62011CC0409
OPINION OF ADVOCATE GENERAL
MENGOZZI
delivered on 24 October 2012 (
1
)
Case C-409/11
Gábor Csonka,
Tibor Isztli,
Dávid Juhász,
János Kiss,
Csaba Szontág
v
Magyar Állam
(Reference for a preliminary ruling from the Fővárosi Bíróság (Hungary))
‛Directive 72/166/EEC — Insurance against civil liability in respect of motor vehicles — Insolvency of the insurer — No payment of compensation by the body responsible for providing compensation for damage caused by a vehicle for which the insurance obligation has not been satisfied — Article 1(4), first subparagraph, of Directive 84/5/EEC — Direct effect — Circumstances in which individuals may seek to have the State declared liable for the incorrect transposition of a directive’
1.
The European Union legislation on compulsory insurance against civil liability in respect of the use of vehicles is already the subject of extensive litigation. This reference for a preliminary ruling from Hungary now allows the Court to examine a fresh aspect of that legislation by raising the question whether, under the directives which preceded the codifying directive adopted in 2009, (
2
) Member States were obliged to provide for the payment of compensation by a body responsible for compensating victims of damage caused by a vehicle for which an insurance policy had been taken out with an insolvent insurer unable to discharge its obligation to pay.
I – Legal context
A – EU law
2.
Article 3(1) of Council Directive 72/166/EEC 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 (
3
) – the first directive to be adopted in that field and now replaced by Directive 2009/103 – provided that ‘[e]ach Member State shall, subject to Article 4, 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. The extent of the liability covered and the terms and conditions of the cover shall be determined on the basis of these measures’.
3.
Second Council Directive 84/5/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles (
4
) (‘the Second Directive’), which was also replaced by Directive 2009/103, further promoted harmonisation in this field.
4.
The sixth recital in the preamble to the Second Directive stated: ‘it is necessary to make provision for a body to guarantee that the victim will not remain without compensation where the vehicle which caused the accident is uninsured or unidentified; … it is important, without amending the provisions applied by the Member States with regard to the subsidiary or non-subsidiary nature of the compensation paid by that body and to the rules applicable with regard to subrogation, to provide that the victim of such an accident should be able to apply directly to that body as a first point of contact’; and ‘however, Member States should be given the possibility of applying certain limited exclusions as regards the payment of compensation by that body and of providing that compensation for damage to property caused by an unidentified vehicle may be limited or excluded in view of the danger of fraud’.
5.
Article 1(1) of the Second Directive provided that ‘[t]he insurance referred to in Article 3(1) of Directive 72/166/EEC shall cover compulsorily both damage to property and personal injuries’.
6.
Under the first subparagraph of Article 1(4) of the Second Directive, ‘[e]ach Member State shall set up or authorise 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 an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied’. That provision was to be without prejudice to the right of the Member States to regard compensation by that body as subsidiary or non-subsidiary and the right to make provision for the settlement of claims between that body and the person or persons responsible for the accident and other insurers or social security bodies required to compensate the victim in respect of the same accident.
7.
The third subparagraph of Article 1(4) of Directive 84/5 specified that, ‘[h]owever, Member States may exclude the payment of compensation by that body in respect of persons who voluntarily entered the vehicle which caused the damage or injury when the body can prove that they knew it was uninsured’.
8.
Article 2 of Third Council Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles (
5
) (‘the Third Directive’), now replaced by Directive 2009/103, provided that ‘Member States shall take the necessary steps to ensure that all compulsory insurance policies against civil liability arising out of the use of vehicles … cover, on the basis of a single premium, the entire territory of the Community …’.
9.
Under Article 3 of Directive 90/232, the following sentence was added to the first subparagraph of Article 1(4) of the Second Directive:
‘However, Member States may not allow the body to make the payment of compensation conditional on the victim’s establishing in any way that the person liable is unable or refuses to pay.’
B – National law
10.
Under Paragraphs 14 and 15 of Government Decree No 190/2004 on compulsory insurance against civil liability in respect of the use of motor vehicles (Korm. Rendelet a gépjármű üzembentartójának kötelező felelősségbiztosításról) (Government Decree No 190/2004), which was in force at the material time, the Kártalanítási Számlát Kezelő MABISZ GKI (Compensation fund of the consortium of Hungarian insurers) intervened with subsidiary liability on behalf of the person responsible for the damage, for the purpose of providing compensation to the victim, only if the person responsible for the damage did not have compulsory insurance against civil liability arising from the use of motor vehicles when the accident occurred, or if the person using the vehicle which caused the damage was unknown, or if the damage was caused by a vehicle which had not been licensed for use on the roads or had been withdrawn from use.
11.
The Government Decree was repealed by Law No LXII of 2009 on compulsory insurance against civil liability arising from the use of motor vehicles (2009. évi LXII. törvény a kötelező gépjármű-felelősségbiztosításról) (‘the Law on motor insurance’), which entered into force on 1 January 2010.
12.
