Presentation on theme: "Jurisdiction and applicable law:"— Presentation transcript:
1 Jurisdiction and applicable law: Impact on claims settlement and subrogation of social security institutions, legal developments in Europe, problems with personal injury claims in EuropeDüsseldorf, 28 April 2005Holger Backu, lawyerDüsseldorf, 28 April 2005
2 Impact on claims settlement and subrogation of social security institutions, legal developments in Europe, problems with personal injury claims in EuropeIntroductionCharacteristics of international vehicle claims, diverging legal indemnification systemsLegal-political discussion, approach to improvement:Fourth Motor Insurance DirectiveEuropean Road Traffic Law Days Trier:Definition of uniform criteria for the assessment of immaterial indemnification ( Trier I, 2000 )Protection of vulnerable road users ( Trier II, 2001 )Refund of legal expenses and harmonisation of limitation rules in Europe ( Trier III, 2002 )Jurisdiction and applicable law – application of the injured party’s national law ( Trier IV, 2003 )Harmonisation of private international law / Rom II ( Trier IV, 2004 )
3 Legal-political discussion, approach to improvement: Impact on claims settlement and subrogation of social security institutions, legal developments in Europe, problems with personal injury claims in EuropeIntroductionLegal-political discussion, approach to improvement:Consideration of different purchasing power when assessing the compensation for pain and sufferingCompensation of surviving dependantsPrinciple of reciprocityCorrect application of national law to international damages claims ( e.g. depreciation )
4 Indemnification of personal injury in Europe BelgiumAmount of compensationRefund of expensesTemporary incapacity for work/disablement (Incapacité/Invalidité temporaire):Compensation of moral and material damagePermanent disablement / final incapacity for work:Compensation of surviving dependants:Funeral costsMoral compensation for the demise of the deceasedMaterial compensation for loss of earnings
5 Indemnification of personal injury in Europe BelgiumAmount of the compensationTemporary incapacity for work/disablement (Incapacité/Invalidité temporaire):Moral indemnification (one-off compensation for customary pain and suffering of the victim as a result of the injuries ):31 EUR per day of hospitalisation38 EUR per day of severe hospitalisation25 EUR per day for 100% incapacity for work19 EUR per day for 75% incapacity for workPretium Doloris ( for extraordinary pain ) :At 100%: 20 EUR per day EUR per degree on a scale of 1-7 degrees ( e.g. 4/7 for 14 days: 4 x 2.50 x 14 = 140 )Moral damage for the loss of one school year: approximately 3,720 EURMaterial damage (loss of earnings)Housekeeping damageLost vacation enjoyment
6 Indemnification of personal injury in Europe BelgiumAmount of the compensationTemporary incapacity for work/ permanent disablement (Incapacité/Invalidité permanente):Moral indemnification (data national Association of Police Judiciary)Person of or under 10 years : 900 EUR/disablement percentagePerson of or under 35 years : 650 EUR/disablement percentagePerson of or under 64 years : 360 EUR/disablement percentageAmounts not imperative, at discretion of the judge(kind and severity of the injury, age, special situation of the victim)
7 Indemnification of personal injury in EuropeBelgiumAmount of the compensationFinal incapacity for work / permanent disablement (Incapacité/Invalidité permanente):Material damage / one-off compensation (table: for permanent disablement below 15%, victim not yet gainfully employed, etc.)Person of or under 10 years: 2,400 EUR/disablement percentagePerson of or under 35 years: 1,775 EUR/disablement percentagePerson of or under 64 years: 1,050 EUR/disablement percentageAmounts not imperative, at discretion of the judgeMaterial damage / capitalisation (for permanent disablement exceeding 15%, damages can be quantified)Capitalisation formula: average earnings over the past 12 months x disablement percentage x coefficient potential duration of gainful employment
8 Indemnification of personal injury in EuropeBelgiumAmount of the compensationFinal incapacity for work / permanent disablement (Incapacité/Invalidité permanente):Aesthetic damage: degree 1 – 7degree 1: between 250 and 744 EURdegree 4: between 2,233 and 8,677 EURdegree 5: 8,677 EUR or moredegree 7: 24,790 EUR or moree.g. pupil, 16 years, hideous scars in the face (Pol. Lüttich, 2001) ,600 EURLoss of joie de vivreSexual damageAffective damageAssistance of third person
9 Indemnification of personal injury in EuropeBelgiumAmount of the compensationCompensation in the case of death:Moral indemnification (tables as per degree of relationship)Loss of spouse: ,916 EURLoss of parents: ,000 EUR eachLoss of child: ,915 EURMaintenance damageExpenses (including but not limited to funeral costs)
10 Indemnification of personal injury in EuropeFranceAmount of the compensationTemporary (complete or partial) incapacity for work (Incapacité temporaire totale/partielle = ITT/ ITP):Economic damage:ITT = net earnings x period of absence from workPhysiological damage (for particularly severe injuries):300 – 800 EUR/month ITT
