European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Compulsory motor vehicle insurance covers liability for personal injuries to all passengers other than the driver (Art. 12(1)) and according to the European court this also includes persons travelling in a part of a motor vehicle which has not been designed and constructed with seating accommodation for passengers and vehicle owners riding as passengers  at the time of the accident . The members o …

Loss or injury covered

Compulsory motor vehicle insurance covers liability for personal injuries to all passengers other than the driver (Art. 12(1)) and according to the European court this also includes persons travelling in a part of a motor vehicle which has not been designed and constructed with seating accommodation for passengers and vehicle owners riding as passengers  at the time of the accident . The members of the family of the policyholder, driver or any other person who is liable under civil law in the event of an accident cannot be excluded from insurance in respect of their personal injuries by virtue of that relationship (Art. 12(2)) . Compulsory motor vehicle insurance also covers personal injuries and damage to property suffered by pedestrians, cyclists and other non-motorized users of the roads who, as a consequence of an accident in which a motor vehicle is involved, are entitled to compensation in accordance with national civil law . Member States are free to determine, within the framework of their civil liability regimes, the damage caused by motor vehicles which must be compensated, the extent of the compensation and the persons who may benefit from it .

Provisions in the insurance policy excluding compensation for third-party victims of an accident where the vehicle is driven or used by persons who do not have express or implied authorization to do so cannot be asserted , nor can clauses excluding persons who do not hold a license permitting them to drive the vehicle or persons who are in breach of the statutory technical requirements concerning the condition and safety of the vehicle (Art. 13). Clauses are also deemed void where they purport to exclude passengers from insurance cover on the grounds that the driver was under the influence of alcohol or drugs at the time of the accident . By contrast, the legislation does not preclude, in the relationship between the insurer and the insured person, recourse by the insurer against the insured person to obtain the recovery of the sums paid out to the victim .

Damage to property or personal injury caused by unidentified or uninsured vehicles is also covered so as not to leave victims without compensation. Article 10 of the directive requires Member States to set up or authorize a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by such vehicles. A Member State satisfies this requirement by setting up a body subject to procedural rules having definite advantages in terms of rapidity and cost in comparison to recourse to court proceedings and whose decision is subject to a number of appeal remedies . The body may not make the payment of compensation conditional on the victim establishing in any way that the person liable is unable or refuses to pay (Art. 10(1)). The Member States may exclude or limit compensation where they can establish both that the victims willingly entered the vehicle which caused the accident and that they knew it was not insured . To reduce the risk of fraud they can also limit or exclude the payment of compensation by the body in the event of damage to property by an unidentified vehicle. Where the damage to property is combined with significant personal injury, the payment of compensation for the property damage may not be totally excluded and Member States may only provide for an excess of EUR 500 or less to be borne by the victim of such damage (Art. 10(3)). Similarly, in the case of vehicles stolen or obtained by violence, an excess of not more than EUR 250 can be borne by the victim in respect of damage to property (Art. 13(2)).

In the case of injury to a person in an accident taking place in a Member State other than the State of residence of the injured party, the Member States must ensure that all insurance undertakings established in their territory appoint a claims representative in each Member State other than that in which they have received their official authorization for the handling of such claims . The requirement to appoint a claims representative does not preclude the right of the injured party or his insurance undertaking to institute proceedings directly against the person who caused the accident or his insurance undertaking. Claims representatives must nevertheless have sufficient powers to represent the insurance undertaking in relation to injured parties and to meet their claims in full.

Case C-356/05 Farrell v Whitty [2007] ECR I-3067, LawLex200900000475JBJ.

Case C-537/03 Candolin v Vahinkovakuutusosakeyhtiö Pohjola [2005] ECR I-5745, LawLex200900001038JBJ.

Pursuant to Article 21(3), the claims representative may act for one or more insurance undertakings.

Case C-348/98 Mendes Ferreira v Companhia de Seguros Mundial Confiança [2000] ECR I-6711, LawLex200900000437JBJ: restating that it is for the Member States to lay down the system of civil liability, the Court of Justice deems that they must require insurance against civil liability to cover personal injuries to passengers who are members of the family of the insured person, of the driver of the vehicle where those passengers are carried free of charge, whether or not there is any fault on the part of the driver of the vehicle which caused the accident, only if the domestic law of the Member State concerned requires such cover in respect of personal injuries caused in the same conditions to other third-party passengers.

Case C-618/21 AR, Judgment of 30 March 2023, LawLex202300004525JBJ.

Case 64/83 Bureau central français v Fonds de garantie automobile and others [1984] ECR p.689, LawLex200900002194JBJ: a national bureau cannot rely on a provision of its national law which does not guarantee cover where the accident is caused by an uninsured driver and attributes the obligation to compensate to a guarantee fund set up to cover claims in respect of accidents caused by uninsured vehicles. The European court ruled that in such cases the national bureau must first settle claims and subsequently seek reimbursement of the sums it has paid from the bureau of the Member State in which the vehicle is registered and if the vehicle is not insured, the bureau of the country in which the vehicle is normally based may in turn claim reimbursement from the guarantee fund of that country.

Case C-129/94 Criminal proceedings against Ruiz Bernáldez [1996] ECR I-1829, LawLex200900000495JBJ.

Case C-63/01 Evans v Secretary of State for the Environment, Transport and the Regions [2003] ECR I-14447, LawLex200900001088JBJ.

Case C-211/07 Commission v Ireland [2008] ECR I-33, LawLex200900001132JBJ.

European Business Law

129. Loss or injury covered

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129. Loss or injury covered

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise