COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC-Treaty concerning the Common Position adopted by the Council on 21.5.1999 with a view to the adoption of a European Parliament and 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 and amending directives 73/239/EEC and 88/357/EEC (Fourth Motor Insurance Directive)

1. BACKGROUND

* On 10 October 1997 the Commission adopted a Proposal for a 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 and amending Directives 73/239/EEC and 92/49/EEC (Fourth motor insurance directive) [1]. The proposal was submitted to Parliament and Council by letter on 13 October 1997.

[1] OJ C 343, 13.11.1997, p. 11.

* At its 353rd plenary session on 25 March 1998, the Economic and Social Committee adopted a favourable opinion [2] (unanimity) on the Proposal for a Directive and suggested certain amendments.

[2] OJ C 157, 25.5.1998, p. 6.

* The Parliament adopted a legislative resolution embodying its opinion [3] on the Commission's Proposal for a Directive at its plenary session on 16 July 1998.

[3] OJ C 292, 21.9.1998, p. 123.

* On 31 March 1999, the Commission adopted an Amended Proposal for a Directive [4] in the light of the opinions of the Parliament and the Economic and Social Committee.

[4] COM(1999)147 final.

* On 21 May 1999, at its 2180th session, the Council adopted the Common Position which is the subject of this Communication.

2. PURPOSE OF THE COMMISSION'S PROPOSAL

* The main purpose of the Proposal is to improve the present situation as regards making claims for damages of persons who have been temporarily in a Member State other than the one of their residence ("visitors") and who have suffered loss or injury in that Member State caused by a vehicle registered and insured in a Member State other than that of their residence.

* The Directive will remove a loophole in the so-called Motor Insurance Directives (72/166/EEC [5], 84/5/EEC [6], 90/232/EEC [7] and 90/618/EEC [8] - respectively first, second and third motor insurance directives and "motor services" directive): none of them took particular account of those victims who - while being temporarily in another Member State - had suffered loss or injury there through a vehicle registered and most often insured in that Member State. From the legal point of view those victims are covered under the current Green Card system; nevertheless, in practice they face many difficulties in obtaining an indemnification or even a reasoned reply to their claim from the insurer of the responsible party.

[5] 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.

[6] 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.

[7] 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.

[8] Council Directive 90/618/EEC of 8 November 1990 amending, particularly as regards motor liability insurance, directive 73/239/EEC and Directive 88/357/EEC which concern the coordination of laws, regulations and administrative provisions relating to direct insurance other than life insurance.

3. COMMENTS ON THE COMMON POSITION

3.1 General considerations

The Common Position adopted by the Council retains the essence of the Commission's initial Proposal. The Commission agrees with the changes introduced by the Council and considers that they will improve the quality of the legislative text.

The Common Position takes account of a large number of amendments requested by the Parliament in its first reading and accepted by the Commission in its Amended Proposal. In this context, it corresponds substantially to the Commission's Amended Proposal.

There remains one point of divergence between the Common Position and the Parliament's opinion. It concerns Parliament's amendment 15, which would have considerably widened the scope of the directive by extending its application to cases of accidents occurring outside the injured party's Member State of residence including also accidents occurring in third countries. This amendment, that neither the Commission nor the Council have been able to accept, would have been the cause of many practical problems, even if all factors ( Member State of the victim's residence, Member state of the accident, Member State of the insurer) governing the intervention of the mechanisms proposed in the directive (claims representative, information centre, compensation body) are situated within the EC territory. It cannot be accepted for the following practical reasons:

- Firstly, those problems are related to applicable law. Since, in most cases, the applicable law will be the law of the Member State of the accident, the result of introducing this E.P. amendment would imply that it would not be sufficient for the claims representative to be familiar with the basic principles of motor insurance legislation in the 15 Member States, but he would also have to carry out additional researches on a case by case basis regarding the laws of any third country every time such a case should come up. This would imply additional infrastructure and, consequently, more important costs for the insurance industry and a rather slow settlement of the injured party's requests.

- Secondly, problems might arise related to attribution of jurisdiction and competence of national courts to judge the dispute in cases where problems cannot be solved via extra-judicial arrangements but need to be settled before the courts.

