DHV (A Protected Party through his Litigation Friend, WTX) v Motor Insurer's Bureau [2025] EWHC 2038 (KB)

[2025] EWHC 2038 (KB)Case No QB-2019-000783
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 01/08/2025
Before
Mr Justice Dexter Dias
Between
DHVClaimantMOTOR INSURERS’ BUREAUDefendant
Patrick Vincent KC and James Pickering (instructed by Levenes Solicitors) for ClaimantLucy Wyles KC and Poppy Blackshaw (instructed by Weightmans LLP) for DefendantHearing Hearing dates: 14 July 2025(Judgment circulated to the parties: 18 July 2025Counsel suggestions received: 24 July 2025)
JUDGMENT
THE HON. MR JUSTICE DEXTER DIASMr Justice Dexter Dias :I - Introduction
[1]This is an application by the claimant in a personal injury case for the defendant to pay penalty interest under Spanish law on the awarded compensation sum.[2]The claimant is a British national who has been anonymised as DHV due to being a protected party. He brings the case through his litigation friend and mother WTX. The defendant is the Motor Insurers’ Bureau (“MIB”), which stands in for the Spanish guarantee fund. The claimant is again represented by Mr Vincent KC and Mr Pickering; the defendant by Ms Wyles KC and Ms Blackshaw. The court is grateful once more to all counsel.[3]This short judgment follows the substantive judgment I sent out to the parties on 5 February 2025 following a lengthy trial before me towards the end of the Michaelmas Term of 2024. This judgment must be read in conjunction with that judgment (DHV v MIB [2025] EWHC 2002 KB). By agreement, the question of penalty interest had to await the court’s substantive judgment. The issue was itemised as Issue 14 in the trial list of issues and framed as follows:
“Whether (a) Spanish penalty interest or legal interest should be awarded in this case and (b) if so, in what amount.”
[4]In the early hours of 21 July 2017, the claimant was seriously injured by a vehicle in Mallorca after he left a wedding he attended and was crossing the road. The vehicle was uninsured and thus the Spanish guarantee fund would ordinarily be obliged to pay any compensation found to be due. The claimant had been drinking and was intoxicated. He crossed the road at an undesignated point and was flush to the road surface when he was struck by the vehicle. I assessed his contribution to the incident at 65 per cent.[5]Due to the mutual arrangements between the United Kingdom and the Kingdom of Spain, the matter came for trial in this jurisdiction with English procedural rules but governed by Spanish substantive law. The MIB, as indicated, stands in the shoes of the Spanish guarantee fund for all effective purposes. The payment of interest under the applicable Spanish law is a question of substantive law as the Court of Appeal explained in Nicholls & Anor v Mapfre Espana Compania De Seguros Y Reaseguros SA [2024] EWCA Civ 718. Dingemans LJ said at para 58:
“In my judgment the interest payable under Act 50/1980 is not a matter of procedure for the purposes of article 1(3) of Rome II, and is governed by the law applicable to the non-contractual obligation, namely the law of Spain.”
[6]Therefore, in determining the dispute between the parties about whether penalty interest should be imposed, I must apply Spanish substantive law. II - Law[7]The relevant statutory provision for the calculation of penalty interest in claims against insurers in Spain is Article 20 of the 50/1980 Insurance Contract Act of 8 October 1980 (“Article 20”).Article 20(9) provides for a specific regime that applies to insurers in the position of a guarantee fund:
“9. When the Insurance Compensation Consortium has to satisfy the compensation as a guarantee fund, it shall be understood that it is in default only in the event that a period of three months has elapsed from the date on which it is claimed the payment of the compensation without the Consortium having proceeded to pay it in accordance with its specific regulations, and the obligation to compensate for delay in the non-payment of the minimum amount shall not be applicable to it. In the remainder when the Consortium intervenes as a guarantee fund and, without exception, when the Consortium contracts as direct insurer, the present article shall be fully applicable.”
[8]However, Article 20(8) provides that no penalty interest may be imposed on a defaulting insurer acting as a guarantee fund in two situations:
“8. There will be no compensation for the insurer's delay when the failure to pay the compensation or the payment of the minimum amount is based on a justified cause or is not attributable to him.”
