[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Bloy & Anor v Motor Insurers' Bureau [2013] EWCA Civ 1543 (29 November 2013) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2013/1543.html Cite as: [2013] EWCA Civ 1543, [2013] WLR(D) 464, [2014] 1 Lloyd's Rep IR 75

[New search] [Printable RTF version] [View ICLR summary: [2013] WLR(D) 464] [Help]

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY

		Royal Courts of Justice Strand, London, WC2A 2LL
		29 November 2013

The Chancellor, Sir Terence Etherton :

Introduction

1. This is an appeal from a decision of His Honour Judge Platts, sitting as a High Court Judge in the Manchester District Registry, on a preliminary issue concerning the law applicable to the assessment of compensation payable to the claimants by the defendant, the Motor Insurers' Bureau ("the MIB"). The claim arises out of a car accident in Lithuania, in which the claimants were injured. Judge Platts held that the compensation payable by the MIB to the claimants is to be determined entirely by reference to English law, and, in particular, without regard to the monetary limit on compensation that would apply under Lithuanian law.

The factual background

2. The claimants are British citizens who are domiciled and resident in England. The first claimant is the mother of the second claimant and sues as the second claimant's litigation friend. On 7 September 2007 they suffered serious injuries in a road traffic accident in Lithuania. The second claimant was just under four months old at the time of the accident. He suffered catastrophic injuries, including severe brain damage, resulting in permanent symptoms and the need for life-long care.
3. The accident was the fault of a Lithuanian national who was domiciled in Lithuania, Daviva Ramanciuckiene. She was subsequently convicted by a Lithuanian court of driving while under the influence of alcohol, careless driving and driving a motor vehicle without insurance. At the date of the accident her insurance had lapsed.

The MIB

4. The MIB is a company limited by guarantee, whose members include all insurers authorised to issue policies of motor insurance in the United Kingdom. At the time of the accident it was obliged by the Uninsured Drivers Agreement 1999 and the Untraced Drivers Agreement 2003 to pay compensation to persons injured in motor accidents where the culpable driver was uninsured or could not be traced. The Uninsured Drivers Agreement 1999 extends to accidents occurring in Great Britain and Member States of the European Economic Area. The Untraced Drivers Agreement 2003 applies to accidents occurring in Great Britain.
5. The MIB is also the compensation body which, pursuant to The Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 SI 2003/37 ("the 2003 Regulations"), is obliged to compensate persons resident in the United Kingdom who have been injured in a car accident occurring in a different Member State of the European Union if, among other situations, the driver who caused the accident has no insurance. The 2003 Regulations were made pursuant to the Fourth Motor Insurance Directive – Council Directive 2000/26/EC of 16 May 2000 ("the Fourth Motor Insurance Directive").

The Motor Insurance Directives

6. The background to the Motor Insurance Directives of the European Union was set out in detail in the judgment of Moore-Bick LJ in Jacobs v Motor Insurers' Bureau [2010] EWCA Civ 1208, [2011] 1 WLR 2609. He referred in paragraph [8] to the 'Green Card' scheme which motor insurers in a number of countries have operated since 1949, and under which the representatives of an insurer in one state handle claims on behalf of an insurer established in another state. The MIB was, and remains, the representative body responsible for operating the 'Green Card' system in the United Kingdom. That system provided part of the foundation for legislation put in place by the EU to ensure that compensation is available for those injured in road accidents regardless of the Member State in which the victim resides or in which the accident occurred.
7. The principal relevant EU legislation comprises Council Directive 72/166/EEC of 24 August 1972, Council Directive 84/5/EEC of 30 December 1983 and the Fourth Motor Insurance Directive. All those Motor Insurance Directives were consolidated, with other provisions and in slightly modified form, in the Sixth Motor Insurance Directive - Directive 2009/103/EC of 16 September 2009 ("the Consolidated Directive"). The consolidated Motor Insurance Directives were at the same time repealed. Although the Consolidated Directive came into existence after the accident in the present case and is not retrospective, the case has been argued by both sides before us by reference to the Consolidated Directive on the footing that no different results would flow from the language used in the Consolidated Directive as compared with the earlier Motor Insurance Directives. That was the position also taken by Waller LJ in Churchill Insurance Company Limited v Wilkinson [2010] EWCA Civ 556 at [17].
8. Reference was made during the hearing to a number of recitals in the Consolidated Directive. They are set out in the Appendix to this judgment.
9. The substantive provisions of the Consolidated Directive dealing specifically with compensation for injured parties following an accident in a Member State other than their residence are in Chapter 7 of the Consolidated Directive. The relevant provisions in Chapter 7 are Articles 20, 24 and 25, which are as follows so far as relevant:

"Article 20

Special provisions concerning compensation for injured parties following an accident in a Member State other than that of their residence

The object of Articles 20 to 26 is to lay down special provisions applicable to injured parties entitled to compensation in respect of any loss or injury resulting from accidents occurring in a Member State other than the Member State of residence of the injured party which are caused by the use of vehicles insured and normally based in a Member State."

"Article 24

Compensation bodies

1. Each Member State shall establish or approve a compensation body responsible for providing compensation to injured parties in the cases referred to in Article 20(1).

Such injured parties may present a claim to the compensation body in their Member State of residence:

…..

2. The compensation body which has compensated the injured party in his Member State of residence shall be entitled to claim reimbursement of the sum paid by way of compensation from the compensation body in the Member State in which the insurance undertaking which issued the policy is established.

The latter body shall be subrogated to the injured party in his rights against the person who caused the accident or his insurance undertaking in so far as the compensation body in the Member State of residence of the injured party has provided compensation for the loss or injury suffered.

Each Member State shall be obliged to acknowledge this subrogation as provided for by any other Member State.

3. This Article shall take effect:

(a) after an agreement has been concluded between the compensation bodies established or approved by the Member States relating to their functions and obligations and the procedures for reimbursement;

(b) from the date fixed by the Commission upon its having ascertained in close cooperation with the Member States that such an agreement has been concluded."