Article 3(21) of the Law on motor insurance defines the compensation fund (‘Kártalanításí Alap’) established as a ‘fund created and financed by insurers … to provide compensation for damage caused by a vehicle for which, on the date of the accident, the keeper holds an insurance policy with an insurer against which insolvency proceedings have been instituted’.
13.
Article 29(3) of the Law on motor insurance states that ‘[t]he compensation fund shall cover the claim which the victim of the damage has against an insurer which is subject to insolvency proceedings, account being taken of the detailed rules provided for under the insurance policy or laid down by law with respect to the assertion of rights to compensation’.
II – Dispute in the main proceedings and the questions referred for a preliminary ruling
14.
MAV Àltalános Biztosító Egyesület (MÁV General Insurance Company) (‘MAV’) is an insurance company established in the form of a non-profit association which offered its members products at reduced rates, with the particularity that the parties insured with that company also assumed obligations as associates. As a consequence, in particular, of actions punishable under criminal law, MAV’s assets disappeared and the company became insolvent. As it was not possible, despite 15 formal notices served on the company between 2003 and 2008 by the Pénzügyi Szervezetek Àllami Felügyelete (State Financial Supervisory Authority), to reinstate trading in compliance with the relevant legal requirements, the supervisory authority withdrew MAV’s licence to engage in its activities, with effect from 15 August 2008.
15.
The documents before the Court disclose that, between 2006 and 2008, Gábor Csonka, Tibor Isztli, Dávid Juhász, János Kiss and Csaba Szontág – the applicants in the main proceedings – had caused various people damage of various kinds with their vehicles. They had all taken out civil liability motor insurance with MAV, which has since become insolvent.
16.
Although Hungarian law makes provision, with effect from 1 January 2010, for protection for the victims of accidents which have been caused by clients of an insurance company which has become insolvent, that was not the position at the time of the accidents involving the applicants in the main proceedings. As a result, they themselves – out of their own pockets – are required to make good the damage that they have caused, rather than their insurance company. (
6
)
17.
On the view that, by not adopting before 1 January 2010 the measures necessary to ensure that, in cases where the insurer of the persons responsible is insolvent, compensation is paid by the body responsible for making good the damage caused by a motor vehicle, the Hungarian State had acted in breach of its obligations under EU law and, in particular, under Article 3 of Directive 72/166, the applicants in the main proceedings brought an action before the Fővárosi Bíróság (Budapest Metropolitan Court) for a declaration that the State had incurred liability and for damages.
18.
It was against that background that the Fővárosi Bíróság decided to stay proceedings and, by an order received at the Court Registry on 1 August 2011, to refer the following questions to the Court for a preliminary ruling under Article 267 TFEU:
‘(1)   At the time when the applicants caused the damage, had the Hungarian State implemented Directive 72/166/EEC, specifically in the light of the obligations under Article 3 of that directive? Must the directive accordingly be regarded as having direct effect vis-à-vis the applicants?
(2)   Under the applicable [European Union] law, may an individual whose rights have been impaired as a result of the fact that the State had not implemented Directive 72/166/EEC require that State to comply with the directive by relying directly on the [European Union] legislation as against that State in order to obtain the guarantees which that State should have offered him on the basis of the directive?
(3)   Under the applicable [European Union] law, may an individual whose rights have been impaired as a result of the fact that Directive 72/166/EEC has not been implemented claim compensation for damage from the State by reason of its failure to implement that directive?
(4)   If [Questions 1, 2 and 3] are answered in the affirmative, does the liability incurred by the Hungarian State as a consequence of the harm caused lie towards the applicants or towards those adversely affected by the road traffic accidents caused by the applicants? …
(5)   Can the State’s liability be put in issue if the damage has been brought about by a drafting error in the legislation?
(6)   Is Government Decree No 190/2004 …, in force until 1 January 2010, compatible with Directive 72/166/EEC, or has Hungary failed to transpose into Hungarian law the obligations laid down in that Directive?’
III – Procedure before the Court
19.
The Hungarian Government and the European Commission lodged written observations with the Court and presented oral argument at the hearing on 26 September 2012.
IV – Legal analysis
20.
In essence, the questions raised by the referring court are designed to determine (a) whether Member States were required under Directive 72/166/EEC to provide that, in cases where the insurer of the person responsible for an accident is insolvent, compensation was to be paid by a body responsible for compensating victims of accidents caused by motor vehicles and (b) the conditions under which individuals may, where appropriate, seek to have the Hungarian State declared liable on grounds of having failed to transpose that directive correctly into Hungarian law.
21.
First of all, I would point out that, although Directives 72/166, 84/5 and 90/232 were repealed by Directive 2009/103, they make up the relevant legal framework for this case, given the date on which the damage is estimated to have occurred.
A – Interpretation of the phrase
‘vehicle for which the insurance obligation has not been satisfied
’
22.
