1 The Forum of Complex Injury Solicitors Incorporating the Richard Grand Society R D G R A N D R V A L L A N C E J C A H I L L P A L L E N P B A L E N J C H A M B E R L A Y N E A D E S M O N D C F A Z A N M H A R V E Y C J A C K S O N S J O H N T L E E G M C C O O L P M O R G A N B N E I L L R N E L S O N - J O N E S T O B S O R N E H P O T T E R R S W A N N E Y T W A R D M Y O U N G R P A N N O N E J P I C K E R I N G T C O O K K R O H D E A A L E X A N D E R J M C Q U A T E R R L A N G T O N D M A R S H A L L C E T T I N G E R K T O N K S
2 EUROPEAN COMMISSION - COMPENSATION FOR VICTIMS OF CROSS- BORDER ROAD TRAFFIC ACCIDENTS IN THE EUROPEAN UNION A RESPONSE BY FOCIS OCTOBER 2012 The members of the Forum of Complex Injury Solicitors (FOCIS) act for seriously injured claimants with complex personal injury and clinical negligence claims, including group actions. The objectives of FOCIS are to:- 1. Promote high standards of representation of claimant personal injury and medical negligence clients, 2. Share knowledge and information among members of the Forum, 3. Further better understanding in the wider community of issues which arise for those who suffer serious injury, 4. Use members' expertise to promote improvements to the legal process and to inform debate, 5. Develop fellowship among members. Membership of FOCIS is intended to be at the most senior level of the profession, currently standing at 27 members. The only formal requirement for membership of FOCIS is that members should have achieved a pre-eminence in their personal injury field. Five of the past presidents of APIL are members of FOCIS. Firms represented by FOCIS members include: Anthony Gold Atherton Godfrey Boyes Turner Charles Russell Digby Brown Field Fisher Waterhouse Freeth Cartwright
3 Girlings Hodge Jones & Allen Hugh James Irwin Mitchell Kester Cunningham John Kingsley Napley Leigh Day Linder Myers MPH Osborne Morris & Morgan Pannones Parlett Kent Potter Rees Prince Evans Russell-Cooke Russell Jones & Walker Stewarts Law Our response to your consultation is based on the following fundamental principles essential to our Civil Justice System, as follows:- 1. Access to Justice for all in our society 2. Protection of those who have been injured by the negligence of others
4 3. Tortfeasor/polluter pays 4. Full care and redress for the injured party 5. Speedy and fair resolution 6. Public confidence in the Civil Justice system. FOCIS welcomes this further consultation to address the adverse effects to victims of crossborder road traffic accidents relating to the applicable law for the assessment of damages and limitation periods. We are concerned that significant under-compensation for victims will otherwise arise, perhaps unintentionally, as a result of Regulation (EC 864/2007 Rome II ) Compensation Awards From the options presented we favour option 6, the application of the laws of the country of the victim s residence. However, we believe it would be better still for the assessment of damages to be in accordance with the laws of the forum, as was the position in English proceedings prior to Rome II. Option 6 will simplify cross-border claims and reduce claim costs. The number of such cross-border claims is so small that the costs to RTA insurers of the above would be negligible and unlikely to have any material impact on premiums. The rights for victims of road traffic accidents to pursue their claims in their home courts, and to bring their actions directly against the defendant s insurer, should be extended to the victims of other accidents. In England, as confirmed by the House of Lords in Harding -v- Wealands, the laws relating to the assessment of damages were procedural. Consequently claimants (from any country) pursuing their claims through the English courts were entitled to recover damages based on English compensation principles. Rome II appears to have reversed that position to the detriment of claimants in English proceedings, consequently creating the additional complexity and associated legal costs of both parties ascertaining and proving by expert evidence what the laws of damages are in the other jurisdiction (usually the lex loci delicti) and how they should apply to the claim. This requirement for foreign expert evidence is causing significant problems and additional cost to cross-border RTA claims. Some defendants are arguing that this expert evidence should not be limited to one foreign law expert, but also that most or all the liability or quantum experts should be from that country or have knowledge of the particular foreign law. In catastrophic injury claims that could involve 10 or more experts per party from the other jurisdiction and the additional cost that entails (including translation costs).
