Harding (Appellant) v. Wealands (Respondent)
55. Until comparatively recently, any private international law questions in a case like the present would have been decided according to the common law. A person who had suffered damage abroad and who wished to bring proceedings to recover compensation for that damage in the English courts had to show that his claim, or any particular head of claim, relating to the damage was actionable both under English law, the lex fori, and under the law of the country where the injury had been sustained, the lex loci delicti: Phillips v Eyre (1870) LR 6 QB 1. In Machado v Fontes  2 QB 231 the Court of Appeal had relaxed the rule to a certain extent by holding that it was sufficient if the act was wrongful in the country where it was committed, even though any damage would not have been actionable in civil proceedings there. In Boys v Chaplin  AC 356 this House overruled Machado v Fontes and declared that, in general, the damage or head of damage had indeed to be actionable under the lex loci delicti as well as under English law. Provided that the claim passed this test, the foreign law then fell out of the picture and the defendant's liability for the damage or head of damage was determined in accordance with English law:  AC 356, 385B-386A per Lord Wilberforce. The remedy to make good the plaintiff's damage was, however, a matter for the law of the forum. So, in assessing and awarding damages, an English court would apply English law.
56. When this House restored the double actionability rule to its full rigour in Boys v Chaplin, there was a somewhat increased risk that the test would exclude certain claims which it would actually be just to admit. Recognising this, the House held that, in appropriate cases, a claim or head of claim could proceed even though it was not actionable under the lex loci delicti. The flexible test for recognising these situations which Lord Wilberforce formulated came to win acceptance. In Red Sea Insurance Co Ltd v Bouygues SA  1 AC 190, the Privy Council held, conversely, that, where justice required in particular circumstances, an action could proceed in the courts of the forum on the basis of the lex loci delicti, even though the damage or head of damage would not be actionable under the lex fori.
57. In the eyes of their supporters, in this version the common law rules for determining whether damage or a head of damage was actionable in an English court displayed a welcome pragmatic flexibility; to their critics, the rules were too uncertain to provide sure guidance for practitioners. In 1990 in a joint report, Private International Law: Choice of Law in Tort and Delict, the English and Scottish Law Commissions sided with the critics and recommended that the common law rules for determining actionability should be replaced by a statutory scheme. The Commissions confirmed, however, at para 3.38, that "the measure or quantification of damages [should be] governed by the lex fori." In due course Parliament enacted the Private International Law (Miscellaneous Provisions) Act 1995 ("the 1995 Act"), Part III of which makes provision for new choice of law rules in tort and, for Scotland, in delict.
58. The first step which Parliament had to take was to abolish the pre-existing common law rules of double actionability which were perceived to be causing the problem. Except for defamation claims, where the common law is preserved by section 13, Parliament abolished these rules in section 10. Indeed Part III affects these rules and no others. This is stated expressly in section 14(2):
This provision serves to delimit the scope of the enactment in Part III and means that there is no room for arguing that the abolition of the rules covered by section 10 must have impliedly effected a change in some other rule of law. More particularly, it immediately suggests that Part III does not affect the assessment of damages since that matter was never governed by the double actionability rules which were abolished by section 10. If that is so, the assessment of damages must continue to be governed by the lex fori.
59. The abolition of the common law rules was just the first step in the reform. The next step was to replace them with new rules. That is what Part III is designed to do. As section 9(1) explains, the rules in Part III are to apply for choosing the law ("the applicable law") to be used for determining "issues relating to tort or (for the purposes of the law of Scotland) delict." So Part III does three things. First, it provides that the English court is to use a particular law (the applicable law) to determine whether an actionable tort has occurred: section 9(4). In effect, this replaces the double actionability test. But, secondly, section 9(4), read along with subsection (1), goes on to provide that the applicable law is to be used to determine other "issues relating to tort". Finally, sections 11 and 12 provide the rules by which the applicable law, which is to be used to determine these issues, is to be chosen. Under section 12 the English court can separate out various issues relating to the tort and, where appropriate, a different law is to be used to determine different issues (dépeçage).
