CJEC, 1st chamber, February 9, 1984, No 64-83

THE COURT (first chamber)

1 By judgment of 22 february 1983, received at the court on 22 april 1983, the french cour de cassation (court of cassation) referred to the court for a preliminary ruling pursuant to article 177 of the eec treaty a question on the interpretation of article 2 (2) of council directive no 72-116 of 24 april 1972 on the approximation of the laws of the member states relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability (official journal, english special edition, 1972, (ii), p. 360).

2 That question was raised in the context of proceedings between the bureau central francais des societes d ' assurance contre les accidents d ' automobile, hereinafter referred to as ' ' the bureau ' ', and the fonds de garantie automobile, hereinafter referred to as ' ' the fund ' ', which was set up to cover claims in respect of accidents caused by uninsured vehicles, for which the bureau was not liable.

3 The bureau is one of the national bureaux set up in the framework of the international insurance card system (' ' green card system ' '). One of the characteristics of the system is that it is based upon agreements under private law concluded bilaterally between the national insurers ' bureaux according to a standard form called the ' ' uniform agreement between bureaux ' '. By virtue of those agreements, each national bureau undertakes, on the one hand, to settle, in its own country, claims in respect of accidents caused by vehicles registered in the other member countries, which have a green card, and, on the other, to reimburse foreign bureaux which have settled claims in respect of accidents caused by vehicles insured in its own country.

4 On 18 july 1976 a car bearing a german number plate was in collision near Fontvieille (Bouches-du-Rhone, France), with another vehicle registered in France.

5 The owner of the french vehicle commenced proceedings for compensation before the tribunal de grande instance (regional court), tarascon, against a mr Buchwieser who, after the accident, presented himself to the police as owner of the german vehicle but who has not since been traced, and against the bureau, relying on an agreement concluded on 7 october 1972 between the national bureaux pursuant to article 2 (2) of directive no 72-116.

6 In the course of the proceedings before that court, it emerged that the german vehicle had been stolen and, consequently, its registration in the federal republic of Germany had been cancelled.

7 In those conditions, the bureau relied upon the terms of article 2 (2) of directive no 72-166, according to which the national bureau guarantees the settlement of claims only ' ' in accordance with the provisions of national law on compulsory insurance ' '. Since the vehicle in question had been stolen and since french law excludes from compulsory motor-vehicle insurance liability on the part of an unauthorized person who uses or has charge of a vehicle, the bureau contended that it was not liable to compensate the owner of the french car.

8 The tribunal de grande instance, tarascon, by interlocutory judgment, invited the fund to intervene in the proceedings and the fund did so; the tribunal, by a judgment of 9 february 1979, dismissed the claim for compensation against the bureau as being without foundation, regard being had to the terms of article 2 (2) of directive no 72-166 and to french law. It decided furthermore that the body which was to compensate the plaintiff could only be the fund.

9 The fund appealed against that decision and the cour d ' appel, aix-en-provence, decided, by a judgment of 6 july 1981, that the damages in question should be paid by the bureau on the grounds that the reference in article 2 (2) of directive no 72-166 to ' ' the provisions of national law ' ' related to the settlement of claims and not to insurance and, consequently, concerned only the upper limit of compulsory insurance cover which, at the time, was 1 000 000 francs for material damage.

10 The bureau appealed to the cour de cassation which, by a judgment of 22 february 1983, asked the court of justice to give a preliminary ruling on the meaning of the expression ' ' provisions of national law on compulsory insurance ' ' contained in article 2 (2) of the directive of 24 april 1972, and in addition to rule whether a vehicle which has been taken out of circulation in a member state of the european economic community in which it was registered may be regarded as still normally based in the territory of that state within the meaning of article 1 (4) of the directive of 24 april 1982.

11 The council directive of 24 april 1972 established a system whose essential characteristics are clearly set out in the last three recitals in the preamble thereto:

' '... The abolition of checks on green cards for vehicles normally based in a member state entering the territory of another member state can be affected by means of an agreement between the six national insurers ' bureaux, whereby each national bureau would guarantee compensation in accordance with the provisions of national law in respect of any loss or injury giving entitlement to compensation caused in its territory by one of those vehicles, whether or not insured;

... Such a guarantee agreement presupposes that all community motor vehicles travelling in community territory are covered by insurance;... The national law of each member state should, therefore, provide for the compulsory insurance of vehicles against civil liability, the insurance to be valid throughout community territory;... Such national law may nevertheless provide for exemptions for certain persons and for certain types of vehicles;

... The system provided for in this directive could be extended to vehicles normally based in the territory of any third country in respect of which the national bureaux of the six member states have concluded a similar agreement. ' '

12 Article 2 (1) of the directive provides that member states are to refrain from making checks on insurance against civil liability in respect of vehicles normally based in the territory of another member state.

13 With regard to vehicles of the type in question in this case, article 1 (4) provides that ' ' territory in which the vehicle is normally based ' ' means ' ' the territory of the state in which the vehicle is registered ' '.