[9]The defendant, while accepting it is in default of the obligation under Article 20(9) to pay compensation within three months of the notification of the claim for damages (which was on 19 September 2017), opposes the imposition of penalty interest, submitting that there is justifiable delay for the purposes of Article 20(8). III - Common ground[10]Helpfully, counsel have approached the issue of penalty interest in a realistic and responsible manner. There is a large area of common ground that I identify immediately.(1) The court must apply Spanish substantive law;(2) The content of the Spanish law the court applies must be found as a fact by the court;(3) Since there has been no application under section 4(2) – (5) of the Civil Evidence Act 1972 and CPR 33.7, other decisions in this court about the content of Spanish law are not admissible as evidence of the content of Spanish law;(4) Interest is a head of loss under Spanish law;(5) Article 20 applies to this case;(6) The question is a binary yes/no question: whether to impose penalty interest or not;(7) Under Article 20(9), a defaulting insurer must pay penalty interest on all amounts due from three months after the date in which it received the claim for compensation. This liability potentially falls into two parts:a. For the first two years, the applicable rate is the legal interest rate plus 50 per cent;b. After that, the applicable rate is 20 per cent;(8) The date of notification of the claim is 19 September 2017;(9) Therefore, the date from which any imposed penalty interest starts (the “dies a quo”) is three months after the date of notification, 19 December 2017;(10) The defendant is in default of its obligation to pay compensation by 19 December 2017;(11) Thus, the sole question for the court is whether under Article 20(8) there is either (a) a justified delay in payment of compensation or (b) a delay not attributable to the defendant, enabling the court not to impose the penalty interest otherwise due under Article 20(9).

IV - First instance decisions

[11]I indicated during the course of oral argument that I would add a short section to the judgment about the view I reached following oral argument about the status of English decisions in which judges of this court have made findings of fact about the content of Spanish law. During the course of submissions, it was recognised on behalf of the claimant that such decisions – findings of fact – were not admissible in these proceedings absent application under CPR Part 33 et cetera. There has been no such application here. The issue arose because in the claimant’s skeleton argument for this hearing there was extended citation of first instance decisions of this court that speak to the content of Spanish law. The defendant objected. It was right to object. It was submitted on behalf of the claimant that these decisions succinctly or elegantly summarise the Spanish law and in a way consistent with the evidence of the experts in these proceedings. I rely exclusively on the admissible evidence before me for determining any question of Spanish law. Ms Wyles accurately identified the three permissible sources of Spanish law:(1) the text of the legal provision (here Article 20);(2) the Spanish Supreme Court doctrine;(3) the expert evidence adduced in these proceedings.[12]I consider nothing else.

V - Justifications

[13]The defendant has set out with admirable clarity the reasons it submits its delay in paying compensation was justified or not attributable to it. The central reason advanced is that the claimant did not quantify his claim until very late in proceedings, with a schedule only provided in August 2024, that is three months before the trial. As Ms Wyles put it, “the submission here is that we did not know what is being claimed.”[14]First, and as a preliminary observation, I note that I received no evidence from the experts about where the burden of proof lies. The persuasive onus is not clear from the text of Article 20. I have not been provided with any Spanish Supreme Court (or indeed other Spanish) decision that illuminates the point. That said, I do not find this to be an impediment. To me, as will be evident, the case is clear, wherever the persuasive burden lies.[15]Second, I examine the obligations on an injured person and the insurer under Spanish law. Under Article 20(9), the obligation on the injured party is to make a claim for “payment of compensation”. It is agreed between the parties that by the claimant filling in the standard MIB form on 19 September 2017, he made a claim for the payment of compensation and therefore fulfilled that obligation. From that trigger point, the defendant as insurer is obliged to pay compensation within three months (I will come to what compensation it is required to pay shortly). However, the defendant paid no compensation before the expiry of the three-month period specified by Article 20(9). This is why the defendant accepts that it is in default.