60. Where matters are in dispute, the first step will be for the court to use the rules in sections 11 and 12 to decide what the applicable law is. Rather as, under Boys v Chaplin  AC 356, there was a general rule of double actionability which could be disapplied in certain circumstances, so too section 11 gives the general rule for choosing the applicable law, while section 12 provides for that general rule to be displaced where it would be substantially more appropriate for the law of another country to apply. Once the court has chosen the applicable law or laws in accordance with these sections, the judge will use the chosen system or systems to determine whether an actionable tort has occurred and any other issue "relating to [the] tort" which arises. Parliament has not defined "issues relating to tort", but it has at least indicated certain matters which do not fall within that category. These are to be found in section 14(3) which provides inter alia:
This provision reinforces section 14(2) by spelling out three types of rule which Part III is not to affect and one approach which it is not to authorise. It is not to affect any rules of evidence, pleading or practice and it is not to authorise a court to determine "questions of procedure in any proceedings" otherwise than in accordance with its own law. So, while Part III authorises - indeed requires - an English court to use the applicable law to determine "issues relating to tort", it does not authorise the court to use anything other than English law to determine any "questions of procedure" which arise in the proceedings.
61. Here the defendant argues that under sections 11 and 12 the applicable law relating to the issue of the assessment of damages is the law of New South Wales. So the claimant is not entitled to recover any more by way of damages for his personal injuries than he would be entitled to recover under the Motor Accidents Compensation Act 1999 ("MACA") of New South Wales. For his part, the claimant says that questions relating to the assessment of damages are "questions of procedure" and so, in accordance with section 14(3)(b), the English court must determine them by using English law. By a majority (Arden LJ and Sir William Aldous, Waller LJ dissenting), the Court of Appeal upheld the defendant's contention that the MACA rules should be applied to the assessment of damages. The result is that the maximum which the claimant could recover by way of damages for his injuries is substantially less than he would be able to recover if the judge had to apply English law.
62. The critical question concerns the interpretation of the expression "questions of procedure" in section 14(3)(b). In the Court of Appeal,  1 WLR 1539, 1559, para 52, Arden LJ explained how, in her view, the English court should approach it:
Later,  1 WLR 1539, 1563, para 66, Arden LJ held that there was "a guiding principle" that
Adopting this approach, she considered, at p 1562, para 61, that the context of section 14 suggested that
On that basis the assessment of damages was not a question of procedure and so was, presumably, to be included among the "issues in the claim" which section 9(4) directs the court to determine by using the applicable law.
63. In my respectful view Arden LJ was wrong to see section 9(4) as containing a guiding principle and section 14(3)(b) as containing an exception which the court can invoke only where there is some overriding imperative for doing so.
64. In Part III Parliament did not enact a comprehensive scheme and a number of exceptions. It simply provided that the law chosen in accordance with sections 11 and 12 is to be used to determine certain issues, while the law of the forum is to continue to be used to determine others. The matters where the United Kingdom courts are to continue to use the law of the forum are spelled out in section 14(3). In particular, Parliament has decided not to authorise an English court to use anything other than English law to determine "questions of procedure". This policy may be criticised as being liable to encourage forum shopping or on some other ground, but it is the policy of the legislature and, as such, it is entitled to exactly the same weight and respect as the policy in section 9(4) that certain other issues are to be determined by the law chosen in accordance with sections 11 and 12. There is accordingly no reason to regard the rule requiring an English court to use English law to determine questions of procedure as "the exception", for which some overriding imperative must be found. On the contrary, the words of section 14(3)(b) should be interpreted and applied in a straightforward fashion, giving them the meaning which is appropriate in the context in which they occur.
