Proposal for 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 92/49/EEC (Fourth Motor Insurance Directive)
Date: 1997-10-10
Institutions: European Commission
Subjects: EC Directive, approximation of laws, insurance indemnity, motor vehicle insurance, third-party insurance

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  10.10.1997 
COM(97)  510  final 

97/  0264  (COD) 

Proposal  for  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 92/49/EEC 

(Fourth Motor Insurance Directive) 

(presented  by the  Commission) 

Explanatory Memorandum 

1. 

Background 

The  issue  of  compensation  for  victims  of traffic  accidents  in the European  Union  has 
been one of the Commission's concerns since the First Motor Insurance Directive was 
adopted  in  1972.1  That  Directive  made third-party  insurance  compulsory  throughout 
the  European  Economic  Community,  as  it  then  was.  The  basic  protection  thus 
provided  was  extended  and  strengthened  by the  Second2  and  Third3  Motor  Insurance 
Directives.  Those  Directives  concerned  traffic  accidents  occurring  in  the  victim's 
State of residence and caused by vehicles either registered  and insured  in that  State or 
registered  and  insured  in  another  Member State.  The  1990 Motor  Insurance  Services 
Directive treats as equivalent to those cases accidents occurring in the victim's State of 
residence where  the vehicle, while registered  in that  country, was insured  (by way  of 
provision of services) by an insurer in another Member State. 

None  of  those  directives,  however,  took  particular  account  of  victims  who,  while 
temporarily  in  another  Member State,  suffer  loss  or  injury  there  through  a  vehicle 
registered  in  a  Member State  other  than  that  where  the  victim  resides.  As  traffic 
increased  between  Member States,  it  became  evident  that  those  victims  ("visitors") 
needed  special protection.  At the beginning  of the  1990s, the Commission  therefore 
requested  two  organisations  for  the  insurance  profession,  the  European  Insurance 
Committee and the Council of Bureaux, to consider the matter. It was quite logical to 
proceed  in this way because the existing  motor  insurance  directives, particularly  the 
First  Directive  of  1972,  involved  a  balance  of private  agreements  between  insurers 
and  legislative  measures.  This  led  to  the  preparation  of  an  "Agreement  between 
Bureaux  on  the  Protection  of  Visitors"  by  the  Council  of  Bureaux  (the  Rome 
Agreement  of  27 May  1994), which  could  have  considerably  improved  the  position 
of visitors. Unfortunately,  the required  unanimity  of all  interested  parties, i.e. of the 
European  motor  insurers  of  all  countries  concerned,  could  not  be  attained.  The 
European Parliament therefore took the initiative in the matter. 

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. 
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. 
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. 
1 

In  its  resolution  of  26  October  1995  under  Article  138b  of  the  EC Treaty  on  the 
settlement  of  claims  arising  from  traffic  accidents  occurring  outside  the  claimant's 
country  of  origin,4  the  European  Parliament  called  on  the  Commission  to  submit  a 
proposal for a directive requiring 

"the Member States  ... to introduce an arrangement  whereby the person 
suffering  damage  in a road  accident  may  apply  directly  to  the  liability 
insurer... ("direct claim"), 

the Member States to ensure ... that every motor vehicle liability  insurer 
...  appoints  a  ...  representative  ...  in  every  other  Member State  and 
authorises  him  to  settle  ...  claims  for  damages  caused  by  vehicles 
insured by the insurer outside the claimant's country of origin ..., 

the Member States to ensure  ... that insurers  ... establish an  information 
centre  ...  able  ...  to  provide  a  claimant  with  the  name  of  the  ... 
representative..., 

the  Member States to  ensure  ... that  insurers  ... inform  the  information 
centres ... of the ... representatives they have appointed ...". 

2. 

Purpose of the proposal 

The  purpose  of  the  European  Parliament's  resolution  is  to  improve  the  present 
remedies available to persons who are temporarily in a Member State other than their 
State of residence and suffer  loss or injury  in that Member State caused by a vehicle 
registered and insured in a Member State other than their State of residence. 

