Claims waiver not to the detriment of the German health insurance or social security institutions

The District Court of Barcelona has ruled incorrectly in a recent judgment. The decision was based on the following facts:

A German employee suffered an accident at work in Spain. Due to the injuries he received a disability pension that is payable by a German social security institution. As part of the settlement of his personal claim, the victim signed after payment for an amount for his pain and suffering, a waiver statement to the Spanish insurance.

The German social security institution submitted in accordance with Art. 116 SGB X [social security code] by subrogation a lawsuit against the Spanish insurance for the amount of the capitalized disability pension.

The District Court in Barcelona has decided in its decision of November 21, 2013 that the German social security institution is not entitled to recourse because the waiver of a claim would waive any claim against the Spanish insurer. The suit was therefore dismissed.

Our assessment: an error of law in the judgment

The District Court in Barcelona has misinterpreted the German legal system here, i.c. Art. 116 SGB X and set an completely Spanish legal consideration. It was unfortunately, not explained well by the colleague, who represented the interests of the German social security institution locally and put forward evidence that under German law of subrogation the social security institution within the meaning of Art. 116 SGB X is automatically subrogated at the moment of the accident and it is not required that payment occurs previously to the injured party. Therefore, the injured party, as in this case, can only renounce his right to claim after the accident. These are for example the claims for damages, which he is entitled to from the accident. Claims for disability, continuation of the wage payment, medical expenses carried by the social security institution etc. are not part of the claims of the victim, as these have already been transferred to the German social security institution. Since they are no longer due to him, he could not waive this claim to these. This erroneous decision of the District Court in Barcelona is also in contradiction to other court decisions on this question of law. Already on October 25, 2000 the District Court in Alicante had decided, for the reasons mentioned above, that a waiver statement of the victim could not be detrimental to the social security institution.

This latest decision does not constitute binding case-law and in other legal cases can always be decided differently by courts of lower instance. For this reason, however, it is necessary that the foreign social security institution together with their lawyers prepare a good reply and also prove the content of German law procedurally correct in Spain. We are happy to assist and refer to the main points:

The Spanish lawyers representing the foreign social security institution in Spain must explain, in detail, the legal nature of art. 116 SGB X, since that provision is materially different from its Spanish counterpart. It also requires the knowledge of private international law in order to present convincing evidence that in these cases of international recourse not Spanish, but German law is applicable. Unfortunately the knowledge of IPL for many Spanish colleagues is not particularly advanced, as we can deduce from judgments again and again. This is the reason that most recovery actions by Spanish colleagues are seen from a Spanish law perspective. This is incorrect and leads to many legally flawed judgments.

We also add that the attorney must prove the content of German law in Spain. Here the actual moment of subrogation would have to be proven to the court by written evidence starting with the accident. This was omitted, and therefore the result of the process is not overly surprising.

Conclusion: Only if your lawyers have done their homework and bring full pleadings together with proof of German law, can you assume that the Spanish judges will not make an error in law. If this preliminary work is not made, such decisions can be disappointingly common place.