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By Daniel Clarke, Barrister, 3 Hare Court
In Cox v Ergo Versicherung AG  UKSC 22 the Supreme Court has given an important decision on the application of the Fatal Accidents Act 1976 (the 1976 Act) in claims involving accidents abroad.
The decision makes clear that once a foreign law applies in a fatal accident claim, there is no place for the 1976 Act, which is not procedural, but substantive. This will matter in cases where the foreign law takes a different approach in its assessment of dependency.
2 April 2014
Lords Neuberger, Mance, Sumption, Toulson and Hodge
The Claimant was married to a major in the British Army serving in Germany who was involved in a fatal road traffic accident there in 2004. The accident was the fault of a German driver. Liability was admitted. The Claimant issued proceedings in the High Court against the driver's insurer. She pleaded that the applicable law was German. This was pursuant to the Private International Law (Miscellaneous Provisions) Act 1995 (the 1995 Act) since Rome II was not yet in force.
A key issue was the applicability of the 1976 Act. The Claimant sought to rely on it. The Defendant denied its applicability, asserting that the equivalent German law (section 844 of the BGB) applied. This was ordered to be tried as a preliminary issue.
The differences between the English and German rules were significant. Under English law, assessment of damages for dependency is a well established anomaly. Dependency is fixed at the moment of death. Nothing that a dependant (or anyone else) can do after death can either increase or decrease the dependency. In particular, a widow's re-marriage or prospects are deemed irrelevant. So are benefits accruing as a result of the death.
In German law, by contrast, the award is not assessed as at the moment of death. There is a duty to mitigate. A claimant is compensated in net terms, excluding only the receipt of proceeds from an insurance policy. As Lord Sumption noted, "German law on the damages recoverable for a fatal accident corresponds to the general principles applied at common law to the recoverability of damages in tort, which require the claimant to be put into a financial position equivalent to that which she would have been in but for the wrong" (para 6).
On the facts of Cox these differences were important. In particular, the Claimant was in receipt of a war widow's pension for life. Credit would be given for this under German law. English law would deem it irrelevant.
The Claimant's case was that the 1976 Act was the starting point. Claims for loss of dependency brought in England could only be brought under the 1976 Act. Further, as the assessment of damages was a procedural matter for the lex fori, this included application of the 1976 Act. In any event, the application of the 1976 Act by the English court was mandatory.
The Supreme Court rejected the Claimant's submissions. German law was the applicable law, pursuant to section 11 of the 1995 Act, as the law of the place of the tort. By section 9(4) of the 1995 Act, once identified, the applicable law determined whether there was liability and also for what heads of damage. English law could apply only to quantification. The Claimant's approach was inconsistent with the 1995 Act. It was also inconsistent with the nature of the 1976 Act. This provided for a cause of action, without which there would be no claim. It was not procedural.
The task for the court would therefore be to quantify damages for loss of dependency under section 844 of the BGB. This was unlikely to present difficulties for an English court since the approach taken in German law corresponded to "the rules of assessment which apply generally in English law in the absence of any statute displacing them" (para 21).
The 1995 Act has since been superseded by Rome II. This will not change the principle that once a foreign law applies in a fatal accident claim, there is no place for the 1976 Act. However, it will mean that (by virtue of Article 15 Rome II) not only the heads of loss, but also their quantification, will be subject to foreign law principles.