14 In compliance with that directive, a supplementary agreement between national bureaux (mentioned above) was signed on 16 october 1972. Article 2 of that agreement provides that:

' ' (A) When a vehicle normally based in a state whose bureau has signed the present agreement goes into the territory of another member state, being a member of the eec, and is there subject to compulsory third-party insurance in force in that state, the owner, user and/or driver shall be deemed to be insured within the meaning of the uniform agreement between bureaux and to be holders of a valid certificate of insurance issued by the bureau of the country in which such vehicle is normally based, irrespective of whether or not they are in fact holders of such a valid certificate. ' '

With regard to the uniform agreement between bureaux, article 1 (e) provides that:

' ' Notwithstanding the terms of such policy it shall be deemed to be a policy giving exactly the indemnity required by the compulsory motor insurance law of the country in which an accident occurs and no more and to be subject to such conditions and limitations as are contained in the policy and are permitted by such law. ' '

The first part of the question

15 The first part of the question seeks to ascertain whether the guarantee which each national bureau must give concerns the settlement of claims in respect of accidents caused on its territory by vehicles normally based in the territory of another member state, on the basis of the provisions relating to compulsory insurance applicable in the state in which it carries on its activities or on any other basis which does not take account of cases of exclusion from insurance provided for in the law of that state.

16 The bureau, the fund and the french government contend that the purpose of the directive was to allow free circulation throughout the community of vehicles insured in a member state. They claim that, whilst taking account of any upper limits of liability, the bureau of the state in which the accident took place must treat the vehicle as being insured in respect of any accident which might occur as long as insurance is compulsory for vehicles of that type in that state. A claim for compensation in respect of an accident cannot be rejected on the basis of specific exemptions from compulsory insurance provided for in national law. The bureau responsible for settling the claim pays it and recovers an equivalent sum in the state in which the vehicle is normally based, either from the national bureau if the vehicle is insured or from the guarantee fund if it is not.

17 Before the court, the bureau took a different position from that which it had taken before the national court. It states that in the context of litigation before its national courts, the bureau of the country in which the accident took place is in fact obliged to support the position of the national bureau of the vehicle ' s country of origin on behalf of which it is acting. On the other hand, once the court has been asked for a preliminary ruling, it may adopt an impartial position and raise the debate to the level of the interests of the communities and of the victims of accidents caused by a vehicle registered in a member state or an acceding state whether or not that registration is lawful and whether or not the vehicle is stolen.

18 It states that in each member state there is a national bureau and a guaranteeing body. What is consistent from one country to another is the guarantee of total cover arising from the joint and complementary obligations of the insurers and the guaranteeing body. If the national law of the handling bureau (the bureau of the country in which the accident took place) provides for certain exemption clauses, the guaranteeing body of the country in which the vehicle is normally based takes the place of the insurer when those clauses apply. The link between the insurer ' s obligation and the guarantee fund ' s obligation is peculiar to each legal system and forms a whole which allows the victim to be guaranteed a settlement in all cases. The logic of the system implies that the national bureau of the country in which the vehicle is normally based covers all accidents caused abroad by that vehicle and recovers from its guaranteeing body the sums paid by it in the absence of insurance cover. The handling bureau does not have to make that sort of decision. By establishing an irrebuttable presumption of insurance, the directive necessarily establishes that interpretation.

19 According to the bureau, article 4 of the proposal for a directive submitted to the council on 24 june 1970 (journal officiel, c 105, p. 17) provided that each state should designate a body responsible for the ultimate settlement of claims in respect of accidents caused abroad by uninsured vehicles registered in that state. Later, all reference to a body in the country of origin responsible for settling claims disappeared from the directive, as did article 4 of the proposal, but the solution did not change in practice. In fact, the european parliament considered article 4 inappropriate because it did not clearly designate the body to which it referred and its inclusion in the system might undermine the functioning of the agreements between bureaux.

20 The bureau adds that the economic and social committee also proposed to eliminate article 4 of the proposal so as to avoid any reference to the intervention of the guarantee fund. The committee explained its attitude as follows:

' ' In any event, the agreements between national bureaux guarantee the settlement of victims ' claims for damages by the bureau of the territory in which the accident took place, for which that bureau is reimbursed by the bureau of the state of which the person liable is a national.

Where there is no insurance, it is for the latter bureau to find, where appropriate, a convenient means of recovering its disbursements. ' '

21 The government of the french republic states that the system established by the directive is based upon a basic underlying principle according to which a country which wishes to have its vehicles enter the territory of another member state without being subject to green-card checks must accept the consequences which may result and in particular the consequences which vehicles bearing its registration plate may cause in another member state, even though their use was unauthorized because they were uninsured. In return for the host member state ' s obligation to refrain from making checks on the green card, the directive imposed two related obligations on the member states in which vehicles are normally based. The first, laid down in article 3, requires them to take ' ' all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance ' ' and ' ' that the contract of insurance also covers, according to the law in force in other member states, any loss or injury which is caused in the territory of those states ' '. The second, provided for in article 4, requires member states which wish to derogate from the provisions of article 3, within the limits provided for in article 4 (a), to take the appropriate measures to ensure that compensation is paid in respect of any loss or injury caused in the territory of other member states by vehicles not required to be insured.

