DHV v Motor Insurers’ Bureau [2025] EWHC 2002 (KB) and [2025] EWHC 2038 (KB): Quantifying Claims under Foreign Law

In a recent judgment Dexter Dias J has given guidance on the approach to be taken to the quantification of a road traffic claim governed by Spanish law; his comments on Recital 33 to Regulation (EC) No.864/2007 (“Rome II”) are however applicable to all foreign law claims.

The facts

On 21^st July 2017 DHV was struck by a car as he crossed the road in Mallorca, sustaining a serious brain injury as a result. The driver was uninsured, and so the claim was brought against the Motor Insurers’ Bureau pursuant to Regulation 13 of the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003. These Regulations transposed into English law the obligations under Articles 5, 6 and 7 of the Fourth Motor Insurance Directive. In particular, before the UK’s withdrawal from the European Union, Article 7 entitled an injured party resident in the UK to apply for compensation to the compensation body in the UK (ie the MIB) following an accident in another member state involving an uninsured vehicle. The Regulations also contain provisions regarding reimbursement of the MIB by the relevant Spanish guarantee fund, the Consorcio de Compensacion de Seguros.

Following the decision of the Supreme Court in Moreno v MIB [2016] UKSC 52 the law applicable to the claim was that of Spain as the place where the accident occurred.

The issues

Consorcio admitted liability in respect of the accident but alleged contributory negligence on the part of DHV on the basis that at the time of the accident he had been so drunk that he had laid down in the roadway; alternatively, that having fallen down he was unable to right himself by reason of his drunkenness.

There were also disputes as to the correct approach to Spanish law, and in particular:

1. The effect of Recital 33 to the Rome II Regulation;
2. Which of the Baremo tables was applicable;
3. Whether pre-consolidation care is recoverable in principle under the Baremo rules;
4. The extent to which private actuarial evidence is admissible under the Baremo rules;
5. Whether future rehabilitation and care expenses were recoverable in principle under the Baremo rules;
6. Whether or not Spanish penalty interest should be awarded (this was the subject of the second, separate judgment).

Contributory negligence

The judge found that at the time of the accident DHV had been drinking to excess and that his evidence as to his movements immediately before the incident was unreliable. He also found that the evidence of the accident reconstruction expert instructed on his behalf was unreliable [para.48]:

“Her original report contained errors. She fundamentally changed her position about the speed of the vehicle. She was prepared to offer opinions on topics she had no sufficient qualifications to give. She did not answer questions directly and often digressed unhelpfully. Her evidence, for example on the impossibility of the injuries to DHV being consistent with his lying on the ground and being “dragged”, was unconvincing and in defiance not only of expert medical opinion but simple precepts of logic and common sense. It took her far too long to make reasonable concessions which she only made when forced to.”

The accident reconstruction expert instructed by the Defendant, on the other hand, Mr Sorton, gave more convincing evidence [paras.50 and 51]:

“He has assessed and reconstructed over 2000 relevant pedestrian-vehicle impact accidents. This is a very substantial base of comparators and examples in the field for him to draw on. Professionally, he has no inherent predisposition to assist either party, but his experience is chiefly being instructed on behalf of claimants not defendants. He gave evidence about facts that might be seen as critical of the driver in this case Mr Gornals and at times evidence that may be construed as helpful to the claimant and unhelpful to the defendant party that had instructed him…As to this critical issue of the claimant’s positioning, Mr Sorton stated that “not a week which goes by without me looking at a case where a pedestrian was struck whilst standing up.” This is a central part of his habitual professional life. I found him to be careful and measured in his evidence, always at pains to alert the court to the limits of his evidence and expertise. There was no overreach, as I encountered with some of the experts…He made concessions when he needed to, not because he was forced to do so but because he plainly saw this as right given the limits of the evidence or his expertise. He was not stubbornly dogmatic in his views.”

It is perhaps unsurprising in the circumstances that the judge came to the conclusion urged upon him on behalf of the Defendant: DHV was drunk at the time of the accident and was lying in the roadway.