The main legal issue raised by the present reference for a preliminary ruling is whether the obligation imposed on Member States by Article 3(1) of Directive 72/166 included the requirement to put in place mechanisms to ensure that victims of road traffic accidents are paid compensation in the specific case where the person responsible for the damage has actually taken out insurance against civil liability in respect of the use of vehicles but with an insolvent insurer. More specifically, the Court is asked to determine whether the EU legislation applicable to the facts required Member States to make provision in such cases for the payment of compensation by the guarantee body to be set up in accordance with the first subparagraph of Article 1(4) of Directive 84/5.
23.
Under that provision, a body was to be set up in order to provide compensation for damage caused by ‘a vehicle for which the insurance obligation provided for in paragraph 1 [of Article 1 of Directive 84/5] has not been satisfied’. The applicants in the main proceedings claim that that phrase must be construed as also referring to vehicles for which civil liability insurance was taken out with an insurer that has since become insolvent. If so construed, they argue, EU law required Hungary – as part of the appropriate measures to be taken under Article 3 of Directive 72/166 to ensure that civil liability in respect of the use of vehicles is covered by insurance – to provide that compensation is to be paid in such cases by a body responsible for compensating victims.
1. Historical, literal and teleological interpretation
24.
The Court has consistently held that, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which that provision arises and the objectives pursued by the rules of which it is part. (
7
)
25.
In that regard, it must be made clear straight away that, even if the questions referred for a preliminary ruling refer only to Article 3 of Directive 72/166, that provision forms part of a much larger body of legislation, one of the features of which has been the successive adoption of a number of directives which have gradually enriched the scope of that provision.
26.
Directive 72/166 was the first to be adopted in this sector. Its initial aim was to enhance the free movement of vehicles and persons travelling in them by providing for the abolition of frontier controls of insurance whilst ensuring that vehicles in use did in fact have insurance for the purposes of safeguarding the interests of persons who might be the victims of accidents caused by such vehicles. (
8
) To do so, it laid down, at Community level, an obligation requiring all vehicles based in the territory of a Member State to be covered by insurance. That is the very purport of Article 3(1) of Directive 72/166, which is framed in very general terms and, as I have already said, provides merely that ‘[e]ach Member State shall … 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’. (
9
) It is accordingly clear from the wording of that provision that its whole purpose was solely to compel the Member States to establish, in their domestic legal systems, a general obligation to insure vehicles, that is to say, to ensure that each owner or keeper of a vehicle makes contractual provision to transfer his civil liability in respect of that vehicle to an insurance company.
27.
It is necessary, however, to read Article 3 of Directive 72/166 in the light of the clarifications provided by the subsequent directives – in particular, Directive 84/5 – in order to determine the obligations imposed on the Member States by the requirement that they take all the appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in their territory is covered by insurance.
28.
After all, in working to approximate the laws in this field – a task which, unless otherwise indicated, it performs only where necessary and which it can undertake gradually – the EU legislature adopted a number of measures to define and clarify (
10
) the general rules governing insurance against civil liability in respect of the use of motor vehicles. The importance attached by the legislature to the situation of victims was to be reiterated again and again. One of the objectives of Directive 84/5 was accordingly to ensure that ‘the victim will not remain without compensation where the vehicle which caused the accident is uninsured or unidentified’ by providing for the establishment of a body to pay such compensation. (
11
) The payment of compensation by that body was not intended to be automatic – being confined to two sets of circumstances – and the legislature had to some extent sought, while pursuing the objective of protecting victims, to limit the financial burden likely to be represented by the payment of compensation by that body, (
12
) leaving it open to the Member States to implement more favourable measures relating specifically to the conditions governing the payment of compensation by that body. (
13
)
29.
Consequently, if it can be inferred from Article 1 of Directive 84/5 that the appropriate measures referred to in Article 3 of Directive 72/166 include the setting up of a body ‘with the task of providing compensation … for damage to property or personal injuries’, (
14
) it follows that the payment of compensation by that body was expressly limited to damage ‘caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied’, (
15
) without prejudice to the right of the Member States ‘to regard compensation by that body as subsidiary or non-subsidiary’. (
16
)
30.
It is also worth examining the travaux préparatoires for Directive 84/5/EEC. Those preparatory documents show that the legislature wished to some extent to limit the circumstances calling for the compulsory payment of compensation by the body to be set up in accordance with Article 1(4) of Directive 84/5 and to adopt a strict interpretation of the expression ‘vehicle for which the insurance obligation … has not been satisfied’. In the initial proposal for Directive 84/5, the intention was to treat as an ‘uninsured’ vehicle (
17
) a vehicle which has caused damage for which, by virtue of the law or of a contractual provision authorised by the law, the insurer is entitled to refuse compensation; ultimately, that proposal was not adopted.
31.
