Interim Payments and Foreign Law

In this blog post, Spencer Turner of 12 King’s Bench Walk considers the recent decision of Folkes (by his litigation friend Patrick Folkes) and Others v Generali Assurances [2019] EWHC 801 (QB). Nichol J held that interim payments in foreign accident claims are governed by English procedural rules: however, the foreign law remains relevant to the substantive assessment of the quantum of the payment. The decision is available here.

Background

The first claimant suffered serious injuries, including a severe traumatic brain injury, after he was accidentally struck by a car whilst crossing the road near his home in Aix-en-Provence, France.

There was no dispute between the parties that French law would determine liability and recoverable compensation in this case.

French law entitles the victim of a road traffic accident to bring a claim directly against the insurer for loss for which the insured driver would be liable. In circumstances where injury is caused to a pedestrian by an accident involving the use of a motor vehicle, French law imposes strict liability on the part of the owner and driver of the vehicle. There is no question of contributory negligence in such circumstances. The defendant had admitted liability to the first claimant.

The issue for the court to determine was whether to order the defendant to make a further interim payment to the first claimant.

The Role of French Law

Article 4 of Rome II provides that the general rule for the determination of the applicable law to a non-contractual obligation is the law of the country in which the damage occurs. There was no dispute in these proceedings that the applicable law was French law.

Articles 1(3) and 15(d) of Rome II provide that matters of evidence and procedure are governed by the law of the forum. Since the process for making an order for an interim payment is part of the procedure which falls to be determined by the law of the forum, Nichol J decided that the process for making an order for an interim payment was to be determined by reference to English law.

The effect was that the standard of proof which French law would set for interim payments, (to be made only for matters which are not challenged by a grounded defence or where the Judge can identify ‘what goes without saying’ or is beyond reasonable challenge) was “immaterial”.

The Interim Payment Application  

The Claimant was 19 at the time of the accident and was now 22. After a hospital stay in France and a period of rehabilitation between September 2016 and May 2017 the Claimant began a trial of independent living in July 2018. The application for the interim payment was, essentially, to allow that trial of independent living to continue.

When the application was issued on 13 November 2018 it was for an interim payment of £300,000. The application originally came before the court on 5 December 2018 and an order was made by Stewart J for an interim payment of £60,000 with the balance to be considered in the future. The Defendant had already made previous interim payments totalling £351,788.

Nichol J concluded that the evidence at this stage of proceedings was incomplete and a broad spectrum of long-term outcomes were possible, particularly in relation to future care. A cautious approach to the application was therefore required by English law. It was the judge’s view that this was particularly appropriate where the final award would be assessed according to French legal principles and taking appropriate assistance from the Dintilhac guidelines.

Taking the sum which was sought as an interim payment, together with the payments already made, Nichol J considered that the likely capital sum of damages awarded to the first claimant would need to be in the region of £660,000 for the interim payment application to succeed.

The parties’ assessments of past and future losses were reviewed by the judge and a total figure of £370,378 was accepted as a likely capital sum of damages. This was substantially lower than the £660,000 which the judge identified as necessary for the interim payment application to succeed. The application was therefore refused.

This decision provides a reminder of the complexities that can arise in personal injury disputes governed by Rome II where the substantive law is governed by the jurisdiction in which the accident happened, and the procedural law is governed by the law of the forum. The application for the interim payment itself will continue to be governed by English procedural rules. However, the application of foreign law to the substance of the claim has clear implications for the court’s approach to the assessment of the “likely final sum” as required by Eeles v Cobham Hire Services Ltd [2009] EWCA Civ 204.

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