30. 3. 82 Official Journal of the European Communities No C 78/9 
freedom rights for a route between Member States to 
an air carrier of a third country and in this respect 
contains provisions incompatible with this Directive, 
the Member State shall take at the first opportunity 
all appropriate steps to eliminate such 
incompatibilities. Until such time as the 
incompatibilities have been eliminated this Directive 
shall not affect the rights and obligations vis-d-vis 
third countries arising from such an agreement. 
Article 11 
1. The Member State shall, before 1 January 1983, 
and after consultation with the Commission, take the 
necessary steps to amend their laws and administrative provisions to comply with this 
Directive. 
2. Such measures shall cover, inter alia, the organ­
ization of, procedures for and means of control, and 
the penalties for any breach. 
3. The Member States shall communicate to the 
Commission all laws and administrative provisions 
made in furtherance of this Directive. 
Article 12 
This Directive is addressed to the Member States. 
Amended proposal for a Council Directive on the coordination of laws, regulations and 
administrative provisions relating to legal expenses insurance (') 
(Submitted by the Commission to the Council pursuant to the second paragraph of Article 
149 of the EEC Treaty on 22 February 1982) 
ORIGINAL PROPOSAL NEW PROPOSAL 
THE COUNCIL OF THE EUROPEAN 
COMMUNITIES THE COUNCIL OF THE EUROPEAN 
COMMUNITIES 
Citations 
First citation First, second, third and fourth citations 
Having regard to the Treaty establishing the (unchanged) 
European Economic Community, and in particular 
Article 57 (2) thereof, 
Second citation 
Having regard to the proposal from the Commission, 
Third citation 
Having regard to the opinion of the European Par­
liament, 
Fourth citation 
Having regard to the opinion of the Economic and 
Social Committee, 
(') OJNoC 198,7. 8. 1979, p. 2. 
No C 78/10 Official Journal of the European Communities 30. 3. 82 
ORIGINAL PROPOSAL NEW PROPOSAL 
Recitals 
First recital 
Whereas 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 ('), eliminated, in order to facilitate the 
taking-up and pursuit of such activities, certain 
differences existing between national laws; (unchanged) 
Second recital 
Whereas, however, Article 7 (2) (c) of the said 
Directive 73/239/EEC provides that 
'Pending further coordination, which must be 
implemented within four years of notification of 
this Directive, the Federal Republic of Germany 
may maintain the provision prohibiting the simul­
taneous undertaking in its territory of health 
insurance, credit and suretyship insurance or 
insurance in respect of recourse against third 
parties and legal defence, either with one another 
or with other classes'; 
Whereas there exist therefore at present barriers to 
the establishment under effective conditions of 
competition of agencies and branches transacting 
legal expenses insurance; whereas it is essential to 
remedy this situation; (unchanged) 
Third recital 
Whereas, in order to protect insured persons, steps 
should be taken to prevent any conflict of interests 
between a person with legal expenses cover and his 
insurer arising out of the fact that the latter is 
covering him in respect of any other class of 
insurance referred to in the Annex to the 
abovementioned Directive or is covering another 
person; Whereas, in order to protect insured persons, steps 
should be taken to preclude, as far as possible, any 
conflict of interests between a person with legal 
expenses cover and his insurer arising out of the fact 
that the latter is covering him in respect of any other 
class of insurance referred to in the Annex to the 
abovementioned Directive or is covering another 
person and, should such a conflict arise, to enable it to 
be resolved; 
Fourth recital (new) 
Whereas contracts under which the insurer provides 
services or bears the cost of defending the insured 
peson in connection with civil liability actions should, 
however, be excluded from the scope of the Directive; 
O OJ No L 228, 16. 8. 1973, p. 3. 
30. 3. 82 Official Journal of the 
ORIGINAL PROPOSAL 
Fourth recital 
Whereas the system of compulsory specialization at 
present applied by one Member State, the Federal 
Republic of Germany, precludes the majority of such 
conflicts; whereas, however it does not appear 
necessary, in order to obtain this result, to extend 
that system to the entire Community, which would 
require the splitting up of composite undertakings; 
Fifth recital 
Whereas the desired result can equally well be 
achieved by requiring such composite undertakings to 
adopt a separate management comprising in particular 
separate accounting and a separation of contracts or 
of the cover provided under a single contract; 
whereas the management of claims in respect of legal 
expenses cover by an entity having separate legal 
personality is also an appropriate way of precluding 
the risk of a conflict of interests; 
Sixth recital 
Whereas in order to attain this same objective, 
specialized undertakings must also comply with 
certain provisions; whereas members of their staff 
who deal with the management of claims ought not 
to carry on at the same time a similar activity in an 
undertaking transacting another class of insurance; 
Seventh recital 
Whereas the conflict of interests which may arise 
between an insurer and an insured person implies 
that the latter must be free to choose his lawyer; 
Eighth recital 
Whereas conflicts may nevertheless arise between 
insurer and insured; whereas it is important that they 
be settled in the fairest and speediest manner possible; 
whereas it is appropriate therefore that provision be 
made in legal expenses insurance policies for an arbi­
tration or equivalent procedure; 
Ninth recital :>pean Communities No C 78/11 
NEW PROPOSAL 
Fifth recital 
(former fourth recital unchanged) 
Sixth recital 
(former fifth recital unchanged) 
Seventh recital 
(former sixth recital unchanged) 
Eighth recital 
Whereas the conflict of interests which may arise 
between an insurer and an insured person implies that 
the latter must be free to choose his lawyer and an 
independent expert or second expert; 
Ninth recital 
(former eighth recital unchanged) 
Tenth recital 
Whereas the second paragraph of point C of the 
Annex to the abovementioned Directive 73/239/EEC (former ninth recital unchanged) 
No C 78/12 Official Journal of the European Communities 30. 3. 82 
ORIGINAL PROPOSAL NEW PROPOSAL 
provides that the risks included in classes 14 and 15 in 
point A may not be regarded as risks ancillary to 
other classes; whereas an insurance undertaking 
should not be able to cover legal expenses as a risk 
ancillary to another risk without having obtained an 
authorization in respect of the legal expenses risk; 
whereas a reference to class 17 should therefore be 
inserted in point C of the said Annex, 
HAS ADOPTED THIS DIRECTIVE: HAS ADOPTED THIS DIRECTIVE: 
Article 1, first paragraph Article 1, first paragraph 
The purpose of this Directive is to coordinate the 
provisions laid down by law, regulation or 
administrative action concerning legal expenses 
insurance as referred to in paragraph 17 of point A of 
the Annex to Council Directive 73/239/EEC, here­
inafter called 'first coordination Directive' in order to 
eliminate any possible conflicts of interest between a 
person with legal expenses cover and his insurer 
arising out of the fact that the latter is covering him 
in respect of any other class of insurance referred to 
in that Annex or is covering another person. The purpose of this Directive is to coordinate the 
provisions laid down by law, regulation or 
administrative action concerning legal expenses 
insurance as referred to in paragraph 17 of point A of 
the Annex to Council Directive 73/239/EEC, here­
inafter called the 'first coordination Directive', in 
order to facilitate the effective exercise of freedom of 
establishment and preclude as far as possible any 
conflict of interest between a person with legal 
expenses cover and his insurer arising out of the fact 
that the latter is covering another person, and, should 
such a conflict arise, to enable it to be resolved. 
Article 1, second paragraph Article 1, second paragraph 
This Directive shall not apply to legal expenses 
insurance where such insurance is linked with that in 
respect of liability arising out of the use of ships, 
vessels or boats on the sea, as referred to in 
paragraph 12 of point A of the Annex referred to 
above. This Directive shall not apply to legal expenses 
insurance where such insurance concerns disputes or 
risks arising out of, or in connection with, the use of 
sea-going vessels. 
Article 2 Article 2 
This Directive shall apply to those various elements in 
a contract of legal expenses insurance whereby the 
insurer provides services or bears costs for the 
purpose, in particular, of: This Directive shall apply to those various elements in 
a contract of legal expenses insurance whereby the 
insurer primarily provides services or bears costs (the 
rest unchanged) 
— securing compensation for the loss, damage or 
injury suffered by the insured person, whether by 
settlement out of court or through civil or 
criminal proceedings, 
— defending the insured person in civil, criminal, 
administrative or other proceedings or in respect 
of any claim made against him otherwise than 
through such proceedings. 
30. 3. 82 Official Journal of the European Communities No C 78/13 
ORIGINAL PROPOSAL NEW PROPOSAL 
The Directive shall not, however, apply to cover 
provided by an insurer providing liability cover, within 
the limits of that cover, for the purpose of defending 
the insured person in civil proceedings. 
Article 3 (1) 
All undertakings which transact at the same time legal 
expenses insurance and insurance in one or more 
other classes set out in the first coordination 
Directive shall manage legal expenses insurance 
separately from the other classes insurance. Article 3 (1) 
(unchanged) 
Article 3 (2) 
The separate management shall be organized in such 
a way that the simultaneous transaction of legal 
expenses insurance and one or more of the other 
classes set out in the first coordination Directive shall 
not prejudice the interests of the insured person with 
regard to the cover of legal expenses. 
