(Re)Insurance Weekly Update 22 - 2015

Welcome to the twenty-two edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2015

This Week's Caselaw

Mapfre Mutualidad Compania v Keefe

Court of Appeal considers whether English claimant could bring a claim against a Spanish insurer and Spanish insured in England

http://www.bailii.org/ew/cases/EWCA/Civ/2015/598.html

The English claimant was injured while staying at the second defendant's hotel in Spain. He claimed against the second defendant's Spanish insurer in English proceedings. The insurer did not challenge jurisdiction. However, the policy limit was lower than the level of damages being claimed and so the claimant joined the second defendant (a Spanish company) to the proceedings too. This issue was of importance to the claimant because damages will be higher if assessed under English, rather than Spanish, law.

The Rome II Regulation did not apply to this case, the accident having taken place before 11 January 2009.

The second defendant argued that the English court did not have jurisdiction to hear either the claim against it or the insurer. Jurisdiction was governed by Regulation 44/2001, Article 11 of which provides that an injured party can bring a direct action in his own country against an insurer domiciled in a Member State "where such direct actions are permitted" (Article 11(2)). It also provides that "if the law governing such direct action provides that the...insured may be joined as a party to the action, the same court shall have jurisdiction over them" (Article 11(3)).

In the CJEU decision of Odenbreit [2007], it was held that the direct action against the insurer had to be permitted in accordance with the law where the claimant (and not the insurer) is domiciled. That was thought to be important here because direct actions against insurers in the circumstances of this case are not permitted under English law. However, Odenbreit was a motor insurance case, and the relevant EU Directive provides that all Member States are obliged to ensure that an injured party in a motor accident has a direct action against the tortfeasor's insurer. The issue in this case was whether the same principle applies outside of motor insurance.

The Court of Appeal concluded that it does not. The relevant law under Article 11(2) which determines whether a direct action is allowed is the law of the court where the action is to be brought. Although that meant English law here, that was not limited to English procedural law but included the private international law rules in...