Lord Justice Moore-Bick: Background
1. On 29th July 2005 the respondents, Mr. and Mrs. Maher, were injured
when a van driven by a M. Marc Kress collided with their Range Rover on
the RN5 road in the area of Mont Sous Vaudrey, France. M. Kress, who
was killed in the accident, was insured by the appellant, Groupama Grand
Est ("Groupama").
2. Directive 2000/26/EC of the European Parliament and Council of 16th
May 2000, usually known as the Fourth Motor Insurance Directive (and to
which I shall refer simply as "the Directive"), obliged Member States to
ensure that a person injured in a motor accident occurring in a Member
State other than that in which he resides should have a direct right of
action against the insurer of the person responsible for the accident.
However, it was left to Member States to decide how the Directive should
be implemented. In the case of some Member States, including France,
such a direct right of action already existed.
3. In FBTO Schadeverzekeringen NV v Odenbreit (C-463/06) [2007]
E.C.R. 1-11321 the European Court of Justice held that by virtue of
Articles 11(2) and 9(1)(b) of Regulation EC 44/2001 ("Regulation 44") a
person injured in a motor accident who has a right to bring proceedings
directly against the insurer of the driver responsible for his injury is
entitled to bring those proceedings before the courts of the Member
State in which he is domiciled, provided that the insurer is domiciled in a
Member State.
4. Groupama is domiciled in France and it is common ground that under
French law Mr. and Mrs. Maher are entitled to bring a claim against
it as the insurer of M. Kress. Mr. and Mrs. Maher are domiciled in the
United Kingdom. Accordingly, on 24th April 2008 Mr. and Mrs. Maher
brought proceedings against Groupama in the Mayor's and City of London
Court claiming damages for personal injury. Their right to do so was
not challenged and liability was not disputed. All that remained was for
damages to be assessed and for the court to decide what amount, if any,
should be awarded by way of interest in respect of the period prior to
judgment.
5. At that point for the first time a dispute arose. Mr. and Mrs. Maher said
that damages should be assessed and interest awarded in accordance
with English law; Groupama said that French law should govern both
questions. (Similar issues have since arisen in another case, Knight v AXA
Assurances [2009] EWHC 1900 (QB), to which our attention was drawn.)
It is not clear to what extent the choice of law is likely to affect the
outcome, but the parties think that it may be significant. The proceedings
were therefore transferred to the Queen's Bench Division of the High
Court and on 24th September Master Fontaine ordered that judgment be
entered for Mr. and Mrs. Maher on the issue of liability. At the same time
she directed the trial of the following two issues:
(1) Are damages to be assessed by reference to English Law or French
Law?
(2) Should the question of the award of pre-judgment interest on those
damages be determined in accordance with English law or French law?
6. The issues were tried by Blair J. He held (1) that damages were to be
assessed by reference to English law and (2) that both English and French
law were potentially relevant to the award of interest, depending on the
facts. Groupama now appeals against his decision.
Assessment of damages
7. If the assessment of damages in this case is to be characterised as
a matter of tort, Mr. Janusz accepted that, in accordance with well-
established principles, it is to be carried out in accordance with English
law as the lex fori. He submitted on behalf of Groupama, however, that
since the claim in this case is made directly against the insurer, whose
liability sounds in contract, it is to be characterised as contractual in
nature and that damages are therefore to be assessed in accordance with
French law as the proper law of the contract. Moreover, he submitted that
the insurer's liability is to indemnify its insured in respect of his liability
as a tortfeasor. He can be sued only in his country of domicile, in this
case France, and therefore what has to be determined is what value a
French court would place on the claim. Mr. Doherty on behalf of Mr. and
Mrs. Maher submitted that the question is not whether the claim is to be
characterised as one that sounds in contract or tort but how the relevant
issue is to be characterised. He submitted that a claim may give rise to a
number of different issues which may fall to be determined by reference
to different systems of law.
