Direct action by English citizens against European insurers for accidents occurring in the EU

  • Market Insight 27 June 2024 27 June 2024
  • UK & Europe

  • Insurance

The UK’s exit from the EU has had a significant impact on cross-border personal injury claims. Before Brexit, an English citizen who suffered personal injury abroad could claim in the UK directly against the tortfeasor’s liability insurer. However, as we will see, this possibility no longer seems so simple.

Direct action by English citizens against European insurers for accidents occurring in the EU

First, it should be noted that jurisdiction within the EU in matters of non-contractual obligations is regulated by the Brussels I Regulation recast.

This regulation states that in insurance contracts the weaker party must be protected by rules of jurisdiction that are more favourable to its interests. In other words, it provides special protection for the weaker party (the policyholder, insured or beneficiary) against the stronger party (the insurance companies). Therefore, it incorporates a specific section regulating the rules of competition in insurance matters. These rules (Articles 10 to 16) provide that the courts of the domicile of the Claimant shall have jurisdiction when the injured party brings a direct action against the responsible insurer.

Basically, the Brussels I Regulation allows the injured party to take direct action against the liable insurer to claim compensation for its injuries. Moreover, this direct action is also provided for in the Rome II Regulation (Article 18).

This protective regulation (foreseen for the policyholder, insured or beneficiary) was extended to victims as per the famous CJEU judgment in the ‘Odenbreit’ case, which ruled that when a European citizen is injured in another EU country she/he may bring an action in her/his country of residence against the European liability insurer covering the claim, provided that the law of the insurer’s country allows the exercise of a direct action.

However, following Brexit, the Brussels I Regulation (recast) is no longer part of UK domestic law, so what happens now to the direct action of English injured parties for accidents occurring in an EU country that allow the exercise of direct action?

The importance on this question lies on the fact that the UK does not foresee the exercise of direct action, so English citizens may have to trust in other jurisdictions, where the direct action is foreseen, to claim directly against the tortfeasor’s insurer.

Well, before answering this question, we must bear in mind that, from the outset, following the UK’s exit from the EU, to serve the claim outside its jurisdiction on the tortfeasor’s liability insurer, authorisation from the English Court must be obtained. How? The English citizen must convince Tribunals that:

  • The claim meets one of the jurisdictional gateways in English procedural law that, essentially are a list of factors or circumstances which establish a connection between the dispute and England which make it potentially appropriate for the case to be heard by the English Courts.
  • The claim has reasonable prospects of success.
  • England and Wales is the proper place to bring the claim (often referred to as the forum conveniens).

Once the question of service of the foreign claim has been overcome, it is necessary to analyse whether it is possible for the English injured party to bring a direct action against the responsible European insurer. And this depends, essentially, on the applicable law.

After Brexit, the acquis Communautaire disappeared from the law applicable in the UK. However, to avoid a conflict in the stability of the system of international legal cooperation in civil and commercial matters, the UK nationalised the Rome I (regulating contractual relations) and Rome II (regulating non-contractual relations) Regulations through the European Union Act and the EU Exit Regulations 2019 No. 834.

The “domestication” of the European regime in the UK came into force on 31 December 2020, so that any cross-border relationship after the materialisation of Brexit (1 January 2021) would not be legally unprotected.

In line with the above, and since Article 18 of the Rome II Regulation is integrated into the Common Law, it provides for the possibility for a victim of personal injury to claim directly against the civil liability insurer, provided that direct action is foreseen in the applicable law.

In other words, English citizens may bring a direct action against the liable insurer provided that such an action is foreseen by the law applicable to the merits of the case (which, according to Article 4 of the Rome II Regulation, the general rule is that the law applicable to a non-contractual obligation arising out of a tort/delict is the law of the place where the damage occurred).

For example, if Spanish law were to be applied because of a traffic accident in Spain, direct action is foreseen (Article 76 of Law 50/1980 of 8 October 1980 on Insurance Contracts), so an English citizen may claim directly against the Spanish Insurer in proceedings instigated in the UK.

If, on the other hand, English law applies because both the victim and the liable party are domiciled in the United Kingdom (exception in Article 4.2 of the Rome II Regulation), the direct action could not be brought as it is not foreseen in English law.

Alternatively, the Claimant could choose to avail himself of the law applicable to the insurance contract, which would be Spanish law and which, as we have said, does allow direct action.

Ultimately, after Brexit there is still the possibility for an English citizen to take a foreign insurer to the English courts. However, this is an issue that may be subject to discussion, especially regarding the most appropriate forum to hear such claims.

In the absence of accession to the Lugano Convention (which provides for a conglomerate of rules of jurisdiction to the signatory states), or nationalisation of the Brussels I bis Regulation, this issue will remain controversial.


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