Cross-‐border accidents
Draft recommendation for direct compensation of material damages
(This recommendation does not relate to injury claims)
B. Presentation of the project
C. Mechanisms for direct compensation
D. Mandatory nature of direct compensation
A. Grounds for the project
A) GROUNDS FOR THE PROJECT
Have the goals set by the EU been
attained ?
A-‐1) The goals set by the EU
– Treaty of Rome : Freedom of movement and judicial certainty
– European construction with regard to insurance
cover for motor vehicles (D.2009/103/CE)
– Freedom of movement : goal attained
– Judicial certainty : goal not fully attained
A-‐2) Results
Description :
• accident between 2 vehicles A and B; full liability for B
• identification of Civil Liability insurer
• timeline for confirmation of cover
• discussion on liability and quantum
• payment
A-‐2-‐a) Results – So why the failure ?
Ü Over-‐complication of claim conditions
A
B
A-‐2-‐b) Results – Consequences of this failure
For the claimant
• timeline for compensation: 3 to 6 months
• increased losses for the Victim
For insurers
• increased compensation and handling costs
• negative public image
B) PRESENTATION OF THE PROJECT
Further to previous congresses
Consultations within the Institute’s Think Tank
B-‐1) Observation : we have the necessary tools to act
• No damage without cover
• Liability easy to determine :
ü statistics provide indicators on the behaviour of drivers , or how accidents happen,
ü on the basis of this information we know that : 90% of accidents are due to just one driver, 50% of vehicles
are at a halt when the accident takes place,
ü use of the accident report form leads to a rapid
decision on liability.
B-‐2) Goal : Direct compensation for the insured Principle :
-‐ Material damages caused to the claimant’s vehicle are paid for by the Civil Liability insurer of this same vehicle.
-‐ The insurer who has settled the material damages
claims reimbursement from the liable Third Party
(his insurer or any substitute entity).
B-‐3) Legal framework
• The project concerns accidents :
ü between motorised vehicles as referred to in Article 3 of the 2009 Directive
ü which take place within the territory of
countries covered by the Green Card system
• This project could be incorporated into the VI Directive framework (2009/103/CE)
• Reference to the 2009 Directive confers a
B-4) Scope of practical application
• Accidents between 2 vehicles
• The project only relates to compensation for materiel damages
• Even in the presence of :
ü Injuries
ü Court action
ü An authorised representative
• The project may be cost-‐limited
• Issues pertaining to liability and the insured’s
entitlement to compensation may only be
C) MECHANISMS FOR DIRECT COMPENSATION FOR THE
INSURED
As Direct Insurer, the Civil Liability insurer of the
vehicle takes the leading role in compensating the
insured
C-‐1) Mechanisms with regard to the insured
•Privileged relationship between the direct insurer and his insured
•The direct insurer is the unique point of contact for the insured :
ü throughout the handling process (from the initial statement through to final payment)
ü for assessment of liability
ü for evaluation of damages
ü for compensation
C-‐2) Mechanisms with regard to the liable Third Party
The direct insurer exercises his right of recovery by subrogation against the liable Third Party or his
guarantor :
• Identification of the Third Party (and his guarantor)
• Waiting time for confirmation of cover
• Discussion on liability and quantum
• Terms of reimbursement
Accident in Budapest involving 2 vehicles
registered in Hungary and Germany
German-‐registered vehicle
Hungarian-‐registered vehicle The drivers exchange contact details
The drivers exchange contact details The claimant sends his statement to his insurer by e-‐mail or letter
1. The claimant’s insurer contacts his insured
2. He arranges for an assessor to examine the vehicle 3. He contacts the representative or correspondent of
the Third Party’s Civil liability insurer
A claim is filed with the
representative or correspondant of the Third Party’s Civil Liability
insurer
When he receives the assessor’s report, the claimant’s insurer :
Contacts his insured to make an offer for «repairs» or
«vehicle replacement value»
The insured agrees : the insurer sends his client a cheque, or orders the garage to proceed with repairs
The insured is satisfied
C-3) Mechanisms – Assessment
Assessment : a vital part of the process enabling the
insurer to check the circumstances and causes of the
accident, the coherence of damages and to quantify
losses.
D) MANDATORY NATURE OF
DIRECT COMPENSATION
D-‐1) Provisions favourable to the insured
-‐ The direct insurer is his unique point of contact -‐ His rights are respected in compliance with
common law
D-‐2) Mandatory for the direct insurer
D-‐2-‐a) A leading role with regard to his insured :
• He is his unique point of contact
• He takes the necessary decisions
• He pays up front
D-‐2-‐b) If he does not fulfill his role
He runs the financial risk of facing court action by his
insured
D-‐3) Mandatory for the Civil Liability insurer
D-‐3-‐a) His conduct towards the claimant :
ü He must not settle the Third Party’s claim for damages himself
ü He must reject any claim from the Third party, and refer him to his direct insurer.
D-‐3-‐b) If he does not comply with this rule
ü He runs the risk of settling the claim twice over
« EUROPEAN REGULATION FOR COMPENSATION »
«
In cases of accidents involving at least 2 motor vehicles subject to the obligation of compulsory insurance as provided for by Article 3 of European Directive 2009, the insurer who provides third party liability cover for the vehicle of the injured person (herein after referred to as “the direct insurer”) undertakes, prior to the exercise of any claim for recovery against the insurer of the liable party (or presumed liable party) to indemnify itself any losses and damage caused to the vehicle of its own insured in accordance with its own rights for recovery subject to the rules of common law.This compensation confers on the direct insurer a right of recovery by subrogation against the liable driver or his third party liability insurer subject to the limits of his liability for the accident in cause.
These provisions apply to the exclusion of all others whatever type of road traffic accident is involved, and the nature and amount of material damages;
-‐ including when the accident has caused personal injury or where legal proceedings have been issued,
-‐ including when the injured person has instructed either a legal expenses insurer or some other organisation to pursue his claim.
The insurer or the Guarantee Fund for the liable party or presumed liable party for the accident will refrain itself from compensating the injured party itself or by way of an intermediary and undertakes to provide to the direct insurer of the injured party any statement or claim provided by this person, his representative, his legal expenses insurer or any
organisation with the right of subrogation on his behalf.
For the introduction of these provisions, provided that does not cause any delay in its application, the insurers listed below and the compensation bodies as designated in Chapter 7 of the Directive of 2009 may agree between themselves the means of determination of liability, of the assessment of damages and contribution claims, without the possibility of these arrangements being used against their insured driver or third parties.