I draw two sets of conclusions from that significant shift between the wording of the proposal and the final wording of Directive 84/5. First, it appears that, in the mind of the legislature, a vehicle in respect of which the insurance obligation has not been satisfied (
18
) was equivalent to an uninsured vehicle (
19
) – which is confirmed, moreover, by the wording of the fifth subparagraph of Article 1(4) of Directive 84/5. (
20
) Next, it is clear that, in the final version of Directive 84/5, the EU legislature knowingly set boundaries to the circumstances calling for the payment of compensation by the body which was to be set up, inasmuch as its only express reference – other than to unidentified vehicles – was to ‘vehicle[s] for which the insurance obligation provided for in paragraph 1 has not been satisfied’, that is to say, vehicles for which an insurance policy has not been taken out. The measure adopted in 1983 clearly shows that the legislature did not itself see Article 3 of Directive 72/166 as a general clause requiring the Member States to set up a guarantee mechanism.
32.
It is worth noting that the legislature did not confine itself to providing that the body to be set up should pay compensation in the event of damage caused by vehicles for which the insurance obligation was not satisfied in general, but was minded to make it clear that this was to be the case only in relation to damage caused by vehicles for which the insurance obligation provided for in paragraph 1 of Article 1 of Directive 84/5 was not satisfied.
33.
That can be explained. After all, since the Member States had an obligation under Article 3 of Directive 72/166 – to which Article 1(1) of Directive 84/5 refers – to ‘take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in [their] territory is covered by insurance’, the mere fact that an uninsured vehicle could cause damage of any kind was a manifestation of the Member State’s failure to perform its task of ensuring that every vehicle was insured. (
21
) The view may be taken that, in such circumstances, the Member State had failed to discharge its duty – albeit very indirectly – and bears some of the responsibility for the situation of a victim of damage caused by a vehicle for which the insurance obligation has not been satisfied. That failure on the part of the State to meet its own obligations therefore justified the payment of compensation by a body responsible for compensating victims.
34.
The situation in which the person responsible for the damage did take out an insurance policy, but with an insolvent insurer, is quite different. Essentially, the case before the referring court highlights the fundamental difference between, on the one hand, the general rules governing insurance against civil liability in respect of the use of motor vehicles as progressively harmonised at EU level and, on the other hand, the rules under which civil liability insurance is guaranteed, which, to my mind, have largely yet to be developed. (
22
)
35.
In those circumstances, I find it difficult to agree with an interpretation of Article 3 of Directive 72/166 along the lines argued for by the applicants in the main proceedings. That provision requires the Member States to ‘take all appropriate measures to ensure that civil liability … is covered by insurance’, not to take all appropriate measures to guarantee the civil liability covered by insurance. (
23
) The difference is subtle but significant and the interpretation suggested by the applicants in the main proceedings seems to me to go too far in stretching, to the point of distortion, the intention on the part of the EU legislature, while the legislature’s silence with respect to cases involving an insolvent insurer seems rather to reflect the reluctance of the Member States to grant a much more extensive right to compensation from the body set up for that purpose, given the financial implications of so doing, which, as we have seen, were also one of the legislature’s key concerns.
36.
After Directive 84/5, the development of the EU legislation in this field did not deviate from that path. When adopting Directive 90/232, the EU legislature continued to assert the objective of guaranteeing for ‘motor vehicle accident victims … comparable treatment irrespective of where in the Community accidents occur’. (
24
) In doing so, it specifically extended protection to the category of persons made up of passengers other than the driver (
25
) and, through the addition of a sentence to the first subparagraph of Article 1(4) of Directive 84/5, prohibited the Member States from making the payment of compensation by the body ‘conditional on the victim’s establishing in any way that the person is unable or refuses to pay’. (
26
) There is no mention of the issue of an insolvent insurer.
37.
At no point, therefore, in any of the texts of the various directives making up the relevant legal framework for this case is mention made of circumstances in which the insurer is insolvent. It is not entirely insignificant that the very wording of Directive 2009/103 – which was recast in a single text and consolidated, without substantive amendment, the provisions laid down in the earlier directives concerning insurance against civil liability in respect of the use of vehicles – does not provide any clarification in that regard either. The aim of that directive is still to ‘guarantee that the victim will not remain without compensation where the vehicle which caused the accident is uninsured’, (
27
) while the Member States remain free to apply certain limited exclusions as regards the payment of compensation by the body set up for that purpose. (
28
)
38.
Accordingly, what may have appeared to be a failure on the part of the legislature to anticipate the issue of insolvency at the time when Directives 72/166, 84/5 and 90/232 were adopted could hardly continue to be perceived as such when it came to the adoption of Directive 2009/103. In the meantime, after all, the EU legislature had adopted a number of measures, in a wide variety of fields, which explicitly addressed the issue of the provider’s insolvency. (
29
) Needless to say, it did not do so in the field of insurance against civil liability in respect of the use of vehicles.
2. Interpretation in case-law
39.
The conclusion I have reached on the basis of a historical, literal and teleological interpretation is not contradicted by the various interpretative guidelines provided by the Court which may be useful in this case.
40.
