Moreno v The Motor Insurers Bureau: A Greek Tragedy?

In the recent case of Moreno v The Motor Insurers Bureau [2016] UKSC 52 the Supreme Court held that where a claim is brought for compensation against the Motor Insurers Bureau (MIB) for an accident occurring in a European Member State, the level of damages is assessed by reference to the law of that state and not by reference to English law. Therefore the measure of damages should be assessed according to the law of the jurisdiction within which the accident occurred.

In this case, the claimant was on holiday in Greece when she was knocked down by a vehicle which resulted in serious injuries. The driver did not have any insurance or hold a valid license. Therefore, a claim was pursued against the MIB under the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 (SI 2003/37) which transposed a series of European Directives.

One of the effects of the 2003 Regulations was that the claimant could pursue a claim against the MIB rather than the driver of the vehicle. The MIB could in turn seek compensation from the Greek compensation body, their equivalent MIB, once the claimant had been compensated.

Liability in this case had been admitted and the only outstanding issue was level of damages being sought. The High Court in their first instance decision had followed the decision in Jacobs v MIB [2010] EWCA Civ 1208 which had determined that compensation was to be assessed by reference to the law of the claimant’s state of residence. The High Court’s decision meant that the claimant would receive a higher level of compensation under English law than she would have done under Greek law. However, the MIB appealed and was granted permission to take the case directly to the Supreme Court.

The appeal was allowed and the Supreme Court held that when reading the 2003 Regulations, the starting point was that they should be interpreted as consistently as possible with the Directives they were intended to implement. Therefore the two key questions were firstly, whether the various Motor Directives prescribed any particular approach to the scope or measure of damages applicable in a claim against a compensation body; and if they did; whether regulation 13(2)(b) of the 2003 regulations reflected the approach under the Directives, or required a different approach.

Directive 2000/26 Art.7 was clear. It did not leave it up to individual Member States to provide for compensation in accordance with any law they may chose. On the contrary, it proceeded on the basis that a victim’s entitlement to compensation would be measured on a consistent basis, by reference to the law of the state in which the accident occurred. The case of Jacobs had looked too narrowly at the scheme created and represented by the Directives and it was held that the amount of the MIB’s liability to the claimant was to be determined in accordance with the law of Greece.

This is a clear departure from Jacobs which had obviously been favourable to claimants. As a result of this decision, claimants injured in some foreign EU jurisdictions are likely to recover a lower level of damages based on the appropriate law of the foreign jurisdiction. Therefore, anyone considering hiring a motor vehicle in an EU jurisdiction would be well advised to take out additional cover.

It is also worth noting that as the UK prepares its proposed exit from the EU, domestic legislation around such issues will require even closer scrutiny and deliberation going forward.

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