Opinion of Mr Advocate General Tesauro delivered on 16 January 1992. - Royale belge v Robert Joris. - Reference for a preliminary ruling: Tribunal de paix de Luxembourg - Grand Duchy of Luxembourg. - Staff Regulations - Subrogation of the Communities. - Case C-333/90.



European Court reports 1992 Page I-01135



Opinion of the Advocate-General

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Mr President,

Members of the Court,

1. On 19 June 1982, Guy Hinger, an official of the European Communities was the victim of a target-shooting accident for which - all parties agree - Robert Joris was responsible.

Following the accident, the Sickness Fund of the European Communities paid for Mr Hinger' s medical and pharmaceutical expenses. The Commission also paid him the sum of BFR 50 218, having determined that he had suffered 1% permanent partial incapacity. That amount, together with BFR 10 619 for medical expenses not covered by the Sickness Fund, was reimbursed by the Royal Belge insurance company under a policy concluded with it by the Commission. Under that policy the insurer was subrogated to the rights of the Commission, which had previously been subrogated, under the Staff Regulations of Officials, to Mr Hinger' s rights.

Relying on that subrogation, Royale Belge instituted proceedings against Mr Joris before the Tribunal de Paix (Magistrates' Court), Luxembourg, in order to recover the sums disbursed by it, amounting to BFR 60 837. Mr Joris contended that the action was inadmissible since on 23 November 1982 - before the date on which the Commission had paid its official the benefits to which he was entitled under the Staff Regulations - a settlement had been concluded between Mr Joris and Mr Hinger under which the latter had received BFR 32 000 as compensation for the damage suffered as a result of the accident. That settlement had, in the defendant' s opinion, discharged his entire liability, Mr Hinger having acknowledged in writing, as is apparent from the receipt for the amount paid by way of settlement, that he had no further claim on Mr Hinger or his insurer. Consequently, in Mr Joris' s view, Mr Hinger had no further entitlement; accordingly, the Commission of the European Communities and, in its stead, Royale Belge, could not, by way of subrogation, exercise rights which no longer existed.

Faced with this difference of views, the Tribunal de Paix, Luxembourg, referred a question to this Court for a preliminary ruling on the interpretation of the relevant provisions of the Staff Regulations, both in the version in force at the material time (Article 73(4) ) and in the present version (Article 85a(1) ). In particular, the national court, taking the view that the settlement may or may not be relied on depending on the time of the subrogation, asks whether the statutory subrogation of the Communities took place upon the occurrence of the harmful event or as a result of the payment made.

2. In should be borne in mind from the outset that Article 73(4) of the Staff Regulations, in force at the material time, provided that "Within the limits of the obligations devolving upon them under Articles 72, 73 and 75, the Communities shall automatically assume the rights of redress of the official or of those entitled under him against the third party responsible for an accident involving the death or injury of an official or a person covered by his insurance". This does not differ greatly, as far as is relevant to the present case, from the text of Article 85a(1) which is now applicable. (1)

From the - infelicitous - wording of Article 73(4), it is apparent first that the subrogation in favour of the Communities relates only to the benefits provided for by the Staff Regulations; consequently, the right to any benefits not covered by the Staff Regulations remains vested in the victim or his beneficiaries. Secondly, it is clear that there is an automatic subrogation in that it occurs without the need for prior consent by the person whose rights are transferred.

3. I think, however, that reference to the automatic nature of the subrogation is not a sufficient answer to the question at issue, in that it remains to be established at what moment the automatic transfer takes place.

In support of the view that it takes place upon the occurrence of the harmful event reference was made on several occasions, both in the written procedure and at the hearing, to the Opinion of Mr Advocate General Warner in Joined Cases 63/79 and 64/79, (2) in particular the passage in which it is stated that the subrogation in favour of the Communities meant that "the official or those entitled under him are wholly divested of their rights (within the limits of the obligations of the Communities".

Now, whilst it is true that the peremptory assertion that Community officials are deprived of any standing to bring an action against the third party, without any reference being made to payment, appears to support the argument put forward, I cannot fail to point out that there is in fact no indication of the time from which, where there is subrogation in favour of the Communities, the persons covered by the Staff Regulations "are wholly divested of their rights". In other words, Mr Advocate General Warner' s interpretation, which in any event related to a case in which compensation by the third party was awarded after payment of the benefits under the Staff Regulations, indicates the effects of the subrogation but does not indicate the time at which those effects arise.