For  the  reasons  set  out  below,  the  Commission  recognises  that  the  Parliament's 
concerns  are justified  and  that  there  is  a  need  to  improve  the  remedies  available  to 
such persons: 

Settlement  of  damages  is  more  complicated  abroad  than  domestically. 
In  the  first  place,  the  injured  party  may  not  know  the  identity  of  the 
insurer  against  whom  he  must  claim.  The  means  of  identifying  the 
insurer differ  from  country to country  and the injured  party may in  fact 
find that no such means are available to him; 

The  victim  will  normally  have to prove  that  his  claim  is justified.  For 
obvious  reasons  it  may  be  difficult  for  him  to  collect  evidence  (police 
reports,  statements  of  witnesses,  etc.)  if  the  accident  happens  abroad 
and, as is sometimes the case, far from his home country; 

OJNo C 308,20.11.1995, p. 108. 

In typical cases such claims will be settled according to a law other than 
the  victim's  home  country.  Claim-settlement 
that  applicable 
procedures may therefore differ  from those applied in that country; 

in 

All  these  difficulties  are  aggravated  if  the  insurer  proves  dilatory.  In 
view  of  the  victim's  unfavourable  position,  insurers  may  in  fact  be 
tempted to induce the victim to abandon his claim. 

Since the free movement of persons forms one of the objectives of the EC Treaty, the 
Commission  must  provide  an  alert  response  to  obstacles  liable  to  jeopardise  its 
attainment.  Similarly,  the  Commission  is  to  consider  consolidating  the  motor 
insurance  directives. The  presentation  of  Directives  72/166/EEC,  84/5/EEC, 
90/232/EEC and the present  proposed  Directive (once adopted  by the Parliament and 
the  Council)  in  a  single  instrument  with  a  rationalised  structure  will  make  the 
provisions more transparent and understandable, so that insurers and drivers will have 
readier access to them. 

3. 

Content of the Directive 

In  line  with  the  principle  of  subsidiarity,  the  victim's  position  may  be  improved  by 
providing  an  intermediary.  This  can  be  done  without  changing  the  rules  on  liability 
and on jurisdiction that currently apply in the Member States. 

For  these  reasons  and  reflecting  the  approach  outlined  by  the  Parliament,  the 
Commission presents the following proposals: 

- 

- 

- 

to  provide  improved  protection  for  victims  of  an  accident  occurring  in  a 
Member State other than that of residence against the insurer of the vehicle involved 
in the accident by establishing special rules supplementing the present system set up 
by the motor insurance directives (Article 1); 

to introduce throughout the European Union a direct right of action for that category 
of victims (Article 2); 

to  secure  the  appointment  by  all  insurance  undertakings  of  a  representative 
the 
for 
responsible 
European Union (Article 3); and 

in  each  Member State  of 

settling  accident  claims 

- 

to establish information  centres (Article 4). 

The Commission also presents the following proposals: 

- 

information  centres  responsible  for 

to  make 
the  representative 
empowered  to  settle  accident  claims,  the  insurer  providing  cover  and  the  vehicle 
involved in the accident (Article 4); 

identifying 

- 

to establish  in the  State of origin  of visitors  a body  responsible  for  settling  claims 
arising out of accidents suffered  by such visitors if there is no claims representative 
or,  if  the  insurer  proves  dilatory,  to  act  as  a  compensating  agency;  on  effecting 
payment  in  the  State  of  residence  of  the  victim,  the  agency  would  acquire  an 
automatic right of action  against  its counterpart  in the  State of the  dilatory  insurer, 
while  the  agency's  counterpart  would  be  subrogated  to  the  rights  of  the  victim 
against the insurer (Article 5); and 

- 

to lay down expressly that, if the vehicle responsible for the accident  is not insured 
or the insurer cannot be identified,  the guarantee funds  must compensate the victim 
on the conditions laid down in Directive 84/5/EEC (Article 6). 

4. 

Comments on the articles of the Directive 

Article 1 (Scope) 

This Directive covers claims for damages arising from accidents caused by vehicles: 

-  registered and insured in the Member State where the accident occurs, 

-  registered  in  the  Member State  where  the  accident  occurs  and  insured  by  way  of 
provision  of  services  in  a  Member State  other  than  the  State  of  residence  of  the 
victim, or 

-  registered  and  insured  in  a  Member State  other  than  the  State  of  residence  of  the 

victim or of the place where the accident occurs. 

