- Council Directives 72/166/EEG [1972] OJ L103; 84/5/EEG [1984] OJL8/17; 90/232/EEC [1990] OJ L129/33; 2000/26/EG [2000] OJ L181/65 and 2005/14/EG [2005] OJ L149/14; which have now been consolidated into a new Directive 2009/103/EG [2009] OJ L263/11. Hereinafter referred to as the “MIDs”.
- “Compensation of Victims of Gross-border Road Traffic Accidents in the EU: Comparison of National Practices, Analysis of Problems and Evaluation of Options for Improving the Position of Cross-border Victims”, report prepared by law firm Demolin Brulard Bar-thelemy for the Commission and available at: http://ec.europa.eu/internal_market/insurance/docs/motor/20090129report_en.pdf (accessed 5 October 2011). Hereinafter referred to as “Commission Report”.
- Ibid, 43–44.
- This objective is apparent form the recitals to the MIDs as discussed below, see infra, Section B.
- 5 Art 28(1) states: “This Regulation shall not prejudice the application of international conventions to which one or more Member States are parties at the time when this Regulation is adopted and which lay down conflict-of-law rules relating to non-contractual obligations.”
- 4 May 1971.
- 7 EU Member States who are also signatories to the Hague Convention are: Austria, Belgium. Czech Republic, France, Latvia, Lithuania, Luxembourg, The Netherlands, Poland, Slovenia. Slovakia and Spain.
- 3 Under Art 7(2) of the first MID vehicles based in certain third countries such as Switzerland and Norway are considered to be based in an EU Member State for the purpose of the Directives by virtue of the motor insurer's bureaux in those countries having concluded agreements with the bureaux of the Member States. However, for the sake of simplicity no further reference to these countries will be made.
- Direct actions against insurers arising out of traffic accidents occurring in EU Member States may be brought in the state of residence of the victim under Arts 9 and 11 of Regulation 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I), as confirmed in the case of Case G-463/06 FBTO Schadeverzekeringen NV v Odenbreit [2007] EGR 1–11321.
- The MIDs are implemented by Member States through national provisions and apply to vehicles normally based in the territory of a Member State. See in particular Art 2, Dir 2009/103/EG [2009] OJ L263/11.
- 11 Although the first five Directives have now been repealed by the sixth consolidating one. throughout this work reference is made to the provisions as they originally appeared within those first five Directives. This is in order that the policies and objectives of the instruments, which are progressive in nature, can also be discussed. All provisions mentioned have been transposed into the consolidated Directive and remain effective.
- 12 The rules of the MIDs in respect of the claims for compensation by a victim can be split into those which deal with claims against a third-party liability insurer and those which govern claims against those compensation bodies set up in accordance with the Directives. Treatment of the issues which arise from claims against compensation bodies are not considered in this work.
- [1972] OJ L103.
- Emphasis added. The significance of this provision is discussed infra, Section B. See text accompanying nn 34–36.
- Dir 71/166/EEG [1972], recital 1.
- Ibid, recital 2.
- G-129/94 [1996] EGR 1–01829.
- Ibid, para 19.
- Dir 2009/103/EG [2009] OJ L263/11.
- [1984] OJ L8/17.
- Case G-348/98 Vitor Manuel Mendes Ferreira and Maria Clara Delgado Correia Ferreira v Companhia de Seguros Mundial Confianfa SA [2000] EGR 1–06711.
- GOM(88) 644 Final,[1989] OJ G16, 2.
- Case G-365/05 Farrell v Minister for the Environment, Ireland, Attorney-General and Motor Insurance Bureau Ireland [2007] EGR 1–03067.
- Case G-537/03 Katja Candolin, Jari-Antero Viljaniemi and Veli-Matti Paananen v Vahinkovakuutusosakey-htio Pohjola and Jarno Ruokoranta [2005] EGR 1–05745.
- Case G-442/10 Churchill Insurance Company Limited, Tracy Evans v Benjamin Wilkinson, by his father and litigation friend Steven Wilkinson, Equity Claims Limited, AG Opinion of 6 September 2011.