65. So, does the expression "questions of procedure" in section 14(3)(b) include questions relating to the assessment of damages? Like Arden LJ, Sir William Aldous adopted a restrictive interpretation of those words: for him, at p 1566, para 86, "the word 'procedure' in the 1995 Act should be given its natural meaning namely, the mode or rules used to govern and regulate the conduct of the court's proceedings." In many contexts something like that might well be regarded as the appropriate meaning and it might very well not include the assessment of damages. But here the expression "questions of procedure" is being used within Part III of a statute on private international law. So it is a fair assumption that Parliament meant the expression to be understood in the way that it would be understood in the field of private international law. In fact, the scheme of Part III would not work on any other basis. In a case like the present, the English court has to decide whether to characterise the relevant aspects of the assessment of damages as issues relating to tort, to be governed by the applicable law, or to regard them as questions of procedure, to be governed by English law. Given that the characterisation under section 9(2) is "for the purposes of private international law", in carrying it out, the court must have regard to the general principles of private international law. To be consistent, the court must apply the same general approach when considering the other side of the question, which involves interpreting and applying section 14(3)(b).
66. By the time Parliament legislated in 1995, it was generally understood that, for the purposes of private international law, some questions relating to damages were substantive while others were procedural. Questions relating to the actionability of heads of claim were substantive, while questions as to the quantification of damages for actionable heads of claim related to the remedy and so were classified as procedural. So, for instance, Lord Hodson said in Boys v Chaplin  AC 356, 379D:
Lord Wilberforce,  AC 356, 392F-393C, was somewhat dismissive of an analysis purely in terms of what he called "the accepted distinction between substance and procedure", but none the less he too envisaged that certain questions relating to damages were to be classified as "procedure" and so as a matter for the application of the lex fori. Similarly, Lord Pearson spoke, at p 394E-F, of "procedural (or adjectival or non-substantive) law" which would regulate the recovery of damages. In Mitchell v McCulloch 1976 SC 1, 7, Lord McDonald referred to counsel for the pursuer's argument that "procedural matters, including the measure of damages, are determined solely by the lex fori." In Stevens v Head (1993) 176 CLR 433, 447, Mason CJ summarised the current thinking:
67. These references, which could be multiplied, demonstrate that questions of the quantification or assessment of damages had long been regarded as "procedural" as opposed to "substantive". I have accordingly no doubt that when Parliament used the expression "questions of procedure" it was intended to cover questions relating to the assessment of damages. Indeed, if that were not so and the assessment of damages were to be regarded as an issue relating to tort to be determined by reference to the applicable law, Parliament would have made a major change in this aspect of the law - despite the Law Commissions' recommendation that the existing state of the law should be preserved.
68. Counsel for the defendant contended, however, that, even if Parliament had used the expression "questions of procedure" in that way when it passed the 1995 Act, the common law was not set in stone and an "updating construction" should be given to section 14(3)(b), to take account of developments since 1995. In particular, the High Court of Australia, which would, in 1995, have accepted that the assessment of damages was procedural (Stevens v Head (1993) 176 CLR 433), had now changed direction and held, in the words of the majority, that "all questions about the kinds of damage, or amount of damages that may be recovered, would ... be treated as substantive issues governed by the lex loci delicti": John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, 544, para 100. In making this change, members of the court had regard to the view of La Forest J, giving the opinion of the Supreme Court of Canada in Tolofson v Jensen (1994) 120 DLR (4th) 289, 321, that
Counsel for the defendant submitted that the expression "questions of procedure" in section 14(3)(b) should now be interpreted in a way which took account of this development. In effect, by adopting the High Court's revised classification of questions relating to the assessment of damages as matters of substance, Arden LJ and Sir William Aldous accepted that argument.