This Article defines the scope of the Directive.  It covers a clearly specified  category of 
victims  whose  position  under  the  green-card  arrangements,  while  the  same  in  law  as 
that of "domestic" victims, is much weaker in practice.  It also defines  the purpose  of 
the Directive, namely, to remedy the dysfunction  in settling the claims of this category 
but  not  -  for  the  present,  at  least  -  to  make  good  other  perceived  problems  in  the 
operation  of  the  rules  on  motor  insurance  in  the  Community.  The  additional  legal 
arrangements,  supplementary  to  the  green-card  arrangements,  are  set  out  in  the 
subsequent  articles and aim to  strengthen  the protection  enjoyed  by that  category  and 
to make it easier to secure compensation. 

Article 2 {Direct right of action) 

The extension of the direct right of action to all Member States is a precondition for the 
proper  functioning  of  the  arrangements  which  are  envisaged.  The  victim's  right  to 
apply  for  compensation  to  the  insurer  providing  civil  liability  motor  cover  for  the 
person  responsible  for  the  accident  is  in  addition  to the  right  of  action  automatically 
available to him against the person responsible for the accident.  It should be noted that 
the direct right of action is not available in all the national legal systems in all matters 
concerning  civil liability  and is available only to victims suffering  an accident  outside 
their State of residence. 

Regarding the practical consequences flowing from prescribing a direct right of action, 
first of all, there will in practice be no change for Member States where a right of this 
nature  already  exists.  Article  2  makes  it  compulsory  for  Member States  to  have  a 
direct  right  of  action,  i.e.  its  introduction  is no longer merely  an option  for  them.  In 
those  States, the fact  that the claim must be made available only  for  visitors  suffering 
an  accident  is  not  really  a  false  difficulty,  i.e.  false  discrimination  against  domestic 
victims.  In  practice,  the  national  rules,  which  are  already  binding,  will  operate  as 
Community rules, at least for non-resident victims. 

Second, where Member States' legal systems do not have a direct right of action, there 
is nothing to stop them creating this as a general right, i.e. available to both "visiting" 
and  "domestic" victims, thereby  removing  all discrimination.  In any case, the whole 
point  of  the  Directive  is that,  since  visitors  suffering  an  accident  are  in practice  at  a 
disadvantage,  their  legal  position  should  be  strengthened  outside  their  State  of 
residence, in comparison with "domestic" victims. 

In Member States which do not at present provide a direct right of action for victims of 
a traffic  accident, such victims have no direct remedy against the other party's insurer. 
The  insurer  cannot  be  sued  on  the  basis  of  civil  liability  nor,  since  there  is  ho 
contractual  link  between  the  insurer  and  the  victim,  does  contractual  liability  arise. 
The direct right of action enables the victim to proceed directly against the insurer and 
without that remedy there would be no point in having a representative responsible  for 
settling claims. 

The  establishment  of  a  direct  right  of  action  throughout  the  European Union  is  of 
considerable importance for the reasons set out below: 

1. 

In  the  case  of  persons  suffering  a traffic  accident  outside  their  Member State  of 
residence, the provision  of this remedy  considerably  improves  their  current  legal 
position under the motor insurance directives in countries where there is no direct 
right  of  action  against  the  insurer.  This  is  particularly  true  where  there  is 
uncertainty  as to the person who is liable or where the person who is liable is out 
of reach (e.g. because he is abroad) or is without means; 

2.  The  combination  of the direct right  of action and the claims representative  in the 
victim's  State  of  residence  (Article  3) makes  it  easier  for  the victim  to reach  an 
out-of-court  settlement  and,  in appropriate  cases, to sue the other party's  insurer. 
Moreover, it considerably  improves the position of such victims in all cases where 
an out-of-court  settlement  cannot be reached.  Finally, providing  for  the victim  a 
direct  right  of  action  against  an  insurer  gives  a  more  solid  assurance  that  the 
judgment which is delivered will be enforced. 

The Directive does not establish new rules of law or amend conventions in the field of 
international  private  law  conferring  jurisdiction  on  courts.  Both  the  definition  of  the 
applicable law and the establishment of the jurisdiction of the courts are determined by-
reference  to  the  rules  of  private  international  law  applicable  in  most  of  the 
Member States.  The introduction of a direct right of action does not of itself establish 
the jurisdiction  of the courts of the State of residence of the victim.  That jurisdiction 
can only be determined on the basis of thé Brussels Convention5  (second paragraph of 
Article 10 read in conjunction with Articles 7, 8 and 9). 

Article 3 (Claims representatives) 

Paragraph  1  sets  out  the  objective  of  this  Article.  Every  insurance  company  of 
Community  origin  operating  throughout  the  Community  on  the  basis  of  a  single 
authorisation  granted  under  Directive  92/49/EEC  (the  Third  Non-life  Insurance 
Directive) or having been granted  a single authorisation under Article 23 of  Directive 
73//239/EEC  must  appoint  a  representative 
the 
European Union  to  settle  claims.  Persons  suffering  injury  or  damage  outside  their 
State of residence are thus enabled to apply, in that  State, to an intermediary  who  can 
handle  claims  for  damages  against  the  other party's  insurer  where  that  insurer  is  not 
established  in  the  State  of  the  victim's  residence.  Obviously,  if  a  national  system 
already incorporates an arrangement for compensating victims of accidents, it could be 
adapted to discharge the duties of the claims representative or even to coexist with the 
system envisaged  in this Directive.  The intervention  of the representative might  form 
an alternative procedure  at the option of the claimant  if it were preferred  to any  other 
remedies available under national law. 

in  every  Member State„  of 

Paragraph  1  also  specifies  the  scope  of  this  Article. 
It  does  not  cover  accidents 
occurring in the State where the victim resides unless the vehicle involved is registered 
outside that  State (i.e. cases covered by the green-card  arrangements, governed  by the 
agreement  concluded  between  national 
insurers'  bureaux  (cf.  Article 2(2)  of 
Directive 72/166/EEC), or registered in that State but insured in another Member State 
by way of provision of services, (governed by Directive 90/618/EEC). 

Regarding the choice of intermediary, the intention is to leave a large degree of latitude 
to insurance undertakings.  It is not necessary that the representative  should be a third 
party.  The  undertaking  may  avail  itself  of  any  arrangements  it  may  have  made  in 
particular countries. 

For example, the representative  may be a subsidiary  or agency  of the undertaking,  an 
insurance  undertaking  belong  to  the  same  group  or 
independent,  a 
claims-settlement  bureau,  or  the  national  green-card  bureau  if  the  members  of  the 
bureau  agree.  It  remains  open to  insurance  undertakings  to  use  their  lawyers  or  tax 
representatives,  or  to  appoint  a  joint  representative  for  a  number  of  undertakings. 

indeed 

5 

Convention  of 27 September  1968 on jurisdiction  and  the  enforcement  of judgments  in  civil 

and commercial matters. 

6 

Moreover,  if  an  insurer  already  has  a  representative6  who  settles  claims  for 
compensation  arising  out  of  contracts  which  the  company  has  concluded  by  way  of 
provision  of  services  in the  State  for  which  the  representative  has been  appointed,  it 
may also appoint him its claims representative under Article 3 of this Directive. 

Under  paragraph 2(a), the nomination  of a claims  representative  is a precondition  for 
the grant of the authorisation to carry on the activity under Directive 92/49/EEC.  Two 
consequences  flow  from  failure  to  nominate  a  representative:  first,  the  authorisation 
will not be granted and therefore the undertaking will not have access to motor vehicle 
liability  insurance;  second,  since  prudential  and financial surveillance  under the third 
insurance  directives  is carried out continuously,  Directive 92/49/EEC provides  for  the 
withdrawal of the authorisation if the insurer no longer satisfies the condition of having 
claims representatives in each Member State.  Put another way, carrying on the activity 
is  prohibited  if  the  conditions  on  which  the  authorisation  was  granted  are  no  longer 
satisfied. 

Likewise,  paragraph  2(b)  applies  to  undertakings  whose  head  office  is  outside  the 
Community  and  was  introduced  to  bring  the  present  Directive  into  line  with  the 
approach adopted since the adoption of Directive 73/239/EEC. 