[16]Third, I consider what compensation should be paid. One must recollect that the text the parties made submissions on, and the court has been invited to consider, is translated from the Spanish. While the translated text in Professor Carreras’s report says that the obligation is to “satisfy the compensation”, no party suggested to the court that it means full payment within three months of the entire compensation that ultimately would fall to be due. Indeed, Mr Vincent specifically submitted on behalf of the claimant that the provision could not mean all the compensation that was finally due or later awarded because three months after the trigger notification it would be very difficult to be precise about the final level of compensation. It seems to me that there is force in this submission. This is, of course, a separate question from the date penalty interest should run from. It is agreed that it runs from notification plus three months; that cannot mean that all the compensation must have been paid by that three-month mark.[17]If then, the requirement is not to pay all the compensation, I next consider what an insurer should pay to avoid activation of penalty interest. This is a question I posed to both counsel. Mr Vincent submitted that it must be “something”, albeit not something trivial or tokenistic. I can accept the submission that a derisory amount, say 10 Euros, when very serious injuries are detailed in the notification form, is unlikely to be sufficient to avoid penalty interest, even if paid within the three-month window. Ms Wyles made the point that the defendant accepts it is default of the Article 20(9) obligation. Therefore, in one sense it does not matter much, as Mr Vincent submits, exactly what the insurer should pay before the close of the window. I note that there has been no Spanish case put before me that deals with this question head on. However, neither expert has suggested that the full compensation must be paid by the end of the three months. This would not be generally possible, I can entirely envisage, as it may be that just as in this case the injuries had not consolidated or assessments were still outstanding about their full extent. It seems to me that such matters do not remove the obligation under Spanish law to make some payment of compensation or, if not and falling in default, provide good reason for any delay. Ms Astigarraga gave evidence about this question. I should say that I had concerns about aspects of her evidence on certain critical points on other issues, as detailed in the substantive judgment. However, on the question of penalty interest, I found her evidence to be logical and reasonable. It was not subject to any material challenge, which supports this assessment. This is unsurprising as her evidence was largely in accordance with both Professor Carreras, the defendant’s expert, and the pronouncements of the Spanish Supreme Court. Ms Astigarraga’s evidence on this point came in an exchange in cross-examination:
“Ms Wyles KC (“LWKC”): An insurer or the MIB receiving the Letter of Claim to the MIB would not have evidence allowing quantification of the claim. Ms Astigarraga: This is the initial claim. I do not refer to that document as I am not familiar with it here. The Letter of Claim in Spain is a simple letter of one page informing about the existence of the accident and the injuries, and no medical evidence is generally attached. The judgment setting the date of penalty interest will consider the attitude of the defendant – if, after receiving it and having knowledge of an injured person, they did something or did nothing. Sometimes they send their own doctors to assess the damages. They usually request having the possibility to do an initial assessment, mainly even before receiving any medical evidence. It is a point the judges can take into account – the attitude to mitigate the damages by acting quickly. LWKC: If they do that, that would be a reasonable thing to do? Ms Astigarraga: Yes. It is the insurer’s obligation to assess promptly and to do payments, even if the initial payment could be £5,000 or £10,000 – an amount to cover the injuries that they have knowledge of at that time. If the claimant is in hospital for a month, it could be for that month. That is the obligation, to do this.”
[18]It seems clear, and beyond dispute, that the failure by the defendant to pay any compensation before the three-month window closes activates the Spanish court’s power to impose penalty interest. We now reach what to my mind is the heart of the matter. The defendant submits that there was not sufficient quantification of the claim to allow for payment of compensation, and this must mean any compensation as none was paid. This is said to provide the justification for delay or alternatively it was a reason for delay not attributable to the defendant. There are several sub-points within this heading. I deal with each of them in turn. A. Interim payments[19]The defendant submits that the court should take into account the three interim payments it has made as part of its justification for delay. It is essential to understand the context of these three payments. The payments were: 17 June 2021: £50,000. 16 June 2022: £70,000. 31 October 2022: £50,000.