- Ibid. The Fourth Chamber in its judgment of 1 December 2011 at paras 23–24 makes the correct point that it is for the national court to interpret the meaning of the national provision and therefore it gave its ruling on the basis of the English Court of Appeal's view that s 151(8) of the Road Traffic Act excludes the insured from the benefit of the insurance. It should be remembered here that the rules of the MID do not purport to affect Member States' ability to formulate rules relating to civil liability. This has been reiterated recently by the ECJ in Case C-409/09 Jose Maria Ambrosio Lavrador, Maria Candida Clival Ferreira Bonifacio v Companhia de Seguros Fidelidade—Mundial SA, judgment of the Third Chamber of 9 June 2011, where rules relating to the reduction of compensation on account of the contribution to liability by the victim, which are concerned purely with the question of the existence or extent of the liability of the driver concerned, were confirmed as being outside the scope of the MIDs. This case was distinguished from Candolin since compensation was not denied on the basis of general or abstract criteria that limited cover against liability but was rather concerned with limitation of the driver's liability
- Directive 88/357/EG on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance [1988] OJ L172/01.
- Dir 2000/26/EG, [2000] OJ L181/65.
- Dir 2005/14/EG, [2005] OJ L149/14.
- Case G-518/06 Commission v Italy [2009] EGR 1–3491.
- Ibid, para 44.
- Ibid, para 52.
- Ibid, paras 66–71.
- Ibid, para 82.
- Ibid, para 75.
- 36 M, para 52.
- 37 Emphasis added.
- See F Seatzu, Insurance in Private International law: A European Perspective (Hart Publishing, 2003). 224.
- 'A helpful way to understand the profitability of insurance is to investigate the level and dynamism of the following ratios: (a) The claims ratio: calculated as claims incurred (including changes in relevant provisions) divided by premiums earned in a year. The higher this ratio is. the greater the proportion of revenue paid out to policyholders (ie a lower ratio is good for the profitability of insurers). It can be seen as a measure of pricing efficiency (b) The expense ratio: calculated as the sales and administration costs divided by premiums earned. This ratio can be seen as a measure of administrative efficiency (c) The combined ratio: is the simple addition of the two. When this ratio exceeds 100%, the result is that the insurer is losing money at the underwriting level. (Insurers invest premiums received and can use the resulting gains to fund such losses, at least to a degree.)” Extract from ‘Retail Insurance Market Study’, report prepared at the request of the European Commission by European Economics available at http://ec.europa.eu/internal_market/insurance/docs/motor/20100302rim_en.pdf accessed on 5 October 2011.
- GOM(97) 510 Final, [1997] OJ G343, 2–3.
- 41 Art 3.
- Case G-463/06 [2007] EGR 1–11321.
- 43 Although this effectively amends Art 3 of the first MID it is achieved under Art 4(1) of the fifth MID as an amendment to Art 1 of the third MID.
- Art 29 Dir 2009/103/EG.
- See A Dickinson, The Rome II Regulation the Law Applicable to Non-Contractual Obligations (Oxford University Press, 2008), 14.87–14.88; J von Hein, “Art 4 and Traffic Accidents” in A Malatesta (ed), The Unification of Choice of Law Rules on Torts and Other Non-Contractual Obligations in Europe (GEDAM, 2006), 172–73.
- GOM(2003) 427 final, 25 (hereinafter referred to as “Commission Proposal”).
- Ibid.
- 48 Council doc 12746/04, 27.09.04.
- COM(2006) 83 final, 18.
- 50 See the first reading of the Parliament, A6–0211/2005 final 27.6.2005, 46.
- The current system under the MIDs has grown out of the “green card scheme” which was begun in 1949 by the UN. The scheme was originally open for adoption by European nations and allowed a person insured in their home state and in possession of a “green card” issued by their insurer to drive in any other state with which reciprocal arrangements had been made. The states which are party to the Green Card scheme have now grown to include states which are outside European territory such as Russia, Israel and Morocco. The green card scheme is not a guarantee, however, that a right of direct action against insurers is permitted by the national system of law. See R Merkin and A Roger, EC Insurance law (Longman, 1997), 52.
- Commission Proposal, supra n 46, 25–26.
- See supra Section B.l(b).
- Art 4(1), Rome II.
- These objectives were expressed by the Commission in its Proposal, see supra n 46, 11–12 and are repeated in Recital 6 of Rome II.