8. In my view the issue of characterisation lies at the heart of the present
appeal. For the purposes of resolving problems in the conflicts of laws
English law recognises a distinction between substantive rules of law,
which are governed by the lex causae, and procedural rules, which are
governed by the lex fori. Many claims are of a complex nature and depend
on the resolution of more than one issue and the authorities clearly
support the conclusion that English law characterises individual issues
that arise for determination rather than seeking to characterise the claim
as a whole. In Macmillan Ltd v Bishopsgate Investment Trust Plc (No. 3)
[1996] 1 W.L.R. 387 Auld L.J. said at page 407B-C:
"Subject to what I shall say in a moment, characterisation or classification
is governed by the lex fori. But characterisation or classification of what?
It follows from what I have said that the proper approach is to look
beyond the formulation of the claim and to identify according to the lex
fori the true issue or issues thrown up by the claim and defence. This
requires a parallel exercise in classification of the relevant rule of law.
However, classification of an issue and rule of law for this purpose, the
underlying principle of which is to strive for comity between competing
legal systems, should not be constrained by particular notions or
distinctions of the domestic law of the lex fori, or that of the competing
system of law, which may have no counterpart in the other's system. Nor
should the issue be defined too narrowly so that it attracts a particular
domestic rule under the lex fori which may not be applicable under the
other system: see Cheshire & North's Private International Law, 12th ed.,
pp. 45-46, and Dicey & Morris, vol. 1, pp. 38-43, 45-48."
9. Later in the same judgment he said this at page 418A-B:
"I agree with the judge when he said [1995] 1 W.L.R. 978, 988: "In
order to ascertain the applicable law under English conflict of laws, it is
not sufficient to characterise the nature of the claim: it is necessary to
identify the question at issue." Any claim, whether it be a claim that can
be characterised as restitutionary or otherwise, may involve a number of
issues which may have to be decided according to different systems of
law. Thus it is necessary for the court to look at each issue and to decide
the appropriate law to apply to the resolution of that dispute."
10. Those passages were considered and applied by this court in Through
Transport Mutual Insurance Association (Eurasia) Ltd v New India
Assurance Co. Ltd [2004] EWCA Civ 1598, [2005] 1 Lloyd's Rep. 67 and
represent the current state of the law.
11. Any claim by an injured person against the driver's insurer may
raise a variety of issues: there may be issues relating to the driver's
liability, the extent to which the claimant was himself partly to blame
for what happened and whether the insurer is liable to indemnify the
driver, in whole or in part. One would not necessarily expect all these
to be determined by reference to the same system of law. For example,
if, in July 2005 a Dutch motorist insured by a German insurer had run
down a British pedestrian in Strasbourg, resulting in an action in this
country by the injured pedestrian against the insurer, one would expect
issues relating to the driver's liability to be determined by reference to
French law as the law of the place where the tort was committed (see
section 11(1) of the Private International Law (Miscellaneous Provisions)
Act 1995), but issues relating to the insurer's liability under the policy of
insurance to be determined by reference to German law as the proper law
of the contract. For the same reason German law would also determine
whether the injured pedestrian had a direct right of action against the
insurer.
12. In this case the right of Mr. and Mrs. Maher to recover damages
from Groupama in respect of their injuries is governed by French law.
Mr. Janusz submitted that, even before the publication of the Directive,
French law in the form of Article L. 124-3 of the Code des Assurances
gave a person injured in a road accident a cause of action against the
wrongdoer's insurer, thus giving him the right to recover damages direct
from the insurer. He also submitted that the right is contractual in nature,
the claimant being treated as the beneficiary of the policy whose right of
recovery takes precedence over that of the insured. However, no evidence
of French law was before the court in this case and the judge made no
finding on the question.
