The decision of Annabel Darlow KC sitting as a judge of the High Court, on 17 June 2024 and relating to claims arising out of a road traffic accident near Chichester in 2019 involving Bulgarian citizens working in the UK demonstrates the appropriate approach to deciding questions of applicable law when all three limbs of article 4 of the Regulation are in play.

Yordanov v Vasilev, Astanov v Angelov: how the accident happened

Having heard both lay witness evidence and expert accident reconstruction evidence, the judge found that the drivers Angelov and Astanov were racing each other at speeds of up to 80 mph on a B road. Angelov was driving a VW in the offside lane attempting to overtake, but on seeing an oncoming car he cut into the nearside lane, across Astanov’s path. He collided with both Astanov’s car and the oncoming car, losing control of the vehicle and suffering fatal injuries as result. His front seat passenger, Yordanov, was also seriously injured, as was Astanov.

Vasiliev was the registered keeper of the VW, which was registered in the UK and insured by Aviva. Any potential claims directly against him had been dropped by the time of the trial. Astanov’s car was registered and insured in Bulgaria.

The cascade of rules in article 4 of Rome II

The UK had not left the EU at the date of the accident and therefore the Rome II Regulation governed the question of the law applicable to the non-contractual (ie tortious) claims that resulted from it. [The content of the Regulation has since been incorporated into domestic law as “assimilated EU law”, meaning that the rules in the Regulation continue to be followed.] 

Condensing article 4, it provides that in tort claims with cross border features:

1. the usual rule is that “the law of the country where the damage occurs” shall apply to the claim
2. but if the claimant and the tortfeasor both have their “habitual residence in the same country” at the time of the accident, the law of that country shall apply to the claim
3. unless, taking account of “all the circumstances of the case, the tort/delict is manifestly more closely connected to a country other than that indicated in paragraphs (1) and (2)”, in which case the law of that country shall then apply.

In effect, there is a general rule at (1), a narrow mandatory exception at (2) and a wide ‘escape clause’ at (3). The task of the court is to apply each of these in turn in order to establish the appropriate applicable law.

Application of article 4 to the facts

The parties were all Bulgarian citizens undertaking seasonal work in the UK and returning to Bulgaria in off-season periods to re-join their immediate families, who remained in Bulgaria. Their lives had followed this pattern for several years, during which their time spent in Bulgaria had gradually decreased.

The question for the judge was whether the above would be sufficient to displace, via article 4(2), the general rule that English law should apply to the claims given that the damage occurred here? Furthermore, if it did – meaning that Bulgarian law would apply – was the manifestly closer connection of the tort to another country - ie England - required at 4(3) satisfied? This has been judicially recognised as a high hurdle, but if it could be met here then English law would apply.

Article 15 of the Regulation provides that the applicable law governs “the basis and extent of liability … any limitation of liability and any division of liability [and] the existence, the nature and the assessment of damage”. So, standing back a little, what is really at stake here is whether the claims arising from the accident should be quantified using English damages law or using what would be assumed to be a less generous approach under Bulgarian law?

For the purposes of 4(2), the judge held that the parties’ habitual residence was Bulgaria. In her decision, their regular seasonal presence in England could not meet “the necessary characteristics of permanence or regularity so as to satisfy the requisite criteria for habitual residence. They both lived in temporary accommodation, within a holiday village, in accommodation that was for all practical purposes dependent upon their continued employment through a particular agency … The factors of duration, regularity, conditions and reasons for the stay in a particular country also indicate that in the specific circumstances of each, the habitual residence of both was in Bulgaria and not England. Each regularly returned to Bulgaria when not working abroad, to the same place of residence on each occasion.”

As noted above, this would mean that Bulgarian law would apply to the claim by Yordanov against Astanov unless 4(3) could be satisfied by demonstrating a manifestly closer connection to England.

The judge set out the approach to 4(3) adopted in the cases of Winrow v Hemphill & Ageas [2014] EWHC 3164 (QB), Marshall v Pickard, MIB & others [2015] EWHC 3421 (QB), and Owen v Galgey [2020] EWHC 3546 (QB). These authorities showed that establishing a “manifestly closer connection” was a high hurdle for the party arguing for it.

It was important to recognise that the connection required is that of tort/delict to “all the circumstances of the case”. This is a wider approach than 4(2), which turns on a single circumstance, ie common “habitual residence”,  and even then only in relation the particular claim between those parties who share it. Considering the tort at hand, the judge’s reasoning is set out below.

“Although the finding of the court is that both Yordanov and Atanasov were habitually resident in Bulgaria within the meaning ascribed in European case law, they nevertheless each had close and significant relations with England. Both were living and working in England at the time of the collision. Atanasov, in particular had paid tax in England for several years and had a regular and established connection with England, having spent at least half of each year in England for the last four years. The vehicle in which Yordanov was travelling at the time of the accident was acquired and registered in England and was insured by an English-registered insurer.

Conversely, the only connections with Bulgaria and the tort are the nationality and habitual residence of the claimant and the first* defendant, together with the fact that the vehicle of the first* defendant was Bulgarian-registered and insured by a Bulgarian-registered insurer, the fifth defendant. When considering the circumstances relevant to Article 4(3) as opposed to Article 4(2), the significance of habitual residence must be set against the fact that both lived and worked in England at the time of the collision. Neither, for example, were present in England as tourists, in the country on a vacation for a few days, before returning home to Bulgaria.”

The outcome on applicable law

The conclusion from the passages above was that the “high hurdle” of 4(3) had been met and English law applied as a result: “Balancing these factors and the degree of connection between each and the tort as I must, I have concluded that the claimant has crossed the high hurdle set by Article 4(3) and proved that it is clear from all the circumstances of the case that the tort is manifestly more closely connected with England than Bulgaria”.

The judge then analysed the relative contribution, under English law, of each of the drivers to Yordanov’s claim and of the appropriate deduction to make for Astanov’s failure to wear a seat belt (deciding on 50% each for the former and 20% for the latter). Issues of quantum were not live at this preliminary stage.

Take away practical points

• The first is somewhat obvious point - at least to practitioners in this area - that the nationality of the parties is generally of little weight in these sorts of case, and habitual residence is the much more important factor. Not only is nationality irrelevant to articles 4(1) and 4(2), but also it is just one of all the circumstances of the tort for the purposes of 4(3).
• Second is that 4(2) applies to particular claims between particular parties, rather than the tort as a whole: “4(2) is to be applied separately, as between each pairing of claimant and defendant. Any other solution would open up the possibility of the determination of the applicable law being subject to manipulation by way, for example, of the joinder of claims simply in order to achieve a particular desired outcome under Article 4(2).”
• The third is that the courts will adopt a methodical approach and examine each of the limbs of article 4 in turn. That approach and this decision once again confirm that 4(3), if satisfied, may operate to revert to the law designated by 4(1) even when 4(2) is also satisfied. The judge said on this point that “on the plain wording of Article 4(3), it might be suggested that Article 4(3) may only point to the law of a country other than that indicated by Article 4(1) or (2), this is accepted not to be the correct reading of the Article as a whole.”

[* These references to the “first defendant”, Vasilev, are likely to be mistakes because (a) the judge had found that Vasilev was habitually resident in England and (b) his car was registered and insured in England. This can be resolved by substituting “first” with “fourth” so that the passage refers instead to Astanov.]