In addition, the Council has introduced other changes to reinforce the clarity and the coherence of the Proposal and to make explicit some aspects that were only implicit in the initial Proposal. In most cases the Council has introduced textual clarifications or minor modifications which are compatible with the overall orientation of the European Parliament amendments and the amended Commission proposal. The Commission agrees to all modifications introduced by the Council.

The main changes in the Common Position with respect to the initial Proposal and to the Amended Proposal are commented on in detail below. Those which respond to amendments requested by the Parliament are analysed in section 3.2, and other changes introduced by the Council in section 3.3.

3.2 Changes to take account of Parliament's amendments

Recitals 5 and 6 of the Common Position

References to the functioning and the deficiencies of the Green Card mechanism have been introduced in the text incorporating Parliament's Amendments 1 and 2. The introduction of these two new recitals helps to understand that though there is a system for the settlement of claims already in place there are still some additional practical difficulties to be solved. This is exactly the same text as in the Amended Proposal.

Recital 7 of the Common Position

The text has been improved to take account of Parliament's Amendment 3 and is very similar to the text in the Commission's Amended Proposal

Recital 8 of the Common Position

The wording has been improved (replacement of the word "victim" by the word injured party" as suggested in E.P. amendment 4 - this term has also been replaced in all other recitals and provisions of the Directive; reference to the notion of "loss or injury") in order to ensure coherence with previous Directives (Article 1 par. 2 of Directive 72/166/EEC).

Recital 9 of the Common Position

The text incorporates Parliament amendment 9. It provides a clear reference to the need to create a direct right of action which establishes a legal link between the injured party and the insurer.

Recitals 10 and 11 of the Common Position

The text incorporates Parliament amendments 5 and 6; it includes a reference to the principle and the advantages of settling the claim via the claims representative. This is the same text as in the Amended Proposal, subject to one linguistic modification: the term "insurer" has been replaced by the term "insurance undertaking" to ensure coherence with other directives of the insurance sector. This term has also been replaced in all other recitals and provisions of the Directive.

Recital 12 of the Common Position

The text incorporates Parliament amendment 7 stating that the creation of claims representatives does not affect either the rules of applicable law nor the matter of jurisdiction.

Recital 14 of the Common Position

The text has been modified in order to take into consideration part of the changes proposed in Amendment 10 (simplification of the text establishing the requirement that the claims representative should be included in the conditions needed in order to obtain the "single licence"). There are also some improvements related to the description of the powers of the claims representative. Reference to representation of the undertaking by its claims representative before the courts has been maintained in the new text; though the current situation of private international law on determination of jurisdiction does not give the option to the injured party to bring any action against the claims representative in his/hers Member state of residence, further developments in that field (i.e. eventual modification of the Brussels Convention) cannot be ruled out.

Recitals 17 and 18 of the Common Position

The text has been modified in order to take into consideration the spirit of amendments 26 and 27 implying the application of reinforced penalties in case the insurer does not provide a reasoned reply within a certain time limit. The nature of the sanctions to be imposed has been specified; these must be systematic and effective. Regarding the content of these penalties a clear reference to both financial and equivalent administrative sanctions has been added whereas a list of a wide range of important administrative penalties has been included in recital 17. Also in recital 18 a reference to additional civil law financial sanctions, i.e. interest for late payment has been included. The recital has been adapted to correspond to the revised text of Article 4 par. (4) of the Common position. The same approach has also been followed in the Commission's Amended Proposal (recitals 10 and 10 a [new]; Article 3 (6)).

Recitals 19, 20 and 21 of the Common Position

As suggested by the Parliament (Amendment 12) the wording of recital 19 has been improved. Recital 11 of the initial and modified Commission proposal has been split into two new recitals (recitals 19 and 20 of the Common Position) to improve the presentation and facilitate comprehension of the text. Some clarification regarding gathering information related to termination of insurance cover - which does not have necessarily to coincide with the original validity of the insurance contract - has been added in recital 20. Moreover, in recital 21 the text has been completed by reference to the cases of vehicles (for example government or military vehicles) which fall under the exceptions from the obligation to be insured against third party liability; this ensures coherence with the revised version of Article 5 par. (4) which includes a new provision covering those vehicles.