11 Indemnification of personal injury in EuropeFranceAmount of the compensationPermanent (complete or partial) incapacity for work (Incapacité permanente totale/partielle = ITP/IPP):Economic damageLoss of earningsPhysiological damageIPP = point value x degree of disablementImmaterial damage (pretium doloris, aesthetic damage, lost joie de vivre, sexual damage, immaterial damage next of kin)Compensation for death of close relatives
12 Indemnification of personal injury in Europe 4600436041103875362535053370277026502585243524002280218019451695144513251125955890Diagram: assessment of the point value for physiological damageIndemnification =Point value x Percentage of incapacity for work10 years20 years35 years42 years52 years60 years75 yearsTaux d’IPP% (incapacity for work) Valeur du point Euro (point value)
13 Indemnification of personal injury in Europe FranceAmount of the compensationCompensation for pain and suffering and aesthetic impairmentDegree 1 very slight (très léger) – 1530 €Degree 2 slight (léger) – 3060 €Degree 3 moderate (modéré) – 4600 €Degree 4 medium (moyen) – 9200 €Degree 5 quite severe (assez important) – €Degree 6 severe (important) – €Degree 7 very severe (très important) – €Degree 8 extraordinary (exceptionnel) more
14 Indemnification of personal injury in EuropeFranceAmount of the compensationThe Cour d’appel d’Aix-en-Provence (2003/04) awards the following compensation amounts for moral damage suffered by the next of kin of a deceased road victim :Spouse ,300 – 23,000 €Childrenminor ,300 – 23,000 €minor fatherless/motherless plus 50%of age, in the household 11,500 – 15,300 €of age, independent / married ,650 – 11,500 €Parentif victim in the household ,300 – 23,000 €if victim not in the household ,200 – 15,300 €grandparents / grandchildren / siblingsin the same household ,150 – 12,200 €in different households ,100 – 9,150 €Cohabitation partner individual case decision
15 Indemnification of personal injury in EuropeSpainAmount of the compensationLaw No 30/95 of 8 January 1995 on third party liability and motor insurance :Obligation of motor insurers to settle personal injury claims in compliance with the annex to the lawUniform table system (5 tables) without regional differencesMaterial personal damage (mainly loss of earnings) are not compensated as incurred but based on corrective factors provided in the tables (percentage increase depending on the income)Physician, hospital, and funeral costs if applicable are refunded separately (Rule 6 of the Annex to Law 30/95)
16 Indemnification of personal injury in EuropeSpainAmount of the compensationTemporary incapacity for work (incapacidad temporal)58.19 EUR per hospital day, EUR per day of incapacity for work, EUR for all other lost income daysCorrective factors based on income situationPermanent injuries (lesiones permanentes)Basis: medical assessment of damage points (pursuant to the medical assessment table of the Law 30/95); The value of each point is determined in the tableCompensation = number of points x value of point + corrective factor
17 Indemnification of personal injury in EuropeSpainAmount of the compensationDamages for pain and suffering (danos morales complementarios)Compensation of max. 77,639 EUR for consequential damage of more than 75 pointsAesthetic damage6 degree scale assigns damage points according to the applicable degreeCompensation for death of the injured personAccording to the degree of relationship max. 116, EUR
18 Indemnification of personal injury in EuropeItalyAmount of the compensationMaterial personal damageDanno Biologico: general impairment of the quality of life caused by a medically diagnosable bodily harm or damage to health (compensation for all negative effects on the physical and mental condition of the injured party)Danno Morale: pretium doloris as compensation and satisfaction for mental pain and sufferingDanno Esistenziale: loss and impairment of constitutional values other than body and health, in particular free personality development with a view to social relationships
19 Indemnification of personal injury in EuropeItalyAmount of the compensationTemporary biological damage:Law 57/2001: daily rate for (100%) disablement = EURPermanent biological damage:„Microlesioni“: governed by national lawLaw 57/2001: national table for injuries rated at up to 9 disablement points – „microlesioni“ (decreasing values with increasing age)First point value : (age 1-10)National table injuries/number of points up to 9 pointsCourt tables for major injuriesAt the discretion of the courtsregional differences
20 Indemnification of personal injury in EuropeItalyAmount of the compensationMoral damageUp to 2/3 of danno biologicoCompensation in the case of deathIure proprio claim of close relatives for compensation of moral damageBiological damage only for damage to health
21 Indemnification of personal injury in EuropeNo table systems:GermanyThe NetherlandsAustriaPortugalUKCompensation and satisfactionCourt decisions / amount of damages for pain and suffering
