CAPPING THE AMOUNTS OF COMPENSATION - CONFORM TO EU RULES?

In the context of claims arising from liability insurance in connection with motor vehicle accidents, it is usual in several EU countries, including Spain and Italy, that the law provides for a cap on the total compensation sum. An Italian court in Tivoli has seen fit to submit this internal legal requirement for a preliminary ruling to the ECJ for clarification (prejudicial question).

Motor vehicle liability insurance law is largely harmonized in the EU; however the statutory maximum amounts of compensation and the acquisition of certain services (e.g. rental cars and expert fees) are still significantly different in the EU countries.

Particularly in the case of large damages the ceiling leads the injured to regard the compensation as insufficient. However, it must be noted that in case of other liability damage which would be outside the car liability, so the cap would not work and the injured party would be entitled to much higher amounts of compensation for the same damage and / or injury.

National legislators always have the legality of this practice confirmed, not least against the background of providing increased legal certainty for liability insurers, who are obliged to make good for a traffic accident. This practice was also recognized by the national courts, where, for example in Spain the principle of capping of claims was used via tables of indemnity for personal damages.

An Italian court in Tivoli has seen fit to submit this legal position for a preliminary ruling on clarification to the ECJ. The Court was essentially asked whether a national provision regulating the amount of compensation, which must be paid for by a non financial or material damage in the case of a traffic accident (non-pecuniary damage), is compatible with the EU legislation on motor vehicle insurance.

In the final application, the Advocate General Nils Wahl saw no doubt that Art. 3 of the Directive 72/166/ECC of April 24, 1972 on the approximation of the laws of the Member States relating to the motor vehicle liability insurance and the enforcement of the compulsory insurance type, Art. 1 paragraph 1 of the Second Council Directive 84/5/EEC of December 30, 1983 on the approximation of the laws of the Member States relating to the compulsory motor vehicle liability insurance and Art. 1a of the Third Council Directive 90/232/EEC of May 14, 1990 on the approximation of the laws of the Member States relating to the compulsory motor vehicle liability insurance must be interpreted as not precluding a national provision such as Art. 139 of Legislative Decree Number 209 of September 7, 2005 concerning the Codice delle Assicurazioni private, in which the criteria for the quantification of the insurer paying compensation for non-pecuniary damages of motor vehicle accident victims are set.

The decision is still pending. We will report.