Recitals 24, 25, 27, 29 and 30 of the Common Position

Those recitals have been modified, firstly, in order to take into consideration part of the suggestions in the Parliament Amendment 13. Amendment 13 announces that the cases where the insurer cannot be identified can also be settled by the Compensation body in the injured party's Member State of residence, in order to make it easier for the visiting victim by establishing only one contact point. However, this new arrangement is an additional possibility which is given to visiting victims and, for that reason, it shouldn't be contradictory to existing compensation mechanisms in cases of accidents caused by an insured or an unidentified vehicle. Thus, this provision has been supplemented by a clear reference that the existing system of insurance directives has to be respected: uninsured or unidentified vehicles are treated under Directive 84/5/EEC and fall within the competence of the guarantee funds. This means that, even if the compensation body intervenes at first instance, the final debtor is always the guarantee fund.

For the same reason of ensuring coherence with Directive 84/5/EEC, which treats equally uninsured an unidentified vehicles, settlement by the compensation body in the injured party's Member State of residence has also been provided for in case of an accident caused by an unidentified vehicle. Again, recital 30 clearly states that the final responsibility lies with the guarantee funds according to Article 1 par. 4 of Directive 84/5/EEC. Secondly, the text of recital 29 has been completed by a reference to an agreement to be signed between the compensation bodies relating to the modalities of reimbursement to correspond with the equivalent provision included in Article 6 paragraph 2.

Article 1 of the Common Position

The wording has been improved to take into consideration, at least in part, E.P. amendment 15 and also to clarify what is meant by "victim" (i.e. the injured party) in the initial proposal and ensure coherence with previous motor insurance directives.

Article 4 paragraph 1 of the Common Position - Article 3 paragraph 1 of the Amended Proposal

Some improvements regarding the wording have been inserted to take into consideration part of the suggestions included in E.P. amendment 17. The Common Position incorporates a provision stipulating that a claims representative shall be appointed in each Member State other than that in which the insurer has received its official authorisation. However, the part laying down that the claims representative shall be instructed and authorised to settle claims has been incorporated in a slightly modified form.

Article 4 paragraph 2 of the Common Position - Article 3 paragraph 3 of the Amended Proposal

The list of persons against whom the injured party might have a claim and consequently wish to institute proceedings has been enlarged to take into consideration different legal possibilities according to the rules in force in the various Member States. The last sentence of this paragraph includes the suggestion provided for in E.P. amendment 25.

Article 4 paragraph 3 of the Common Position

The text has been modified in that respect following E. P. amendment 21. The insurer should be responsible for the choice of his representative and consider whether he is suitable for this task or not. E.P. amendment 18 has been partly taken into consideration as regards the idea that the claims representative should be able to communicate with the victim in his own language. This idea was also reflected in Article 3 paragraph 1 last sentence of the Amended Proposal. Finally, regarding the representation powers of the claims representative the text has been considerably simplified. This new formulation allows the claims representative to undertake any possible action which results in meeting the claims in full without having its activity restricted to representing the insurer only before national administrations. Moreover, any discussion on the applicability of the Brussels Convention can be avoided in this way.

Though the text of the common position does not incorporate the first part of amendment 18 or amendment 19, it derives from the philosophy of the text that the insurer is free to decide which representative he wishes to appoint as well as that claims representative may act for one or more insurers.

Article 4 paragraph 4 of the Common Position - Article 3 paragraph 6 of the Amended Proposal

The text has been modified in order to insert, at least in their spirit, E.P. amendments 26 and 27 providing for reinforced penalties to guarantee that the victim will receive a reasoned offer within a short period of time. The nature of penalties has been specified; they have to be systematic and effective. This means that there is an absolute obligation imposed upon national authorities to apply sanctions, without giving them the possibility to derogate from that principle. Certainly, they will retain some discretionary margin as far as the gravity of the sanction is concerned which will vary according to the circumstances. Regarding the content of those penalties a clear reference to both financial and equivalent administrative sanctions has been added; a list of a wide range of important administrative penalties has been included in recital 17 to make this "equivalent effect" more explicit.

There is a difference between, on the one hand financial sanctions provided for in the first subparagraph of paragraph 4 of this Article, which can be according to legal tradition of each Member State administrative fines or, less often, specific civil law sanctions and, on the other hand, late payment interest, which are due in case of late payment and, in most Member States, form part of general civil law rules. Apart form defining the nature of those sanctions to make the provisions of the directive more effective, the text does not include any references to the modalities of application; this question will be settled, in line with subsidiarity, by national administrative and civil law provisions. Also a clear reference to late payment interest has been added in the last subparagraph of Article 4 par. 4.