[20]The defendant made the first payment following the claimant listing the case for an interim payment application. Very shortly before the listed hearing, the first payment was made. As Mr Vincent graphically termed it, the defendant only made the payment “through gritted teeth”. There is force in that submission because of the defendant’s approach to the next two interim payments in June and October 2023. The claimant’s applications were each fully contested and interim payment was only made following an order from a King’s Bench Master. These were not voluntary payments. This seems to me to be significant in assessing the approach and attitude of the defendant in seeking to justify delay in payment of compensation. It is correct as the defendant submits that two years before the 2024 trial, the defendant had paid on an interim basis 80 per cent of the amount that ultimately the claimant would be awarded by the court. However, these were not offers of compensation. They were returnable interim payments. I cannot place much weight in the defendant’s submission that an order for repayment was “extremely unlikely” or merely “a technical possibility”. The point is the objective status of the payment. It was returnable and not a payment of non-refundable compensation. It is correct that in the Spanish Supreme Court judgment of 24 April 2014, the court said that interim payments were relevant to whether penalty interest should be awarded. Therefore, I emphasise, I do take them into account. The question is the weight to be attached to them, given the stage at which they were paid and the attitude of the defendant towards these payments. The first was paid almost four years after the MIB notification form. I judge that to be a very long and unjustified delay. As indicated, there was either reluctance or outright resistance to the making of these payments on the part of the defendant. I find this significant. Therefore, I place limited weight on these interim payments given the oppositional attitude of the defendant. I underline, however, that I judge the question of justification in the round, considering all the relevant factors together. B. Liability[21]I turn to a key consideration. At no point before the trial did the defendant make an offer to pay compensation or in fact pay compensation, a point the claimant places heavy reliance on. Ms Wyles is correct to point out that for the most part the claimant has been a protected person and there are court rules around that. That is not an unusual state of affairs in a serious personal injury case. It was possible to have made a voluntary payment, certainly when he did not have protected status. The defendant did not. One then examines the sequence and history. On 15 October 2020, the defendant accepted primary liability. Despite accepting such liability, it made no offer of compensation, nor paid any. Ms Wyles submits that “there is nothing in the expert evidence about offers”. This is true as far as the two experts before me are concerned. However, the Spanish Supreme Court touched on this point in its decision dated 7 February 2019. Its judgment is quoted in Professor Carreras’s evidence at B1407-08. Indeed, Ms Wyles cited the case in her submissions. It says as material:
“In general, in short, and invoking a clearly established model of conduct, the purpose of Article 20 Insurance Contract Law is to sanction the failure to pay compensation, or to offer adequate compensation, from the moment that an orderly insurer, having knowledge of the incident, would have satisfied or offered it.”
[22]To me, two matters are noteworthy. First, that the Spanish Supreme Court speaks of “having knowledge of the incident”, not being in receipt of detailed or precise quantification of the claim. As Ms Astigarraga stated, again without challenge, in Spain the trigger notification is “a simple letter of one page informing about the existence of the accident and the injuries, and no medical evidence is generally attached.” What the Spanish court then scrutinises is the “attitude of the defendant” on its receipt. Second, the Supreme Court mentions in terms not just the failure to pay compensation but the failure “to offer adequate compensation” and will consider whether the insurer has satisfied its obligation by having “offered it” (compensation). Thus, I cannot accept the conclusion Ms Wyles invites the court to reach that the question of offers of compensation is a “red herring”.[23]When an insurer seeks to justify its delay in paying compensation, it seems to me that it is obvious that in the absence of any concrete payments of compensation, offers of compensation must plainly be relevant as the Spanish Supreme Court states in terms. This is because they indicate the insurer’s attitude and approach. This clearly is a relevant factor, as Ms Astigarraga informed the court in evidence without challenge or contradiction. It would be curious indeed if the court ignored a situation where an insurer had made an offer of nearly full compensation which the claimant had rejected. Testing the argument in that way makes it clear that offers of compensation are relevant to the attitude of the insurer and the reasonableness of its subsequent conduct when it seeks to be relieved of the penalty interest sanction following its admitted initial default.[24]Of further significance is that on 12 September 2017, it was established that the driver of the Spanish vehicle was uninsured. Under Spanish law, it is agreed and for reasons explained in detail in my substantive judgment, the maximum contributory negligence that can be attributed to the claimant in the circumstances of an uninsured driver is 75 per cent. In the end, my finding was that the claimant was 65 per cent responsible for the incident and his ensuing injuries. Nonetheless, despite a minimum residual level of 25 per cent responsibility following the acceptance of primary liability in October 2020, the defendant made no offer of compensation before trial. C. Information about injuries[25]The central plank of the defendant’s resistance to penalty interest is that the claimant did not quantify his claim until the schedule of loss in August 2024. To assess the merits of this argument, one must examine the nature of the information available to the defendant at different stages. I first examine the MIB notification form dated 19 September 2017.[26]The claimant said he was a pedestrian. He gave the name of the driver and the vehicle registration number, stating that he got the details from the police. The circumstances of the accident were that the driver failed to see the claimant and “drove his vehicle into [DHV]” as he was crossing the road. This caused him to be “knocked down and then dragged along the road as the driver failed to stop”. The form adds that the claimant “suffered severe injury, loss and damage”. At Box 11.14, the claimant confirmed that he had sustained personal injuries. At Box 11.15, these were described as “very severe brain injury along with multiple orthopaedic injuries.” At Box 11.16, in answer to the question “Are you still suffering from these injuries?”, the answer was “Our client is still suffering from the effects of the injury and has immediate needs of rehabilitation.” The injury was said to prevent him from returning to normal work or completing “normal daily activities”. The name of the hospital in Mallorca was given and it was said that the claimant had stayed in hospital as an inpatient for “48 nights”.[27]The next information to consider comes from an Immediate Needs Assessment (“INA”) dated 6 October 2017. It was based on an assessment of the claimant’s condition on 21 September 2017. The assessment was made by a case manager Kate Wright. At Section 2.2, Ms Wright detailed the injuries listed in the discharge summaries from the two hospitals in which the claimant had been treated, in Spain and in England. “2.2.1 As reported in the Discharge Summary from Son Espases Hospital:• Sub-arachnoid haemorrhage (bleeding below the arachnoid layer of the membranes surrounding the brain).• Interhemispheric subdural haematoma (bleeding below the dura layer of the membranes surrounding the brain).• Right frontal subdural haematoma (bleeding below the dura layer of the membranes surrounding the brain).• Signs of cerebral oedema (swelling of the brain).• Longitudinal fracture of the left petrous temporal bone (skull fracture of the temporal bone).• Fracture of the nasal bones.• Fracture of the right scapula (shoulder blade).• Ipsilateral ilio-/ischiopubic fracture (pelvic fracture).• Right costal fractures (rib fractures). 2.2.2 As reported in the Discharge Summary from The Royal Surrey County Hospital:• Right frontal contusions (bruising to the front right side of the brain).• Bi-lateral sub-arachnoid haemorrhages (bleeding below the arachnoid layer of the membranes surrounding the brain on both sides of the brain).• Subdural haematoma – unsure if this was evacuated in Spain* (bleeding below the dura layer of the membranes surrounding the brain).• Left temporal fracture (skull fracture of the temporal bone).• Nasal bone fracture.• Right complex scapular fracture.• Right acromio-clavicular (top of the shoulder) joint injury.• Right ribs 1 and 9 fractures.• Right acetabular/pelvic fractures.• Large superficial wounds to left upper back and shoulders. Ms Wright provided an additional note:
“*Please note that The Royal Surrey County Hospital have intimated that [DHV] may have had brain surgery to remove (evacuate) his sub-dural haematoma. This procedure is not listed in the discharge summary from Son Espases Hospital, nor were [the claimant or his former girlfriend] ever aware of any neuro surgery having taken place.” “*Please note that The Royal Surrey County Hospital have intimated that [DHV] may have had brain surgery to remove (evacuate) his sub-dural haematoma. This procedure is not listed in the discharge summary from Son Espases Hospital, nor were [the claimant or his former girlfriend] ever aware of any neuro surgery having taken place.”
Additional injuries reported by [the claimant]: •. Partial removal of left ear - sutured back in place. •. [The claimant] suffered from post-traumatic amnesia (PTA) from the accident through to 20th August 2017. •. Worsening of pre-existing left knee injury”[28]It seems to me that here was a substantial body of information highly relevant to the question of whether any meaningful quantification of the claim was possible to enable any payment of at least some compensation. An exchange during Professor Carreras’s cross-examination supports this conclusion:
“Patrick Vincent KC (“PVKC”): The Immediate Needs Assessment has very detailed descriptions of the injuries, their effects, care, the treatment likely, the effect on his earnings – a comprehensive overview. If that is what it is, that complies with what the Claimant should be producing to the insurers to allow them to value the claim?”