"Article 25

Compensation

1. If it is impossible to identify the vehicle or if, within two months of the date of the accident, it is impossible to identify the insurance undertaking, the injured party may apply for compensation from the compensation body in the Member State where he resides. The compensation shall be provided in accordance with the provisions of Articles 9 and 10. The compensation body shall then have a claim, on the conditions laid down in Article 24(2):

(a) where the insurance undertaking cannot be identified: against the guarantee fund in the Member State where the vehicle is normally based; …"

10. Articles 9 and 10 specify minimum levels of compensation, including a reduced level payable prior to 11 December 2009. The relevant provisions are as follows:"

"Article 9

Minimum amounts

1. Without prejudice to any higher guarantees which Member States may prescribe, each Member State shall require the insurance referred to in Article 3 to be compulsory at least in respect of the following amounts:

(a) in the case of personal injury, a minimum amount of cover of EUR 1 000 000 per victim or EUR 5 000 000 per claim, whatever the number of victims;

(b) in the case of damage to property, EUR 1 000 000 per claim, whatever the number of victims.

If necessary, Member States may establish a transitional period extending until 11 June 2012 at the latest within which to adapt their minimum amounts of cover to the amounts provided for in the first subparagraph.

Member States establishing such a transitional period shall inform the Commission thereof and indicate the duration of the transitional period.

However, until 11 December 2009 at the latest, Member States shall increase guarantees to at least a half of the levels provided for in the first subparagraph.

…"

"Article 10

Body responsible for compensation

1. Each Member State shall set up or authorise a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in Article 3 has not been satisfied.

…

4. Each Member State shall apply its laws, regulations and administrative provisions to the payment of compensation by the body, without prejudice to any other practice which is more favourable to the victim."

11. Member States are free to provide more generous levels of compensation than are stipulated in Article 9. On that point, Article 28 of the Consolidated Regulations provides as follows:

"Article 28

National Provisions

1. Member States may, in accordance with the Treaty, maintain or bring into force provisions which are more favourable to injured parties than the provisions needed to comply with this Directive."

12. The amounts of compensation payable by the MIB exceed the minimum amounts specified in the Consolidated Directive.
13. The Lithuanian compensation body for the purposes of the Consolidated Directive is the Motor Insurers' Bureau of the Republic of Lithuania ("the Lithuanian MIB"). At the date of the accident in which the claimants were injured, the maximum sum payable under Lithuanian law by the Lithuanian MIB was 500,000 euros for personal injury and 100,000 euros for damage to property in respect of a single road accident, however many persons were injured. Those amounts were certainly not above the minimum amounts specified in the Motor Insurance Directives.

The 2002 Agreement

14. Article 24.3 of the Consolidated Directive provides that Article 24 shall only come into effect after an agreement has been concluded between the compensation bodies established or approved by the Member States relating to their functions and obligations and the procedures for reimbursement. Those provisions, like the other provisions in Article 24, derive from the Fourth Motor Insurance Directive.
15. An agreement pursuant to what is now Article 24.3 of the Consolidated Directive was concluded and is dated 29 April 2002 ("the 2002 Agreement"). It is headed "Comité Européen Des Assurances" and, underneath that, "Agreement Between Compensation Bodies and Guarantee Bodies". The MIB was a party to the 2002 Agreement as the United Kingdom's compensation body. There are five recitals which refer to various provisions of the Fourth Motor Insurance Directive. There then follow eleven numbered clauses. The following provisions in clauses 5, 6 and 7 are particularly relevant:

"Clause 5

The aim of the second part of this Agreement, is to define the tasks and obligations of the undersigned Compensation Bodies and Guarantee Funds within the framework of Article 7 of Directive 2000/26/EC as well as the reimbursement procedures."

"Clause 6

The function of each signatory Compensation Body, in its capacity as the Compensation Body recognised by the Member State where it is established, is to compensate injured parties following an accident which comes within the scope of Directive 2000/26/EC as defined in Article 1 of that Directive, where one of the following two situations arises:

6.1. where identification of the vehicle is not possible;

6.2 if, within a period of two months following the accident, it is impossible to identify the insurance undertaking."

"Clause 7

7.1 In either of the situations referred to in Clause 6 above, the compensation Body which has received a claim must immediately inform, depending on the circumstances, either the Guarantee Fund defined in Article 1 of Directive 84/5/EEC of the Member State in which the accident took place or the Guarantee Fund of the Member State in which the road traffic vehicle which caused the accident is normally based.

7.2 When it makes a compensation payment to an injured party, the Compensation Body shall;

- reply to requests for information enabling the claim to be assessed, which it receives from the final paying body for reimbursement (Guarantee Fund),

- apply, in evaluating liability and assessing compensation, the law of the country in which the accident occurred.

- comply with the provisions of Article 1 of Directive 84/5/EEC."

16. Pursuant to what is now Article 26.3(b) of the Consolidated Directive, clause 11 provides that the date of entry into force of the 2002 Agreement shall be fixed by the European Commission. It came into force on 20 January 2003.

The 2003 Regulations

17. The 2003 Regulations were made in order to give effect to what are now Articles 23, 24 and 25 of the Consolidated Directive (formerly Articles 5, 6 and 7 of the Fourth Motor Insurance Directive). Regulation 10 approved the MIB as the compensation body for the United Kingdom for the purpose of the Fourth Motor Insurance Directive. Regulation 12 deals with the obligation of the MIB in a case where the insurer of the culpable driver is identified. Regulation 13 deals with the entitlement to compensation where the vehicle or insurer is not identified. The present case falls, therefore, within Regulation 13. The preliminary issue turns specifically on the meaning and effect of Regulation 13(2)(b). For reasons which I give below Regulation 12 is also relevant to the interpretation of Regulation 13. Regulations 12 and 13 are as follows, so far as relevant:

"Response from the compensation body

12.  (1)  Upon receipt of a claim for compensation under regulation 11, the compensation body shall immediately notify—

(a) the insurer of the vehicle the use of which is alleged to have caused the accident, or that insurer's claims representative;

(b) the foreign compensation body in the EEA State in which that insurer's establishment is situated; and

(c) if known, the person who is alleged to have caused the accident,

that it has received a claim from the injured party and that it will respond to that claim within two months from the date on which the claim was received.

(2) The compensation body shall respond to a claim for compensation within two months of receiving the claim.

(3) If the injured party satisfies the compensation body as to the matters specified in paragraph (4), the compensation body shall indemnify the injured party in respect of the loss and damage described in paragraph (4)(b).

