Update on Choice of Law

The Private International Law (Miscellaneous Provision) Act 1995 came into force in this country on 1 May 1996.  Its relevance for personal injury practitioners lies in Part III of the Act since it governs choice of law in claims where the accident happened overseas but the claimant wishes (jurisdiction of the English court permitting) to bring his claim here.

The real heart of the Act insofar as it affects personal injury actions is contained in sections 11 and 12.  In effect, s.11 provides the general rule that the law governing issues in the claim (i.e. those matters of substance rather than procedure) will be that of the country in which the claimant sustained injury, and s.12 provides a means of getting round this in appropriate circumstances.

A claimant or a defendant may wish to displace the general rule and argue that the law of another country should apply to the substantive issues in the claim (usually, but not necessarily English law if the claim is proceeding over here). 

Despite the fact that the 1995 Act has been in force now for some 10 years, reported cases have been few and far between to assist practitioners in picking their way through this area of law.  But recently the Court of Appeal and House of Lords have considered two separate issues arising out of foreign accidents in the case of Harding v Wealands  [2004] EWCA Civ 1735 and [2006] UKHL 32.

Facts

Mr Harding was English and Miss Wealands Australian.  They lived together in England and intended to make their lives here.  They went to New South Wales for a holiday.  During the course of the holiday Miss Wealands was responsible for a catastrophic road accident which left Mr Harding a tetraplegic.  At the time of the accident she was driving her own Australian-registered car on her Australian driving licence with the benefit of Australian insurance.  Mr Harding commenced proceedings in England and liability was not contested.  A dispute arose regarding the way in which his damages would be considered.  Miss Wealands’ insurers were anxious to take advantage of the far lower damages that would be awarded under the laws of NSW.  Mr Harding, unsurprisingly, disagreed.

Issues

Two issues arose: (1) Should the general rule that the law of NSW would govern the issues in the claim be displaced in favour of English law; and (2) What issues would fall to be determined according to the applicable law, and which issues would remain issues of procedure to be determined come what may under English law as the law of the forum.

Judgment of Elias J

At first instance Elias J considered that (1) the general rule was to be displaced.  He followed the test laid down by the Court of Appeal in Roerig v Valiant Trawlers [2002] EWCA Civ 21, the first time issues of the applicable law had been considered by the Court of Appeal, of (a) identifying the issue in respect of which it was suggested that the law of NSW should not apply; (b) identifying the factors connecting the tort with NSW and with England; and (c) conducting a comparison to see whether it was ‘substantially more appropriate’ for the law of England to govern the issues in the claim.  He considered that the factors connecting the tort with England were sufficiently strong.  Accordingly English law would govern all issues in the claim, whether substantive or procedural.  Although technically irrelevant, he then went on to consider (2) and determined that the restrictions on damages imposed by various statutory provisions of NSW law were rules of procedure and so the English court would not in any event apply them.

The Court of Appeal

The insurers appealed.  The Court of Appeal (Waller LJ, Arden LJ and Sir William Aldous) agreed unanimously that, in respect of (1), it was not substantially more appropriate for English law to apply.  Of particular importance was the fact that Miss Wealands was Australian and driving on her own licence, Waller LJ stating, “…where the general law, by virtue of s.11 being the law where the tort occurred, is also the national law of one of the parties, it will, I suggest, be very difficult to envisage circumstances that will render it substantially more appropriate that any issue could be tried by reference to some other law.”. 

On the second issue, (2), they had more difficulty, concluding (Waller LJ dissenting) that the relevant provisions of local law were issues that went to Mr Harding’s right to claim damages, and so were properly to be characterised as ‘substantive’.  Consequently, given their judgment on (1), they had to be applied so as to limit significantly Mr Harding’s claim for damages. 

The House of Lords

Mr Harding took the matter to the House of Lords, the first time their Lordships have been asked to consider a dispute of this kind under the 1995 Act.  They allowed the appeal and restored the judgment of Elias J on the basis of their conclusions on the second issue.  As a result they did not need to, and did not consider issue (1) at all.  The majority agreed with the judgments of Lord Hoffmann and Lord Carswell that the provisions of NSW law went to the question of the assessment of Mr Harding’s damages and so was a matter of procedure.  Accordingly, they were inapplicable before an English court, which would proceed to quantify his damages on English principles since English law was the law of the forum.   

Accordingly, it seems to be the case that the Court of Appeal’s analysis of s.11 and s.12 of the 1995 Act, the test it laid down in Roerig and the factors that are likely to be relevant to any consideration of the applicable law still hold good.  However the relevance of the choice of applicable law in personal injury actions may well be lessened by the House of Lords’ conclusions regarding the matters that fall to be considered under English law as the law of the forum.

KATHERINE DEAL