Admittedly, the Court has never had occasion to give a ruling directly on the interpretative issue raised by the present reference. None the less, on numerous occasions and in various contexts, it has interpreted the directives concerning the obligation to insure against civil liability in respect of the use of vehicles. It has consistently held that ‘EU rules … are designed to ensure the free movement of vehicles normally based on EU territory and of persons travelling in those vehicles and to guarantee that the victims of accidents caused by those vehicles receive comparable treatment irrespective of where in the European Union the accident has occurred’, (
30
) thus paraphrasing the preamble to Directive 72/166. More specifically, the Court has construed Article 3 of that directive as ‘requir[ing] the Member States to ensure that civil liability in respect of the use of motor vehicles normally based in their territory is covered by insurance, and specifies, inter alia, the types of damage and the third parties who have been victims of an accident to be covered by that insurance’. (
31
)
41.
In Evans, (
32
) the Court sketched the beginnings of an interpretation of Article 1(4) of Directive 84/5 when it held that, in the case of an insufficiently insured vehicle, (
33
)‘even if the victim is able to identify the person against whom legal proceedings should be brought, such proceedings are often liable to be fruitless because the defendant does not have the requisite financial resources to comply with the judgment given against him’, (
34
) and that it was in order to deal with such situations that Directive 84/5 provided for the setting up of a compensatory body. However, since the main proceedings in that case concerned the conditions for providing compensation for damage caused by an unidentified vehicle, the Court did not pursue any further the analysis of circumstances involving a vehicle ‘for which the insurance obligation … has not been satisfied’.
42.
It was not until Churchill Insurance Company Limited and Evans that the Court proffered further guidance on the interpretation of that expression. It stated, with reference to the specific context of that judgment, that ‘the situation in which the vehicle that caused the damage was driven by [an uninsured] person, while a driver was, moreover, insured to drive that vehicle, and the situation specified in the third subparagraph of Article 1(4) of the Second Directive in which the vehicle which caused the accident was not covered by any insurance policy, are situations neither similar nor comparable’. (
35
) It also held that ‘the payment of compensation by a national body is considered to be a measure of last resort’ envisaged for only two cases, (
36
) and confirmed that, ‘despite the general aim of protecting victims of EU rules … the … legislature allow[ed] Member States to exclude the payment of compensation by that national body in certain limited cases’. (
37
)
3. Final remarks
43.
Taken as a whole, the foregoing analysis shows that there is nothing explicit in the wording of the relevant legislation to support the assertion that the compensatory body has an obligation to pay compensation where the insurer of the person responsible is insolvent. While it is true that the analysis of the legislative texts and their development over time reveals a constant concern to protect victims, it also makes apparent the fact that that concern was duly offset against the financial burden represented by the payment of compensation by a body such as that provided for in the first subparagraph of Article 1(4) of Directive 84/5, with the result that, even today, that body is required to pay compensation in only two specific situations and the Member States are still able to limit such payments.
44.
Lastly, I should also like to emphasise the important difference that exists, in my view, between a vehicle in respect of which the insurance obligation as described in Article 3 of Directive 72/166 has not been satisfied and a vehicle insured with an insolvent insurer. After all, a vehicle for which the insurance obligation has not been satisfied is an uninsured vehicle. A vehicle which was insured with an insolvent insurer has satisfied the obligation to secure insurance against civil liability in respect of the use of vehicles. The risk cover is genuine but the compensation is delayed by the financial situation of the insurer.
45.
That fundamental difference can be illustrated as follows.
46.
In the first situation – in which no insurance is taken out – the legal relationship is a direct bilateral one between the victim and the person responsible. In that specific situation, the EU legislature has explicitly provided for the payment of compensation by the body to the victim, not least because such a situation involves two ‘weak’ parties.
47.
In the second situation – in which insurance is taken out with an insolvent insurer – the legal relationship becomes triangular and involves not only the person responsible and the victim of the damage but also a business the activity of which is also subject to a more complex legal regime including not least rules on prudential supervision. It is not inconceivable, therefore, that there may be other specific legal remedies available for the purposes of securing compensation, (
38
) in which case the payment of compensation by the compensatory body would become less necessary.
48.
Lastly, I would reiterate that such an interpretation of the EU legislation is without prejudice to the option available to the Member States of implementing measures which are more favourable to victims. As the Hungarian Government pointed out, the Alkotmánybíróság (Hungarian Constitutional Court) gave a decision on 8 November 2011 (
39
) in which it took the view that the Hungarian legislature had not provided the guarantees necessary for the proper functioning of mutual insurance companies – the form in which MAV was established – and that it had, by omission, infringed the constitution in failing to adopt measures that would make it possible to assert rights based on compulsory motor insurance policies with an insurer which is the subject of insolvency proceedings instituted before 1 January 2010.
49.
For all the foregoing reasons, I suggest that the Court’s answer should be that Article 3(1) of Directive 72/166 and the first subparagraph of Article 1(4) of Directive 84/5 do not preclude national legislation under which the body set up at national level pursuant to Article 1(4) of Directive 84/5 is not required to pay compensation in the event of damage caused by a vehicle for which an insurance policy was taken out with an insolvent insurer.
B – Question 6
50.
The referring court asks the Court to comment on whether Government Decree No 190/2004 is compatible with Directive 72/166.