13. In support of this part of his argument Mr. Janusz submitted that it
would not have been possible for M. Kress or his estate to have been
joined as an additional defendant to the proceedings in this country and
that it would be anomalous if the claimants could recover a greater (or,
presumably, lesser) sum in damages from his insurers than would be the
case if they had sued him in France. The judge expressed the preliminary
view that there might be some merit in that argument, but found it
unnecessary to decide the point.
14. I agree with the judge, for reasons that will shortly become apparent,
that it is unnecessary to decide that question, but for what it is worth I
incline to the view that M. Kress (or rather his estate) could have been
joined as a party to the proceedings here. The basic rule, enshrined in
Article 2(1) of Regulation 44, is that a person domiciled in a Member State
can only be sued in the courts of that state, but the Regulation contains
a number of exceptions to that rule, many of which are designed to avoid
the risk of conflicting decisions being reached in the courts of different
Member States. The need to minimise the possibility of irreconcilable
judgments being given in two Member States is expressly recognised
in paragraph (15) of the preamble to the Regulation, which provides as
follows:
"In the interests of the harmonious administration of justice it is
necessary to minimise the possibility of concurrent proceedings and to
ensure that irreconcilable judgments will not be given in two Member
States. There must be a clear and effective mechanism for resolving cases
of lis pendens and related actions and for obviating problems flowing from
national differences as to the determination of the time when a case is
regarded as pending. For the purposes of this Regulation that time should
be defined autonomously."
15. Mr. Janusz submitted that paragraph (15) is directed solely to
problems of lis pendens and related actions which arise as a result
of differences between national laws relating to the point at which
proceedings are regarded as having been commenced and which are
governed by Section 9 of the Regulation. Those who framed paragraph
(15) clearly had such problems at the forefront of their minds, but the
threat to the harmonious administration of justice by irreconcilable
judgments is of a much broader nature and the desirability of avoiding it
is something that must be borne in mind when seeking to interpret other
parts of the Regulation.
16. Article 11 concerns proceedings against insurers in cases where direct
actions are permitted. It provides as follows:
"1. In respect of liability insurance, the insurer may also, if the law of
the court permits it, be joined in proceedings which the injured party has
brought against the insured.
2. Articles 8, 9 and 10 shall apply to actions brought by the injured party
directly against the insurer, where such direct actions are permitted.
3. If the law governing such direct actions provides that the policyholder
or the insured may be joined as a party to the action, the same court
shall have jurisdiction over them."
17. In this case we are concerned with paragraph 3. That says nothing
about the capacity in which the insured may be joined in the proceedings,
simply that the same court shall have jurisdiction if the law which
governs direct actions allows the insured to be joined in an action
against the insurer. It was not suggested that French law does not permit
both insured and insurer to be joined in the same proceedings and
such a course would obviously be sensible if, for example, there were
issues both as to the liability of the insured for the accident and the
insurer's obligation to indemnify him under the policy. It would be highly
unsatisfactory if the courts of Member State A held in an action brought
by the injured person against the insurer that the driver was liable but
that the insurer was not liable to indemnify him and the courts of Member
State B held in an action against the driver that he was not liable at all.
There are powerful policy reasons, therefore, for trying both claims in the
same action.
18. Mr. Janusz submitted, however, that that is not possible because
Article 11(3) only permits the joinder of the insured as a third party
at the suit of the insurer. In support of that submission he drew our
attention to the commentary on Article 10 (the predecessor of Article
11) in the Jenard report on the Brussels Convention and to certain
dicta of Morland J. in Patterson v Carden (unreported, 14th September
2000) giving judgment on an appeal from the Guildford County Court.