4. In the present case, however, it is necessary to establish whether the subrogation, as provided for in the Staff Regulations, involves, after the accident and irrespective of payment, a transfer of the victim' s rights to the institution concerned - in essence, whether the right of subrogation in favour of the Communities may be seen as an "atypical" form of subrogation. (3)

In that connection, it was argued in the course of the proceedings that the very fact that the subrogation in favour of the Communities is stated to be within the limits of the obligations incumbent on them following the harmful event and not within the limits of the benefits actually paid implies that the subrogation takes place with effect from the time of the harmful event.

It must, I think, be concluded that such a provision implies at the very least that payment is not an essential precondition for "subrogation" of the Communities to the rights of their employees. For subrogation to take place, as is apparent from the very expression used, it is, on the other hand, sufficient to establish that the Communities are under an obligation, by virtue of the Staff Regulations, to pay social benefits to their employees, the effect of which is, as far as the present case is concerned, to compensate for damage suffered through an accident attributable to a third party.

It does not seem to me that there can be any reasonable doubt that such a circumstance can be established as soon as the harmful event occurs. Suffice it to observe that entitlement to the benefits under Article 72 of the Staff Regulations (medical and pharmaceutical expenses) is always guaranteed in any event and that accidents not covered by Article 73 (which is specifically concerned with the benefits paid following accidents) are clearly indicated in the rules adopted for its implementation.

Indeed, in view of the fact that the Community institutions are required to pay out social security benefits even after an accident attributable to a third party, it follows that the Communities certainly bear at least some of the consequences of the harmful event - at the very least, the medical and pharmaceutical expenses covered by the Sickness Fund. In my opinion it is thus sufficient, for the purposes of subrogation, that the damage suffered by the official (or part of such damage) should place the Communities under an obligation to pay certain social-security benefits; the specific consequence will be that the official will be divested of the right to claim compensation for that damage from the third party.

It must be added, as the Court itself has stated, "the purpose of the right of subrogation enjoyed by the Communities is to prevent an official from being compensated twice in respect of the same damage". (4) Whilst it is true that that purpose can be achieved in various ways (and even without subrogation), it must nevertheless be recognized that, since the Communities are in any event required to pay the benefits to which the official is entitled under the Staff Regulations, the possibility of overlapping benefits can be avoided only if the official is deprived of any standing to bring proceedings for compensation against the third party - to the extent to which, of course, that damage is in any event to be compensated for by the Communities through the benefits provided for in the Staff Regulations.

The foregoing observations thus bring me to the view that the subrogation of the Communities to the rights of its employees takes place upon the occurrence of the harmful event.

5. That conclusion answers the question in the form in which it has been submitted by the national court; however, I feel that I should go into further detail on the issue of reliance upon a settlement arrived at between the third party and the Community employee and, more generally, the question whether it is possible for a third party who has paid compensation for the damage directly to the employee to rely on that payment as against the Community institutions.

In my opinion, it is necessary to distinguish the relationship between the official and the Community institution from the relationship between that institution and the third party. Whilst it is true that the subrogation of the Communities to the rights of the official takes place as soon as the harmful event occurs, I have some doubts as to whether that subrogation takes effect, in a similarly automatic manner, as against the third party, to such an extent as to preclude reliance on a settlement validly arrived by him under ordinary law.

Let me say straight away that I am not convinced by the Commission' s argument that the third party, even though he acted in good faith, may not, by virtue of the fact that the Staff Regulations are a Community regulation which is thus directly applicable in all the Member States, set up the defence of due payment.

6. I would point out first that the Staff Regulations are essentially intended to govern the position of officials in relation to the institutions which employ them. Whilst it is true that the Court held in Case 137/80 that "the Staff Regulations, in addition to having effects in the internal order of the Community administration, are binding on the Member States in so far as their collaboration is necessary in order to give effect to those regulations", (5) and therefore indicated that the Staff Regulations may also have effects vis-à-vis third parties, I have some difficulty in admitting that a provision of the Staff Regulations such as that which concerns us here also has an effect - a direct effect - upon the subjective rights of a third party to such an extent that he is deprived of the right to conclude a settlement or that the exercise of that right is rendered nugatory, with the result that the settlement cannot be relied on to protect his interests - a result, moreover, constituting a derogation from the ordinary law governing subrogation in relation to liability for damage. It should also be remembered that the view expressed by the Court in the case cited concerned a situation in which the full effectiveness of the provision of the Staff Regulations in question (which it had been called on to examine) could be ensured only through collaboration of the Member States. In the present case, however, the position is undoubtedly different.