Professor Carreras: Yes, it is good information. PVKC: Certainly from the point they have this, the trigger starts for penalty interest? Professor Carreras: Yes. But I have to make an observation: it is October 2017, a few weeks after the accident. The date of Consolidation was later. PVKC: Consolidation is a different question. For the purpose of penalty interest, undoubtedly, when they get a document like this, they need to be complying with Article 20 and making some offer? Professor Carreras: An insurer in Spain, yes. PVKC: An insurer in England with the same information – there is no reason they cannot do the same thing? Professor Carreras: I agree.”[29]I should add that the consolidation date is 25 January 2018, just over one month after the close of the three-month window on 19 December 2017. Ms Wyles submitted that “quantification cannot be settled until the consolidation date”. This date was early in this chain of events, being January 2018. I have not been directed to any evidence supporting any attempts by the defendant to quantify the claim following the date of consolidation. Nor, as Mr Vincent correctly submits, is there any evidence of difficulties the defendant had quantifying the claim.[30]When asked what information the defendant in fact possessed, it was said on behalf of the defendant that “We do not deny that we have lots of information about this claim, piles and piles of it, but not a schedule particularising the claim until last year.” This seems to me to be highly revealing and reflects poorly on the defendant. The defendant later submitted that “there was a lot of information, but it did not allow quantification until the schedule.” While it may be the case that it did not allow for full or precise quantification, that is not the test. Under Article 20, there must be some payment of compensation, or as the Spain Supreme Court said in its 2016 decision already cited, an offer of compensation. Neither of these things was forthcoming before trial. Another way to look at the defendant’s failure is to recognise that Professor Carreras agreed that the information provided in the INA is “good information”. That is plainly correct and I accept his evidence on this. To my mind, it is sufficient to permit some quantification of compensation by the defendant. Yet the defendant paid no compensation. Once primary liability was accepted in 2020, there was a minimum 25 per cent responsibility. Once more, no compensation was paid or offered before trial.[31]It seems to me that the fallacy in the defendant’s position is that is has conflated an obligation to pay some compensation with an obligation to pay full compensation following precise quantification. I do accept Ms Wyles’s point that in Spain at the outset of the legal claim there must be full quantification, on what she calls “Day 1”. But the obligation to pay some compensation by the end of the three-month window arises despite the obvious inability in many or even most cases to provide full quantification by the close of the window. If an insurer then seeks to rely on the lack of quantification as a justification for delay in paying compensation, one has to judge the insurer’s approach against the Spanish Supreme Court’s doctrine about Article 20. It is agreed between the Spanish experts to be that:
“the Spanish Supreme Court has decided a large number of cases regarding Article 20. The doctrine emanating from these judgments can be summed up as: (i) Article 20 aims to penalize insurers who unduly delay the payment of compensation arising from their insurance activity; (ii) This Article applies in general and will only cease to apply in special cases with a restrictive criterion”

The doctrine emanating from these judgments can be summed up as:

[32]There are several authoritative Spanish Supreme Court cases that have been put before me that support these propositions, and from which, no doubt, they have been derived. A vital point is that the disapplication of penalty interest once there is default only arises in “special cases” and the rule is “restrictively” applied. This presents the defendant with serious difficulties. It has paid no compensation (I have explained my approach to the ultimately returnable interim payments above). As the defendant’s expert elaborated at B1404, there may be justification where “it was essential to wait for a judicial decision on the claim, in which case Article 20 will not apply.” When considering whether it was “essential” to await the trial before payment of any compensation or any offer, it seems to me this is a difficult position to defend given that the defendant has accepted primary liability and the claimant’s contributory negligence is limited to 75 per cent. The Spanish Supreme Court has repeated, and Professor Carreras accepted, that questions about the degree of contributory negligence do not justify delay in payment of compensation. In these circumstances, was the payment of no compensation given the body of information in the initial MIB notification form and the INA justified? I find it was not.[33]Equally, where there are disputes about the level of damages, the Spanish Supreme Court has held that this is ordinarily not a reason to make no compensation payment. The cases where there have been justifiable reasons for delay reveal the type of “special case” in which the Spanish court would find justification for delay. Indeed, Professor Carreras cites (B1406) the Supreme Court judgment of 24 April 2014:
“this Court has declared on repeated occasions that the compensation established in Article 20 of the Law of Insurance Contracts has from its genesis a marked penalising character and a clearly preventive purpose, to the extent that it serves as an incentive and stimulus for the fulfilment of the main obligation that weighs on the insurer, which is that of the opportune payment of the corresponding compensation capable of providing the full restitution of the right or legitimate interest of the injured party. The insurer's default only disappears when from the circumstances of the claim or from the text of the policy, uncertainty arises regarding the insurance cover which makes the intervention of the judicial body necessary in the face of the existing discrepancy between the parties in this respect, until this uncertainty is cleared up by the judicial decision, none of which is present in the case (judgements of 13 June 2007; 26 May and 20 September 2011 and 25 January 2012. Regarding uncertainty, the Court has also stated that the mere discrepancy in the amounts claimed does not constitute uncertainty.”