(4) The matters referred to in paragraph (3) are—

(a) that a person whose liability for the use of the vehicle is insured by the insurer referred to in regulation 11(1)(c) is liable to the injured party in respect of the accident which is the subject of the claim, and

(b) the amount of loss and damage (including interest) that is properly recoverable in consequence of that accident by the injured party from that person under the laws applying in that part of the United Kingdom in which the injured party resided at the date of the accident.

(5) …"

"Entitlement to compensation where vehicle or insurer is not identified

13. (1)  This regulation applies where—

(a) an accident, caused by or arising out of the use of a vehicle which is normally based in an EEA State, occurs on the territory of—

(i) an EEA State other than the United Kingdom, or

(ii) a subscribing State,

and an injured party resides in the United Kingdom,

(b) that injured party has made a request for information under regulation 9(2) , and

(c) it has proved impossible—

(i) to identify the vehicle the use of which is alleged to have been responsible for the accident, or

(ii) within a period of two months after the date of the request, to identify an insurance undertaking which insures the use of the vehicle.

(2) Where this regulation applies—

(a) the injured party may make a claim for compensation from the compensation body, and

(b) the compensation body shall compensate the injured party in accordance with the provisions of Article 1 of the second motor insurance directive as if it were the body authorised under paragraph 4 of that Article and the accident had occurred in Great Britain."

18. The MIB contends that Regulation 13 (2)(b) should be interpreted as though it continues with the words:

"so long as the compensation in question does not exceed the amount payable by the guarantee fund in the Member State in which the vehicle causing the accident was normally based".

The proceedings

19. The claimants commenced these proceedings against the MIB in September 2010 claiming (1) a declaration that the MIB is liable to make compensation pursuant to the 2003 Regulations; (2) in the case of the first claimant, compensation or damages of between £100,000 and £500,000; (3) in the case of the second claimant, compensation or damages of over £500,000, including a claim for personal injuries in excess £1000; (4) in the case of the second claimant, compensation or damages by way of periodical payments.
20. In its defence the MIB admits that it is obliged to pay compensation to the claimants pursuant to the 2003 Regulations. It claims, however, that, pursuant to the 2003 Regulations interpreted consistently with and in the light of the Fourth Motor Insurance Directive, its liability to pay compensation is limited to the amount for which Ms Ramanciuckiene and/or the Lithuanian MIB would have been liable, that is to say 500,000 euros for personal injury, including 1000 euros for non-pecuniary damage, in respect of all claims arising out of the same accident.
21. Mr Fergus Randolph QC, for the MIB, clarified during the course of the hearing of the appeal that the MIB also asserts that, even if English law applies to the assessment of damages generally, the 2003 Regulations, on their proper interpretation, limit the compensation payable to the claimants by the MIB to the maximum recoverable under Lithuanian law.
22. By an order dated 8 February 2011 His Honour Judge Foster QC, sitting as a judge of the High Court, gave judgment for the claimants for an amount to be decided by the court. By order dated 27 February 2013 the MIB was ordered to pay £600,000 to the claimants by way of interim damages by 27 March 2013.
23. By an order made by consent dated 7 August 2012 it was ordered to be determined as a preliminary issue:

"whether the Defendant is liable to pay compensation to the Claimants assessed in accordance with Lithuanian Law".

The Judgment of HH Judge Platts

24. The preliminary issue was tried by Judge Platts on 19 December 2012. He handed down his written judgment on 11 January 2013. It contains a careful and comprehensive analysis.
25. The Judge concluded that the issue is precisely the same as was considered by the Court of Appeal in Jacobs, namely which law should apply to the assessment of compensation under Regulation 13(2)(b), and that the Court of Appeal's decision in that case that English law should apply is therefore binding. The Judge acknowledged that MIB's alternative argument that, even if English law is to be applied to the assessment of damages, there should still be a cap on its liability in accordance with Lithuanian law was not an argument considered by the Court of Appeal in Jacobs. He concluded, nevertheless, that, considering the reasoning of the Court of Appeal as a whole, the decision in Jacobs is directly applicable to the facts of the present case.
26. The Judge rejected the argument of the MIB that the imposition of "the cap on the liability" of the Lithuanian MIB derives from European law. The Judge's analysis was that the Motor Insurance Directives stipulate only a minimum level of compulsory insurance cover and do not provide for, or even envisage, a "cap" or maximum level of cover. He said that it is for each Member State to decide its own level of cover subject to the prescribed minima and that the cap provided for in Lithuanian law is a domestic decision taken within the parameters of the Motor Insurance Directives but by no means a consequence of them.
27. The Judge rejected the MIB's submission that the Motor Insurance Directives and Regulation 13 of the 2003 Regulations should be interpreted so as to avoid a "tension or mismatch" between clause 7.2 of the 2002 Agreement and the ordinary meaning of the wording of Regulation 13(2)(b). He described the 2002 Agreement as "no more than a contractual arrangement made between various organisations set up by Member States to give effect to the Directive."
28. The Judge also rejected the argument of the MIB that the monetary ceiling restriction on the liability of the Lithuanian MIB under Lithuanian law is a matter of substantive law rather than procedure, and, therefore, is a matter that should be governed by the lex causae rather than the lex fori having regard to the Private International Law (Miscellaneous Provisions) Act 1995 and the decision of the House of Lords in Harding v Wealands [2006] UKHL 32, [2007] 2 AC 1. He considered that those private law arguments are irrelevant in view of the express provisions in Regulation 13 defining both the existence and the extent of the MIB's obligation.
29. The Judge said, in conclusion, that he was not persuaded the words of Regulation 13 should bear anything other than their ordinary or natural meaning, that is to say the claimants' damages are to be assessed "as if… [the] accident had occurred in Great Britain". He rejected the MIB's invitation to make a reference to the Court of Justice of the European Union ("the CJEU") in order to enable him to determine the preliminary issue.
30. The Judge's formal order dated 11 January 2013 was as follows, so far as relevant:

"1. The ruling on the preliminary issue is that the defendant is liable to pay compensation to the claimants assessed in accordance with English and not Lithuanian law and such compensation is not limited by reference to the amount that the defendant might recover by way of reimbursement from the Motor Insurers Bureau of the Republic of Lithuania."