In my view, however, neither greatly assisted his argument. It is quite
true that when commenting on the last paragraph of Article 10 of the
Brussels Convention (which corresponds to Article 11(3) of Regulation 44)
Professor Jenard states that the insurer may join the insured as a third
party to the action against him by the injured party. The reason he gives
is that the proper administration of justice demands that the actions be
brought in the same court in order to prevent different courts from giving
irreconcilable judgments. Prof. Jenard does not say, however, that the
insured cannot be joined by the claimant as an additional defendant to
an action against the insurer and, since, as I have sought to show, the
importance of avoiding irreconcilable judgments is just as great where
there may be concurrent actions against the insurer and insured, the
harmonious administration of justice would be better served by allowing
the insured to be joined in an appropriate case. Moreover, if an exception
to the basic rule in Article 2(1) is to be made at all in cases involving
direct claims against insurers, there seems to be no good reason why it
should be limited to third party proceedings and so operate for the benefit
of the insurer alone.
19. In Patterson v Carden the claimant began proceedings against two
insured and sought to join their insurers as additional defendants to the
action. She relied on Article 7 of the Brussels Convention which provided
as follows:
"In respect of liability insurance, the insurer may also, if the law of the
court permits it, be joined in proceedings which the injured party has
brought against the insured."
The provision is reproduced in identical terms in Article 11(1) of
Regulation 44.
20. Having been referred to the relevant passage in the Jenard Report, in
which the author expresses the opinion that Article 10 permitted an action
to be brought against a liability insurer as a third party to a claim by the
injured party against the insured but did not refer to the possibility that
the insurer might be joined as a co-defendant, Morland J. held that the
insurers could not be joined as co-defendants, but he gave no reasons for
his decision other than that he accepted what Professor Jenard had said.
21. I think there is a strong argument for holding that the proper
administration of justice makes it essential that the claimant should
be able to join both insurer and insured in the same action where it
is necessary to do so to avoid the risk of irreconcilable judgments. In
the present case Mr. and Mrs. Maher were entitled to bring proceedings
against Groupama in this country following the Odenbreit decision and,
although it is unnecessary finally to decide the matter, I think that they
were entitled to join M. Kress or his estate as an additional defendant.
22. However, I think it is irrelevant in this case to enquire into either
the juridical nature of the claimant's rights against the insurer under
French law or into the question whether M. Kress or his estate could be
sued only in France. The only question that matters is how English law
characterises the particular issue that arises for determination, namely,
how much should Mr. and Mrs. Maher receive to compensate them for the
injuries they have suffered. It is an issue that falls to be decided primarily
in the context of a claim against the person responsible for the accident,
M. Kress, and I think it is clear that it is an issue that arises in tort, not
contract. That was the judge's conclusion and it was also the conclusion
of Sharp J. in Knight v AXA Assurances. I think they were both right. It
follows that damages are to be assessed by reference to English law,
being a matter of remedy to be determined in accordance with the lex
fori: see Harding v Wealands [2006] UKHL 32, [2006] 2 A.C. 1.
23. Somewhat late in the day Groupama made an application to amend
its grounds of appeal in order to argue that by virtue of Article 10(1)
(c) of the Rome Convention, enacted into English law by the Contracts
(Applicable Law) Act 1990, the assessment of damages is to be governed
by the proper law of the contract. Article 10 provides as follows:
"1. The law law applicable to a contract by virtue of Articles 3 to 6 and
12 of this Convention [the proper law of the contract] shall govern in
particular;
...
(c) within the limits of the powers conferred on the court by its procedural
law, the consequences of breach, including the assessment of damages in
so far as it is governed by rules of law."
24. This submission, which was not the subject of any detailed argument
before the judge, raises questions of construction not only of the
Convention, but of the Financial Services and Markets Act 2000 and
Directive 88/357/EEC which it implements. It is unnecessary to consider
any of those questions in the present case, however, because, as Mr.
Janusz accepted, the Rome Convention applies only to contractual
obligations. The issue for determination in the present case does not
relate to the assessment of damages for breach of contract, but to the
assessment of damages for tort. The Rome Convention can therefore have
no application and in those circumstances I would refuse permission to
make the amendment sought.
