Holiday drivers could face crippling damages claims

Holidaymakers who injure a fellow British tourist while driving abroad may find themselves under-insured and personally liable for damages running into millions of pounds following a recent House of Lords ruling.

It follows the case of Giles Harding from London who was paralysed from the neck down in a car crash in Australia in 2002. The vehicle was being driven by his girlfriend, Tanya Wealands.

Miss Wealands’ insurance company argued that the case should be heard in Australia where the accident took place and where compensation payments tend to be about 30 per cent less than in Britain. It led to four years of legal argument but the matter has now been finally resolved with the House of Lords ruling that the matter should be dealt with according to English law.

It’s estimated that Mr Harding can now expect to get damages in the region of £5.5m, much higher than he would got in Australia.

Andrew Scott, head of the personal injury department at Andersons Solicitors in Nottingham, says the ruling is a great relief to British travellers injured abroad but it also has serious implications for the person causing the accident.

“This is because car hire insurance abroad may not cover the cost of damages awarded in British courts which are among the highest in the world.

“Many comprehensive motor insurance policies available in other countries limit their pay-outs to relatively low figures of between £250,000 and £500,000 because that is the maximum likely to be granted by their local courts. However, if an injury case is now heard in Britain as it can be following the House of Lords ruling then the victim could be awarded far more than that.

“It means the person who caused the accident would have to pay for the extra compensation themselves.”

Mr Scott urged holidaymakers hiring cars abroad to study the insurance policy offered and ask what the maximum pay-out would be in the event of an accident. “It may be possible to increase the cover by paying extra on the premium, but this varies in different countries so people need to check the policy carefully.”

Note to editors: For further information contact Andrew Scott on 0115 988 6700 AScott@andersonssolicitors.co.uk

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Court closes escape route for avoiding costs.

Companies that lose court cases can no longer escape having to pay costs by declaring themselves bankrupt or transferring their assets elsewhere, following a landmark case in the High Court.

A British plumbing business called Antares Ltd sued an Italian company called Antares SRL for breach of a franchise agreement. Shortly before the trial, the Italian firm transferred most of its assets to another company called Antares for Water and Fire (AWF). Then, after losing the case it agreed to be struck off the Italian Companies Register. That meant Antares Ltd in Britain was unable to recover the costs it had been awarded by the court.

It then decided to ask the court to rule that the third company (AWF), which had connections to Antares SRL, should be liable for the costs. Mr Justice Richards agreed that the transfer of assets had been done merely to prevent the British firm from being able to recover costs and damages. He then ruled that the third company, AWF, should pay those costs.

Gary Dickie a Partner at Andersons Solicitors comments “The judgment is an important development because in previous cases it had been considered that if costs were to be awarded against a third company in this way then it needed to be shown that such a company had caused those costs to have been incurred. Mr Richards said that causation will still be an important factor but cannot be considered to be a necessary pre-requisite in awarding costs against a third party”

Gary believes that the ruling is also important because it shows that courts are prepared to take steps to prevent a firm trying to thwart a judgment made against them. It is likely to prove very significant at a time when transferring assets from one company to another across national borders is becoming more commonplace.

Gary Dickie is a Partner at Andersons Solicitors in Nottingham. He can be contacted on gdickie@andersonsolicitors.co.uk or tel: 0115 988 6728.

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