22 Indemnification of personal injury in EuropeAmount of damages for pain and suffering / countries without table systems:AGNLPWhiplash injury1,000 € - 3,000 €100 € – 3,000 €1,000 € - 5,000 €500 €Rib bruise1,000 € - 2,000 €300 €– 1,000 €400 €Broken arm3,500 € - 5,000 €1,000 € – 2,500 €800 €1,200 €Paraplegia150,000 €250,000 €125,000 €50,000 €Maximum amount220,000 €500,000 €100,000 €
23 Indemnification of personal injury in EuropeProblems arising for cross-border claims:Compensation of pain and suffering in the case of deathDiverging expert assessment methods: solutionsRegional differencesPrinciple of reciprocityPurchasing power equality in the assessment of compensation for pain and suffering
24 Applicable law and jurisdiction Differences in the law of damagesInternational jurisdiction stipulates the applicable conflict-of-law provisions
25 Applicable law and jurisdiction Competent courtsAction against the person causing the damage:Residence of responsible personPlace of damaging eventIn intervention proceedings: place of criminal court where public law action is broughtAction against the insurer:Place of registered officePlace of subsidiaryPlace where the damage occurredPlace where action against the person causing the damage can be brought
26 Applicable law and jurisdiction International procedural law – legal basesEU: European Convention on Jurisdiction and Enforcement of Judgements in Civil and Commercial Matters (Brussels Convention of 1968)EU: Council Regulation 44/2001EFTA: Convention on Jurisdiction and Enforcement of Judgements in Civil and Commercial Matters (Lugano Jurisdiction Convention of 1988)No international rules: §§ 17 and 32 and § 328 of the German Code of Civil ProcedureScope:International jurisdictionRecognition and enforcement of judgements in civil and commercial matters
27 Applicable law and jurisdiction Court competenceChoice between various international jurisdictionsImpact on applicable law (forum shopping)Consequence:Additional jurisdictions (e.g. jurisdiction in the injured party‘s country / Fifth Motor Insurance Directive) potentially result in variations concerning the applicable law
28 Applicable law and jurisdiction Private international law – legal basesContractual relationsRome Convention on contractual obligationsArt. 27 – 37 of the German Introductory Law of the Civil CodeGerman Introductory Law of the Insurance Contract ActTort relationshipsHague Convention on the Law applicable to Traffic Accidents of 4 May 1971Foreign private international lawArt. 40 ff. of the German Introductory Law of the Civil Code
29 Applicable law and jurisdiction Hague Convention on the Law applicable to Traffic Accidents 1971Signatory States:Belgium, France, Yugoslavia, Croatia, Luxembourg, the Netherlands,Austria, Switzerland, Slovak Republic, Slovenia, Spain,Czech RepublicPrinciple: lex loci delicti commissi (Art. 3)Art. 4 – 6 law of the country of registration or where the vehicle is normally basedInvolvement of a vehicle (claims of passengers)Several vehicles (all registered in the same State)Involvement of persons outside the vehicle (all persons with habitual residence in the country of registration)
30 Applicable law and jurisdiction German Introductory Law of the Civil Code (Germany)Lex loci delicti commissi principle Art. 40 paragraph 1„Tort liability is based on the law of the country where the liable person has committed the harmful event“. Choice between the place where the event happened and the place where that event results in damage, Art. 40 paragraph 1 No 2.„ The injured party may require the application of the law of the country where the harmful event resulted in damage.“
31 Applicable law and jurisdiction German Introductory Law of the Civil Code (Germany)Exception from the lex loci delicti commissi principle:Art. 40 paragraph 2 – common habitual residence„If the liable person and the injured party at the time the event occurred had their habitual residence in the same State, the law of such State shall apply“.Art. 41 – considerably closer connectionAccessory connection to contract law or actual relationship between the parties involved (Art. 41 paragraph 2 No 1)General clause (Art. 41 paragraph 1)Art. 42 – subsequent choice of law
32 Applicable law and jurisdiction Applicable law/ Italian private international law (Art. 62 Law 218/1995)Translation:1. Tort liability is based on the law of the country where the harmful event occurred. The injured party may require the application of the law of the country where the tort was committed.2. Where the harmful event involves the citizens of only one country, and they are also domiciled in such country, the law of such country shall apply.The injured party may select between the place where the event happened (Art. 62 paragraph 1 No 1) and the place where that event results in damage (Art. 62 paragraph 1 No 2). By way of exception the law of joint country of domicile applies, if the parties involved are citizens of such country (Art. 62 paragraph 2).
