| EU 4th Directive Published 16th May 2000, implemented in UK by January 2003 |
| EU 5th Directive11th June 05, to be implemented in UK by 11 June 07 [alternative download site PDF] [HTML] |
| Report of EU Committee on Legal Affairs & Internal Market (Willi Rothley) preparatory to 5th Directive.10.10.2003 |
| FSA Regs implementing 4th Directive (Scroll down to paragraph 7.6) |
| EU 1st Directive Published 24 April 1972 |
| List of EU Motor Insurance Directives and Decisions |
| EU Main Treaties |
| Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction |
| List of International Motor Insurance Bureau with contact details |
| Conseil Des Bureaux Administer the European Green Card System |
| MIB database of UK representatives of foreign insurers |
| ARTICLE | PROVISION | COMMENTARY |
| 1 to 3 | Preamble | |
| 4 | Technical - concerning "domicile" of vehicles with temporary and permanent registration plates | No general relevance |
| 5 | Compensation for victims where vehicles have false or no registration plates | Under existing rules responsibility for dealing with the "uninsured claim" rests on the state bureau of the country which originally validly registered the vehicle. This Article sensibly passes responsibility to the Bureau of the country in which the accident takes place, it beggars belief that it was ever otherwise and that it has, it would seem, taken a mere 35 years to correct this anomaly, says a lot about the workings of the EU |
| 6 | Concerns police checks of motor insurance documents | This Article will have no bearing on PI litigation in the UK |
| 7 | Relates to compensation for victims where the vehicle is not required to be conventionally insured eg vehicles owned by the Crown, a local authority etc | This Article will have no bearing on PI litigation in the UK |
| 8 | Concerns compensating victims of certain types of vehicle which do not require to be insured | This
Article is easily
overlooked and at first brush, appears to be very technical could but
could have an interesting effect.
Its a good example of how EU legislation weaves a tangled web. You have
to refer back to: (i) the original EU 1972 Directive, and in particular the definition of motor vehicles under Article 1 of the 1st Directive "vehicle" means any motor vehicle intended for travel on land and propelled by mechanical power, but not running on rails, and any trailer, whether or not coupled]; and; (ii) the right of the state to exempt from compulsory insurance certain types of vehicle [Article 4(b) certain types of vehicle or certain vehicles having a special plate ; the list of such types or of such vehicles shall be drawn up by the State concerned and communicated to the other Member States and to the Commission.]. This new Article 8 requires the state bureaux to compensate the victims of accidents caused by motor vehicle which are not required to be insured. In other words if an accident is caused by a motorised kiddy scooter or motorised disabled scooter, MIB will have to cough up? I may be wrong but if so, this will require amendment to the existing MIB Agreements. |
| 9 | Concerns non-European territories of EU member states | Technical- No general relevance |
| 10 | Increases the minimum cover for third party personal injury claims and property damage | Here in the UK we already have unlimited liability for personal injury but the UK government will need to introduce a higher limit for property damage, however in practice the current property damage limit is never reached anyhow. Therefore the impact in practical litigation will be nil. |
| 11 | Concerns "inflation indexation" of the new limits under 10 | Of no practical relevance |
| 12 | Claims are now to be allowed for property damage in cases of unidentified vehicles causing significant personal injury | This
is interesting. The current MIB Untraced rule is "sorry, no
vehicle reg ..no property damage claim",
under this new Article, the Claimant will be able to claim property
damage if MIB also pays to him or anybody else involved in the same
accident, compensation for a "significant injury". "Significant Injury"
is not defined under the Article (and is left to member states
to
define) but might just mean attending a hospital/ GP within a specified
period. If there is no injury at all to anybody involved in the RTA,
then (as presently) MIB will still not have to
pay property damage where there is no TP reg. The rational behind Article 12 is that if there is claimed to be a "significant injury", this means it is more likely that an accident "really" took place and in the manner alleged by the victim, so it is less likely that the claim for property damage is "made up" or fraudulent. Clearly the prevalence of insurance / motor fraud on the continent is a lot less than in the UK. |