Interest
25. The proper classification of the court's power to award interest is
also, in my view, the key to the determination of the second issue. The
question is whether an award of interest under section 35A of the Senior
Courts Act 1981 ("the 1981 Act") is to be classified as a substantive right
or a remedy. Questions of substantive rights are governed by the lex
causae and it is common ground that in this case the law applicable to the
tort is French law. Accordingly, section 35A has no application if it creates
a substantive right. If, on the other hand, it is remedial in nature, it is
a power that the court has at its disposal, since matters of remedy are
regarded as procedural in nature and governed by the lex fori.
26. The juridical nature of section 35A has been considered on several
occasions without being authoritatively resolved. In Midland International
Trade Services Ltd v. Al Sudairy (11th April 1990, reported Financial
Times 2nd May 1990) Hobhouse J. held that it should not be characterised
as creating a substantive right for three reasons: (i) because in English
law there was no right to recover interest by way of damages for the late
payment of money and section 35A was enacted as an alternative to a
substantive right; (ii) because the court's power to award interest under
section 35A arises only in connection with legal proceedings; and (iii)
because the power to award interest is discretionary and is not of such a
character as to create a legal right.
27. The issue next arose for decision in Kuwait Oil Tanker SAK v Al Bader
(15th December 1998, unreported). In my judgment I noted that the
decision in Midland International Trade Services v Al Sudairy had been
criticised in Dicey & Morris, 12th ed at pages 1446-1447 where the editors
had suggested that the existence of a right to claim interest was properly
classified as a substantive matter and was thus to be referred to the
lex causae. However, I regarded the reasons put forward by Hobhouse
J. for regarding the court's power to award interest under section 35A
as procedural as compelling and I therefore followed and applied his
decision.
28. When giving judgment on the appeal in Kuwait Oil Tanker SAK v
Al Bader [2000] 2 All E.R. (Comm) 271 the Court of Appeal found it
unnecessary to reach a final conclusion on the question, preferring to
leave it for fuller argument at a later date (see paragraphs 207-208).
In doing so, however, it expressed the view that court's power to award
interest under section 35A creates a right in a claimant to claim interest
which is recognised and consistently given effect on the basis that it
represents compensation to the claimant for having been kept out of
money to which he has been held entitled. The court also suggested
that before reaching a decision on the question it would wish to consider
the effect of Article 10(1) of the Rome Convention. However, the Rome
Convention would only be relevant in a case where the claimant was
seeking damages for breach of contract.
29. The question was canvassed again by the Court of Appeal in Lesotho
Highlands Development Authority v Impregilo S.p.A. [2003] EWCA Civ
1159, [2003] 2 Lloyd's Rep. 497, but again without reaching a firm
decision.
30. The judge expressed his conclusion on this question as follows:
"32.... The claim for interest on damages should be characterised as an
issue in tort (see para 33-396 that I have quoted above). Any question
as to whether there is a right to claim interest by way of damages
(such as the Defendant has obliquely raised in its skeleton argument),
depends therefore on French law as the applicable law under s. 11 Private
International Law (Miscellaneous Provisions) Act 1995. I should add
however that the result appears to be the same if s. 35A Supreme Court
Act 1981 is applied simply onto the basis that it is a procedural provision
and so applicable as part of the lex fori....
33. Assuming that interest is recoverable, the rate is to be determined
under English law as the lex fori: see in this respect the views expressed
in Dicey, Morris & Collins, ibid, at para 33-397. But this does not
necessarily mean that the rate will be the domestic English rate. The
principles governing the Court's discretion under s. 35A are sufficiently
flexible to enable the court to arrive at an appropriate rate, whether
English or French (ibid, at para 33-398)."