Furthermore, in the first subparagraph first indent of Article 4 par. 4, it is clearly stated that the offer made by the insurer has to be a "reasoned" one; similarly in the second indent the word "appropriate" has been replaced by the word "reasoned" . This word reflects better the intention to establish an obligation for the insurer to give motivated answers regarding his intervention or his denial to compensate the damage suffered by the injured party.

Regarding the above mentioned issues the same approach has also been followed in Article 3 paragraph 6 of the Commission's Amended Proposal.

Article 5 paragraph 1 of the Common Position

Regarding the substance the text corresponds to the text of Article 4 paragraph 1 of the modified proposal. Nevertheless, the presentation has been improved. Reference to the expiry of the period of validity of the insurance cover - which, in many cases, does not necessarily coincide with the expiry of the validity of the insurance policy itself - has also been inserted to take into consideration, at least in spirit, the suggestion in E.P. amendment 29. The text has also been modified following E.P. amendment 28 in order to include a reference to vehicles not required to be insured, such as military and government vehicles; indents (4) and (5) have been introduced in order to include all variations and derogations from the duty to be covered against third party liability provided for in directive 72/166/EEC.

Article 5 paragraphs 3 and 4 [new] of the Common Position - Article 4 paragraphs 3 and 4 [new] of the Amended Proposal

The presentation of the text in paragraph 3 has been improved following the spirit of E.P. amendment 30. Contrary to the Commission's Amended Proposal, E.P. amendment 31 creating an obligation imposed upon Member States to ensure that information centres react immediately to the injured party's requests has not been inserted in this paragraph. The Commission now considers that this obligation was too vaguely formulated in the modified proposal since it didn't set any precise time limits for the information centre to react.

Article 6 paragraphs 1, 2 and 3 of the Common Position - Article 5 paragraphs 1, 2 and 3 of the Amended Proposal

The presentation of the text has been improved. E.P. amendment 33 has been partially accepted as far as following points are concerned:

- Specific provision has been made in paragraph 1 that intervention of the compensation body should be excluded when there is a dispute before the courts on the amount of compensation. The Compensation Body does not have any judicial powers.

- The suggestion that the Compensation Bodies could chose to conclude an agreement on the modalities of reimbursement has also been accepted.

Moreover, the list of persons to be informed that the Compensation Body in the injured party's Member State of residence is about to intervene has become wider by including on the one hand the person responsible for the accident - this might raise pressure against the insurer - and, on the other hand the Compensation Body in the insurer's Member State of establishment, since this latter body will be involved in the action pursuing reimbursement against the insurer.

Furthermore, a clarification has been inserted regarding the Member State where reimbursement by the insurer takes place. For the purposes of reinforcing pressure on the insurer who has failed to comply with its duties, it is essential to claim reimbursement from the establishment which has effectively delivered the contract, which does not have necessarily to be the head office.

Finally, following the example of Article 2 par. 2 of Directive 72/166/EEC, the Commission should adopt a decision to define the date of entry into force of the agreement to be signed among compensation bodies in the Member States. This legal act is necessary in order to make the effects of a private agreement enforceable on the EC territory.

All these modifications were also included in the Commission's Amended Proposal.

Article 7 of the Common Position

Regarding cases where the insurer cannot be identified, the E.P. suggestion provided for in amendment 33 has been inserted in the text, i.e. to give the injured party the possibility to use the mechanism of the compensation bodies provided that the existing system of insurance directives is respected: uninsured or unidentified vehicles are treated under Directive 84/5/EEC and fall within the competence of the guarantee funds. Certainly, in order to make it easier for the visiting victim and establish only one contact point, the intervention of the compensation Body has been accepted, but then the final responsibility lies with the guarantee funds according to Article 1 par. 4 of dir. 84/5/EEC.

For this reason, contrary to the suggestion in amendment 34, the concrete reference to the mechanism provided for in Article 1 par. 4 of Directive 84/5/EC is maintained in the text to make clear that in case of unidentified or uninsured vehicles the responsibility for compensating the injured party lies with the guarantee fund and not with the compensation body established by the present directive. This same suggestion had also been included in the modified proposal.