As a consequence, the judge concluded that damages should be reduced by 65% to reflect contributory negligence, the maximum deduction allowable under Spanish law being a reduction of 75%. The court justified this high level of contributory negligence by reference to Spanish caselaw, illustrating the importance to parties in cross border litigation of putting before the court all relevant authorities, even from jurisdictions which do not operate the common law doctrine of precedence.

The effect of Recital 33

As the judge concluded, Rome II applied to the case because (following Moreno) it has a foreign law element, the accident having occurred abroad. Pursuant to Article 4(1) of Rome II, Spanish law applied. The dispute between the parties related to the importance or otherwise of Recital 33 to the Regulation, which reads:

“According to the current national rules on compensation awarded to victims of road traffic accidents, when quantifying damages for personal injury in cases in which the accident takes place in a State other than that of the habitual residence of the victim, the court seised should take into account all the relevant actual circumstances of the specific victim, including in particular the actual losses and costs of after-care and medical attention.”

The Claimant contended that Recital 33 was relevant to the level of damages recoverable by DHV from the Spanish court because it is part of a directly applicable European regulation. Further, it reflects an important concept fundamental to justice in DHV’s case, namely compensation for the actual losses he has incurred and will incur. Recital 33 must have some effect, so submitted the Claimant, and cannot be merely exhortatory.

The Defendant, on the other hand, submitted that Recital 33, being a mere preamble and not part of the body of the Regulation itself, is incapable of altering substantive law. The recital is ‘toothless’ and is the result of a compromise during the negotiations during the passage of the Regulation. It is of no practical influence.

The Defendant derived support for its position from the jurisprudence of the Court of Justice of the European Union itself; in Casa Fleischhandel v Bundesanstalt für Landwirtschaftliche Marktordnung [1989] ECR 2789 the CJEU states at para.31:

“Indeed, a recital in a regulation, although it may shed light on the interpretation to be given to a rule of law, cannot in itself constitute such a rule.”

Experienced practitioners will recognise that what the CJEU acknowledges as a rule of law can be a highly flexible concept, differing from case to case and sometimes even within judgments. Nevertheless Dexter Dias J considered that the recitals to the Regulation are not in themselves rules but rather – variously – exhortations, clarifications or aids to interpretation, as the Defendant contended. He concluded that the function he was required to perform under Rome II was to apply Spanish law within the same margin of discretion a Spanish judge might have. Therefore, if a Spanish judge might apply Recital 33 to allow a claimant to recover his full losses in respect of care and medical attention, so might he; but not otherwise. At paras.127 and 129 of the judgment the consequence of this determination is made clear:

“While it can inform the interpretation of Rome II and its application (for example, to article 15(c) on compensation), it cannot change substantive Spanish law. While it acts as an exhortation and reminder about one aspect of the philosophy underlying Rome II, it has no more than persuasive force or interpretive weight. I find that this is the conclusion a Spanish court would reach…

I have been provided with no comparable case where a Spanish court has applied recital 33 or explained any relevance, let alone enhanced relevance, this recital has had to a road accident claim. There is no authority to support the application of recital 33 to the assessment of compensation due to a foreign resident person injured in Spain whose actual losses in the state of habitual residence outstrip what is identified explicitly in the Baremo limits. Put another way, there is no Spanish authority to support the use of recital 33 to award compensation for actual losses in the state of habitual residence at a greater level than would be awarded to an injured person in Spain.”

It is difficult to over-emphasise the importance of this conclusion, both to the Claimant DHV himself, given that it rendered his future care and treatment claims irrecoverable, and to other claimants in the aftermath of the decision, should it be followed. It will now be necessary for claimants to demonstrate by reference to expert evidence that pursuant to the applicable law a foreign court would allow an English claimant to recover the care and treatment costs (s)he is likely actually to incur; and a general right to full compensation, or restitutio in integrum, will not do. In the absence of such evidence the claimant is likely to be very significantly undercompensated, notwithstanding that (s)he may, perhaps in contrast to a claimant domiciled within the foreign jurisdiction, have no other way of accessing these basic needs. This potentially very large shortfall is, so the court concluded, simply one of the downsides of the need for certainty and predictability identified by the Supreme Court in Moreno.