Paragraph 3 specifies  the duties of the claims representative  and his relations  with the 
undertaking.  It is made clear that the representative acts purely in accordance with the 
instructions,  general  or  specific,  issued  to him by the undertaking.  His  acts  bind  the 
undertaking only with regard to the victim.  He will be liable to the insurer for his acts 
if he fails to comply with his instructions or acts ultra vires. 

The  paragraph  does  not  contain  any  provisions  on  the  law  applicable  to  accidents 
suffered  by visitors.  In most cases, the rules of private international  law applicable in 
the  various  Member States make this  the  law of  the  State  where  the  accident  occurs. 
As in the case of the direct right of action, the law applicable is always determined by 
reference  to the generally  applicable rules of private international  law.  This Directive 
does not provide any criteria for the choice of the applicable law (for example, lex loci 
or the law of the State of residence of the victim, etc.). 

the  representative's  qualifications.  The  cases  which  will 
Paragraph 4  specifies 
normally  be  envisaged  within  the  framework  of  the  examination  under  the  Directive 
will not be governed by the law of the victim's State but by that of the State where the 
accident  occurred,  which  will  in  most  cases  be  the  State  where  the  insurer  is 
established.  While  it would be unreasonable  to require that the  representative  should 
be  acquainted  with  the  law  of  that  country,  and  a fortiori  of  the  law  of  all  the  other 
Member States,  it  is  essential  that  he  should  understand  the  differences  between  the 
law applicable to the particular  case and the law with which the victim  is accustomed, 
at  least  with  regard  'to  the  rules  on,  and  the  level  of,  compensation  in  each 
Member State. 

Article  12a(4) of Directive 88/357/EEC, inserted by Article 6 of Directive 90/618/EEC. 

7 

Paragraph 5 sets out the effects  of the representative's  acts with  regard  to the  victim. 
In  so  far  as  the  representative  has  legal  power  to  represent  the  insurer  in  settling 
claims, his acts will bind the insurer with regard to the victim. 

The  paragraph  does  not  confer jurisdiction  on the  courts  of  the  State  of  the  victim's 
residence.  This would  be inappropriate  in cases which must normally  be  determined 
on the basis of a law other than the lex fori, i.e. the rules of private international law of 
the court hearing the dispute.  Thus the fact that the representative will have power to 
represent the insurer "before  the courts" will be of limited practical  importance  in the 
context of this Directive. 

Paragraph 6 is intended to get the insurer to settle the claim within a reasonable period. 
It  is  intended  to  prevent  the  insurer  from  resorting  to  procrastinating  responses. 
Moreover, the offer  of compensation  must be genuine, not an empty  formality  merely 
intended  to  fulfil  the  requirement  to  submit  an  offer.  Within  three  months  of 
presentation  of  the  victim's  substantiated  claim,  the  other  party's  insurer  must 
genuinely  participate  in  the  compensation  process  by  providing  a  detailed  response. 
The insurer  or his representative  will  naturally  have to be able to  assess the  damages 
involved  and liability therefor  before  a final decision can be taken.  If liability  for  the 
accident  has  not  been  clearly  established  or  if  the  victim's  loss  and  injuries  are  not 
fully  determined,  the  obligation  to  make  an  offer  will  remain  suspended  until  this 
information becomes available. 

The  penalties  provided  for  in  paragraph  6  fall  within  the  discretion  of  the 
Member States; nevertheless  they must  be appropriate,  in order  to make  sure that  the 
insurer  discharges  his  obligations  to  the  victim.  While  the  objective  of  paragraph 6 
differs  from  that of paragraph 2, it intensifies  the pressure on the insurer to make  sure 
that he discharges his obligations to the victim.  The insurer is obliged to make an  offer 
of  compensation  within  a  specified  time-limit.  The  result  is  a  combination  of 
supplementary  administrative  penalties,  since the  administrative  penalty  of  refusal  to 
grant, or  withdrawal  of,  the undertaking's  authorisation  is accompanied  by a  different 
penalty,  pecuniary  or  administrative,  and  the  two  are  intended  to  secure  prompt 
compensation  for  the  victim.  The  first  penalty  (refusal  or  withdrawal  of  the 
authorisation)  compels  the  insurer  to  establish  arrangements  whereby  the  victim  can 
secure  his  rights  against  the  insurer.  The  second  penalty  concerns  details  of  the 
claimant's claim, i.e. to have the claim settled promptly.  The combination  of the two 
penalties is intended to get the insurer to settle the claim within a reasonable period so 
that the intervention  of the compensation  body  is exceptional  and a last  resort  for  the 
victim. 