51.
It is therefore appropriate to recall the Court’s settled case-law to the effect that it is not the task of the Court, in preliminary ruling proceedings, to rule upon the compatibility of provisions of national law with the legal rules of the European Union; the Court confines its analysis to an interpretation of the provisions of EU law which will be of use to the national court, which has the task of determining, in fine, the compatibility of the provisions of national law with EU law for the purposes of deciding the dispute in the main proceedings. (
40
)
C – The question of direct effect and the circumstances in which the State incurs liability for failing to transpose a directive correctly into national law
52.
In view of the interpretation that I have suggested to the Court, I do not consider there to be any need to answer the questions raised by the referring court regarding the recognition of direct effect or the circumstances in which the Hungarian State incurs liability for failing to transpose Directive 72/166 correctly into national law. It is therefore only by way of a lesser alternative that I shall quickly address these questions.
53.
First, since the obligation to set up a body responsible for providing compensation for damage caused by a vehicle for which the insurance obligation has not been satisfied is laid down in the first subparagraph of Article 1(4) of Directive 84/5, I believe that the questions concerning direct effect and the possible liability on the part of the Hungarian State, as raised by the referring court, must be redirected as relating to Directive 84/5.
54.
Furthermore, it may be helpful to bear in mind that the question of the direct effect of a provision laid down in a directive is distinct from the question of the circumstances in which a Member State’s liability for infringing EU law must be capable of being pleaded before the national courts. (
41
)
55.
Accordingly, it must be ascertained whether the individuals in a given dispute may rely as against the State (
42
) on a provision of a directive which has not been transposed into national law or has been transposed incorrectly, as the case may be, in order to bar the application of a national provision which is contrary to it or in order to have it substituted for that national provision. The Court has consistently held that a provision in a directive has direct effect ‘if it appears, as far as its subject matter is concerned, to be unconditional and sufficiently precise.’ (
43
) The question, therefore, is whether the first subparagraph of Article 1(4) of Directive 84/5 makes it sufficiently possible to identify the beneficiaries of the obligation which it lays down and the scope of the task entrusted to the body to be set up. That provision contains an indirect reference to Article 3 of Directive 72/166, which, for its part, leaves a measure of discretion to the Member States with respect to how the compulsory insurance scheme is organised; however, that discretion is only procedural or organisational (
44
) and does not extend to the actual substance of the compulsory insurance or to the cases in which the payment of compensation by the body is compulsory. (
45
) That reference is not therefore, in itself, an obstacle to recognition of the direct effect of the provision at issue.
56.
Furthermore, since it is concerned with the provision of compensation for damage caused, the first subparagraph of Article 1(4) of Directive 84/5 is intended to guarantee the rights of the victims of such damage, who therefore appear to be the beneficiaries of that provision. The second subparagraph of Article 1(4) of Directive 84/5 confirms this by expressly providing, moreover, that ‘[t]he victim may … apply directly to the body which … shall be obliged to give him a reasoned reply regarding the payment of any compensation’.
57.
In those circumstances, the first subparagraph of Article 1(4) of Directive 84/5 may be recognised as having direct effect.
58.
On the other hand, as regards the liability of the Hungarian State, it must be ascertained whether the inaction or the inappropriate action of the Member State may create, for the individuals who have thus been deprived of the enjoyment of rights conferred on them by the directive, a right to obtain redress before the national courts.
59.
As the Court has consistently held, the principle of liability on the part of a Member State for damage caused to individuals as a result of infringements of EU law for which the State is responsible is inherent in the system of the Treaty. (
46
)
60.
The order for reference seems to indicate national case-law to the effect that, in actions for compensation, individuals may not lawfully rely on a failure to fulfil obligations on the part of the legislature where the occurrence of the damage is attributable to the acts of the legislature or to its failure to act. (
47
) It must therefore be recalled that the principle of State liability for damage caused to individuals as a result of infringements of EU law for which the State is responsible ‘holds good for any case in which a Member State breaches [EU] law, whatever be the organ of the State whose act or omission was responsible for the breach[;] … [t]he fact that, according to national rules, the breach complained of is attributable to the legislature cannot affect the requirements inherent in the protection of the rights of individuals who rely on [EU] law and, in this instance, the right to obtain redress in the national courts for damage caused by that breach’. (
48
)
61.
As regards the circumstances in which a Member State is required to make reparation for loss and damage caused to individuals as a result of infringements of EU law for which the State is responsible, the Court has held that these are threefold: ‘the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation incumbent on the State and the loss or damage sustained by the injured parties’. (
49
)
62.
The first subparagraph of Article 1(4) of Directive 84/5 confers on individuals the right to require the payment of compensation by the compensatory body in the two situations expressly referred to in that provision.
63.
