Action brought on 26 April 2001 by the EFTA Surveillance Authority against the Principality of Liechtenstein

(Case E-5/01)

(2001/C 242/10)

An action against the Principality of Liechtenstein was brought before the EFTA Court on 26 April 2001 by the EFTA Surveillance Authority, represented by Peter Dyrberg, acting as agent of the EFTA Surveillance Authority, 74, Rue de Trèves, B-1040 Brussels.

The applicant claims that the Court should:

1. Declare that, by failing to adopt, within the time-limit prescribed, the national provisions necessary to comply with Articles 3(1), 4, 6 and 7, read in conjunction with Article 2, of the Act referred to in point 6 of Annex IX to the EEA Agreement (Council Directive 87/344/EEC of 22 June 1987 on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance), as adapted by way of Protocol 1 to the EEA Agreement, the Principality of Liechtenstein has failed to fulfil its obligations under Article 10 of that Act and Article 7 of the EEA Agreement.

2. Order the Principality of Liechtenstein to pay the costs of the proceedings.

Legal and factual background and pleas in law adduced in support:

- Article 3(1) of the Directive states that 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, should the Member State so request, the amount of the relevant premium are specified.

- Article 4 of the Directive provides that any contract of legal expenses insurance shall expressly recognise that where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve the intrests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such lawyer or other person.

- Article 6 of the Directive provides that Member States shall adopt all appropriate measures to ensure that, without prejudice to any right of appeal to a judicial body which might be provided for by national law, an arbitration or other procedure offering comparable guarantees of objectivity is provided for whereby, in the event of a difference of opinion between a legal expenses insurer and his insured, a decision can be taken on the attitude to be adopted in order to settle the dispute. Further the insurance contract must mention the right of the insured person to have recourse to such a procedure.

- Article 7 of the Directive provides that whenever a conflict of interests arises or there is disagreement over the settlement of the dispute, the legal expenses insurer or, where appropriate, the claims settlement office shall inform the person insured of the right referred to in Article 4 and the possibility of having recourse to the procedure referred to in Article 6.

- It follows from Article 10 of the Act, as adapted by way of Protocol 1 to the Agreement, that the time limit for Liechtenstein to take the necessary measures to comply with the Act expired on 1 May 1995.

- At the expiry of the abovementioned time limit, Liechtenstein had not taken the legislative measures necessary to comply with the Act. Nor had such measures been taken at the end of the time limit set by the EFTA Surveillance Authority in its reasoned opinion, in which it requested Liechtenstein to take the measures necessary to comply with the Act. Liechtenstein has, therefore, failed to comply with its obligations under Article 10 of the Act and Article 7 of the EEA Agreement.