| 13 | Deletion of the MIB excess for property damage caused by an uninsured vehicle | No more £300 MIB excesses! Except, on my reading of Article 12, this does seem to allow the excess to be kept where the vehicle is unidentified- so what this will probably mean in practice is that the MIB excess is abolished in MIB Uninsured Agreement, but stays in the Untraced Agreement where the vehicle is unidentified but a claim for property damage is still allowed by virtue of Article 12, but not for claims under the Untraced* Agreement where the uninsured vehicle is identified! Obviously it will be for the government to implement Art 12 & 13 by way of new MIB Uninsured and Untraced Agreements. Watch this space. |
| 14 | Concerns insurance branches acting as representatives of the insurer | Of no practical relevance. |
| 15 | Insurance of passengers taking lifts who know the driver was "under the influence" of alcohol or drugs | This merely provides that the insurer cannot as a mater of contract exclude indemnity for such claims per se but it leaves the issue of liability squarely to domestic law ie based on negligence and contributory negligence. UK practice should therefore be unaffected. |
| 16 | Liability towards pedestrians and cyclists | This provision is intended to ensure that pedestrians and cyclists always have a right to seek compensation from the insurer in the event of an accident, but does not guarantee it, if, for example they are wholly liable themselves. This is the current situation in the UK and therefore should have no impact. Originally the idea was that there would be more or less strict liability if a cyclist or pedestrian got injured regardless of negligence, but this seems to have been watered down to almost nothing. Unless the government goes beyond the requirements of the 5th Directive, all they (the UK government) has to do is make sure that a cyclist or pedestrian "can claim" against the motor insurer, but Art 16 does not say the claim has to be allowed under domestic law. Pedestrians and cyclists victims are already covered by RTA motor insurers, so Art 16 is a dead letter as far as the UK is concerned. |
| 17 | Insurance of vehicles taken overseas | Clarifies that insurance for extended stays overseas is available under a normal domestic policy provided that the vehicle is not normally located abroad. This is already the case in GB and will thus have no impact. |
| 18 | Insurance of imported motor vehicles | Allows UK motorists to buy from their existing insurer up to 30 days short term cover for new vehicles which they wish to import from other EU States ie pending re-registration. The reason for this is that existing EU rules apparently make it very difficult for such insurance cover to be granted by a UK insurers |
| 19 | Right to demand statement of previous insurance claims ie for No Claims Bonus Purposes | Policyholders will be able to ask their insurers for a statement of previous claims when changing to another insurer –making it a bit easier to prove your No Claims Bonus. The insurer will have 15 days to comply |
| 20 | Insurers
may not apply their insurance excess against the victim |
In practice, insurers don't do this anyway, but it could be helpful in the event of an insolvency of a company which "self insures" eg the million pound excess arrangements of some of the big transport companies |
| 21 | Direct right of action against insurers for domestic victims | Already covered by UK legislation. See The European Communities (Rights against Insurers) Regulations 2002 |
| 22 | Insurer to give Reasoned Response to a third party claim within 3 month | This
extends existing
provisions under the 4th Directive which currently only apply
to "cross border" accident claims. Under the existing
provisions, according to the Department of Constitutional Affairs (see Fourth
Motor Insurance, Directive Transposition Note, January 2003):
relevant Injured parties should receive a reasoned offer of
compensation or reasoned reply to the points raised in their claim from
the insurer or their claims representative within three months
of
presenting their claim, and where this requirement is not met, interest
shall be payable on the amount of compensation offered or awarded. This
echoes the Personal Injury Protocol, but through FSA Rules will now be
extended to all accident claims ie ULRs and PIs. If the insurer fails
to make payment
or give a "reasoned reply" within 3 months,
for the
first time there will be a right
to interest even where legal