The Appeal

31. Permission to appeal was given by Moses LJ on 27 March 2013. At the same time he granted a stay in relation to the amount by which the interim order for payment of £600,000 exceeded 500,000 euros.
32. There are four grounds of appeal. I shall consider them in turn.

Ground 1

33. The first ground of appeal is as follows:

"The Court was wrong to find that the decision of the Court of Appeal in Jacobs was directly applicable to the facts of the present case – see paragraph 32 of the judgment – having found earlier that the issue for determination in the present case: that of the lawfulness of the cap on MIB's liability, was not an argument considered by the Court of Appeal in Jacobs."

34. Jacobs concerned a claim against the MIB by the claimant Mr Jacobs, who lived in England. His claim arose out of injuries he sustained when he was struck by a car driven by a German national, Herr Bartsch, in a car park in Spain. At the time of the accident Herr Bartsch lived in an EEA state, possibly Spain or Germany. The car driven by him was ordinarily based in Spain. It was not possible to identify any insurance undertaking which insured Herr Bartsh or anyone else to drive the vehicle. It was common ground that in those circumstances Mr Jacobs was entitled to recover compensation for his injuries from the MIB.
35. Mr Jacobs instituted proceedings against the MIB to recover compensation under the 2003 Regulations. The MIB contended that, by reason of the application of the principles of Regulation EEC No. 864/207 on the law applicable to non-contractual obligations, generally known as "Rome II", compensation was to be assessed in accordance with Spanish Law.
36. An order was made by consent for the trial of a preliminary issue as to whether the MIB was required to pay compensation to Mr Jacobs assessed in accordance with Spanish law or in accordance with English law. Owen J held that Rome II applied and the applicable law was that of Spain.
37. In the Court of Appeal the leading judgment was given by Moore-Bick LJ. It contained, as I have already said, a detailed history of the Motor Insurance Directives. It also described the 2002 Agreement, the 2003 Regulations and the role of the MIB. Moore-Bick LJ said that the right of an injured person to make a claim against the MIB derives from the 2003 Regulations. He accepted (at [23]) that an interpretation of the 2003 Regulations which allowed a claimant to recover from the compensation body in his own country more than he could have recovered from the driver's insurer or the driver himself might be regarded as anomalous.
38. Moore-Bick LJ found (in [29]) that, in the paradigm case where the culpable driver is insured, Regulation 12(4)(b) provides that the compensation payable to the injured party by the MIB is to be assessed in accordance with the law of England, Scotland or Northern Ireland as the case may be. He observed that this differs from the terms of the 2002 Agreement and that the practical consequence in a case such as Jacobs is that the MIB must fund the payment of compensation insofar as it exceeds the amount recoverable in accordance with the law of the country in which the accident occurred. He considered that this was consistent with common sense and policy and, if there was an anomaly, it was not such as to warrant giving Regulation 12 a different meaning.
39. Turning to Regulation 13, Moore-Bick LJ concluded (at [37]) that Regulation 13(2)(b) requires compensation to be assessed on the basis that the accident occurred in Great Britain. He observed that that has the incidental merit of ensuring that the measure of compensation recoverable under Regulation 13 is likely to be broadly the same as that recoverable under Regulation 12. He considered (in [34]) that "the somewhat complicated language" of Regulation 13(2)(b) was designed to expand the range of cases falling within the Untraced Drivers Agreement, which is limited to accidents occurring in Great Britain. He said (at [38]) that Rome II has no application to the assessment of the compensation payable by the MIB under Regulation 13(2)(b) since Regulation 13(2)(b) is not a choice of law clause and is not concerned with determining the liability of the wrongdoer but rather is concerned with defining the existence and extent of the MIB's obligation to provide compensation for injury suffered in road traffic accidents. He said (at [39]) that he would accordingly hold, on the preliminary issue, that the MIB was obliged to pay compensation to the claimant assessed in accordance with the law of England.
40. The other two members of the Court of Appeal in Jacobs agreed with Moore-Bick LJ.
41. Mr Randolph submitted that the answer to the preliminary issue in the present case is not governed by the conclusion of the Court of Appeal in Jacobs because the court was there concerned with the possible application of Rome II whereas it is common ground that Rome II has no application to the present case in view of the date of the accident. The MIB's argument is that the critical issue in the present case is whether, under English private international law, the Lithuanian "cap on liability" (as Mr Randolph described it) is a matter of substantive law and accordingly governed by the lex causae, namely Lithuanian law, or a matter of procedure and so governed by the lex fori, namely English law.
42. The MIB emphasises that the Judge himself acknowledged in his judgment (at [27] and [32]) that the issue in Jacobs was indeed different. Mr Randolph submitted that no respondent's notice has been served and so the claimants are precluded on this appeal from contending otherwise. Furthermore, as I have said, Mr Randolph clarified in his oral submissions that the MIB's case is that, even if English law applies to the assessment of compensation, the limitation on compensation under Lithuanian law applies. That point (by reference to Spanish rather than Lithuanian law), again, does not appear to be have been argued in Jacobs.
43. I agree with the Judge that the present case is governed by the decision in Jacobs. Although the Judge did say at the beginning of paragraph [27] of his judgment that the issue in the present case is different from that considered by the Court of Appeal in Jacobs, he almost immediately went on to qualify that comment by saying that in substance the issue was precisely the same, "namely which law should be applied to the assessment of damages".
44. It is true that the arguments in the two cases have been presented differently and the MIB accepts that Rome II, which featured prominently in Jacobs, has no application to the present case. The arguments in Jacobs and in the present case, however, are all deployed in respect of the same critical question, that is whether the law applicable to the assessment of compensation under Regulation 13(2)(b) is to be assessed by reference to the law of the part of Great Britain where the injured party resides or the law of the place where the accident took place. The decision in Jacobs was that, subject to establishing the tortious liability of the culpable driver under the applicable law for the tort (in the present case, Lithuanian law, and admitted), Regulation 13(2)(b) is a deeming provision with all the consequences that follow, including that the assessment of compensation is governed entirely by the law of the relevant part of Great Britain: see Jacobs at [35] and the analogous provisions of Regulation 12(4)(b). That precisely answers the preliminary issue in the present case. Moreover, Moore-Bick LJ considered the issue against the background of all the relevant EU legislation and the 2002 Agreement, taking due note of the consequence that the MIB will only be able to obtain limited reimbursement from those Member States guaranteeing a lower level of compensation pursuant to the Motor Insurance Directives.