22 The interpretation suggested by the french government was, it states, that which inspired the drafting of the applicable french provisions and in particular, those relating to intervention by the guarantee fund. The law of 21 december 1972, which was designed to incorporate into french law the rules laid down in the directive, extended the territorial powers of that body, so as to allow it to accept responsibility for damages in respect of accidents caused abroad by an uninsured vehicle registered in France, such damages having already been paid by the national bureau of the country in which the accident occurred. Correspondingly, the guarantee fund was exempted from having to compensate victims of accidents caused in France by uninsured vehicles registered in a member state of the community.

23 The italian and british governments and the commission all consider that the directive can be interpreted only as meaning that claims for compensation against vehicles coming from other member states must be treated on the same basis as claims made against vehicles covered by compulsory insurance in the state of the bureau responsible for settling them. Such an interpretation would also be in accordance with the uniform agreement between bureaux and the aforementioned supplementary agreement.

24 It should be noted that the seventh recital in the preamble to the directive makes clear that the abolition of checks on green cards is to be effected only by means of an agreement between the national insurers ' bureaux under which each national bureau guarantees compensation in accordance with the provisions of national law in respect of any loss or injury giving entitlement to compensation caused in its territory by a vehicle normally based in another member state, whether or not insured.

25 In accordance with that recital, article 2 (2) of the directive, as amended, provides that the relevant provisions of the directive are to take effect:

' ' After an agreement has been concluded between the nine national insurers ' bureaux under the terms of which each national bureau guarantees the settlement, in accordance with the provisions of national law on compulsory insurance, of claims in respect of accidents occurring in its territory caused by vehicles normally based in the territory of another member state, whether or not such vehicles are insured. ' '

26 Thus, the effect of the directive is to assimilate any vehicle normally based in the territory of another member state to a vehicle properly insured in accordance with the provisions of the national law of the state in which the accident occurred, at the time at which it occurred. The fact that the directive provides for that consequence whether or not the vehicles are insured indicates that frontier checks must not relate to the validity of the insurance as regards the person having charge of the vehicle at the time at which it crosses the national frontier, and, a fortiori, during its stay in the national territory.

27 The directive ' s eighth recital states that the guarantee agreement between bureaux presupposes that all community motor vehicles travelling in community territory are covered by insurance. In accordance with that idea, the directive does not provide for the intervention of the various guarantee funds but only of the national bureau of each member state. The latter must settle the claims, seeking reimbursement of the sums it has paid from the bureau of the member state in which the vehicle is registered. 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.

28 It follows that, as regards vehicles to which the directive applies, the national bureau of the member state in which the accident has occurred guarantees the settlement of claims in respect of accidents which are required to be covered under the compulsory insurance scheme of that country, within the limits and in accordance with the provisions of its national law, whether or not the driver is actually insured.

29 It follows from the foregoing considerations that the first part of the question submitted may be answered by stating that the expression ' ' provisions of national law on compulsory insurance ' ' contained in article 2 (2) of directive no 72-166 must be understood as referring to the limits and conditions of civil liability applicable to compulsory insurance, provided always that the driver of the vehicle at the time at which the accident occurred is deemed to be covered by valid insurance in conformity with that legislation.

The second part of the question

30 For the reasons set out in the judgment of the court (first chamber) in case 344-82 (gambetta), the answer to the second part of the question submitted must be that when a vehicle bears a properly issued registration plate, that vehicle must be regarded as being normally based, within the meaning of the directive, in the territory of the state in which it is registered, even if at the relevant time the authorization to use the vehicle had been withdrawn, irrespective of the fact that the withdrawal of the authorization renders the registration invalid or entails its revocation.

Costs

31 The costs incurred by the government of the french republic, the government of the italian republic, the government of the united kingdom, and the commission of the european communities, which have submitted observations to the court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

The court (first chamber),

In answer to the question referred to it by the french cour de cassation by a judgment of 22 february 1983, hereby rules:

1. The expression ' ' provisions of national law on compulsory insurance ' ' contained in article 2 (2) of council directive no 72-166-eec of 24 april 1972 (official journal, english special edition 1972 (ii), p. 360) must be understood as referring to the limits and conditions of civil liability applicable to compulsory insurance, provided always that the driver of the vehicle at the time at which the accident occurred is deemed to be covered by valid insurance in conformity with that legislation.

2. When a vehicle bears a properly issued registration plate, that vehicle must be regarded as being normally based, within the meaning of the directive, in the territory of the state in which it is registered, even if at the relevant time the authorization to use the vehicle had been withdrawn, irrespective of the fact that the withdrawal of the authorization renders the registration invalid or entails its revocation.