- See eg Candolin, supra n 24, para 17; Bernaldez, supra n 17, para 13; Ferreira, supra n 21, para 24: Commission v Italy, supra n 30, para 75; Case G-166/02 Daniel Fernando Messejana Viegas v Com-panhia de Seguros Zurich SA, Mitsubishi Motors de Portugal SA [2003] EGR 1–07871, para 22; Case G-447/04 Autohaus Ostermann GmbH v VAV Versicherungs AG [2005] ECR 1-10407, para 25.
- The Parliament had proposed fairly substantial amendments to the original Commission proposal for a general rule of choice of law contained in the then Art 3. The amendments entailed subjecting the type and quantification of damages for those who suffer personal injury in traffic accident cases to the law of the victim's habitual residence. The proposal was rejected but disagreement over the matter was one of the reasons that it became necessary to have recourse to the conciliation procedure and why there are a number of compromise provisions relating to traffic accidents in Rome II. See “Report on the Proposal for a Regulation of the European Parliament and of the Council on the Law Applicable to Non-contractual Obligations” (”Rome II), 27 June 2005, A6–0211/2005 FINAL, 18.
- See the Commission Report, supra n 2.
- European Parliament first reading of Rome II, supra n 57, 20.
- The MIDs require national implementing measures. If these conflict with subsequent EU legislation those subsequent measures must take precedence. This much is a basic principle of EU law and was made clear in the case of Case 106/77 Simmenthal [1978] EGR 629, paras 17–22.
- cases C-369/96 and C-376/96 [1999] EGR 1–8453.
- Since Rome I and Rome II are to be interpreted congruously, the wording of Art 9(1) of Rome I could also be persuasive. It defines an overriding mandatory provision as: “[Pjrovisions the respect for which is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the con-tract under this Regulation.” For more on the meaning of “overriding mandatory rules”, see R Plender and M Wilderspin, The European Private International Law of Obligations (Sweet & Maxwell, 3rd edn, 2009), 27–009–27–013.
- Case G-381/98 Ingmar Gb Ltd v Eaton Leonard Technologies Inc [2000] EGR 1–9305.
- The original Court of Appeal reference to the EGJ is reported at Ingmar Gb Ltd v Eaton Leonard Technologies Inc [1999] EGG 49. The EGJ ruling was accepted by the Court of Appeal on 23 January 2011 and remitted to the Queen's Bench Division where MorlandJ assessed the compensation and his judgment is reported at [2001] GLG 1825.
- Plender and Wilderspin, supra n 62, 1–033.
- Commission Proposal, supra n 46, 1.
- Commission Report, supra n 2.
- Ibid, 43–44.
- Ibid, 63.
- Ibid, 68–76.
- 71 M, 77–84.
- Ibid, 22–23.
- 73 Art 6 of Rome I for example allows, in certain circumstances, a consumer (as defined in the Article) to bring a contractual claim under the law of the state of his habitual residence.
- Greece has a population of around 11 million, yet according to the Hellenic Statistic Authority received in excess of 17 million foreign visitors during 2007. Statistics can be found at: www.statistics.gr/portal/page/portal/ESYE/BUGKET/A2001/Other/A2001_STO03_TB_MM_12_2007_02_F_EN.pdf
- See supra n 39 for a report published on behalf of the Commission into the retail insurance market which shows that the primary driver of motor insurance premiums is a rise in average claims costs mainly due to inflationary pressures such as the rise in cost of medical treatment or repair of vehicles. The report makes mention of both the MIDs and Rome II but at no point suggests that the cost of settling cross-border claims is a distinctive feature of rising pre-mium prices. However, as stated above if cross-border claims require more resources this will feed into the average claims cost and affect claims ratios, which will impact on premium prices. So an indirect correlation cannot be ruled out. See in particular pp 70–77 and 108–10.
- See the Commission report supra n 2, which concludes that the numbers of traffic accidents involving a foreign party and which occur outside of the victims' state of habitual residence is very small (far less than 1%).
- Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Towards a European road safety area: policy orientations on road safety 2011–2020, COM(2010) 389 final, 20.07.2010.
Journal of Private International Law
Volume 8, 2012 - Issue 2