Article 8 a [new] of the Amended Proposal

This Article has been rejected in the Common Position. E.P. amendment 4 had been partially taken into consideration by the Commission in that respect; though not extending the scope of application of the present directive to cover accidents occurring in a 3rd country, the Commission had agreed to explore the possibility of extending the arrangements provided for in this Directive via an international agreement to cover also persons resident in a Member State who are injured parties in traffic accidents caused by a vehicle insured and normally based in a Member State other than their Member State of residence but occurring in a third country.

However, this suggestion did not in fact establish any clear obligation for the Commission to undertake specific action. The simple obligation to present a report without being followed by the obligation to undertake a concrete initiative does not imply any legally binding obligation which is worth being included in a Directive. In any event, the Commission is free to prepare such a report, and above all take the E.P. concerns into consideration in future legislative initiatives.

3.3 Other changes

Recital 13 of the Common Position and Recital 9 of the initial Commission Proposal

Recital 13 replaces recital 9 of the initial Commission proposal. The text has been improved in order to show more clearly the complementary functions of the claims representative and the direct right of action and to avoid misleading interpretation that the activities of the claims representative establish jurisdiction in the injured party's Member State of residence, unless this is provided by the Brussels Convention [9] - which is not the case, at least at present - or any other international agreement dealing with the matter of jurisdiction.

[9] Convention of 27 September 1968 on jurisdiction and the enforcement of judgements in civil and commercial matters.

Recital 15 of the Common Position

This recital includes a clear indication that the activities of the claims representative are not sufficient to establish jurisdiction in the injured party's Member State of residence or imply the application of the laws of that State as far as the settlement of the claim is concerned. This same idea was also included in the modified Commission proposal, but in that text it was part of recital 12.

Recital 16 of the Common Position

A correction has been inserted in the text, to ensure coherence with other insurance directives: the insurance class activity for which the appointment of a claims representative is required is the one listed in "class 10 of point A of the Annex of Directive 73/239/EEC, except for carrier's liability".

Recital 22 and 23 of the Common Position

The text of the directive has been made more clear as far as justification for providing information regarding the person who is in possession of the vehicle is concerned: in both recital 22 as well in Article 5 par. 4 the concept of legitimate interest, which is a principle generally accepted in the laws of the various Member States has been introduced. A reference to directive 95/46/EEC on the protection of individuals with regard to the processing of personal data and on the free movement of such data [10] has been added in recital 23. This reference ensures the necessary coherence with provisions regarding data protection and the general Commission policy in that field, since, in the case of an uninsured or non duly insured vehicle, the processing of personal data and, in particular, the name and address of the owner or usual driver of the vehicle, which belong to this type of data, have to be communicated. Article 5 has been completed along the same line (introduction of a new paragraph 5). The same idea exists also in the Commission modified proposal (recitals 11 b [new] and 11 c[new]).

[10] OJ L 281, 23.11.1995, p. 31.

Recital 26 of the Common Position

This recital has been added to recall that the objective of creating a "network" of compensation bodies is to create an additional legal device aiming at strengthening the protection of injured parties and not at modifying civil law provisions which may be different in the various Member States. This need of establishing a "safety net" is not present in case the injured party has already been compensated in case other legal persons - which do not face the same practical difficulties as individual persons - are subrogated to the injured party in his claims.

Recital 28 of the Common Position

In case other legal means for obtaining compensation are already in place under the national law of a Member State, providing for an additional protection for its residents in case an accident occurs outside this Member State, the injured party may in practice have the choice between this possibility and the compensation body. Nevertheless, it has to be at the complete discretion of the injured party whether he/she chooses the one or the other mechanism, otherwise national provisions might neutralise the role of the compensation body. By adding this recital any interpretation of the directive reducing the additional protection created by the system of compensation bodies is excluded.

Article 1 of the Common Position

With regard to the scope of the directive (Article 1), a significant modification which improves the effectiveness of the mechanisms provided for in the proposal has been made. It concerns the differentiation of the scope of application of Article 3 compared to the scope of application of Articles 4 to 6 of the proposal.

The two cumulative entrance points (concluding of a motor insurance contract plus registration of the vehicle outside the victim's country of residence) provided for in the initial proposal have been maintained to define the scope of Articles 4 to 6.

