Latvijas Republikas Augstākā tiesa; 2022-11-28; C30435820
Decision by national courts in the field of European Union law — ECLI:LV:AT:2022:1128.C30435820.11.L
Date: 2022-11-28
Subject matter: Brussels Convention of 27 September 1968;Judicial cooperation in civil matters
Origin: Latvia

82022LV1128(51)_ENG_SUMJURE
JURE summary
JURE summary
This case, decided by the Latvijas Republikas Augstākā tiesa (hereinafter ‘the Supreme Court’), concerns the right to bring an action in an insurance dispute.
The plaintiff claimed that his car had been damaged during construction work carried out by a construction company whose liability was insured by the Latvian branch of a foreign insurance company (hereinafter ‘the defendant’).
The Vidzemes priekšpilsētas tiesa (hereinafter ‘the Court of First Instance’) satisfied the plaintiff’s claim and ordered the defendant to pay the plaintiff the damages. Following the judgment, the bailiff commenced enforcement proceedings, which ended when the construction company was deleted from the Commercial Register and ceased to exist. The defendant subsequently informed the plaintiff that the insurance compensation would not be paid. The Court of First Instance consequently dismissed the claim on the grounds that the plaintiff had no further claims against the defendant.
The case was referred to the Rīgas apgabaltiesa (hereinafter ‘the Court of Appeal’), which closed the case. Referring to the Apdrošināšanas līguma likums (1), the Court of Appeal held that the plaintiff could not recover damages from the insurance contract concluded between the building company and the defendant. The fact that the construction company had already ceased to exist did not constitute grounds for bringing a direct claim against the defendant (insurer).
The plaintiff appealed in cassation to the Supreme Court. The Supreme Court referred to the national law governing the obligation to insure against damage caused by one's acts or omissions. Insurance covers damage caused by the insured to third parties. In the case of civil liability insurance, the third party is the person to whom the insurance compensation is due. The insurer did not have the right to refuse to pay the compensation within the time limit specified in the contract if proof of the insured event had been provided.
In the present case, the Court of First Instance, in its initial decision, found that the incident occurred as a result of the actions of the construction company, whose liability is insured by the defendant, which caused damage to the plaintiff's property, i.e. it recognised the plaintiff as a third party. On the contrary, the Court of Appeal concluded that the plaintiff was not a third party entitled to compensation. This was wrong. The fact that a third party is not directly named in the contract does not mean it cannot be identified. In a civil liability insurance contract, the third party is an abstract group of persons, as the assumption of a potential injured party is only hypothetical. The Supreme Court found that the Court of Appeal had failed to distinguish properly between a 'direct claim' and a claim for compensation under the insurance contract. The Court of Appeal should have considered whether the plaintiff, as a third party, had acquired the right to join the insurance contract under Articles 1520 to 1522 of the Civillikums (2) and whether the defendant had unjustifiably delayed the payment of compensation.
The Supreme Court also referred to rules of jurisdiction under the Brussels I Regulation (recast) (3). It held that the injured party was the weaker party to the contract, protected by the law, allowing him to bring the case before the Latvian courts.
The Supreme Court overturned the decision of the Court of Appeal and remitted the case for further proceedings.
(1) Apdrošināšanas līguma likums (Law on Insurance Contracts).
(2) Civillikums (Code Civil).
(3) Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast).