Direct right of actions for English claimants against European insurers

Posted: 24/09/2015

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For some time now, it has been common practice for solicitors acting on behalf of English claimants injured in accidents abroad to utilise EU regulation 44/2001 (as detailed in FBTO v Odenbreit (2008) II Pr 12) to bring direct actions against the negligent party's insurer through the courts of England and Wales. 

In Williams v MAPFRE (2015), an English domiciled claimant suffered injury at the hotel in Spain where she was holidaying.

As a direct right of action against an insurer exists under Spanish law, the claimant brought a claim directly against the hotel’s Spanish insurer in the courts of England and Wales under EU regulation 44/2001 (Odenbreit). 

However, the defendant argued that the Spanish legislation governing the direct right of action against the insurer only allows a claimant direct access to the indemnity/cover available to the hotel under the insurance policy. The defendant insurer successfully argued that, as the policy only provided cover to their insured for claims pursued within Spain, the claimant could not bring a direct action against the insurer in England. 

The court held that, as the Spanish insurer would not be liable to indemnify the hotel under the policy, the claimant could not bring the action against the insurer in the English courts. Any direct claim against the Spanish insurer could therefore only be pursued in Spain. 

In FBTO v Odenbreit, the court held that the direct right of action against the insurer in the claimant's country was strictly subject to the existence of a direct right of action under the applicable foreign law. 

When considering a direct right of action against a European member state insurer it is now important to look at the relevant legislation in that country governing the terms and extent of the direct right of action and to consider that alongside the negligent party’s insurance policy and the extent/limits of the policy cover. 

We can envisage significant difficulties both with obtaining pre-action disclosure of insurance policies and with potential proportionality issues with costs. 

However, having discussed this case with one of our Spanish experts, the decision may be incorrect and based on a defective understanding of the Spanish law. So this may not be the end of the matter. 

This argument will not be available to any European member state insurer in road traffic claims due to the Motor Insurance Directive (EC 2009/103). 

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