As is apparent from its very structure, the provision concerning subrogation is undeniably addressed first and foremost to officials, who are required to comply with it. In that regard, it is sufficient for them not to accept from the third party any sum in respect of damage already compensated for or which should be compensated for by the institution concerned.

Any different solution would have the effect of making the third party responsible for the accident bear the entire burden of an infringement by an official of the provision of the Staff Regulations in question, in so far as he would have to commence legal proceedings in order to recover the sum paid. On the other hand, the infringement by the official of a provision specifically addressed to him would become meaningless within the Community administration.

7. That is not all. Even if it were assumed that everyone residing within the Community was necessarily aware of the existence of provisions of the Staff Regulations which might be applicable to them merely through their coming into "contact" with a person governed by the Staff Regulations (and if it is taken for granted that it is possible in all cases to identify people to whom the Staff Regulations apply (6)), I consider that in the present case there are other factors which militate against the Commission' s argument.

Apart from the obvious fact that the effect claimed by the Commission would in any event be limited to accidents occurring within Community territory, I would point out that certain provisions of the Staff Regulations refer to specific rules which, as it were, constitute the detailed arrangements for their application. That applies to Article 73 of the Staff Regulations, the provision at issue here, by virtue of which officials are covered against risks of accident "subject to rules drawn up by common agreement of the institutions of the Communities after consulting the Staff Regulations Committee". The Rules on the insurance of officials of the European Communities against the risk of accident and occupational disease adopted in implementation of Article 73 of the Staff Regulations are rules lacking any external significance which, inter alia, deal with the events for which compensation is available and the risks which are not covered.

Only knowledge of those rules would enable a third party to establish whether or not an official was covered by the Community insurance for that kind of accident. I shall merely say, in that regard, that a solution which placed on the third party responsible for an accident of which a Community official was the victim the burden of knowing not only the Staff Regulations but even a set of internal rules would lack any legal basis.

8. As far as those rules are concerned, I also feel that I should draw attention to Article 8 of them, a provision which itself lays down the conditions for subrogation in the event of accidents, providing, in its first paragraph, that the benefits and allowances under the Staff Regulations are to be paid only "on condition that they subrogate the European Communities to their rights and proceedings against any responsible third party".

I must presume, given the conflicting wording of the Staff Regulations, that that provision has, by implication, been repealed. However, whilst on the one hand I cannot fail to draw attention to the extreme ambiguity and uncertainty deriving from such a situation, on the other I do not conceal the fact that difficulties of interpretation arise from the second and third paragraphs of that article, in particular where - for the purposes relevant to this case - it provides that "In order to seek an amicable settlement of their claims or to compound with the third party, the official or those entitled under him must obtain the consent of the institution to which the official belongs". Two explanations are possible: either, by inserting in the Staff Regulations a specific provision (Article 85a), which now governs all cases of subrogation, the intention was to repeal Article 8 in its entirety (needless to say, in such a case formal repeal would have been desirable); or that provision must be taken to mean, given that the official is entirely divested of his rights as soon as the harmful event occurs, that the institution itself to which the official belongs may waive its right to take proceedings against the third party, thus allowing the official to arrive at a settlement. The latter hypothesis would confirm - if confirmation were needed - that any settlement may indeed be invoked by the third party, he not being required to be aware either of the existence of the rules in question or, still less, to know whether or not the official had permission from the institution in question to agree to a settlement by way of compensation for the damage suffered.

9. Finally, it must be emphasized that by virtue of a principle recognized in the laws of all the Member States - I refer to the principle of the protection of legitimate expectations - the rights of people who have acted in good faith are safeguarded. In particular, with regard to the matters at issue in this case, it must be observed that the legislation of all the Member States, and also the relevant case-law, provide adequate safeguards for any third party who has made direct payment to the victim for damage arising from any accident. (7)

10. In view of the foregoing, I consider that the third party responsible for an accident of which a Community official is a victim may validly set up the defence of due payment against the institution which has been subrogated to the official' s rights. A different approach would be called for only if the Community institution had informed the third party of the existence of the right of subrogation and its wish to exercise that right.

The principle whereby subrogation takes place automatically must therefore be taken to apply in such a way that subrogation takes place even without the prior consent of the official or the persons entitled under him and not as meaning that it takes place without any notification to the third party whereby the institution concerned informs the third party of the existence of, and its wish to exercise, the right of subrogation conferred by the Staff Regulations. Only such an expression of intention, I repeat, would have the effect of precluding reliance on a settlement as against the institution.