Ground 2

45. The second ground of appeal is as follows:

"The Court was wrong to dismiss MIB's submissions on private international law and in particular that the cap on its liability, being a matter of substantive law, was governed by the lex causae – here Lithuanian law – rather than the lex fori, that would only be appropriate to procedural matters such as the assessment or quantification of damages. In particular, the learned judge's reliance on the Court of Appeal's decision in Jacobs was erroneous given his admission that the Jacobs decision did not concern or otherwise relate to such a liability cap."

46. Mr Randolph submitted that English conflict of laws principles, including the Private International Law (Miscellaneous Provisions) Act 1995, form part of the mix of United Kingdom's laws imported by Regulation 13(2)(b). He described the limits on compensation under Lithuanian law as a "cap on liability" and submitted that, under English conflict of laws principles, such a limitation is a matter of substantive law governed by Lithuanian law as the lex causae. I consider that the short answer to that argument is that Regulation 13(2)(b) deems the accident, in which the claimants were injured, to have occurred in England and that leaves no room for Lithuanian law at all in the assessment of compensation. As I have said, that was the conclusion of the Court of Appeal in Jacobs and why Moore-Bick LJ confirmed that no conflict of laws issue was involved.
47. In any event, I do not accept Mr Randolph's detailed argument that the limitation on the assessment of compensation under Lithuanian law is a liability cap to be treated as a matter of substantive law governed by the lex causae. Mr Randolph supported this ground of appeal by detailed reference to the speeches of the House of Lords in Harding v Wealands. In that case the claimant, an Englishman, was severely injured following an accident in a vehicle driven by the defendant, an Australian national, which occurred in New South Wales. The claimant commenced proceedings in England against the defendant, where the defendant was working. The defendant contended that the law of New South Wales applied to the assessment of damages and relied on certain provisions of the Motor Accidents Compensation Act 1999 of New South Wales ("MACA"), which imposed restrictions on the amount of damages which could be recovered. A preliminary issue was ordered as to what was the law applicable to the quantification of damages. It was held that, under the common law rules of private international law, questions of the quantification and assessment of damages are regarded as procedural rather than substantive and, pursuant to section 14(3)(b) of the Private International Law (Miscellaneous Provisions) Act 1995, questions of procedure are to be decided by the law of the forum. It was further held that the relevant provisions of MACA should be characterised as procedural and, accordingly, the quantification of the claimant's damages was a matter of procedure to be determined in accordance with English law.
48. Mr Randolph relied upon various passages in the speeches in the House of Lords to the effect that certain aspects of the assessment of damages ought properly to be regarded as substantive rather than procedural. He referred to the following passages in the speech of Lord Woolf:

"8. In determining the meaning of the word "procedure" the context in which the word is being used is of the greatest significance. In section 14(3)(b) "procedure" is used in conjunction with "rules of evidence, pleading or practice". In that context it is natural to regard the assessment of damages as being a matter of procedure rather than substance.

9. The fact that the present context is one in the field of conflicts of law does not mean that "procedure" is being used in a special sense rather than in the sense in which you would expect it to be used having regard to the context in which it appears. It makes good practical sense to draw a distinction between the treatment of questions of procedure and questions of substance; the former to be dealt, as you would expect in accordance with the procedure normally applied by the court in which the proceedings are brought.

10. This does not however mean that a cap on the amount of damages is obviously a question of procedure rather than a question of substance and if I had been left in doubt as to the correct answer I would certainly have been prepared to apply Pepper v Hart [1993] AC 593."

49. Mr Randolph also referred to various passages in the speech of Lord Hoffmann (with special emphasis on paragraphs [26], [27], [30], [42]-[46], [48] and [50]). Lord Hoffmann (with whom the other members of the appellate committee agreed) cited (at [27]) the following passage from the speech of Lord Wilberforce in Boys v Chaplin [1971] AC 356 at 389:

"The broad principle should surely be that a person should not be permitted to claim in England in respect of a matter for which civil liability does not exist, or is excluded, under the law of the place where the wrong was committed. This non-existence of exclusion may be for a variety of reasons and it would be unwise to attempt a generalisation relevant to the variety of possible wrongs. But in relation to claims for personal injuries one may say that provisions of the lex delicti, denying, or limiting, or qualifying recovery of damages because of some relationship of the defendant to the plaintiff, or in respect of some interest of the plaintiff (such as loss of consortium) or some head of damage (such as pain and suffering) should be given effect to."

50. Lord Hoffmann said at [46] and [50] as follows:

"46. … Cope v Doherty [(1858) 4 K & J 367, 384-385 and (1858) 2 De G & J 614, 626] is authority for the proposition that a contractual term which limits the obligation to pay damages for a breach of contract or a tort, or a statutory provision which is deemed to operate as such a term, qualifies the substantive obligation. It is not part of the rules of the lex fori for the assessment of damages. "

"50. … I could add other possible uncertainties which have not yet come before the courts. For example, there may be rules of foreign or domestic law, under which a tort or other wrongful act gives rise to a liability to pay a conventional sum of money, which make it impossible to separate the concept of actionable damage from the concept of a remedy for that damage. It might be more realistic to say that the rule simply lays down the conditions under which the claimant is entitled to payment of a prescribed sum of money. But I do not propose to explore this or other hypothetical cases because they do not arise in this case and, so far as I know, have not arisen in the past."

51. I do not accept Mr Randolph's submission that, in the light of the passages in Harding v Wealands to which he referred, the limitation on compensation under Lithuanian law is, under English principles of private international law, a matter of substance, and so governed by Lithuanian law. That limitation is properly classified as procedural and therefore governed by the law of England and Wales. In the present case, as in Harding v Wealands, the "cap" is a simple monetary limit on recoverable compensation. It is to be distinguished from rules of substantive law which, for example, exclude certain kinds of damage or require a certain causal connection or relate to remoteness. That distinction is clearly made in the following passages in the speech of Lord Hoffmann in Harding v Wealands:

"24. In applying this distinction to actions in tort, the courts have distinguished between the kind of damage which constitutes an actionable injury and the assessment of compensation (ie damages) for the injury which has been held to be actionable. The identification of actionable damage is an integral part of the rules which determine liability. As I have previously had occasion to say, it makes no sense simply to say that someone is liable in tort. He must be liable for something and the rules which determine what he is liable for are inseparable from the rules which determine the conduct which gives rise to liability. Thus the rules which exclude damage from the scope of liability on the grounds that it does not fall within the ambit of the liability rule or does not have the prescribed causal connection with the wrongful act, or which require that the damage should have been reasonably foreseeable, are all rules which determine whether there is liability for the damage in question. On the other hand, whether the claimant is awarded money damages (and if so, how much) or, for example, restitution in kind, is a question of remedy."

