A Response by the Forum of Insurance Lawyers to the European Commission s Consultation on Limitation Periods for Compensation Claims for Victims of

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1 A Response by the Forum of Insurance Lawyers to the European Commission s Consultation on Limitation Periods for Compensation Claims for Victims of Cross-Border Road Traffic Accidents in the European Union. November

2 FOIL (The Forum of Insurance Lawyers) exists to provide a forum for communication and the exchange of information between lawyers acting predominantly or exclusively for insurance clients (except legal expenses insurers) within firms of solicitors, as barristers, or as in-house lawyers for insurers or self-insurers. FOIL is an active lobbying organisation on matters concerning insurance litigation. FOIL represents over 5000 members. It is the only organisation which represents solicitors who act for defendants in civil proceedings. This response has been drafted following consultation with the membership. Any enquiries in respect of this response should be addressed initially to: Shirley Denyer Shirley Denyer LLP FOIL Knowledge Services (Consultant) shirley.denyer@foil.org.uk Sinclair House 2D Park Avenue Eccleston Park Prescot Merseyside L34 2QZ 2

3 A Response by the Forum of Insurance Lawyers to the European Commission s Consultation on Limitation Periods for Compensation Claims for Victims of Cross-Border Road Traffic Accidents in the European Union. FOIL members have considered with interest the above consultation paper. Member firms are frequently instructed in road traffic accident and other claims with a crossborder element and therefore have significant practical experience of dealing with issues of limitation within Member States. Question 1: Have you experienced not receiving any compensation for damage suffered due to the expiry of time-limits for bringing a claim or are you aware of such a situation which affected a victim of a cross-border traffic accident. Please provide details of such cases or case. Question 2: Would the position have been different if the accident had not happened abroad? If yes, please explain why? Whilst limitation issues can arise in any claim, with or without a cross-border element, it is relatively unusual for a road traffic accident claim to be lost on a limitation point, even though different limitation periods do apply depending upon the jurisdiction in which the accident occurred and the applicable law. In FOIL s experience, claims following road traffic accidents are generally pursued fairly promptly after the accident. Almost all the claimants bringing claims against insurers represented by FOIL members will be legally represented themselves and the limitation issues are well-known. Question 3: Do you think that the options presented above would be appropriate to address the problems outlined and, of so, why? Do you have a preference concerning these options and, of so, why? Question 4: As regards Option 1, who should be responsible for providing the relevant information to the accident-abroad victim, the accident-abroad victim s own insurer or the liable party s liability insurer? What is the best form of provision of such information? FOIL does not believe that limitation is a significant problem in cross-border road traffic accident claims. It does not believe it would be appropriate to require 3

4 insurers to provide case specific information to the accident-abroad victim, whether their own insured or not. Limitation issues, when they arise, can be complex, affecting individuals differently depending upon their age and characteristics, details of which may not necessarily be known to the insurer. Limitation is also influenced by judicial discretion in some jurisdictions, a factor which it would be impossible for insurers to adequately reflect. Providing detailed information would incur costs which would inevitably be reflected in increased premiums, at a time when motor insurance is already perceived by consumers and Governments as very expensive. Providing case specific information would be very close to providing legal advice, raising the issue of liability in the event that the information was incorrect, misinterpreted by the victim, or simply not received. Question 5: Do you think that improving general information on the national rules on limitation and prescription for claims on compensation for damages in crossborder traffic accidents would be useful? As indicated above, FOIL does not believe that limitation is a significant problem in cross-border road traffic claims. However, there can be no harm in improving public awareness of the issue if this could be done at modest cost. It would be helpful for very general advice to be provided on the EU website but a detailed breakdown of the provisions relating to each jurisdiction would not be advisable. There is always a danger that detailed information may be incorrect or misleading, or open to misinterpretation by a lay person. It would be preferable for the information to advise in general terms that time limits exist in bringing compensation claims and that victims should take legal advice at the earliest opportunity. Question 6: As regards Option 4, which aspects of the law of limitation or prescription periods should a European instrument cover: the length of the limitation period, the commencement and expiration of the period, the grounds of suspension or interruption of the period, rules on computation of time or all of the above? FOIL does not believe that the rules on limitation should be harmonised within the EU. As indicated above, it does not believe there is a significant problem to be solved here and it would be inappropriate to isolate one aspect of civil justice to be harmonised. Although it is only seeking to address choice of law and not 4

5 substantive national legal principles, the complexities that have arisen with regard to Rome II give an indication of the difficulty in seeking to put in place common principles across very different civil justice systems. It is likely that harmonisation of limitation would prove much more challenging and time consuming. A fundamental change to substantive legal principles would be likely to result in unforeseen consequences and potential injustice if the careful balance of procedural law present in each jurisdiction is swept away and replaced by a homogenised version, perhaps ill-suited to the general law within some of the jurisdictions. Question 7: Do you think there are alternative actions that could be taken to improve the situation of accident-abroad victims by ensuring the rightful compensation for damages caused by traffic accidents. Should such actions be taken by the Member States or by the Union? FOIL takes the view that the present system is working satisfactorily in ensuring that victims of road traffic accidents receive appropriate compensation. It does not believe that further reforms are required at an EU level. Question 8: In your view, does the fact that law applicable to claims arising out of the traffic accident will in certain cases differ depending upon the court seised of the case create problems for victims? Have you experienced this or are you aware of a concrete situation in which this has been problematic for victims? If so, what is the appropriate solution to address the shortcomings of the current situation? It is unsatisfactory to have two different regimes running alongside one another to address the issue of choice of law. FOIL members have not reported any specific examples where this issue has arisen but as the consultation paper makes clear there is the potential for forum shopping and injustice between victims. It would be appropriate for a provision to be introduced establishing that Union law should take priority where all parties to the accident are domiciled within the EU. 5