GUNN AND OTHERS V DIAZ AND OTHERS

[2017] EWHC 157 (QB), High Court of Justice, Queen's Bench Division, Mrs Justice Andrews DBE, 3 February 2017

Procedure - Road traffic accident in Costa Rica - Family members and health insurers sustaining consequential damage in UK - Permission to serve claims in tort on Costa Rica defendants granted and extended - Tort gateway no longer good as a matter of law - Whether subrogated claim against insurers could be pursued in English court - Necessary and proper party

The lead claimant had suffered injuries when hit by a rented car in Costa Rica. The other claimants were her family and health insurers. The family members were, under Costa Rican law, entitled to claim for "moral damages" arising from Ms Gunn's accident. The defendants were three possible drivers of the car at the time of the accident, its owner and a lessee (a car rental which had let the car to the three drivers) and the national motor insurance monopoly of Costa Rica, INS. INS had underwritten a mandatory driver's liability policy under Costa Rican law for two of the putative drivers. It had issued a voluntary owner's liability policy to the owner, which did not include the lessee (the car rental) of the car as an insured. INS was sued in England under a Costa Rican statute permitting direct claims against the insurer. The court had permitted service out of the claim on the basis that damage from the tort had been sustained within the jurisdiction. The car rental and one of the drivers were served, and judgment in default on liability was entered against them. The other defendants were difficult to serve, and extensions of the order for service out were granted. In the meantime, the Court of Appeal judgment (now on appeal to the Supreme Court) in Brownlie v Four Seasons Holdings Inc [2015] EWCA Civ 665 ruled that "damage" for the purpose of the tort gateway meant direct damage, not consequential loss, thus removing the legal basis on which permission to serve out had been granted. At the extension hearings, counsel for the claimants did not draw Brownlie or its effects to the attention of the court. The claimants now instead sought to rely on the "necessary and proper" defendant gateway, saying that INS was such a party to the claim against the car rental. In the alternative, the claimants said that the as yet unserved owner of the car was an anchor defendant for a claim against INS.