31. Mr. Janusz submitted that whether a claimant has a right to recover
interest on any sum awarded as damages is a matter for the lex causae
and so for French law. He submitted that the reasoning of Hobhouse J. in
Midland International Trade Services v Sudairy has been undermined by
the decision of the House of Lords in Sempra Metals Ltd v Inland Revenue
Commissioners [2007] UKHL 34, [2008] 1 A.C. 561 and he relied on the
commentary in Dicey, Morris and Collins, The Conflict of Laws 14th ed.
paragraphs 33-392 and 393 where the learned editor says:
"It is submitted that the existence of a right to claim interest is properly
classified as a substantive matter and thus should be referred to the
lex causae of the relevant claim.... In contrast, it is also submitted that
English law as the lex fori determines the rate at which interest is payable
since this question is more appropriately classified as a procedural matter,
akin to the calculation of damages."
32. Mr. Doherty submitted that the power to award interest under section
35A is properly to be classified as procedural rather than substantive and
invited the court to approve and apply the decision of Hobhouse J. in
Midland International Trade Services v Al Sudairy for the reasons he gave.
He also relied on observations made by Lord Denning in Jefford v Gee
[1970] 2 Q.B. 130 and by Lord Steyn in Lesotho Highlands Development
Authority v Impregilo S.p.A. [2005] UKHL 43. [2006] 1 A.C. 221 as
supporting that submission.
33. I accept that the existence of a legal right to claim interest is properly
to be classified as a substantive matter to be determined by reference
to the lex causae, but the question that arises for determination in this
case is whether section 35A of the 1981 Act creates a substantive right
or merely a remedy. Although in Kuwait Oil Tanker SAK v Al Bader this
court suggested that section 35A creates a right to claim interest, that is
not how it has hitherto generally been regarded. In Jefford v Gee [1970]
2 Q.B. 130 Lord Denning, giving the judgment of the court, commented
on section 3 of the Law Reform (Miscellaneous Provisions) Act 1934 ("the
1934 Act"), the precursor to section 35A, at page 149F saying:
"Seeing that a claim for interest under the Act of 1934 need not be
pleaded (Riches v Westminster Bank [1934] 2 All E.R. 725), it is plain
that it is itself not a cause of action. It is no part of the debt or damages
claimed, but something apart on its own. It is more like the award of
costs than anything else. It is an added benefit awarded to the plaintiff
when he wins the case."
34. In Riches v Westminster Bank this court had held that a claim for
statutory interest need not be pleaded. Du Parcq L.J. said:
"... I think that the plaintiff on the cause of action pleaded was not
entitled to interest as of right and, therefore, that the judge was at
liberty, in the exercise of his discretion, to award interest under the Law
Reform (Miscellaneous Provisions) Act 1934, s. 3. The discretion which
the judge has under that section seems to me to be as unfettered as any
discretion can be... "
35. It is accepted that although the court has a discretion in the matter
of awarding interest, the discretion must be exercised judicially and
in accordance with established principles. The ordinary rule is that a
successful party is awarded interest at such rates and for such periods
as the court considers will fairly compensate him for being kept out of
his money. However, the discretionary nature of the power is underlined
by the fact that in some circumstances the court will depart from the
ordinary rule. In Jefford v Gee at page 151E-F Lord Denning gave as an
example the case where one party or the other has been guilty of gross
delay. Another is to be found in Part 36 of the Civil Procedure Rules.
Rule 36.14(3)(a) provides that the court may award a claimant who has
obtained a judgment at least as advantageous to him as an offer he has
previously made to settle the claim interest on the whole or part of any
sum of money awarded as damages at a rate not exceeding 10% above
base rate. Such an award is not intended to be compensatory, but is
intended to encourage defendants to accept sensible offers of settlement.
These are but two examples of how the discretion may be exercised
having regard to the particular circumstances of the case and the conduct
of the parties to the litigation. They proceed on the footing that section
35A does not create a substantive right to interest but a remedy at the
court's discretion, albeit one that must be exercised judicially.