"39. My Lords, the next question is whether the provisions of MACA to which I have referred should be characterised as relating to the actionability of the economic and non-economic damage suffered by Mr Harding or to the remedies which the courts of New South Wales provide for such damage. On this point we could not have better authority than that of the High Court of Australia in Stevens v Head (1993) 176 CLR 433. The majority (Brennan, Dawson, Toohey and McHugh JJ) analysed the equivalent damages-limitation provisions of the Motor Accidents Act 1988, at pp 454-460, and concluded that they were concerned with quantification rather than heads of damage. Although MACA is more restrictive of the court's power to award damages than the 1988 Act, the character of the relevant provisions is in my opinion the same."

52. Lord Hoffmann referred (at [42]) to the statement in the 7^th edition (1958) of Dicey's Conflict of Laws at page 1092 that "statutory provisions limiting a defendant's liability are prima facie substantive; but the true construction of the statute may negative this view" and the accompanying footnote mentioning dicta in Cope v Doherty. Having examined that case, however, Lord Hoffmann concluded (at [46]) that the proposition in Dicey was too widely stated. He said that Cope v Doherty (which concerned a statute limiting the heads of loss recoverable in a marine collision) is authority for the proposition that a contractual term which limits the obligation to pay damages for a breach of contract or a tort, or a statutory provision which is deemed to operate as such a term, qualifies the substantive obligation. That has no relevance, however, to the present case, any more than it was relevant to the provisions in MACA, which were under consideration in Harding v Wealands. The limitation relied upon by the MIB in the present case is a simple monetary ceiling on recoverable loss and not a limitation of the type of loss which is recoverable, that is to say, in Lord Hoffmann's words, a limitation of actionable damage.
53. It follows that the decision in Jacobs is binding in the present case not only for the reasons I have already given in relation to the first ground of appeal but also because, in any event, the limitation on the amount of recoverable compensation under Lithuanian law is a matter of procedure and so governed by English law.

Ground 3

54. The third ground of appeal is that "the Court was wrong to find that the imposition of a cap under Lithuanian law on the liability of the domestic guarantee fund did not derive from EU law."
55. The wording of this ground of appeal disguises the true complaint of the MIB in relation to the Judge's analysis. Plainly, as the Judge himself expressly recognised, the obligation of Lithuania to fix a level of compulsory insurance cover payable by the Lithuanian MIB derives from European law, specifically the provisions of the Motor Insurance Directives to which I referred earlier in this judgment. The real complaint of the MIB is that, if the Judge had taken full and proper account of the European law context giving rise to the 2003 Regulations, the Judge ought to have concluded that Regulation 13(2)(b) should be interpreted in the way for which the MIB contends. Mr Randolph emphasised in that context the principle in EU jurisprudence that, where a Member State seeks to implement an EU Directive by national legislation, the domestic courts should, if possible, interpret the national legislation in a way that makes it compatible with, and so as to give effect to, the Directive. He referred in that connection to Churchill Insurance Co Ltd. v Fitzgerald [2012] EWCA Civ 1166, [2012] 3 CMLR 49.
56. There are two main strands to the MIB's case on this aspect. Firstly, Mr Randolph relied upon the following matters which, he submitted, can be identified in the Motor Insurance Directives. He said that the intention is to provide comparable treatment wherever the accident occurred. He also said that the role of the compensation fund in a case where the accident occurred in a different Member State is purely "passive" or "utilitarian", namely to act as a "post box" for the guarantee fund in the Member State in which the accident occurred. In that connection he emphasised the procedure specified in Articles 25.1 and 24.2 of the Consolidated Directive, under which the compensation fund making the payment to the resident victim is recouped, in the case where the culpable driver is uninsured, from the guarantee fund in the Member State where the uninsured vehicle causing the accident is normally based.
57. As part of that same submission Mr Randolph said that the arrangements for payment by the MIB in a case like the present, and its right of recoupment from the foreign compensation or guarantee fund, are intended to mirror so far as practicable the situation where there is a claims representative appointed in the Member State where the injured party is resident by the insurance undertaking of the culpable driver. He referred, in that connection, to Articles 21 and 24 of the Consolidated Directive, and laid particular emphasis on recital (35) of the Consolidated Directive, which is as follows:

"This system of having claims representatives in the injured party's Member State of residence affects neither the substantive law to be applied in each individual case nor the matter of jurisdiction."