In fact, the Commission, replying in writing to a question put to it at the hearing, stated that it did not inform Mr Joris of its entitlement to bring an action as subrogee, since, in view of the reimbursement obtained from Royale Belge, such an action would be virtually pointless. And indeed, the medical expenses covered by the Community Sickness Fund in connection with the facts of this case were not the subject of any subrogation.

I cannot agree with the Commission' s argument. I shall merely say that under the Staff Regulations it is the Community institution that is subrogated to the rights of its employee upon the occurrence of the harmful event; the subrogation of the insurer to the rights of the institution, resulting from a contract and governed by ordinary Belgian law, does not take place until later, as a result of the payment. It follows that the Community institution' s insurer is not entitled to take action against the third party unless payment has been made, that is to say at a later stage. In any event, therefore, it would be the responsibility of the Community institution to approach the third party; any other course would, in the present case, mean that the Commission itself undermined its insurer' s right of subrogation.

11. The foregoing observations do not of course imply that officials may be compensated twice for the same damage. The relevant provision of the Staff Regulations must in fact be interpreted as meaning the official or the persons entitled under him are liable to the Community institution for any prejudice to its right of subrogation. In other words, the Community official is wholly liable to the institution concerned for conduct preventing the institution from having recourse, to the appropriate extent, to the third party.

The institution concerned therefore may and must deduct the amount already received by its employee if it has not already paid the benefits due under the Staff Regulations; or else seek, by an action for the recovery of undue payments, reimbursement of the difference where the official has already received both compensation from the third party and the benefits provided for by the Staff Regulations.

In short: (a) the right of subrogation in favour of the Communities arises automatically, as regards the official, as soon as the harmful event occurs; (b) the third party responsible for the accident may rely in defence on a previous payment to the Community institution concerned, unless that institution told him in advance of the existence of the right of subrogation and of its intention to exercise it; (c) the official is liable to the institution if he has adversely affected the latter' s right of subrogation.

I would add that the solution suggested here is the same as regards Article 85a(1) of the Staff Regulations.

12. In the light of the foregoing considerations, I propose that the Court give the following answers to the question referred to it by the Tribunal de Paix, Luxembourg:

(a) Article 73(4) of the Staff Regulations and the new version thereof contained in Article 85a(1) are to be interpreted as meaning that the subrogation of the Communities to the rights, including rights of action, of a person covered by the Staff Regulations, or persons entitled under him, as against a third party responsible for an accident - up to the amount of the benefits paid in fulfilment of obligations under the Staff Regulations - takes place as soon as the harmful event occurs;

(b) the subrogation takes effect as against the third party only after the institution concerned brings to the notice of the third party the existence of the right of subrogation and its intention to exercise it;

(c) the Community employee is liable to the institution employing him where he adversely affects the latter' s right of subrogation by concluding a settlement or taking some other action; in such circumstances the institution may deduct the amount already received by the official or his beneficiaries from the benefits due under the Staff Regulations if it has not already paid them or else bring proceedings to recover overpayment.

(*) Original language: Italian.

(1) Article 85a(1) provides "Where the death, accident, injury or sickness of a person covered by these Staff Regulations is caused by a third party, the Communities shall, in respect of the obligations incumbent upon them under the Staff Regulations consequent upon the event causing such death, injury or sickness, stand subrogated to the rights, including rights of action, of the victim or of those entitled under him against the third party".

(2) Joined Cases 63/79 and 64/79 Boizard v Commission [1980] ECR 2975, Opinion at p. 2992, in particular p. 2998.

(3) I would point out that in the laws of all the Member States, the concept of "subrogation" relates exclusively to the subrogee' s assumption of the rights of the subrogor as a result of, and after, the payment.

(4) Case 103/81 Chaumont-Bartel v Parliament [1982] ECR 1003, paragraph 11 of the judgment.

(5) Case 137/80 Commission v Belgium [1981] ECR 2393, paragraph 8 of the judgment.

(6) It is perhaps not inappropriate to point out that the Staff Regulations apply to people covered by an official' s insurance and that, as far as medical and pharmaceutical expenses are concerned, the Communities' right of subrogation extends to those benefits as well.

(7) In particular, having regard to everything said in the course of the proceedings, I would emphasize that even the Luxembourg legislation referred to, on the basis of which the social security authorities are subrogated to the rights of the insured as soon as the harmful event occurs and thus enjoy their own right of recourse against third parties, provides that where, despite the existence of the machinery thus created, the insured has already received compensation for the damage from the third party responsible, the social security authority will set off against the benefits due to the victim the amount received by the latter from the third party (Articles 118 and 237 of the Code des Assurances Sociales).