With regard to the first condition, it is obvious that if the establishment which delivered the contract is located in the victim's country of residence the reason which is behind this proposal ceases to exist since the practical difficulty for the victim of coming into contact with the insurer in order to be compensated no longer exists. Certainly, if the victim is not informed of the identity of the insurer, he will have still recourse to the information centres (Article 5) in order to locate him; nevertheless, thereafter he will no longer have recourse to the other structures (claims representative, compensation body) mentioned in the proposed Directive.

On the second condition, the existing mechanisms on the basis of directive 90/618/EEC ("services representative") are sufficient in order to rectify a situation in which the insurer who insured the vehicle which caused the accident is established outside the country of the victim's residence but the vehicle is registered in the victim's country of residence. Indeed, in this case there is not a legislative lacuna, namely absence of a direct contact mechanism between the victim and the insurer of the responsible person : the services representative is an adequate interlocutor between the victim and the insurer.

Article 6 follows the same reasoning since the purpose of the creation of compensation bodies is to remedy the deficiencies of the functioning of Article 4 and, thus, the frequency of the use of compensation bodies depends on the effectiveness and the performances of the mechanism of claims representatives.

Regarding application of the direct right of action (Article 3) there is a need to apply this mechanism to all persons having suffered injury outside their Member state of residence, without taking into consideration the Member State of origin of the insurer or of the vehicle. This would create considerable problems of discrimination among visiting victims having suffered similar damages but under slightly different conditions, would restrict considerably - and without any particular reason - the scope of the Directive, finally a lacunae would remain for the cases covered by directive 90/618/EEC, since only the possibility of establishing contact with the insurer would be given to injured parties, without though giving them the legal possibility to obtain directly compensation from the insurer.

The scope of application of Article 7 is wider in order to ensure coherence with Articles 6 and 7 of Directive 72/166/EEC. According to these provisions, Member States shall check, at the point of entry into the Union, whether 3rd country vehicles are provided either with a valid green card or with a frontier insurance certificate. The wording in this subparagraph is identical to the one used in the modified proposal.

Article 2 of the Common Position

The definitions that have been included in this article are limited to the minimum necessary in order to understand the provisions of the directive. In addition, they are based on definitions which already exist in earlier directives in order not to disturb the 'acquis communautaire' on the matter.

Article 3 of the Common Position

The group of beneficiaries of this direct right of action corresponds to the one defined in Article 1 (scope of application) of the text of the Common Position.

Article 4 paragraph 1 of the Common Position - Article 3 paragraph 1 of the modified proposal

Some simplification has been introduced by avoiding references to provisions regarding the authorisation regime, which made the presentation of the text more complicated, without bringing any substantial added value.

Article 4 paragraph 2 of the Common Position - Article 3 paragraph 3 of the modified proposal

The wording and the presentation have been improved and simplified beyond the suggestion in E.P. amendment 20.

Article 4 paragraph 5 of the Common Position

Along the same line as paragraph 4 of this same article and in order to ensure effectiveness of penalties as required in Amendments 26 and 27 of the E.P. an additional obligation has been imposed upon the Commission, i.e. to report on the effectiveness of those penalties, and, eventually, after a comparative examination of the different national sanction mechanisms, to establish the equivalent effect among those mechanisms. If the general provisions defining only the main features that must necessarily be present when Member States impose a penalty fail to produce the expected results, this additional provision obliges the Commission to propose new, more concrete measures to remedy to this problem. In this case, the subsidiarity argument is not relevant since the Member States will have failed to make good use of their discretionary power.

Article 4 paragraph 6 of the Common Position - Article 3 paragraph 7 of the modified proposal

The text has been reformulated and completed in order to make clear that the existence of a claims representative does not constitute an establishment - principal or secondary - of the insurance company as far as either substantial law rules - reference to the third [11] and second [12] non-life directives - or rules governing attribution of jurisdiction are concerned - reference to the Brussels convention.

[11] Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC (third non-life insurance Directive).

[12] Second Council Directive 88/357/EEC of 22 June 1988 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC.

Article 5 paragraph 1 of the Common Position

In order to avoid saturation of the system, a maximum period for the preservation of data related to vehicles has been defined.