58. The second European strand relied upon by the MIB is that both the 2002 Agreement and the 2003 Regulations were made pursuant to the provisions of the Fourth Motor Insurance Directive. It is not disputed that the 2002 Agreement was the agreement contemplated in what is now Article 24.3 of the Consolidated Directive (formerly Article 6.3 of the Fourth Motor Insurance Directive). Clause 5 of the 2002 Agreement expressly ties its aims to the obligations imposed by Article 7 of the Fourth Motor Insurance Directive. Mr Randolph also emphasised that clause 11 of the 2002 Agreement provided that the date of entry into force of the 2002 Agreement was to be fixed by the European Commission. The 2003 Regulations were brought into force pursuant to the obligation of the United Kingdom in the Fourth Motor Insurance Directive. Accordingly, it is argued by the MIB, the Motor Insurance Directives, the 2002 Agreement and the Regulations must be read together so as to produce a coherent scheme compliant with European law.
59. I agree with the Judge that MIB's approach is flawed. Mr Randolph is correct to say that the 2002 Agreement was entered into pursuant to the Fourth Motor Insurance Directive and, in particular, was the agreement contemplated by Article 6.3 of that Directive. The parties to it, however, are purely private bodies. They are insurance industry bodies in the different Member States. As I have already said, the MIB itself is a company limited by guarantee, whose membership is made up of insurance companies. The Comité Européen Des Assurances, whose name appears at the head of the 2002 Agreement, is a representative industry body. The 2002 Agreement is, therefore, neither legislation nor an agreement between Member States. It is a purely private agreement between insurance industry bodies. The Motor Insurance Directives have not empowered such bodies or such an agreement to impose on the governments of Member States limitations on the liability of insurers, and hence Member States, where such governments wish to provide for greater compensation for victims of traffic accidents than the minimum amounts specified in the Motor Insurance Directives. Nor did the Fourth Motor Insurance Directive confer on the European Commission any power to dictate the terms of the 2002 Agreement. Furthermore, as Mr Alexander Layton QC, for the claimants, cogently observed, the 2002 Agreement post-dated the Fourth Motor Insurance Directive and cannot determine its meaning.
60. Mr Randolph submitted that the Member States do not have a completely free hand in the light of, for example, the European legal principle of effectiveness. I do not see, however, how that principle can have any relevance to the facts of the present case or Jacobs.
61. Furthermore, if the MIB is correct in its submission that Regulation 13(2)(b) imports English conflict of laws principles, it must follow, if the limitation on the amount of compensation recoverable under Lithuanian law is properly characterised as procedural, that the 2002 Agreement cannot have had the effect for which the MIB contends.
62. In contrast to the 2002 Agreement, the 2003 Regulations represent the will and intention of Parliament. For the reasons I have given, Regulation 13(2)(b) has the meaning determined in Jacobs. Even if Jacobs is, contrary to my view, not binding in the present case, I would come to the same conclusion as the Court of Appeal in that case. Giving the words in Regulation 13(2)(b) their natural meaning, it clearly provides for compensation to be assessed in accordance with English law (or the law of Scotland or Northern Ireland as the case may be). That is consistent with Regulation 12. Regulation 12 provides the clearest possible indication that Parliament did not intend to limit compensation in the way stipulated in the 2002 Agreement. The wording of Regulation 13(2)(b) is different from Regulation 12(4)(b) but, as Moore-Bick LJ observed in Jacobs (at [34]), that is because its purpose was to bring a wider range of cases within the scope of the Untraced Drivers Agreement, which is limited to accidents in Great Britain.
63. Mr Randolph accepted that there was nothing in the Motor Insurance Directives preceding the 2003 Regulations which required Member States, in a case such as the present or in Jacobs, to limit the compensation payable to the injured party to the amount which could have been recovered by a victim from the guarantee fund in the Member State in which the accident took place and the uninsured vehicle was normally kept. In his oral submissions, however, Mr Randolph sought to recast the issue as being whether what are now Articles 24.2 and 25.1 of the Consolidated Directive require the reimbursement of a compensation fund in the position of the MIB in the present case to be a complete reimbursement rather than a partial one. On the other hand, he also acknowledged that the Motor Insurance Directives do not expressly address the present issue. I understood his contention to be, at least at one point in his submissions, that it was left to the agreement contemplated in Article 24.3 of the Consolidated Directive to determine the reimbursement arrangements.
64. What is perfectly clear is that the Motor Insurance Directives expressly stipulate that Member States can provide for their residents payment of more compensation than the specified minimum amounts. Regulation 13(2)(b) of the 2003 Regulations represents, therefore, a perfectly coherent policy of Parliament to provide residents in the United Kingdom, whose losses will accordingly be suffered here, with a more generous level of compensation than would have been recoverable in the foreign Member State where the accident took place and so putting them on a par with the victim of an accident taking place in the United Kingdom itself.
65. Finally, on this aspect, it seems to me that there is at the least, a strong argument that the Fourth Motor Insurance Directive actually did provide for precisely the policy to be found in Regulation 13(2)(b) of the 2003 Regulations. What is now Article 25 of the 2009 Consolidated Directive provides that, where it is impossible to identify the insurance undertaking within two months of the date of the accident, the injured party may apply for compensation from the compensation body in the Member State where he resides and the compensation shall be provided in accordance with the provisions of Articles 9 and 10. What is now Article 10.4 provides that each Member State shall apply its laws, regulations and administrative provisions to the payment of compensation by the compensation body without prejudice to any other practice which is more favourable to the victim. Mr Randolph submitted that Article 10.4 is not relevant to the present case and that it does not address how to deal with a "cap on liability" (as he put it). I am inclined to think, however, that Article 10.4 is, on the contrary, directly in point. This issue was raised by the claimant in Jacobs but Moore-Bick LJ did not address it because he did not need to. Similarly it is not strictly necessary for us to decide it in the present case because of all the other reasons that I have given supporting the claimants' and the Judge's interpretation of Regulation 13(2)(b) on the facts of the present case.

Ground 4

66. The fourth ground of appeal is as follows:

"The Court was wrong to refuse to order a preliminary reference to the Court of Justice of the European Union given that on its own admission it found that its decision would lead to (a) inconsistency with an agreement specifically referred to in the relevant EU legislation and (b) an incompatibility with certain stated aims of that legislation.

As the relevant facts were agreed and the issue before the Court was one of interpretation of EU legislation, the issue should have been subject to a preliminary reference."

67. Mr Randolph urged us with considerable force to make a reference to the CJEU. He pointed out that there have been many references in relation to the Motor Insurance Directives but none on the present issue. He observed that the issue of compensation in cases of cross-border car accidents is a growing one.
68. The MIB put forward the following suggested questions for a reference in its supplementary skeleton argument.

"1. When a person resident in one Member State has been injured in a road traffic accident in another Member State and that accident was caused by an uninsured driver resident in that latter Member State, are the provisions of the EU motor insurance directives, and in particular Directive 84/5/EEC and Directive 2000/26/EC, which provisions were subsequently incorporated into Directive 2009/103/EC, to be interpreted as permitting the compensation body in the Member State in which the victim resides to limit the compensation due to the victim to the maximum amount payable in the Member State in which the accident occurred, which amount (and no more) will be reimbursed by the compensation body in that latter Member State?

2. Is the answer to the above-mentioned question affected by the fact that the 2002 Inter-Bureaux Agreement, which agreement was specifically envisaged by Directive 2000/26/EC, provides that in circumstances such as those relevant to the present proceedings, the compensation body in the Member State in which the victim resides is to apply, when evaluating liability and assessing compensation, the law of the country in which the accident occurred?"