The applicable Baremo table

As with the accident reconstruction evidence, so with the Spanish law evidence; Dexter Dias J reached clear conclusions as to the reliability of the parties’ respective experts. First, the expert instructed on behalf of the Claimant [paras.54 – 58]:

“I found Ms Astigarraga to be in certain vital respects an unsatisfactory witness. This unsatisfactoriness ranged from simple factual matters such as the number of times she had testified in English proceedings (it was two cases, neither of which were in the High Court but in the court below) to her persistent attempt to deny she had copied parts of a colleague’s expert report. It seems that the root of her difficulty is that she approached the case at times more as an advocate for the party instructing her rather than an independent arms-length expert.

Critically, she did not mention in her statement of truth a recognition of her Part 35 duties to this court. Further, she failed to mention in her report what was obvious: that she had relied on a separate report produced by Ms Romero, an associate lawyer in her firm as a source for her own report. Additionally, and this adversely impacted her credibility, she tried to suggest under persistent and legitimate questioning from Ms Wyles that she had not copied Ms Romero’s report. Ms Romero’s report is dated 2022. Ms Astigarraga’s reports are dated 2023 and 2024…

Finally, Ms Astigarraga accepted that she “might” have copied passages from Ms Romero’s report. Not only had she initially denied this, but she had said at the outset of her evidence that it would be wrong to do so. Further, she had not complied with Part 35 and identified Ms Romero as one source of her report. She plainly copied parts of Ms Romero’s report, failing to cite it as a source as she should have. Her explanation that she “did not copy” was obviously unconvincing and not true.

This interlude caused the court to think carefully about Ms Astigarraga’s credibility. It did not destroy it, but these were poor and unhelpful answers and unworthy of a legal professional entrusted with assisting a court on such a central issue as the nature of applicable Spanish law.”

By contrast, the Defendant’s expert witness, Professor Carreras, was ‘a very engaging, fluent and articulate witness’ [para.62]:

“I detected no sense of partiality, and was satisfied that at all times he was attempting to assist the court rather than argue one side of the case on behalf of those who instruct him…I found his evidence straightforward, directly engaging with the question, aware of his limitations and balanced. I found no reason to doubt his balance or credibility.”

And all this despite the fact that Professor Carreras is usually instructed by those acting for Claimants.

It was perhaps inevitable in the circumstances that the judge preferred the evidence of Professor Carreras to that of Ms Astigarraga as to which of the Baremo tables should be used as the basis for compensating the Claimant, and found therefore that he should use the table in force at the time of the consolidation of the injury rather than the updating table in force at the time of the trial. In coming to this conclusion he once again had regard to the lack of caselaw (at least in the civil Spanish courts) in support of the Claimant’s position; this lacuna suggesting to him that the Spanish courts simply would not use updating tables in the way proposed on behalf of the Claimant.

Pre-consolidation care

Once again, in considering this issue the court had regard to the fact that there was no Spanish authority in which a claimant had recovered the cost of care provided prior to the date on which his or her injury had consolidated. Inevitably as a result DHV did not recover his claim for past care.

The admissibility of private actuarial evidence

The Baremo tables allow for the admissibility of private actuarial evidence only in very limited circumstances; the general rule is that the tables themselves provide for the multipliers and multiplicands to be utilised by the Spanish court. Dexter Dias J had no difficulty in rejecting the Claimant’s suggestion that private actuarial evidence could be admitted outside the clearly defined limits set out in the tables, thus rendering a quantity of interesting and informative actuarial evidence given in the case entirely moot.

Future rehabilitation and care expenses

As practitioners experienced in dealing with Spanish cases will be aware, it is only in cases involving exceptionally grave injuries that a claimant may recover for the cost of future rehabilitation and care expenses. DHV’s injuries, whilst serious, did not fall within the exceptional categories set out in the Baremo tables, and (because he could not pray in aid Recital 33 of Rome II) his future care and treatment claims were therefore irrecoverable.

