DHV v Motor Insurers' Bureau [2025] EWHC 2038 (KB) - Philip Matthews, Temple Garden Chambers
18/08/25. On 1 August 2025, Mr Justice Dias delivered judgment in a dispute between DHV, a protected party, and the Motor Insurers’ Bureau (MIB) over the payment of penalty interest under Spanish law. The issue arose from a serious road traffic accident in Mallorca in July 2017, in which DHV, a British national, sustained catastrophic injuries after being struck by an uninsured vehicle while crossing a road. Under reciprocal arrangements between the UK and Spain, the MIB stood in the position of Spain’s guarantee fund. The substantive trial in February 2025 determined liability and damages, and this follow-on judgment addressed solely whether penalty interest was payable.
Spanish substantive law governed the claim, and Article 20 of the Spanish Insurance Contract Act 50/1980 was central to the dispute. Article 20(9) obliges insurers, including the guarantee fund, to pay compensation within three months of receiving a claim, failing which penalty interest applies. The penalty rate is the legal interest rate plus 50% for the first two years, and 20% thereafter. Article 20(8) provides an exception where delay is justified or not attributable to the insurer. Both sides agreed that the MIB received the claim on 19 September 2017, meaning default would commence on 19 December 2017 unless...
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