Next, it will be for the referring court to establish whether the Hungarian State’s allegedly incorrect transposition of Directive 84/5 into national law caused damage to the applicants in the main proceedings which is directly linked to the breach of the obligation laid down in the rule of EU law. In its analysis, the referring court will have to take particular account of the fact that the applicants in the main proceedings are not the victims of damage but the perpetrators of damage and will have to consider the cause of the damage, which might also lie in the fraudulent behaviour of the insurer. The referring court will also have to answer the question whether the applicants in the main proceedings are indeed required, under Hungarian law, to use their own assets to make good the damage which they have caused and for which their insurer cannot provide compensation because it is insolvent.
64.
If the referring court concludes that damage has been caused, it will also have to establish whether that infringement constitutes a sufficiently serious infringement of EU law (
50
) for the purposes of the case-law of the Court. To do so, it must take account of all the factors which characterise the situation, including ‘the clarity and precision of the rule infringed, whether the infringement or the damage caused was intentional or involuntary, whether any error of law was excusable or inexcusable, and the fact that the position taken by a Community institution may have contributed towards the adoption or maintenance of national measures or practices contrary to [EU] law’. (
51
)
65.
Lastly, subject to respect for the principles of equivalence and effectiveness, the form of reparation is determined by the domestic legal system of each Member State, provided that it is appropriate and effective. (
52
) The Court has also stated that, in order to determine the loss or damage for which reparation may be granted, the national court may ascertain whether the injured person showed reasonable diligence in order to avoid the loss or damage or limit its extent. (
53
) That criterion might be useful to the referring court, given the particular form in which the insurance company at issue in the main proceedings was established and the role which the insured persons played in its management.
V – Conclusion
66.
In the light of all the foregoing, I propose that the Court should answer as follows the questions referred by the Fővárosi Bíróság:
(1)
Article 3(1) of Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of 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, and the first subparagraph of Article 1(4) of Council Directive 84/5/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles do not preclude national legislation under which the body set up at national level pursuant to Article 1(4) of Directive 84/5 is not required to pay compensation in the event of damage caused by a vehicle for which an insurance policy was taken out with an insurer which has become insolvent.
(2)
It is not for the Court, in preliminary ruling proceedings, to rule upon the compatibility of provisions of national law with the legal rules of the European Union, as the Court confines its analysis to an interpretation of the provisions of European Union law which will be of use to the national court, which has the task of determining, in fine, the compatibility of the provisions of national law with European Union law for the purposes of deciding the dispute in the main proceedings.
(
1
)	Original language: French.
(
2
)	Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 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 (OJ 2009 L 263, p. 11).
(
3
)	OJ, English Special Edition 1972 (II), p. 360.
(
4
)	OJ 1984 L 8, p. 17.
(
5
)	OJ 1990 L 129, p. 33.
(
6
)	The Hungarian Government stated that full compensation had already been paid for the personal injuries to be indemnified by MAV and that the applicants in the main proceedings had themselves partly compensated the victims for the material damage which they had caused.
(
7
)	See, among many, Case C-433/08 Yaesu Europe [2009] ECR I-11487, paragraph 24 and the case-law cited.
(
8
)	Second and third recitals to Directive 72/166.
(
9
)	The Hungarian Government observed, without being contradicted on that point, that the Hungarian language version provides, more precisely, that the Member States must take all appropriate measures to ensure that vehicles have civil liability insurance.
(
10
)	Article 1 of Directive 84/5.
(
11
)	Recital 6 to Directive 84/5.
(
12
)	Recital 8 to Directive 84/5.
(
13
)	Sixth subparagraph of Article 1(4) of Directive 84/5.
(
14
)	First subparagraph of Article 1(4) of Directive 84/5.
(
15
)	The first subparagraph of Article 1(4) of Directive 84/5 refers, in the English language version, to a ‘vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied’; in the Italian version, to ‘un veicolo … per il quale non vi é stato adempimento dell’obbligo di assicurazione conformemente al paragrafo 1’; and, in the Spanish version, to ‘un vehículo … por el cual no haya sido satisfecha la obligación de aseguramiento mencionada en el apartado 1’. The German language version, which is significantly different, refers to uninsured vehicles (‘Jeder Mitgliedstaat schafft eine Stelle oder erkennt eine Stelle an, die für Sach- oder Personenschäden, welche durch ein nicht ermitteltes oder nicht im Sinne des Absatzes 1 versichertes Fahrzeug verursacht worden sind, zumindest in den Grenzen der Versicherungspflicht Ersatz zu leisten hat’).
(
16
)	First subparagraph of Article 1(4) of Directive 84/5.
(
17
)	Article 2 of the Proposal for a second Council Directive on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles (OJ 1980 C 214, p. 10).
(
18
)	Expression used in Article 1(3) of the Proposal for a second directive, which became Article 1(4) of Directive 84/5.
(
19
)	Expression used in Article 2 of the Proposal for a second directive, which was ultimately not retained in the final version of Directive 84/5.
(
20
)	Under which ‘[Member States] may … authorise, in the case of damage to property caused by an uninsured vehicle, an excess … for which the victim may be responsible’ (emphasis added).