Article 5 paragraph 2 of the Common Position

The obligation of the insurer regarding the content of the data he has to communicate to the information centre has been considerably restricted to the communication of the data regarding claims representatives he has appointed in the Member States outside the Member State where he is established. Regarding the rest of the data gathered by information centres it is up to the Member states to decide which is the best way for them to collect those data. In fact, this obligation to provide information imposed only upon the insurer as a unique information source has been considered far too restrictive and also ineffective when this information can be provided from other sources with the data required in a quicker and more effective way.

Article 5 paragraphs 3 and 4 [new] of the Common Position - Article 4 paragraphs 3 and 4 [new] of the Amended Proposal

In order to ensure coherence with paragraph 1 of this same Article a limited period of 7 years has been set as regards access by the injured party to the data preserved in the information centre with a reference to the specific accident. In any event, procedures relating to the communication of data administrated by public bodies - or private bodies serving a public interest - vary form one Member State to another.

An additional paragraph 4 has been added to concentrate on the cases where providing to the injured party more information than that facilitating direct right of action or compensation via the claims representative is justified. The injured party must have a legitimate interest, i.e. need to bring evidence that compensation can only be achieved by suing the person responsible. The reason for making this part more explicit is to take into consideration, on the one hand, data protection requirements linked to the processing of personal data, such as the name and address of the responsible person and, on the other hand, to ensure that the injured party will be able to obtain compensation. The concept of legitimate interest is a principle generally accepted in the laws of the various Member States in the context of both administrative and civil law.

Article 5 paragraph 5 [new] of the Common Position - Article 5 paragraph 5 [new] of the modified proposal

Provision has been made, that directive 95/46/EEC on the protection of individuals with regard to the processing of personal data and on the free movement of such data, has to be respected.

Article 6 paragraph 1 of the Common Position

An additional subparagraph has been added at the end of paragraph 1 referring to the possibility left to Member States to regard compensation by the compensation body as subsidiary (or non-subsidiary) in case there are other mechanisms in place ensuring compensation of the same damages; this corresponds entirely to an equivalent provision included in Article 1 paragraph 4, at the end of the first subparagraph of directive 84/5/EEC and ensures a coherent approach as regards bodies (compensation bodies - guarantee funds) ensuring parallel functions under different circumstances. Finally, this same paragraph includes a prohibition imposed upon Member States to make compensation by the compensation body conditional on the obligation to previously seek compensation from the person liable before addressing demand to the compensation body. The only conditions required for the intervention of the compensation body should be those provided for in paragraph 1 of Article 6, namely, absence of claims representative, or absence of a reasoned reply from the insurer.

Article 6 paragraph 2 of the Common Position - Article 5 paragraph 2 of the Amended Proposal

The subrogation mechanism provided for in Article 6 par. 2 has been completed. An obligation is established for all Member States to recognise the subrogation of the compensation body in the Member State of residence of the injured party and, consequently, of the compensation body in the Member State of the insurer's establishment which has issued the contract to the injured party's rights.

Article 7 of the Common Position

The Council text is more complete and goes beyond the Commission's and E.P. suggestions: it gives the same treatment to both uninsured and non identified vehicles and, thus ensures complete coherence with Directive 84/5/EEC as well as equal treatment of all victims having had an accident outside their Member State of residence.

Article 8 of the Common Position

This Article corresponds entirely to Article 3 paragraph 2 of the modified proposal. For methodology reasons and in order to respect rules of legislative technique this paragraph has been separated from Article 4 which refers to the claims representative since it modifies older insurance directives.

Article 9 of the Common Position

This article is destinated to fill any possible lacunae or remedy to cases of bad application of directive 90/618/EEC. In this directive, the mechanisms for controlling designation of the "services representative" are less strict that those included in this proposal. Many cases where the insurer had failed to appoint a services representative have been reported to the Commission in the last decade, which made it necessary to find a quick solution to this problem. By giving this additional competence to intervene in case the insurer has not fulfilled his duty according to Directive 90/618/EEC, the mechanism of the claims representative might be a suitable remedy to the deficiencies of the mechanism of the services representative provided for in Directive 90/618/EEC.

4. CONCLUSION

The Commission takes the view that the Common Position retains the key elements of the Commission's Proposal as well as those of the European Parliament amendments that were accepted by the Commission and incorporated in its Amended Proposal. The Commission can fully support this Common Position.