69. In my view, however, the argument falls down for a variety of reasons. This is not a case of the kind envisaged by Lord Wilberforce in Royal College of Nursing of the United Kingdom v Department of Health and Social Security  AC 800, 822, where a new state of affairs, or a fresh set of facts bearing on policy, has come into existence since the 1995 Act was passed and the courts have to consider whether they fall within the parliamentary intention expressed in the words of the enactment. Indeed the decision of the Supreme Court of Canada in Tolofson v Jensen antedated the 1995 Act - but Parliament did not follow its lead. All that the appellant can point to, therefore, is a change in the way that the High Court of Australia classifies questions about the quantum of damages for purposes of the common law rule in intra-Australian cases. As is plain from the judgments in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503, however, their Honours were knowingly altering what had previously been well settled law. Moreover, they were doing so because they felt impelled by what they saw as a requirement of the federal nature of the constitution. A similar consideration influenced the Canadian Supreme Court in Tolofson v Jensen (1994) 120 DLR (4th) 289. It remains to be seen whether the High Court will hold that all questions about the kind or amount of damages are to be determined by the lex loci delicti in international cases: Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491, 520, para 76. These decisions of the Canadian and Australian courts, which show how the common law can be reshaped, may give ammunition, or food for thought, for critics of the policy adopted by Parliament in the 1995 Act. But they contain nothing which can justify the House in altering what would otherwise be the appropriate interpretation of the statute.
70. The passage which Lord Hoffmann has quoted from the Hansard report of the speech of the Lord Chancellor, Lord Mackay of Clashfern, in reply to the probing amendment in the name of Lord Howie of Troon, confirms the construction which I would, in any event, have placed on the words in section 14(3)(b). But more importantly, perhaps, it shows that Parliament was assured that the provision would prevent damages being awarded by reference to the law and standards of other countries. The particular problem raised by Lord Howie related to the high level of damages in the United States which he was anxious should not be replicated here. But it would be equally unacceptable if, say, United Kingdom courts had to award damages according to a statutory scale which, while adequate in another country because of the relatively low cost of services etc there, would be wholly inadequate in this country, having regard to the cost of the corresponding items here. As Parliament was assured by the Lord Chancellor, section 14(3)(b) guards against such eventualities. The interpretation advocated by the defendant would undermine the basis on which Parliament legislated.
71. The defendant relies on the provisions of MACA. So the ultimate question is whether the relevant provisions are to be regarded as procedural or substantive for the purposes of private international law. If they are procedural, they are to be disregarded since questions of procedure are to be regulated by the law of the forum in accordance with section 14(3)(b). If they are substantive, then they would apply if the law of New South Wales were the applicable law, as the Court of Appeal held, reversing Elias J.
72. Lord Hoffmann has analysed the passage in Dicey and Morris, Conflict of Laws, to the effect that "statutory provisions limiting a defendant's liability are prima facie substantive; but the true construction of the statute may negative this view." I respectfully agree with his analysis. In any event, as the passage recognises, in any given case the answer to the question must depend on the construction of the relevant provision in the context of the particular statute. In the present case the defendant relies on various provisions in Chapter 5 of MACA, headed "Award of damages". Many of them derive from equivalent provisions in the Motor Accidents Act 1988. The restrictions on the damages recoverable for non-economic loss under that Act were considered by the High Court of Australia in Stevens v Head (1993) 176 CLR 433. Applying the customary common law approach in private international law, the High Court classified them as procedural. That decision is not conclusive of any or all of the matters in dispute, but it does provide useful guidance from the highest court in the country.
73. Section 122(1) of MACA explains that Chapter 5 applies to, and in respect of, "an award of damages" relating to death or injury in motor accidents. Section 123 provides that "A court cannot award damages to a person in respect of a motor accident contrary to this Chapter." While, of course, it may be necessary to look beneath the surface of a statutory provision to ascertain its nature, the legislature is here signalling that the provisions in Chapter 5 are directed to what a New South Wales court can award by way of damages. In other words, prima facie at least, they are concerned, not with the scope of the defendant's liability for the victim's injuries as such, but with the remedy which the courts of New South Wales can give to compensate for those injuries. For purposes of private international law, prima facie they are procedural in nature.