[34]The position in Spain is clear. Despite this, Professor Carreras provided the court with evidence that:
“From the information I have been given and have been able to study, I would point out that the MIB has not until recently had all the information, or at least all the really important information, about the extent and consequences of the injuries suffered by the Claimant and about the financial implications of the claim.”

He added:

“If a Spanish Court were to examine the situation from the point of view of the information available to the MIB and the times at which it was provided by the Claimant's legal representatives, as well as the amounts and dates of the payments on account made by the MIB to the Claimant, the Spanish Court would most probably come to the conclusion that it is not appropriate in this case to impose on the MIB the payment of a punitive rate of interest. .. It is not for me, of course, to argue on this point, but I feel I must stress that, in my professional opinion, a literal and strict application of the punitive interest of article 20 of the Spanish Insurance Law would not be a fair application if a Spanish court were to decide a case in circumstances similar to this one.”
He added:[35]With respect, Professor Carreras is right and wrong. He is right that it is not for him to argue the case, although he proceeds to do so. However, I do consider his opinion of how a Spanish court would approach this case to be relevant. Mr Vincent accepted that it was permissible for this court to consider the Professor’s opinion. However, I cannot accept his opinion evidence on this point. That is because, as he has more than once emphasised, Article 20 is interpreted restrictively and the Spanish court strives to give effect to the policy of the provision, which is to promote prompt payment of compensation due to the injured party. The approach of the Spanish court is to apply Article 20 strictly, that is, restrictively. Indeed, Professor Carreras gave further evidence that “the Spanish courts have applied the ‘just cause’ of Article 20(8) very restrictively.” I accept this evidence. It is supported by the Spanish Supreme Court judgments placed before me and the evidence of Ms Astigarraga. The Spanish Supreme Court in its decision of 14 July 2016 emphasised that the imposition of penalty interest is intended to have a “sanctioning” effect and this has been “repeatedly stated”. The prospect of such punitive sanction as opposed to compensation is plainly intended to concentrate the mind of a responsible insurer. The Supreme Court continued that:
“The insurer's default only disappears when there is uncertainty about the insurance coverage that makes the intervention of the Court necessary due to the discrepancy between the parties.”
[36]There is no uncertainty about insurance coverage here. While I accept that the full quantification of the claim was not provided to the defendant until the August 2024 schedule, there was a wealth of material that permitted the defendant as an experienced insurer to make a reasonable assessment from an early stage, certainly from the INA, but also from the contents of the MIB notification form, to enable it as a responsible insurer to make some compensation payment beyond the derisory or tokenistic. The need to pay some compensation is only strengthened by the defendant’s acceptance of primary liability in October 2020. Yet no compensation was paid. Potentially returnable interim payments were made, either with obvious reluctance or having been fully opposed and forcing the court to make an order, but not non-returnable compensation.[37]I reject the submission that the “uncertainty about the extent of the claim” was “an unknown question mark”. Alive to the decisions from the Spanish Supreme Court, the defendant submits that such uncertainty was not a mere “discrepancy” for the purposes of the Supreme Court doctrine. I cannot agree. This was precisely the type of situation envisaged by the Spanish Supreme Court. It certainly did not justify the failure to pay any non-returnable compensation. The argument that the Provisional Schedule filed by the claimant at the start of the legal claim in June 2019 was insufficient to “permit quantification of the claim”, falls foul of the same analysis. When viewed in the context of the MIB notification form and the INA, there was no reasonable justification not to pay some compensation.[38]At this point I consider two further arguments by the defendant. First, that there were a number of procedural delays in the English proceedings, what the defendant terms “cogent procedural reasons”. It is correct, as the defendant submits, that this court gave directions for a wide range of expert evidence. The trial was twice vacated, due to the claimant’s need for further treatment and the filing of further expert evidence. None of this justifies the failure to pay any compensation. Second, it is also correct that the course of the English proceedings meant that the quantified schedule was not provided to the defendant “until more than 5 years after” it would have been provided in Spain (the stated Day 1 of the legal claim). One returns to the question whether there was sufficient material for the defendant to have paid some compensation after a reasonable assessment. For the reasons given, there obviously was. The counter-submission is that the Spanish guarantee fund “would have known the precise claim it was facing”. This repeats the misanalysis: to avoid the imposition of penalty interest following default, the obligation is not to pay a precise and full amount, but some compensation.