Rome II was intended to bring about uniform choice of law rules but had left some uncertainty over when the regulation applied in cross border accidents. Tarek Uddin explains how the recent case of Homawoo has helped bring clarity.
The Court of Justice of the European Communities confirms that the date of application of Regulation (EC) No 864/2007, otherwise known as ‘Rome II', applies only to events giving rise to damage occurring after 11 January 2009 and the date on which proceedings were issued or the court assesses damages has no bearing on the temporal application of Rome II.
Rome II was intended to bring about uniform choice of law rules in non - contractual obligations. The general rule in Article 4(1) provided that: "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".
However, until the decision in Homawoo V GMF Assurances SA, practitioners and insurers had been left with some uncertainty as to when the regulation applied in the context of cross border accidents, given the two differing dates on which the regulation was to come into force.
Article 31 of Rome II states: "Application in time - This regulation shall apply to events giving rise to damage which occur after its entry into force." This is 20 August 2007, which is 20 days after publication in the Official Journal of the European Union in the absence of a given date. However, at Article 32 of Rome II it states: "Date of application - this Regulation shall apply from 11 January 2009."
"Insurers had been left with some uncertainty as to when the regulation applied in the context of cross border accidents."
Practitioners and insurers across the EU have been uncertain as to whether Rome II applied to accidents occurring after 20 August 2007 or 11 January 2009 and whether the issue of proceedings between the two dates had any bearing on the applicability of the regulation.
In the case of Homawoo, on 29 August 2007, the claimant, while on holiday in France, sustained injuries crossing a road when he was struck by a French registered vehicle, which was driven by a French resident. He issued proceedings in the UK on 8 January 2009 and judgment was entered on 10 March 2010. The preliminary issue of the interpretation of Articles 31 and 32 came before Mr Justice Slade in the High Court.
The claimant's case was that the words "entry into force" in Article 31 were to be read as "date of application" so as to apply to events occuring after 11 January 2009 and, in the alternative, the words in Article 32 "shall apply" were to be read as "shall apply to proceedings commenced", hence applying to proceedings commenced on or after 11 January 2009 in respect of accidents occurring on or after 20 August 2007.
However, the defendant contended that the words "shall apply" in Article 32 simply meant "shall apply to the determination by a court of issues governed by Rome II", that is to accidents occurring on or after 20 August 2007. The High Court referred the preliminary issue of the interpretation of Articles 31 and 32 of Rome II to the CJEC for clarification - Mr Justice Slade having preferred the latter dated of 11 January 2009.
"The claimant's case was that the words "entry into force" in Article 31 were to be read as "date of application"."
Decision of the CJEC
The CJEC approved Advocate General Mengozzi's opinion that Articles 31 and 32 of Rome II are to be interpreted as requiring a national court to apply the regulation only to events giving rise to damage occurring after 11 January 2009. Moreover, the date on which proceedings were brought or the date on which a case was determined had no bearing on the temporal application of Rome II. The CJEC felt that such an interpretation ensured full attainment of the regulation's objectives of predictability of the outcome of litigation, legal certainty as to applicable law and uniform application of the regulation in all member states.
The CJEC's reasoning for the insertion of the two dates was explained at paragraph 24 of the judgment: "Such a procedure may in particular, once the act has entered into force and is therefore part of the legal order of the European Union, enable the member states or European Union institutions to perform, on the basis of that act, the prior obligations which are necessary for its subsequent full application to all persons concerned."
Moreover, at paragraph 37, the CJEC held: "Articles 31 and 32 of the Regulation...must be interpreted as requiring a national court to apply the regulation only to events giving rise to damage occurring after 11 January 2009 and that the date on which proceedings seeking compensation for damage were brought or the date on which the applicable law was determined by the court seised have no bearing on determining the scope ratione temporis of the regulation."
European insurers with cases falling within the gap period of 20 August 2007 and 11 January 2009 now have some certainty following the CJEC's decision. For UK and European insurers alike, cases reserved on the basis that Rome II applied to accidents occuring on or after 20 August 2007 will have to be reviewed as the applicable law, for UK claimants at least, will now be determined by the pre-Rome II position as governed by the Law Reform (Miscellaneous Provisions) Act 1995 and the House of Lords decision of Harding v Wealands such that English law will apply to the assessment of damages of those heads of loss which are recoverable under the applicable foreign law. In most cases, these reserves will have to be increased.
For post-11 January 2009 accidents, the insurance industry has certainty and clarification of the applicable law. The European insurance industry can take some comfort from the knowledge that the temporal scope issue will, over time, decline as more of those cases are concluded. That being said, there will always be the uncertainty for insurers which arises from those cases where claimants seek to displace the general rule under Rome II.
Tarek Uddin is an associate in the large loss team at Weightmans, specialising in the defence of catastrophic injury claims
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