pursuant to CPR 17.4 which states:

This rule applies where-


(a) a party applies to amend his statement of case in one of the ways mentioned in this rule; and

(b) a period of limitation has expired under-

(i) the Limitation act 1980;

(ii) the foreign limitations periods act 1984; or

(iii) any other enactment which allows such an amendment, or under which such an amendment is allowed.

(2)        the court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts, or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings (emphasis added)

30. Faced with an application pursuant to CPR 17.4, the Defendant may well push back and content that the mandatory nature of (2) above, and the need for the new claim to arise from the same or substantially the same facts is fatal to the Claimant, given that the very fact that the claim is now grounded on a provision of foreign law means it cannot arise from the same or substantially the same facts.

31. This is a superficially attractive argument, since it is a trite proposition that, for most purposes, foreign law is treated by the English court as a question of fact, to be pleaded and proved: Biano v Bennett [2015] EWHC 6262 (QB).

32. However, everything is not always what it seems in the world of civil procedure. Simply because foreign law is ordinarily treated as a question of fact does not necessarily compel the conclusion that it must be so for all purposes, including procedural amendments.  In the little known decision of Latreefers v Hobson [2002] EWHC 1586 (hereafter ‘Latreefers’) the then Vice-Chancellor (Sir Andrew Morritt) reached the following conclusion on this very question when faced with determining an application to amend a pleading to rely on a foreign law (Liberian law) after expiry of limitation:

“Accordingly the permissibility of the proposed amendments depends on the third question whether the new claim or cause of action arises out of the same or substantially the same facts as are already in issue. In my view it does. The difference between the unamended and amended versions of the particulars of claim is the reliance in the latter, in particular paras 9A-9C, on the principles of Liberian law. Any requirement to treat them for pleading purposes as allegations of fact does not, in my view, make them facts for the purposes of s 35(5) Limitation Act 1980 or r 17.4. The same facts, strictly so-called, are relied on as grounding the causes of action under both English and Liberian law. Even in paras 141A and 144A the facts relied on in support of the claims under specific provisions of Liberian law are the same as before. In that respect there is no difference between the two versions of the particulars of claim”

33. In other words, the facts that ‘matter’, for the purposes of CPR 17.4 are the facts that ground the claim, i.e. those facts leading to the establishment of a duty, breach and damage.  The new claim arises from those facts, even if it is pleaded under a different foreign law. CPR 17.4 is therefore satisfied.


34. Experience suggests than this is an issue than arises in practice with considerable frequency.  It is therefore important that Claimant solicitors are aware of the provisions of Rome II, and the jurisprudence, which could be the difference between a successful claim and a happy claimant, and a strike out and professional negligence claim.

Featured Counsel

Jack Harding

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