36. I do not think that the recognition in Sempra Metals Ltd v Inland
Revenue Commissioners of a right at common law to recover interest as
damages for late payment when the loss is properly proved and is not
too remote alters the position in the slightest. Section 35A re-enacted
the provisions of section 3 of the 1934 Act as amended by section 22
of the Administration of Justice Act 1969. At the time each statute was
passed it was understood that there was no such right at common law, a
defect which the legislation was no doubt designed to alleviate. Whether
Parliament intended to create a legal right to recover interest or merely
to give the courts a power to award interest in appropriate cases turns on
the language of the statute properly understood in its context. It cannot
be affected by later developments in the law. There is no necessary
inconsistency between the existence of a substantive right to interest
and the existence of a statutory discretion. Substantive rights to recover
interest were already well known to the law when the 1934 Act was
passed, hence the prohibition in section 3(1)(a) on giving interest upon
interest. Moreover, as Lord Scott of Foscote pointed out in paragraph 152,
section 35A enables the court to award interest notwithstanding that it
could not, for remoteness or other reasons, be recovered as damages.
37. With all due respect to the reservations expressed by the members of
this court in Kuwait Oil Tanker SAK v Al Bader, I remain of the view that
Hobhouse J. was right in holding that section 35A of the 1981 Act creates
a remedy rather than a substantive right to interest. The power to award
interest arises only in connection with legal proceedings and, although
exercised in accordance with well-established principles, is one that may
take account of a variety of factors. The requirement in subsection (2)
to award interest on damages for personal injury or death, save where
there are special reasons not to do so (which substantially reproduces
the former legislation) merely constrains the exercise of the discretion in
those cases. It does not in my view detract from that conclusion.
38. In Lesotho Highlands Development Authority v Impregilo S.p.A. the
House of Lords was concerned with, among other things, section 49(3)
of the Arbitration Act 1996, which, in the absence of agreement to the
contrary, gives arbitrators a power to award interest, either simple or
compound. One question for determination was whether the power to
award interest under that section was excluded in a case where the terms
of the contract itself or the proper law of the contract gave a substantive
right to interest. Their Lordships were all of the view that it did not. Both
the Court of Appeal and the House of Lords treated the provisions as
discretionary in nature, so the decision thus lends some support to the
conclusion that section 35A creates a remedy rather than a substantive
right.
39. Our attention was also drawn to the case of Somers v Fournier (2002)
D.L.R. (4th) 611, in which the Court of Appeal for Ontario considered
whether section 128 of the Ontario Courts of Justice Act 1990 created a
substantive right to interest or was procedural in nature. The discussion
of the factors which tend to point in one direction or another is interesting
and helpful, particularly when read in the light of the preceding discussion
of the statutory provisions relating to the award of costs. The court held
that the power to make an award of costs was procedural but that the
section giving power to award interest created a substantive right. The
approach of the courts in Ontario to costs bears many similarities to
our own and so the court's decision in relation to interest would provide
some support for Mr. Janusz's argument were it not for the fact that the
legislation under consideration was worded in rather different terms.
Section 128 stated in terms that "A person who is entitled to an order
for the payment of money is entitled to claim and have included in the
order an award of interest thereon... ". Such language is, as the court
held, apt to create a substantive right to interest, even though it may
be displaced, varied or reduced in the exercise of the court's discretion.
Given the difference in the statutory provisions, I think that the position
in England with regard to interest is more similar to that which applies to
costs, as Lord Denning observed in Jefford v Gee.
40. In these circumstances I agree with the judge that the existence of
a right to recover interest as a head of damage is a matter of French
law, being the law applicable to the tort, but whether such a substantive
right exists or not, the court has available to it the remedy created by
section 35A of the 1981 Act. Having said that, the factors to be taken
into account in the exercise of the court's discretion may well include any
relevant provisions of French law relating to the recovery of interest. To
that extent I agree with the judge that both English and French law are
relevant to the award of interest.
41. For these reasons I would dismiss the appeal.
Lord Justice Etherton:
42. I agree.
Lord Justice Mummery:
43. I also agree.