33 Applicable law and jurisdiction Jurisdiction in the injured party‘s country of residence?A possible basis is the reference pursuant to Art. 11 paragraph 2 in conjunction with Art. 9 paragraph 1 b) of the Regulation, since Art. 11 paragraph 2 of the Regulation VO 44/2001 is mainly deemed as a reference to legal consequences and not to legal bases.Application of the injured party‘s country of originDiscussion Rome IICosts of bringing an action
34 Applicable law and jurisdiction Harmonisation of the rules governing the law applicable to non-contractual obligations - Rome II:Commission proposal of 22 July 2003:Art. 3 – General RulesThe law applicable to a non-contractual obligation shall be the law of the country in which the damage arises or is likely to arise, irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event arise.However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country when the damage occurs, the non-contractual obligation shall be governed by the law of that country.Notwithstanding paragraphs 1 and 2, where it is clear from all the circumstances of the case that the non-contractual obligation is manifestly more closely connected with another country, the law of that other country shall apply. A manifestly closer connection with another country may be based in particular on a pre-existing relationship between the parties, such as a contract that is closely connected with the non-contractual obligation in question.
35 Applicable law and jurisdiction Harmonisation of the rules governing the law applicable to non-contractual obligations - Rome II:Commission proposal of 22 July 2003:Art. 4 - Product liability:Without prejudice to Article 3(2) and (3), the law applicable to a non-contractual obligation arising out of damage or a risk of damage caused by a defective product shall be that of the country in which the person sustaining the damage is habitually resident, unless the person claimed to be liable can show that the product was marketed in that country without his consent, in which case the applicable law shall be that of the country in which the person claimed to be liable is habitually resident.
36 Applicable law and jurisdiction Harmonisation of the rules governing the law applicable to non-contractual obligations - Rome II:Parliament draft of 29 March 2005:Notwithstanding any provision of this Regulation to the contrary or a valid jurisdiction agreement the court seized of the matter applies its national law to the quantification of the damage, unless the circumstances of the case require the application of the law of another country.
37 Social security subrogation Conflict-of-law provisionEEC Regulation No 1408/1971Art. 93: Vicarious statute (legislation of the country where the social security institution is based)DAK versus Laererstandes Brandforsikring (judgement of 2 June 1994, case C-428/92)Caisse de pension des employés versus Dieter Kordel and Frankfurter Allianz Versicherungs AG (judgement of 21 September 1999, case C-397/96)
38 Social security subrogation NotionsSubrogation claim and extent governed by the law of the country where the social security institution is based (EEC Regulation No 1408/71)National subrogation limits do not restrict subrogation claims of liable institutions of other Member StatesClaims of the injured party or surviving dependants are governed by the law of the place where the damage occurred (pursuant to applicable private international law). National insured sums apply.
39 Social security subrogation Rome II – Commission proposal of 22 July 2003Art. 15 – Subrogation and multiple liabilityWhere a person ("the creditor") has a non-contractual claim upon another ("the debtor"), and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person's duty to satisfy the creditor shall determine whether the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship in whole or in part.The same rule shall apply where several persons are subject to the same claim and one of them has satisfied the creditor.
40 Conclusion Jurisdiction: Applicable law: Impact on claims settlement and subrogation of social security institutions, legal developments in Europe, problems with personal injury claims in EuropeConclusionJurisdiction:Significant to determine the applicable lawJurisdiction in the injured party‘s country: Application of foreign law, inclusion of foreign evidence problematic (longer trials and higher costs)Applicable law:Relevance of diverging – partly conflicting – conflict-of-law provisionsApplication of the law of damages in the injured party‘s country of origin controversial (currently not viable)Compensation of personal damage:Quantification of immaterial compensation based on table system and court rulings, diverging medical assessment methodsConsideration of the situation in the injured party‘s country in the compensation of damages
41 Social security subrogation: Impact on claims settlement and subrogation of social security institutions, legal developments in Europe, problems with personal injury claims in EuropeSocial security subrogation:National differences apply to subrogationSubrogation entitlement and extent governed by the law of the country in which the social security institution is based, national subrogation bans are not consideredHandling of international claims:Comprehensive, pragmatic line of thoughtKnowledge of different legal systemsKnowledge of relevant private international law and international procedural law provisionsFamiliarity with different mentalities and languagesInternationality