We have previously reported on the first instance decision of Maher v Groupama Est [2009] EWHC 38 (QB) in which the English Court considered two preliminary issues in proceedings brought by English claimants in London, against the French insurer, Groupama, for damages they incurred in an accident in France, in which the French insured was killed. The Court had been asked to decide whether (a) damages in a personal injury claim, and (b) pre-judgment interest on those damages, should be determined according to French or English law. The judge decided that damages were to be assessed by reference to English law and that both English and French law were potentially relevant to the award of interest, depending on the facts.

On appeal (Maher v Groupama Grand Est [2009] EWCA Civ 1191), Groupama made two arguments: firstly, that since the claim was made directly against the insurer, whose liability sounded in contract, it was to be characterised as contractual in nature and that the damages should therefore be assessed under French law as the proper law of the contract; and secondly, that whether a claimant had a right to recover interest on damages was a matter for the law of the cause, which was in tort, and so French law was applicable.

The Court of Appeal dismissed the appeal by Groupama. It stated that the only question that mattered in this case was how English law characterised the particular issue that arose for determination, namely, the amount that the claimants should receive to compensate them for their injuries. Following the decision in Knight v Assurance [2009] EWHC 1900 (QB), that issue fell to be decided primarily in the context of a claim against the person responsible for the accident, which issue arose in tort, not contract. As such, damages were to be assessed by reference to English law.

With respect to Groupama’s second argument, the Court considered the scope of s.35A of the Senior Courts Act which grants the courts power to award interest on damages. It concluded that s.35A created a remedy rather than a substantive right to interest. The requirement in s35A(2) to award interest  on damages for personal injury or death, save where there were special reasons not to do so, merely constrained the exercise of discretion and did not detract from the conclusion that s.35A was a remedy. Accordingly, the right to recover interest as a head of damages was a matter of French law, being the law applicable to the tort, but whether a substantive right existed or not, the court had available the remedy created by s.35A. It noted that one of the factors the court might take into account when exercising its discretion might be the relevant provisions of French law to the recovery of interest. Thus the High Court decision that both English and French law are relevant to the award of interest, was upheld.