proceedings never get to be issued (but see the Butts below!). The Directive leaves Member States to decide the rate of interest. The interest rate suggested by FSA in the current 4th Directive Regulations is Base Rate +4% (=8.5% at time of writing) but interest is only calculated from the date after the 3 months has expired rather than the date of the accident (as compared to the date of loss for Court interest but which normally runs at 6%) . The current FSA rules will have to be amended as they currently only cover cross-border claims. There are obvious loopholes in the right to interest, eg if the insurer gives a reasoned reply denying liability within 3 months but 9 months later admits liability and then pays up, the client will not get interest under these new provisions because the insurer "replied" within 3 months and paid within 3 months of finally admitting liability! Also the 3 month period for payment only commences when the claim has been fully quantified by the Claimant and there is no provision to require the insurer to make an interim payment if they do not deny liability, this makes something of a mockery of the right to interest. If for example the Claimant suffers a really serious injury and cannot present final medical evidence for say two years, but his vehicle is on day1 a £5000 "write off", the insurer can get away without paying any interest on the write off until 27 months after the accident! We submit the FSA needs to take a serious look at these regulations, and in our opinion interest should be payable from when each item of loss is incurred and whether or not liability is initially denied, why after all should the victim lose out, its his money that has been lost! As a final footnote the 3 month time limit will also apply to MIB! [The exclamation mark needs no further comment] |
| 23 | Insurance Information Centres | National Information Centres which were set up under the 4th Directive (ie the MID) will be required to provide insurer information to domestic as well as foreign victims. MID already does this and free of charge- full marks to the UK. |
| 24 | Injured party may sue liable Insurer in the victim's home Court | If I
have read this
right, this Article states that the injured
victim of an accident overseas may sue the liable insurer (and in such
proceedings the policyholder or insured as additional Defendants) in
the Claimant's Home Country court. This is good news,
it means for example a UK resident injured in an accident whilst in
France can sue in the UK Courts. There is nothing in the Directive
itself regarding whether the UK Courts should apply "French Procedure"
when quantifying damages are awarding legal costs or deciding
limitation issues, this is covered by the Rules governing Conflict of Laws. (As an aside it should be noted that the fact the UK Court may have jurisdiction to hear the claim, the applicable law may be that of the location where the accident took place). This is likely to be seen as one of the biggest change resulting from the EU Directives. The idea is fine where liability is admitted but the mind boggles as to how the UK courts are going to deal with a liability dispute concerning say an RTA in Turkey, Bulgaria, or Poland for example. For UK solicitors there may be some swings and roundabouts with Article 24 because we may lose a few overseas clients who would have otherwise have approached UK lawyers who will now be able to pursue their claims through their own domestic courts. Article 24 is stated to be declaratory of the existing "pre-5th Directive EU law", so it appears there is no need to wait until implementation of the 5th Directive to launch these cross border raids! See Articles 9(1) (b) and 11(2) Council Regulation (EC) No 44/2001 22/12/2000. However as relates to "third party claims" there is at least one important caveat, the 2000 Regulations refer to an injured party, it is not clear to me whether this means the right only applies to victims who have suffered a personal injury or whether a party in "injured" if he has suffered any loss whether bodily or pecuniary. I am therefore somewhat doubtful that Art. 24 will help the Claimant who was uninjured but wishes to make a claim for vehicle damage or towing charges against a liable foreign insurer, and of course there is the question of accidents involving some potential Claimants who might have been injured and other who have suffered only financial losses. As relates to claims against one's "own" insurer, under Article 9 there is an absolute right for any insured, policyholder or beneficiary (whether the subject of the claim concerns an injury or not) to sue the insurer for contractual benefits due under the insurance in the Claimant's home Court. This is not a "big deal" because obviously most Claimants insure with domestic insurers but it could possibly be helpful for example in relation to disputes with foreign insurers of cars hired whilst abroad, and it will apparently come into its own when there is a "single market" for insurance. [As a complete aside, because Article 9(1) allows the insurer to be sued in the insurers "home court"§, this means for example in relation to an accident in Scotland if the insurer is "domiciled" in England he can be sued in the English Courts? See also The European Communities (Rights against Insurers) Regulations 2002 ] |
| 25 & 26 | References in certain Directives | Technical only. Ignore. |