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15/10/19

Insurance claims in the EU after Brexit

 

You cant help but have noticed recently, that the Prime Minister, Boris Johnson has stated that Britain will leave the EU under deal or no deal in October 2019. Even if that is delayed until 2020 it now seems likely that the Britain will leave the EU at some point soon.

Britain leaving the EU means a number of loopholes will emerge which, in near future, may leave the UK residents involved in road traffic accidents (RTAs) in the EU in an uncertain position.

At present, citizens of the EU have ‘choice of law’: a judgement in one EU member state can be enforced in another. Therefore, if a UK resident is injured in an RTA in the EU, in most circumstances, he can bring and pursue his claim for compensation in the UK courts in the same manner as if the injury had occurred in the UK. It is a requirement for the EU insurers to appoint their claim handling agents in the member states to deal with motor insurance claims. Accordingly, the Claimant’s lawyers can pursue the claim through the UK representatives of the EU insurers. A non-fault injured person or party can recover his due compensation and legal costs upon successful settlement of the claim. If the third party driver happens to be uninsured/untraced, the Claimants lawyers can pursue their clients’ claims in the UK directly through the Motor Insurers Bureau (MIB).

As Britain leaves the EU (with or without a deal), it is probable that little change will be noticed immediately as many Personal Injury laws originate from the European Directives and domestic laws implement EU Directives. However, it is unclear how UK’s laws and court decision dealing with the road traffic accidents will be implemented in the EU.

As matters stand now (not much information has been disclosed by the government on this issue), Britain leaving the EU would mean that  a UK resident involved in an RTA in the EU is unlikely to get due compensation for a number of the reasons, such as, the EU insurers will be under no obligations to appoint their representatives in the UK, the Claimants will be unable to make claim via the MIB and the UK courts’ judgements will not be enforceable in Europe etc.

It is worth noting that National Insurers’ Bureau (Green Card Bureau) guarantees that a victim of a road traffic accident caused by a foreign vehicle, originating from a country participating in the Green Card system, will be compensated in the ‘country of accident’. Therefore, a Post-Brexit UK Claimant will be required to bring his claim in the territory where the accident had happened. Although the Green Card Bureau guarantees compensation, yet a UK resident will be asked to cross a number of undesired bridges in coming days including; delays, expense of bringing a claim using a foreign lawyer, using a different language, unwished-for travels to and from the country of the accident, and far most important, the issue of recoverability of litigation cost & the amount of compensation. In many EU member states the injured persons has to pay for his own legal advice and representation (occasionally part, or, sometimes in full) which from time to time is irrecoverable from the Defendant even though if a claim is successful.

The above factors can reduce the overall level of damages a Claimant will ultimately receive after paying his expenses and legal costs. Likewise, the UK lawyers would be unable to act for the Claimants in small value claims (amounting up to few thousand pounds) for the similar reasons they will have to face once the Civil Liability Act 2018 kicks in after April 2020.

The current state of government affairs suggests in the upcoming months victims of road traffic accident in the EU may be left to accept their unfortunate accident as ‘an act of God’ (which is also a clause in an insurance policy designed to protect insurers from paying out in ‘certain’ circumstances). In case of a ‘No deal’ or a ‘Poor deal’ the UK victims of RTA in the EU are likely to face severe injustice.

Uncertainty and ambiguity surrounds the post-Brexit affairs. In order to preserve the UK citizens’ rights in the EU the Department for Transport and the MIB need to work to ensure that bilateral agreements are in place with EEA countries. Therefore, for the time being it is ‘wait and see’ sitation and only time will tell exactly how UK citizens’ claims in the EU will be made after Brexit and how UK lawyers will be able to help Claimants in these matters.

We at Recovery Assist will be keeping a close eye on this issue as it continues to develop!

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