[39]It is submitted that the delay in payment by the defendant has not “thwarted” the rationale behind Article 20. I cannot agree. There must have been a series of carefully considered decisions by an experienced institutional insurer declining to pay any compensation to the claimant before trial and refusing to make any offer before trial despite accepting primary liability and in the further context of there not being any salient matters it was essential for this court to determine before the defendant paid at least some compensation.[40]It seems to me that the non-payment of compensation by the defendant runs contrary to the purpose of the rule in Article 20, which as the Spanish experts agree, and the Spanish Supreme Court has stated repeatedly, is to promote prompt payment of compensation to injured parties. That has not happened. I find that there has been a serious, substantial and unjustified delay in the payment of compensation to the claimant. None of the reasons advanced by the defendant, individually or collectively, justifies the delay on a restrictive application of the Article 20(8) exception. This is not a special case. Coverage is not in issue. It is materially different to any of the cases placed before me where the Spanish Supreme Court has found justifiable reasons for delay (whether the insurance policy covered the facts (Spanish Supreme Court judgments, 24 May 2012; 14 July 2016); or whether the insured had paid premiums (18 January 2018)). Indeed, the defendant does not rely on any comparator case, recognising that each decision depends on its facts.[41]Overall, I have no hesitation in concluding that an orderly insurer would have paid some compensation and not delayed in the unjustified way that the defendant has. There is nothing in the facts of this case that takes it out of the norm or makes it “a special case” exempt from a restrictive application of the penalty interest rule following the defendant’s admitted default. Wherever the persuasive burden lies, to my mind, this case is clear-cut: there is no justifiable reason for delay and no other relevant reason for the delay in payment not attributable to the defendant. VI - Legal interest[42]The claimant submits that he is entitled to legal interest from the date of notification to the closing of the three-month window. The defendant objects. It seems to me that there are a number of difficulties with this submission by the claimant. First, it was not pleaded. Second, neither of the Spanish experts dealt with the matter in their reports. Third, the issue was not explored in evidence. Thus, the court is faced with an application that has not been pleaded and about which there is no evidence of the approach in Spain. In such circumstances, I cannot accede to the claimant’s application. It is refused.[43]The parties agreed that penalty interest ceased to accrue on 28 April 2025, which was 14 days after the date on which the MIB offered to pay the outstanding amount of damages. After this point, the parties agreed that legal interest accrued on the outstanding amount of damages until 12 June 2025, when a further interim payment of £50,000 was made, which satisfied the outstanding damages sum. VII – Disposal[44]I briefly summarise my findings: 1. The defendant is in default of its obligation to pay compensation under Article 20(9). 2. The binary yes/no question about whether the defendant should pay penalty interest is capable of a clear answer: Yes. 3. The defendant was not justified in delaying payment of compensation to the claimant, nor is there reason for delay that is not attributable to the defendant for the purposes of Art. 20(8). 4. Therefore, penalty interest is payable under Art. 20(9) from 19 December 2017 (date of notification of claim for compensation plus three months). 5. I answer Issue 14 in the following way:a. The defendant must pay the claimant penalty interest from 19 December 2017 (the dies a quo) to 28 April 2025 (the agreed end date of penalty interest).b. The claimant is not entitled to legal interest up to the dies a quo. Such legal interest as is due is set out at para 43 above.[45]Accordingly, I make the following further case management directions: 1. The amount of penalty interest is to be agreed between the parties given this judgment, failing which, short further written submissions must be provided setting out the rival figures and calculations for the court’s determination (filing by 4 pm, 7 days after the circulation of the draft judgment). 2. The parties should resolve the relatively minor dispute about the correct applicable exchange rate, failing which, short written submissions should be filed and served at the same time. 3. The parties to draw up an order to reflect the terms of this judgment, to be filed similarly.