This shall mean in particular that: 
— separate accounts shall be kept in respect of the 
legal expenses business, 
— legal expenses cover shall be the subject of a 
contract separate from that drawn up for the 
other classes of insurance or shall be dealt with in 
a separate section of a single policy in which the 
nature of the legal expenses cover and the amount 
of the relevant premium shall be specified. Article 3 (2) 
(unchanged) 
— separate accounts shall be kept in respect of legal 
expenses business, 
— legal expenses cover shall be the subject of a 
contract separate (the rest unchanged) 
Article 3 (3), first subparagraph 
Furthermore, Member States may require under­
takings which transact or wish to transact within their 
territory at the same time legal expenses insurance 
and insurance in one or more other classes set out in 
the first coordination Directive to entrust the 
management of claims in respect of legal expenses 
insurance to an undertaking having separate legal 
personality. That company shall be mentioned in the 
contract or separate section referred to in the second 
indent of paragraph 2. Member States which make 
use of this option shall so inform the Commission and 
the other Member States. (This paragraph, slightly amended, becomes the first 
paragraph of Article 4) 
Article 3 (3), second subparagraph 
Article 4 of this Directive shall apply by analogy to 
the relations between the undertaking which transacts 
both legal expenses and other insurance and the 
company which is entrusted with the management of 
claims. (This paragraph, slightly amended, becomes the 
second paragraph of Article 5) 
No C 78/14 Official Journal of the European Communities 30.3.82 
ORIGINAL PROPOSAL 
Article 3 (4) NEW PROPOSAL 
Article 3 (3) 
Every contract of legal expenses insurance entered 
into by an undertaking which transacts such insurance 
and one or more other classes of insurance, but does 
not entrust the management of claims in respect of its 
legal expenses business to an entity having separate 
legal personality, shall provide that where the person 
enjoying legal expenses cover calls upon the insurer 
to meet obligations in respect thereof, the latter shall 
advise him of any factor liable to bring about a 
conflict of interests between them and shall at the 
same time give him the possibility of entrusting the 
defence of his interests to a lawyer of his choice. Any 
insurer not fulfilling this obligation shall compensate 
the insured person for any resultant loss. (former Article 3 (4) as amended) 
Every contract of legal expenses insurance entered 
into by an undertaking which transacts such insurance 
and one or more other classes of insurance shall 
provide that: 
— the insurer shall advise the insured person with 
legal expenses cover, on the signing of the 
contract, of the possibility of a conflict of interests 
between them; 
— where the insured person calls upon the insurer to 
meet his obligations the latter shall afford him the 
opportunity of entrusting the defence of his 
interests to a lawyer of his choice. 
Any insurer not fulfilling this obligation shall 
compensate the insured person for any resultant loss. 
Article 4, first paragraph 
(former Article 3 (3), first subparagraph as amended) 
Member States may require undertakings which 
transact or wish to transact within their territory at 
the same time legal expenses insurance and insurance 
in one or more other classes set out in the first 
coordination Directive to entrust the management of 
claims in respect of legal expenses insurance to an 
undertaking having separate legal personality. That 
undertaking shall be mentioned in the separate 
contract or separate section referred to in the second 
indent of Article 3 (2). 
Member States which make use of this option shall so 
inform the Commission and the other Member States. 
Article 4, second paragraph 
Article 3 (3) shall not apply to undertakings which 
entrust such management to an undertaking having 
separate legal personality. 
Article 4 Article 5, first paragraph 
Where an undertaking transacting only legal expenses 
insurance has financial, commercial or administrative 
links with an undertaking which transacts one or 
more of the other classes of insurance set out in the 
first coordination Directive, no member of the (former Article 4 unchanged) 
30.3.82 Official Journal of the European Communities No C 78/15 
ORIGINAL PROPOSAL 
management of the indoor or outdoor staff of either 
company who is concerned with the management of 
claims or with legal adivce in respect thereof may at 
the same time carry on a similar acitvity in the other 
company. NEW PROPOSAL 
Article 5 Article 5, second paragraph, (new) 
This provision shall apply by analogy to the 
relationships referred to in the first paragraph of 
Article 4, between an undertaking which transacts at 
the same time legal expenses insurance and insurance 
in one or more other classes and an undertaking 
having separate legal personality to which it entrusts 
the management of claims in respect of legal expenses 
insurance. 
Article 6, first paragraph 
On each occasion when it is necessary to instruct a 
lawyer to represent or defend the interests of a person 
with legal expenses cover, the latter must be free to 
choose his lawyer. The insured person shall not have 
the capacity to surrender this right by contract. Every time that occasion arises to instruct a lawyer 
either to represent or to defend the interests of a 
person with legal expenses cover, or both, the latter 
must be free to choose his lawyer. The insured person 
shall not have the capacity to surrender this right by 
contract. 
Article 6, second paragraph, (new) 
Lawyer means any person entitled to pursue his pro­
fessional activities under one of the denominations laid 
down in Directive 77/249/EEC intended to facilitate 
the effective exercise by lawyers of freedom to provide 
services ('). 