5 In addition to the complexity and costs that this causes, it also has significant potential for injustice, because the laws of the assessment of damages vary widely from country to country and are inter-related with other provisions that country makes for those who have sustained injuries, for instance via their medical system. In addition, that country s laws may be based on considerations from that country s financial or societal issues, which do not easily translate to the claimant s situation. For instance in Harding -v- Wealands, the laws of New South Wales (where the accident occurred) would have applied various caps and limits on the compensation available to Mr Harding for his loss of earnings and his care needs based on pay rates that were applicable in New South Wales, but quite different from those applicable in England. In addition the laws of New South Wales provided for a very different discount rate (5% rather than 2.5% in England) for the calculation of multipliers for future loss, which were based on financial considerations relating to the economy of New South Wales. Had these been applied to England they would have resulted in significant under-compensation to Mr Harding who was a tetraplegic with significant lifetime losses. In reality he would have been unable to fund his future care needs that would obviously arise in England. Unless Rome II is amended, current and future claimants in Mr Harding s position will be similarly under compensated. We oppose the wait and see approach of option 1 and we are concerned that recital 33 of Rome II is likely to be ineffective in enabling the Courts to adequately provide for appropriate compensation based on the claimant s residence, because they will still have to adhere to Articles 4(1)-4(3), which may apply laws for the assessment of damages which differs considerably from the actual losses the claimant is likely to incur in his home country. We agree with the MOJ s position in response to the 2009 consultation: that in relation to options 3, 4 and 5 it would be very difficult to formulate any agreed guidelines given the wide disparity in Member States compensation systems, and this would in any event be disproportionate to the scale of the problem and would have wider implications for compensation awards in other circumstances. Fort these reasons, any harmonisation of the substantive law in this area would not be appropriate. We also agree with the MOJ s position in response to the 2009 consultation in relation to options 7 and 8: provisions on first party insurance in this area would create disparities in other areas and would create a privileged class of victims whose injury was sustained in a road traffic accident rather than in an accident not involving a motor vehicle. These options also seem to assume that victims will be passengers of a motor vehicle, which will not be the case for pedestrians and cyclist victims. Whilst, of the options presented, option 6 is the one that best accords with the principles we refer to in the preamble, we are of the view that it would be preferable for the assessment of damages to be in accordance with the laws of the forum, as was the position in England and Wales prior to Rome II. In the majority of cases that would have the same consequence as option 6, because most victims will chose to bring their claims in their home courts. However, in the event that they chose to litigate in another country, or (for non-rtas in
6 which there is no direct right of action against the insurer) they were forced to bring their claim in another country, then it would avoid the courts of that country facing the complications of having to have expert evidence on assessment of damages in the claimant s home country. It would also avoid the scenario mentioned in the consultation of a court having to assess damages on a number of different bases if there are multiple claimants of different nationalities. We note the MOJ s response to the 2009 consultation was heavily premised on the understanding that the number of such cross border claims was small. In the report of the Commission s own contractor (Contract ETD/2007/ IM/H2/116) executive summary to the Final Report, Part II Analysis, it is stated at paragraph that the authors of the present study believe that the percentage of persons effectively concerned by this study is very limited and represents far less than one percent of all road traffic accidents. Consequently the costs to RTA insurers of the above would be negligible and unlikely to have any material impact on premiums. There will also be some cases (i.e. where the claim is brought in the victim s home courts applying less generous compensation laws than applied where the accident occurred) in which the above leads to lower compensation and a saving to the insurers when contrasted with the current Rome II position. In contrast, the impact on the cross-border victim of continuing to apply the law of the place where the accident occurred is often profound. In the case of those who have suffered catastrophic injuries it can result in substantial undercompensation. Those under-compensated victims then fall back on their own welfare state to meet their residual needs (in so far as the State provides a safety net) but at the cost to that country s tax payers. It is anomalous and unfair that the victims of accidents other than RTAs are not afforded the same right of action in their home courts, and a direct right of action against the defendant s insurers. The victims of accidents do not choose to be injured and should not be forced to litigate abroad, nor through the artificial construct of bringing a claim against a Defendant whose defence is run by his insurers. Limitation Periods Of the options proposed we see option 8 as preferable; that the limitation period be calculated according to the law of the country of the visiting victim s place of residence. However, as with our submission above concerning compensation awards, we believe the best option would be the limitation period being according to the laws of the country in which the claim is brought. We also support the concepts of options 2 and 3 of providing people with better information of their rights in cross-border situations, although we see this as a modest impact supplementary measure as opposed to an alternative change in the law as proposed above. Option 7, a Europe-wide harmonisation of limitation periods also has merit, but would no doubt take many years to achieve, with the likelihood of injustice in the meantime.
7 We oppose option 4, as the requirement of an earlier notice to the insurer runs the risk of creating an unwarranted second hurdle for the victims of accidents, in addition to the actual limitation period.