69. Mr Randolph referred to the opinion of the Advocate General in Pelitto v Unpi 9 October 2013 Case C-371/12 as supporting a "clear European involvement" in the present case. The Advocate General in that case referred to the more than 1,500,00 individuals who every year suffer personal injuries as a result of car accidents in the EU and who are affected by the EU rules on motor vehicle insurance.
70. For the reasons I have given earlier in this judgment I cannot see any advantage being obtained from a reference and, in particular, from those questions formulated by the MIB. Although Mr Randolph, in the context of this ground of appeal, presented the dispute as one concerning the proper interpretation of Articles 24 and 25 of the Consolidated Directive, and, in particular, the provisions for reimbursement, the critical question in the present case is the meaning of United Kingdom legislation, namely Regulation 13(2)(b) of the 2003 Regulations. The interpretation of United Kingdom legislation is not a matter for the CJEU.
71. In any event, as I have also said, Regulation 13(2)(b) is entirely consistent with the requirements of the Motor Insurance Directives. Its meaning has been authoritatively determined in Jacobs. Mr Randolph submitted that Jacobs could and should be reviewed on a reference to the CJEU. I consider, however, for the reasons I have given earlier in this judgment, that even if this Court is not bound by the decision in Jacobs the plain meaning and effect of Regulation 13(2)(b) are that compensation is to be assessed in accordance with the law of that part of Great Britain where the accident is deemed to have occurred.
72. Mr Randolph also supported the MIB's argument for a reference with the submission that the MIB, like the other parties to the 2002 Agreement, would be in breach of the 2002 Agreement if they paid compensation assessed in accordance with the law of the Member State where the injured person resides rather than where the accident occurred. I find it difficult, however, to see what damage would be suffered as a result of such breach of contract. More to the point, I do not see how the possible breach of the 2002 Agreement could justify an expensive and time consuming reference to the CJEU when the meaning and effect of Regulation 13(2)(b) are clear and I am entirely satisfied there is no serious issue as to whether assessment of compensation in accordance with English law would be in breach of the Motor Insurance Directives.
73. For those reasons, and having regard to the guidance and principles for making a reference to the CJEU described by Sir Thomas Bingham in R v International Stock Exchange of the United Kingdom and the Republic of Ireland Ltd ex parte Else (1922) Ltd [1993] QB 534 at 545D-G, I would refuse to make a reference in the present case.

Conclusion

74. For all those reasons I would dismiss this appeal.
APPENDIX Recitals in the Consolidated Regulation

"(12) Member States' obligations to guarantee insurance cover at least in respect of certain minimum amounts constitute an important element in ensuring the protection of victims. The minimum amount of cover for personal injury should be calculated so as to compensate fully and fairly all victims who have suffered very serious injuries, while taking into account the low frequency of accidents involving several victims and the small number of accidents in which several victims suffer very serious injuries in the course of one and the same event. A minimum amount of cover per victim or per claim should be provided for. With a view to facilitating the introduction of these minimum amounts, a transitional period should be established. However, a period shorter than the transitional period should be provided for, in which Member States should increase these amounts to at least half the levels provided for."

"(14) It is necessary to make provision for a body to guarantee that the victim will not remain without compensation where the vehicle which caused the accident is uninsured or unidentified. It is important to provide that the victim of such an accident should be able to apply directly to that body as a first point of contact. However, Member States should be given the possibility of applying certain limited exclusions as regards the payment of compensation by that body and of providing that compensation for damage to property caused by an unidentified vehicle may be limited or excluded in view of the danger of fraud. "

"(18) In the case of an accident caused by an uninsured vehicle, the body which compensates victims of accidents caused by uninsured or unidentified vehicles is better placed than the victim to bring an action against the party liable. Therefore, it should be provided that that body cannot require that victim, if he is to be compensated, to establish that the party liable is unable or refuses to pay."

"(20) Motor vehicle accident victims should be guaranteed comparable treatment irrespective of where in the Community accidents occur."

"(34) Parties injured as a result of a motor vehicle accident falling within the scope of this Directive and occurring in a State other than that of their residence should be entitled to claim in their Member State of residence against a claims representative appointed there by the insurance undertaking of the responsible party. This solution would enable damage suffered by injured parties outside their Member State of residence to be dealt with under procedures which are familiar to them."

"(35) This system of having claims representatives in the injured party's Member State of residence affects neither the substantive law to be applied in each individual case nor the matter of jurisdiction."

"(47) In order to ensure that the injured party will not remain without the compensation to which he is entitled, it is necessary to make provision for a compensation body to which the injured party may apply where the insurance undertaking has failed to appoint a representative or is manifestly dilatory in settling a claim or where the insurance undertaking cannot be identified. The intervention of the compensation body should be limited to rare individual cases where the insurance undertaking has failed to comply with its duties in spite of the deterrent effect of the potential imposition of penalties."

"(48) The role played by the compensation body is that of settling the claim in respect of any loss or injury suffered by the injured party only in cases which are capable of objective determination and therefore the compensation body should limit its activity to verifying that an offer of compensation has been made in accordance with the time limits and procedures laid down, without any assessment of the merits."

"(50) The compensation body should have a right of subrogation in so far as it has compensated the injured party. In order to facilitate enforcement of the compensation body's claim against the insurance undertaking where the latter has failed to appoint a claims representative or is manifestly dilatory in settling a claim, the body providing compensation in the injured party's State should also enjoy an automatic right of reimbursement with subrogation to the rights of the injured party on the part of the corresponding body in the State where the insurance undertaking is established. This body is the best placed to institute proceedings for recourse against the insurance undertaking."

"(52) This system can be made to function by means of an agreement between the compensation bodies established or approved by the Member States, defining their functions and obligations and the procedures for reimbursement."

"(53) Where it is impossible to identify the insurer of a vehicle, it should be provided that the ultimate debtor in respect of the damages to be paid to the injured party is the guarantee fund provided for this purpose situated in the Member State where the uninsured vehicle, the use of which has caused the accident, is normally based. Where it is impossible to identify the vehicle, it should be provided that the ultimate debtor is the guarantee fund provided for this purpose situated in the Member State in which the accident occurred."

Lady Justice Hallett

75. I agree.

Lady Justice Sharp

76. I also agree.