How far does the rule of UK law reach? That simple question has been considered and discussed by legal scholars and judges in many previous cases, with interesting answers (sometimes contradictory). In the recent case of Cox v Ergo Versicherung AG (formerly known as Victoria), the Supreme Court added more to that ongoing discussion.
The case concerned the unfortunate matter of Major Christopher Cox. Whilst stationed with the British Army in Germany, he was run over whilst on his bike just outside his base. He later died from the injuries he received. His widow moved back to the UK (where for all intents and purposes they had been living throughout his Army career), eventually remarrying and having two children with her new husband. However, she was still pursuing the driver of the car that killed Major Cox, Herr Gunther Kretschmer, for damages.
From the outset, liability was never an issue. It was found early on that Herr Kretschmer was responsible and culpable for the accident. His insurers also accepted the fact of Herr Kretschmer’s liability, and were prepared to pay damages to the victim’s widow. Despite the great consensus from both parties throughout the case, there was one issue which complicated matters,and which ensured that the case made its laborious way through the legal system for 10 years.
That issue was, essentially, one of jurisdiction. Jurisdiction is essentially where a legal matter occurred; under what nation’s legal system would a case he heard, tried and judged? In international law, or in matters of international trade or shipping, that answer is never, ever easy, and establishing the simple matter of jurisdiction can take on a life of its own, eclipsing the actual case at hand. In the case of Cox v Ergo Versicherung AG, the issue was whether the former Mrs Cox should be awarded damages in line with UK law, or German law.
Under the terms of the UK Fatal Accidents Act (1976), she was entitled to be compensated “in proportion to her loss”, and any subsequent marriage is to be disregarded when awarding damages. Indeed, the Court also had to consider whether her damages might fall under any other legislation or case law. By contrast, the German Civil Code, known as the BGB, is less generous. Under s.844, essentially the widower would have to be compensated with the intent of restoring her to the financial position she would have been in had the accident not happened. Such proportionality and sense of restitution is a hallmark of the BGB, and the German legal system. The question before the five Supreme Court judges was which legal system should damages be awarded under.
Giving the leading speech, Lord Sumption sums up the case history to date and the relevant legislation. The Court of Appeal had ruled that the UK courts should apply the German legal code in this instance; that was appealed. At paragraph 12 he begins to weigh both arguments up. Aside from the provisions of the 1976 Act, Lord Sumption also considered the provisions of the Private International Law (Miscellaneous Provisions) Act 1995. The provisions of those Acts aside, it is eventually established conclusively at paragraph 20 that:
“[The relevant] provisions [of the 1976 Act] do not lay down general rules of English law relating to the assessment of damages, even in personal injury actions, but only rules applicable to actions under the Act itself. Sections 1A, 3(3), 3(4) and 4, which include the provisions relevant to the present appeal, apply only to “an action under this Act”, i.e. to actions brought under section 1. The context shows that the same is true of the other provisions of section 3 (“in the action”). An action to enforce a liability whose applicable substantive law is German law is not an action under section 1 of the Fatal Accidents Act.”
With that firmly established, the rest of the case, and the verdict, falls into place. If the matter does not fall under the 1976 Act, and is neither covered by the 1995 Act, then virtually by default, the principles of the German BGB need to be applied. At 22, one difficulty is raised, and skilfully overcome; namely, the widow’s remarriage, and her receipt of maintenance from her new husband prior to there being any legal obligation for him to do so. In a dense, complicated but skilfully argued chain of legal reasoning, Lord Sumption expertly overcomes this barrier, finding that:
“Purely voluntary payments from someone with no legal obligation to make them cannot be regarded as an alternative to what she has lost. It follows that credit need not be given for it.”
The matter of jurisdiction and the extra territorial application of UK law is raised- and easily dismissed. Although admittedly there are some grounds for UK law to be applied in this case, Lord Sumption navigates around this skilfully. Indeed, he points out at 29 that (essentially and by implication) the matter of the supremacy of the BGB has already been established in lower courts. After applying the relevant case law to the matter under discussion, he still comes to the same conclusion- albeit admitting that in many instances UK law would take supremacy in a similar case abroad.
Despite that, Lord Sumption readily agrees with the lower court- although he comes to the same conclusion by a different method. In a concurring judgement, Lord Mance also reaches the same conclusion- again by a different series of legal reasoning. Mrs Cox’s appeal is overturned- and she was awarded damages in line with the German BGB.
Although concerned with damages, and civil law, Cox v Ergo Versicherung AG raises interesting points of private international law, and jurisdiction. Although ruling that UK law does not apply in this particular matter, the case leaves the door wide open for similar cases involving British citizens (or perhaps property) to be heard under UK law abroad.
Lord Sumption (supported by Lord Mance) refers particularly to the construction of the 1976 and 1995 Acts, and relies heavily on the 2006 case of Lawson v Serco Ltd. Although it is automatically presumed that UK law cannot be readily applied abroad, the construction of the relevant legislation allows that to be the case if the matter at hand has substantive UK ties. Lord Sumption goes to great length to deny the extra territorial application of the 1976 Act- but does not conclusively state that it can never happen.
In the matter of private international law, and settling UK related disputes abroad, Lord Sumption delivers a skilful, surgical and detailed blow to that. Despite dismissing such extra territorial claims, he does not conclusively rule against such claims ever being allowed. As such, Lord Sumption is (more by accident than design) maintaining the legal status quo, in keeping the possibility of such cases being successful open, while emphatically dismissing this particular claim. Whilst seeming to be bold and decisive, Lord Sumption is actually being legally cautious. That is surprising, as it is normally Lord Neuberger (very quiet in this case) who is the cautious member of the Supreme Court, not Lord Sumption.