Criminal Proceedings against Ruiz Bernáldez (Case C-129/94) 1996

FACTS:

The defendant caused a road accident while driving in a state of intoxication. The Seville Criminal Court subsequently ordered him to make reparation for the damage to property which he had caused; however, on the basis of a Spanish law which excluded from cover damage caused by an intoxicated driver, it absolved the defendant’s insurer from any liability to pay compensation. The Public Prosecutor appealed to the Seville Provincial Court, seeking an order declaring the insurer to be jointly liable with the defendant. The Provincial Court stayed the proceedings and referred to the Court of Justice of the European Communities for a preliminary ruling the question whether art 3(1) of Council Directive (EEC) 72/166 on the approximation of the laws of the member states relating to insurance against civil liability in respect of the use of motor vehicles, which obliged member states to ensure that motor vehicles were insured against civil liability, was to be interpreted as meaning that a compulsory insurance contract could provide that in certain cases (in particular where the driver of the vehicle was intoxicated) the insurer was not liable to pay compensation for personal injuries and damage to property caused to third parties by the insured vehicle, or whether in such cases the compulsory insurance contract could provide only that the insurer was to have a right of recovery against the insured.

HELD:

The aim first of Directive 72/166 was to ensure the free movement of vehicles normally based on Community territory and their occupants, and, the second aim was to guarantee that victims of accidents caused by those vehicles received comparable treatment irrespective of where in the Community the accident had occurred.

Article 3(1) of the directive was therefore to be interpreted as meaning that compulsory motor insurance had to enable third party victims of accidents to be compensated for all the damage to property and personal injuries sustained by them; any other interpretation would have the effect of allowing member states to limit payment of compensation to third party victims of a road traffic accident to certain types of damage, thus bringing about disparities in the treatment of victims depending on where the accident had occurred, which was what the directives were intended to avoid.

It followed that art 3(1) of the directive was to be interpreted as meaning that, without prejudice to art 2(1) of Directive 84/5, which concerned the ineffectiveness of certain exclusion clauses as against victims, a compulsory insurance contract could not provide that in certain cases – particularly where the driver of the vehicle was intoxicated – the insurer was not obliged to pay compensation for the damage to property and personal injuries caused to third parties by the insured vehicle. It could, however, provide that in such cases the insurer was to have a right of recovery against the insured.

On the 28^th March 1996 the Court of Justice delivered the following judgement:

The Audiencia Provincial de Sevilla (the Seville Provincial Court) referred to the Court of Justice for a preliminary ruling under art 177 of the EC Treaty five questions on the interpretation of Council Directive (EEC) 72/166 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 (the first directive) and Council Directives (EEC) 84/5 (the second directive) and (EEC) 90/232 (the third directive), both on the approximation of the laws of the member states relating to insurance against civil liability in respect of the use of motor vehicles.

Those questions were raised in criminal proceedings against Rafael Ruiz Bernáldez, who caused a road accident while driving while intoxicated.

By judgment of 7 September 1993 the Seville No 3 Criminal Court ordered Mr Ruiz Bernáldez to make reparation for the damage to property he had caused. On the other hand, it absolved the insurance company with which Mr Ruiz Bernáldez had taken out a policy covering damage caused by his vehicle from any liability to pay compensation. It did so on the basis of art 12(3) of the Reglamento del Seguro Obligatorio (Compulsory Insurance Rules), approved by Royal Decree No 2641/86 of 30 December 1986.

The Audiencia Provincial de Sevilla, hearing the Ministerio Fiscal’s appeal against the latter part of the judgment, considered whether, having regard to the Community directives relating to insurance against civil liability in respect of the use of motor vehicles, art 12(3)(b) of the Reglamento del Seguro Obligatorio could be interpreted as meaning that the insurer did not have to compensate the victim a road traffic accident caused by an intoxicated driver.

Since the national court was uncertain as to the answer, it stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

(1) Does the wording of Article 3(1) of the First Council Directive 72/166/EEC of 24 April 1972 allow the internal rules of the system of compulsory insurance against civil liability in respect of the use of motor vehicles in each Member State to lay down any exclusions deemed fit or, on the contrary, must exclusions from cover be limited to those expressly provided for in the Second Council Directive 84/5/EEC of 30 December 1983?

(2) Does the exclusion from compulsory insurance cover of damage to property caused by vehicles driven under the influence of alcohol comply with the abovementioned legislation?

(3) Must the cases referred to in Article 2(1) of the Second Council Directive 84/5/EEC be regarded as a precise and exhaustive enumeration of the statutory provisions and contractual clauses which may remove insurance cover but which are not valid as against the person who has suffered harm so that any other statutory or contractual exclusion would be valid as against him’?

 (4) If a statutory provision or contractual clause which excludes insurance cover where the driver responsible for the damage is intoxicated is valid in relations between the insurer and the insured, could its validity as against a third party who has suffered harm be considered to be in compliance with the system laid down in Directives 72/166/EEC, 84/5/EEC and 90/232/EEC’?