(
21
)	Other, of course, than in the specific circumstances referred to in Article 4 of Directive 72/166, to which, moreover, Article 3 of that directive makes express reference.
(
22
)	In that regard, both the Hungarian Government and the Commission have mentioned the Commission’s White Paper of 12 July 2010 on Insurance Guarantee Schemes (COM(2010) 370 final). Insurance guarantee schemes are defined there as ‘providing last-resort protection to consumers when insurance undertakings are unable to fulfil their contractual commitments’ and as protecting ‘against the risk that claims will not be met if their insurance company becomes insolvent’. The Commission points out that, of the 30 countries forming the European Union and the European Economic Area, only 12 operate a general insurance guarantee scheme and that 56% of all non-life insurance policies are unprotected (see the White Paper on Insurance Guarantee Schemes, p. 1). The Commission therefore recommended the ‘establish[ment] at EU level [of] a coherent and legally binding framework on [insurance guarantee scheme] protection, applicable to all policyholders and beneficiaries, by means of a directive as defined in Article 288 TFEU’. The Commission also confirmed at the hearing that it had never brought infringement proceedings against a Member State on grounds of the non-payment of compensation by a guarantee body in the event of the insolvency of an undertaking insuring against civil liability in respect of the use of vehicles.
(
23
)	Nor is that finding contradicted by the wording of Article 2 of Directive 90/232, under which ‘Member States shall take the necessary steps to ensure that all compulsory insurance policies against civil liability arising out of the use of vehicles … guarantee, on the basis of the same single premium, in each Member State, the cover required by its law’, which, once again, refers to the circumstances in which the Member States must organise compulsory insurance but does not specifically provide that insurance policies must be guaranteed.
(
24
)	Recital 4 to Directive 90/232.
(
25
)	Article 1 of Directive 90/232.
(
26
)	Article 3 of Directive 90/232.
(
27
)	Recital 14 to Directive 2009/103.
(
28
)	Ibid.
(
29
)	The solvency of the insurance company was thus at the heart of First Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (OJ 1973 L 228, p. 3), which was made applicable to motor vehicle liability insurance by Directive 90/618/EEC of 8 November 1990 (OJ 1990 L 330, p. 44). Reference is also made, by way of example, to Article 7 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (OJ 1990 L 158, p. 59) and to Article 10 of Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (OJ 1993 L 141, p. 27).
(
30
)	Case C-442/10 Churchill Insurance Company and Evans [2011] ECR I-12639, paragraph 27 and the case-law cited.
(
31
)	Ibid., paragraph 28.
(
32
)	Case C-63/01 Evans [2003] ECR I-14447.
(
33
)	An expression which, in the context of that judgment, the Court curiously held to be synonymous with that, used in Article 1(4) of Directive 84/5/EEC, of a ‘vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied’ [see Evans, paragraph 20].
(
34
)	Evans, paragraph 23.
(
35
)	Churchill Insurance Company Limited and Evans, paragraph 40 (emphasis added). For the text of the third subparagraph of Article 1(4) of Directive 84/5, see point 7 of this Opinion.
(
36
)	Churchill Insurance Company Limited and Evans, paragraph 41.
(
37
)	Ibid., paragraph 42.
(
38
)	In its written observations and at the hearing, the Hungarian Government argued in particular that some of the claims against the insolvent insurer could be recovered when the insurer came to be wound up.
(
39
)	Decision No 83/2001 (XI.10).
(
40
)	Case C-368/09 Pannon Gép Centrum [2010] ECR I-7467, paragraphs 28 and 29 and the case-law cited.
(
41
)	I would also point out, in case of doubt, that the question whether the first subparagraph of Article 1(4) of Directive 84/5 may be regarded as having direct effect has no bearing on the question whether the applicants in the main proceedings are entitled to rely on that provision before the referring court.
(
42
)	Case C-356/05 Farrell [2007] ECR I-3067, paragraph 40 and the case-law cited.
(
43
)	Ibid., paragraph 37 and the case-law cited.
(
44
)	For a similar assessment, see point 64 of the Opinion of Advocate General Stix-Hackl in Farrell.
(
45
)	The same is true of the option open to the Member States of making the payment of compensation by the compensatory body subsidiary or of making provision for the settlement of claims between the body and the insurers: the fact that these two areas are left to the discretion of the State does not have the effect of diluting the firm obligation to set up a body responsible for providing compensation in the circumstances prescribed by the EU legislature.
(
46
)	Evans, paragraph 82 and the case-law cited.
(
47
)	Page 3 of the order for reference.
(
48
)	Joined Cases C-46/93 and C-48/93 Brasserie du Pêcheur and Factortame [1996] ECR I-1029, paragraphs 32 and 35.
(
49
)	Evans, paragraph 83 and the case-law cited.
(
50
)	Ibid., paragraph 87 and the case-law cited.
(
51
)	Ibid., paragraph 86 and the case-law cited.
(
52
)	Brasserie du Pêcheur and Factortame, paragraphs 82 and 83.
(
53
)	Ibid., paragraphs 84 and 85.