On 3 August 201zoe_read6, the Supreme Court gave its ruling in an appeal concerning a claim for compensation against the Motor Insurers’ Bureau (“MIB”). Specifically, the court considered whether the level of damages to be paid out by MIB is assessed by reference to the law of the state in which the accident took place or by reference to English law. Further background to this case can be found in our Case Preview.


Ms Moreno is a UK resident. In May 2011, whilst on holiday in Greece, she was struck and seriously injured by a car. The car was registered in Greece but driven by an unlicensed and uninsured driver. As such Ms Moreno was unable to claim direct against either the driver or his insurer. Instead a claim was pursued against the MIB under the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 (SI 2003/37) (“the 2003 Regulations”) which transposed a series of European Directives but were enacted prior to the codifying Council Directive 2009/102/EC.

The purpose of these arrangements was to ensure victims of motor accidents occurring anywhere within the EU would be compensated and to facilitate such compensation. It established a scheme whereby Ms Moreno could claim against MIB, who could in turn seek compensation from the corresponding Greek body. Regulation 13(2)(b) of the 2003 Regulations states that the MIB shall compensate a person injured in another member state “as if it were a body authorised under paragraph 4 of that Article [i.e. the national body of the relevant member state tasked with providing compensation to persons injured by uninsured vehicles] and the accident had occurred in Great Britain“.

Liability in the case was not in issue. The only outstanding issue was the level of damages being sought. The High Court in their first instance decision had found, following Jacobs v MIB [2010] EWCA Civ 1208, that compensation under the 2003 Regulations fell to be determined by reference to the law of the claimant’s state of residence. That decision meant the claimant here would receive a higher level of compensation than the corresponding claim would have achieved under Greek law. MIB appealed the decision, arguing that Rome II should apply, which provides that the law applicable to non-contractual obligations is the law of the country in which the damage occurs. Utilising the leapfrog procedure, the case was sent directly to the Supreme Court.

The Supreme Court’s decision

The lead judgment, with whom the other Lords agreed, was given by Lord Mance.

The appeal was allowed. The Supreme Court held that when reading the 2003 Regulations, the starting point was that they should be interpreted as consistently as possible with the Directives they were intended to implement. This had been established in the well-known case Marleasing v La Comercial Internacional de Alimentacion (Case C-106/89).

As such the central questions were first whether the various Directives prescribed any particular approach to the measure of damages applicable in a claim to a compensation body. Second, if they did, whether Regulation 13(2)(b) of the 2003 Regulations reflected that approach or an alternative.

The Supreme Court found that Directives were clear. It did not leave it up to the individual Member States to provide for compensation in accordance with a law of its choosing. Instead it prescribed that compensation would be assessed, on a consistent basis, by reference to the law of the state in which the accident took place.

Specifically, Article 7 of Directive 2000/26/EC (one of the Directives the 2003 Regulations had bought into effect) pointed to a link between the compensation available in the state of the accident and that available from the injured party’s local compensation body (in this case the MIB). Additionally, Article 6(2) of that Directive enabled the MIB to be substituted for the injured party in claims against the tortfeasor or his insurer, in so far as the MIB had provided compensation. It could not be right that the MIB was expected to pay out more than they could subsequently recover in the state where the damage occurred.

The court also looked at the agreement between compensation bodies (such as the MIB) and guarantee funds in the various member states, created in order to give effect to the Directives. This agreement expressly stated that the liability of the compensation body was to be assessed in accordance with the laws of the member state where the damage took place.

Referring to the second question, the 2003 Regulations were held to be entirely consistent with the approach take in the Directives. There was no suggestion in the 2003 Regulations or elsewhere that the domestic legislator intended to do anything other than faithfully transpose and give effect to the Directives. Regulation 13 intended only indicate that the obligation of the MIB to compensate a person injured abroad arose only when the injured party could show that the tortfeasor was liable for the injury (as a person injured in the UK would also have to show). The Supreme Court found that Jacobs and Bloy v Motor Insurers’ Bureau [2013] EWCA Civ 1543 should be overruled, because otherwise the measure of damages would vary depending on who the injured party pursued.


This was a clear departure by the Supreme Court from previous Court of Appeal rulings on the same issue; both Jacobs and Bloy being overruled on the point.  The obvious consequence for those seeking redress from MIB is that they have certainty now that their damages will be determined by reference to the law of the country in which they were injured.  For many, this will result in a lower level of recovery.

The second key point is that, as Lord Mance noted, “With British exit from the Union, this [compensation arrangements across the EU] will, no doubt, be one of the many current arrangements requiring thought.”