Article 6, third paragraph, (new) 
Furthermore, where recourse is had to an expert, the 
insured person shall be free to choose the expert or a 
second expert. 
Article 6, first paragraph 
Member States shall adopt all appropriate measures 
to ensure that legal expenses insurance policies 
provide for an arbitration or equivalent procedure 
whereby, where there is a difference of opinion 
between a legal expenses insurer and his client as to 
what action should be taken, the dispute shall be 
resolved by one or more persons who shall be lawyers 
or arbitrators. Article 7, first paragraph 
(former Article 6, first paragraph) 
O OJ No L 78, 16. 3. 1977, p. 17. 
No C 78/16 Official Journal of the European Communities 30. 3. 82 
ORIGINAL PROPOSAL NEW PROPOSAL 
Article 6, second paragraph 
The insured person shall not be required to bear more 
than one half of the costs resulting from such 
procedure. Article 7, second paragraph, (new) 
(former Article 6, second paragraph, as amended) 
The costs resulting from such procedure shall be feed 
by those persons, lawyers or arbitrators, and the 
insured person shall not be required to bear more than 
one half of such costs. 
Article 8, (new) 
The Member States shall be responsible for the 
establishment or adaptation and the effective 
operation of a supervisory body on which insurers and 
insured persons are represented. That body shall 
supervise compliance with the provisions contained in 
this Directive. It shall grant authorizations, impose 
fines on insurance undertakings, where necessary, and 
receive complaints from insured persons, without 
prejudice to the authority of national judicial bodies. 
Article 7 Article 9 
Member States shall abolish all provisions which 
prohibit an insurer from carrying on within their 
territory legal expenses insurance and other classes of 
insurance at the same time. (former Article 7 unchanged) 
Article 8 Article 10 
The second paragraph of point C of the Annex to the 
first coordination Directive shall be replaced by the 
following text: 
'However, the risks included in classes 14, 15 and 
17 in point A of this Annex may not be regarded 
as risks ancillary to other classes'. (former Article 8 unchanged) 
Article 9 Article 11 
Member States shall amend their national provisions 
so as to comply with this Directive within 12 months 
of its notification and shall forthwith inform the 
Commission thereof. 
The provisions thus amended shall be applied within 
18 months of the date of notification. Member States shall amend their national provisions 
so as to comply with this Directive before 1 July 1984 
and shall forthwith inform the Commission thereof. 
The provisions thus amended shall be applied before 
1 January 1985. 
Article 10 Article 12 
Following notification of this Directive, Member 
States shall communicate to the Commission the texts (former Article 10 unchanged) 
30. 3. 82 Official Journal of the European Communities No C 78/17 
ORIGINAL PROPOSAL NEW PROPOSAL 
of the main provisions of the laws, regulations or 
administrative provisions adopted by them in the field 
covered by this Directive. 
Article 11 Article 13 
This Directive is addressed to the Member States. (former Article 11 unchanged) 
Amendment 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 (') 
(Submitted by the Commission to the Council pursuant to the second paragraph of 
Article 149 of the EEC Treaty on 3 March 1982) 
ORIGINAL PROPOSAL NEW PROPOSAL 
THE COUNCIL OF THE EUROPEAN THE COUNCIL OF THE EUROPEAN 
COMMUNITIES COMMUNITIES 
citations unchanged 
first five recitals unchanged 
sixth recital 
Whereas it is necessary to make provision for a body Whereas it is necessary to make provision for a body 
to bear secondary liability for the payment of to bear secondary liability for the payment of 
compensation in cases where the vehicle responsible is compensation in cases where the vehicle responsible is 
unidentified or uninsured, or where the insurer is uninsured or unidentified; whereas in the latter case, 
entitled to disclaim liability; whereas this latter case however, it is permissible that compensation should 
must be treated in the same way as a case of non- not be paid in respect of damage to property, or 
insurance; should be paid only within certain limits, for example 
by applying an excess; 
new recital 
Whereas it is in the interest of victims that the effects 
of exclusion clauses be limited to the relationship 
between the insurer and the insured person responsible 
for the accident; whereas it is necessary to provide 
that all other instances in which the insurer is entitled 
to disclaim liability must be treated as instances of 
non-insurance; 
seventh recital 
Whereas the members of the family of the insured Whereas the members of the family of the insured 
person, driver or person liable are deserving of person, driver or person liable are deserving of 
consideration as potential injured parties and should consideration as potential injured parties and should 
be afforded protection comparable to that of other be afforded protection comparable to that of other 
third parties; third parties, in any event in respect of their personal 
injuries; 
O OJ No C 214, 23. 8. 1980, p. 9.