Spanish penalty interest

In a separate, second judgment Dexter Dias J acceded to the Claimant’s submission that he should award penalty interest pursuant to Spanish law. This was perhaps an inevitable result given the decision of the Court of Appeal in Nicholls & Anor v Mapfre Espana Compania De Seguros Y Reaseguros SA [2024] EWCA Civ 718¸ in which the Court found that the imposition of Spanish penalty interest is a matter of substantive law.

The governing Spanish statute is Article 20 of the 50/1980 Insurance Contract Act of 8 October 1980, which provides for the imposition of penalty interest unless Article 20(8) applies. Article 20(8) states that:

“There will be no compensation for the insurer’s delay when the failure to pay the compensation or the payment of the minimum amount is based on a justified cause or is not attributable to him.”

The MIB submitted that there was a justified cause as to why it had not compensated DHV prior to trial, allowing it to escape the imposition of penalty interest: the Claimant had not provided it with a fully pleaded Schedule of Loss until August 2024, some three months before trial. Therefore, so the MIB submitted, it could not have paid him the sum claimed, not knowing what that sum actually was. It had, however, made three interim payments: £50,000 on 17^th June 2021, £70,00 on 16^th June 2022, and £50,000 on 31^st October 2022, but only after the Claimant had made applications for such payments. As the judge observed [para.20]:

“These were not voluntary payments. This seems to me to be significant in assessing the approach and attitude of the defendant in seeking to justify delay in payment of compensation. It is correct as the defendant submits that two years before the 2024 trial, the defendant had paid on an interim basis 80 per cent of the amount that ultimately the claimant would be awarded by the court. However, these were not offers of compensation. They were returnable interim payments. I cannot place much weight in the defendant’s submission that an order for repayment was “extremely unlikely” or merely “a technical possibility”. The point is the objective status of the payment. It was returnable and not a payment of non-refundable compensation. It is correct that in the Spanish Supreme Court judgment of 24 April 2014, the court said that interim payments were relevant to whether penalty interest should be awarded. Therefore, I emphasise, I do take them into account. The question is the weight to be attached to them, given the stage at which they were paid and the attitude of the defendant towards these payments. The first was paid almost four years after the MIB notification form. I judge that to be a very long and unjustified delay. As indicated, there was either reluctance or outright resistance to the making of these payments on the part of the defendant. I find this significant. Therefore, I place limited weight on these interim payments given the oppositional attitude of the defendant.”

The fact remained that at no point before the trial did the Defendant make an offer to pay compensation or in fact pay compensation, a point the Claimant placed heavy reliance on – and this notwithstanding that it had admitted liability on 15^th October 2020, some four years prior to the trial. There was, in addition, no evidence as to any difficulties the Defendant may have experienced in quantifying the claim, at least approximately, prior to receipt of the Schedule of Loss; and this was particularly so given that it had been successful in reducing the claim very nearly to the minimum that it could possibly have expected to pay, having largely succeeded in its arguments on contributory negligence and the costs of care and medical treatment.

The judge concluded [para.39]:

“There must have been a series of carefully considered decisions by an experienced institutional insurer declining to pay any compensation to the claimant before trial and refusing to make any offer before trial despite accepting primary liability and in the further context of there not being any salient matters it was essential for this court to determine before the defendant paid at least some compensation.”

There was no justification for the delay in compensating the Claimant, and Spanish penalty interest was therefore payable.

Comment

The Claimant’s victory in recovering Spanish penalty interest may well be seen as a Pyrrhic one. His case on contributory negligence was not accepted; his case on Recital 33 was firmly rejected; and he failed to recover any sums for care or medical treatment. Cross border practitioners will readily conclude that of these determinations, the judge’s rejection of the Claimant’s case on Recital 33 is of the greatest general concern. If Dexter Dias J is correct in his analysis, Recital 33 is of decorative effect only and has no practical use in the English courts, unless it can be established that a foreign court would have regard to it so as materially to affect the level of compensation awarded within that jurisdiction. Indeed, at times in the judgment the court comes perilously close to derogating responsibility for decisionmaking to the Spanish courts, often relying on a lack of Spanish authorities to prove, or at least provide strong support for, a negative proposition. Whether or not this can be correct may be open to question; it will be interesting to see whether DHV appeals, given the importance of these issues in his case in particular and to cross border personal injury claims more generally.