74. Of course, when it enacted MACA the Parliament of New South Wales was not concerned with the categories of private international law. So, not surprisingly, Chapter 5 contains provisions on matters which would traditionally fall on the substantive side of the line for purposes of private international law. This is the case, for example, with mitigation of damages in section 136. The same goes for section 138, on contributory negligence, and section 140, on volenti non fit iniuria.
75. Neverthless, in Parts 5.2 and 5.3, dealing respectively with damages for economic and non-economic loss, the provisions are formulated in a way that emphasises their nature as directions to the courts of New South Wales. For instance, where the legislature refers to "an award of damages", it is referring to something that can only be made by a court. So, under section 125(2), in "an award of damages" for economic loss, "the court is to disregard" any amount by which the injured person's weekly earnings would have exceeded $A2,500, subject to indexation. Under section 127(1), "where an award of damages is to include compensation" for future economic loss, the present value of that future loss "is to be qualified by adopting the prescribed discount rate" - clearly a direction to a judge who is going to include this kind of compensation in an award of damages as to how to go about it. Similarly, under section 134, the maximum amount "that a court may award" for non-economic loss is now $A309,000, again subject to indexation.
76. Undoubtedly, in practice these and other provisions can be expected to govern the amounts for which claims are settled outside the courts. But that does not make them substantive. It merely means that litigants, who know what the court can and cannot award, will settle their claims accordingly. More particularly, it does not mean that the provisions are to be regarded as substantive rather than procedural for purposes of private international law. In that context, the brocard ubi remedium ibi ius would be an unsafe guiding principle.
77. I would accordingly hold that the provisions of Chapter 5 of MACA on which the defendant relies relate to the remedy which the courts of New South Wales can award and are procedural for the purposes of section 14(3)(b) of the 1995 Act. That being so, they fall to be ignored when the English court awards damages for the claimant's injuries. I recognise that this means that the defendant's insurers may have to meet a higher claim for damages than would be the case if the provisions of MACA applied. I recognise also that making a higher award would conflict with certain of the overall objects set out in section 5 of MACA. But I do not regard that as a compelling consideration since, as defendant's counsel was careful to acknowledge, the impact on the scheme of applying a different scale of damages in claims litigated in this country is unlikely to be anything other than marginal.
78. For these reasons, as well as for those given by Lord Hoffmann, with whose speech I am in full agreement, I would allow the appeal and hold that the quantification of damages is to be determined in accordance with English law. Since all the issues in dispute relate to the quantification of damages, it is unnecessary to decide which law would be the applicable law for determining issues relating to tort in accordance with sections 9(1) and (4) of the 1995 Act.
79. I have had the advantage of reading in draft the opinions prepared by my noble and learned friends Lord Hoffmann and Lord Rodger of Earlsferry. I fully agree with their reasons and conclusions, with one slight qualification on one aspect of the case, on which I shall add a few words.
80. Your Lordships have found it possible to decide the question of construction of section 14(3)(b) of the Private International Law (Miscellaneous Provisions) Act 1995 without recourse to external aids. The appellant's counsel also relied strongly, however, on the statement made in the House of Lords on 27 March 1995 by the then Lord Chancellor, Lord Mackay of Clashfern, set out in para 37 of Lord Hoffmann's opinion. This was not just an expression of the Government's intention from a most authoritative source, it was a reassurance to Lord Howie of Troon that his amendment was not necessary, since issues relating to the quantum or measure of damages would come within the ambit of the words "questions of procedure" in section 14(3)(b). As Lord Hoffmann has said (para 37), it is as clear a case for the application of the principle stated in Pepper v Hart  AC 593 as anyone could hope to find. If the officious bystander had volunteered his opinion on the point, it could have been nothing short of conclusive.