(5) If the provisions of the abovementioned directives, in particular Article 3(1) of Council Directive 72/166/EEC, allow exclusion of compulsory insurance cover against civil liability in respect of the use of motor vehicles which is valid as against the victim where the driver was intoxicated, may it be considered that such a case entails an absence of insurance as provided for in Article 1(4) of the Second Council Directive 84/5/EEC which would determine payment and cover by the body provided for in that article?’

Admissibility

The Spanish Ministerio Fiscal submitted that there is no need to answer the aforementioned questions referred for a preliminary hearing, as they are irrelevant to the outcome of this matter.

On this issue, the court pointed out that such a request from a national court may be rejected only if it is quite obvious that the interpretation of Community law sought by that court bears no relation to the actual nature of the case or the subject matter of the main action (see, inter alia, Furlanis costruzioni generali SpA v Azienda nazionale autonoma strade (ANAS) Case C-143/94 [1995] ECR I-3633 at 3648-3549 (para 12)). That is not so, however, in the main proceedings in this case. Accordingly, the preliminary questions must be considered by the Court of Justice.

Questions 1 to 4

Questions 1 to 4 may be considered together.

The Spanish and Greek governments, the United Kingdom and the European Commission consider that the directives leave member states a wide discretion with respect to the terms and conditions of compulsory insurance, but that they must ensure in any event that the victim is compensated, either in all cases or at least in the principal fields of civil liability, in particular where the damage is caused by a vehicle driven by an intoxicated person.

In the Commission’s view the directives authorise such exclusion clauses, even in the relations between the insurer and the victim, on condition that the vehicle is then treated as an uninsured vehicle and the body referred to in art 1(4) of the second directive compensates the victim.

The directives show that their aim is firstly to ensure the free movement of vehicles normally based on Community territory and of persons travelling in those vehicles, and secondly of guaranteeing that the victims of accidents caused by those vehicles receive comparable treatment irrespective of where in the Community the accident has occurred. Article 3(1) of the first directive thus provides that member states are, subject to the derogation’s in art 4, to take all appropriate measures to ensure that civil liability in respect of the use of vehicles is covered by insurance. The original version of that article left it to the member states, however to determine the damage covered and the terms and conditions of compulsory insurance.

In view of the aim of ensuring protection art 3(1) of the first directive must be interpreted as meaning that compulsory motor insurance must enable third party victims of accidents caused by vehicles to be compensated for all the damage to property and personal injuries sustained by them, up to the amounts fixed in art 1(2) of the second directive. Any other interpretation would have the effect of allowing member states to limit payment of compensation to third party victims of a road traffic accident to certain types of damage, thus bringing about disparities in the treatment of victims depending on where the accident occurred, which is precisely what the directives are intended to avoid, art 3(1) of the first directive would then be deprived of its effectiveness.

In that context the first sub-paragraph of art 2(1) of the second directive merely recalls that obligation with respect to provisions or clauses in a policy excluding from insurance the use or driving of vehicles in particular cases (persons not authorised to drive the vehicle, persons not holding a driving licence, persons in breach of the statutory technical requirements concerning the condition and safety of the vehicle). However, by way of derogation from that obligation, the second and third sub-paragraphs of art 2(1) provide that certain persons may be excluded from compensation by the insurer, having regard to the situation they have themselves brought about (persons entering a vehicle which they know to have been stolen) or to the compensation they can claim elsewhere (victims who may obtain compensation for the damage suffered from a social security body).

The answer to Questions 1 to 4 must therefore be that art 3(1) of the first directive is to be interpreted as meaning that, without prejudice to the provisions of art 2(1) of the second directive, a compulsory insurance contract may not provide that in certain cases, in particular where the driver of the vehicle was intoxicated, the insurer is not obliged to pay compensation for the damage to property and personal injuries caused to third parties by the insured vehicle. It may, on the other hand, provide that in such cases the insurer is to have a right of recovery against the insured.

Question 5

Question 5 is put only on the basis of the court’s answer to the preceding questions being that art 3(1) of the first directive is to be interpreted as meaning that a compulsory insurance contract may provide that in certain cases, in particular where the driver of the vehicle was intoxicated, the insurer is not obliged to pay compensation for the damage to property and personal injuries caused to third parties by the insured vehicle.

In view of the answer to Questions 1 to 4, there is no need to answer Question 5.

Conclusion

The court (Fifth Chamber), in answer to the questions referred to it by the Audiencia Provincial de Sevilla, by order of the 4^th April 1994, hereby rules that:

Art 3(1) of Council Directive (EEC) 72/166 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, is to be interpreted as meaning that, without prejudice to the provisions of art 2(1) of Council Directive (EEC) 84/5 on the approximation of the laws of the member states relating to insurance against civil liability in respect of the use of motor vehicles, a compulsory insurance contract may not provide that in certain cases, in particular where the driver of the vehicle was intoxicated, the insurer is not obliged to pay compensation for the damage to property and personal injuries caused to third parties by the insured vehicle.

It may, on the other hand, provide that in such cases the insurer is to have a right of recovery against the insured.

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