Paragraph 7 indicates that the claims representative duly appointed under this Directive 
does  not  constitute  a  branch  within 
the  meaning  of  Article  10(1)  of 
Directive 73/239/EEC, as amended by Article 32 of Directive 92/49/EEC. 

Article 4 {Information centres) 

The  purpose  of  Article 4 is to  enable the victim to  identify  the insurer  of the  vehicle 
involved  in the  accident;  it  is often  at this point  that  the victim's  difficulties  become 
extreme.  This information  is also necessary for the effective  exercise of the direct right 
of action. 

From  1990 the  Community  legislature has been aware of the difficulties  victims have 
in identifying  the insurer of the vehicle involved  in an accident.  Under Article 5(1) of 
Directive 90/232/EEC,  Member States  must  "adopt  the  necessary  measures  to  ensure 
that  the  parties  involved  in  a  road  traffic  accident  are  able  to  ascertain  promptly  the 
identity of the insurance undertaking ...". 

there  have  been  complaints 

Subsequently, 
that  this  provision  has  not  been 
implemented  satisfactorily  in  all  Member States.  A  survey  of  the  current  situation 
undertaken by the Commission shows that these complaints are well founded.. 

To give an example, in some Member States a victim who knows only the registration 
number of the vehicle  involved  in an accident will be able to identify  the insurer only 
with great difficulty,  if at all. 

A  distinction  must  be  drawn  between  the  requirement  imposed  by  Article 5(1)  of 
Directive 90/232/EEC  and  that  imposed  by  this  Directive  on  the  Member States  in 
establishing  information  registers.  Article 4(1)  of  the  present  Directive  requires  the 
establishment  of a precise mechanism  (an "information  register") so that it is possible 
to  identify  the  insurer,  his  representative  responsible  for  settling  claims  in  the 
claimant's  State  of  residence  and,  if  necessary,  the  insured.  The  Third  Motor 
Insurance  Directive  imposes  an  obligation  on  Member States  to  produce  a  specific 
result,  without,  however,  spelling  out  the  details  of  what  must  be  done  to  meet  that 
obligation.  Moreover, that obligation applies to certain information  only, i.e. the name 
of  insurance  undertakings.  In  the  present  Directive,  the  information  is  much  wider, 
extending to the claims representative.  This kind of information  is also necessary  for 
following  the  procedure  set  up  in  Article 3.  It  is  practical  to  entrust  information 
centres with the task of keeping registers not only of insurance undertakings but of the 
claims representatives appointed by such undertakings.  Moreover, a victim can secure 
other  information  concerning  the  insured  if the  conditions  for  disclosure  specified  in 
Article 4(3) of this proposed Directive (the vehicle is not validly or legally insured) are 
fulfilled. 

It  is  undoubtedly  the  case  that  Member States  which  have  already  established 
databases  or  information  registers  under  Article 5(1)  of  the  Third  Motor  Insurance 
Directive  will  readily  be  able  to  adapt  or  supplement  those  facilities  or  make  them 
operational under this Directive. 

The  objective  is  to  ensure  that  victims  can  easily  identify  the  insurer  of  the  other 
party's  vehicle  and discover the name and address of the representative  of the  insurer 
in the State of the victim's residence but it may well be that the means for doing so are 
not centralised  in a single unit; it will be enough  if,  according to the situation  in each 
9 

individual country, the various items of information  are held by. different  organisations 
since this information  will be obtainable from a single address. 

In  order  to  ensure  that  the  arrangements  envisaged  are  effective,  the  information 
centres in the various countries will have to be in communication with each other; this 
will  enable  accident  victims  to  obtain  information  in  the  State  where  the  vehicle  is 
registered  and,  perhaps  more  important,  in  their  State  of  residence. 
In  any  event, 
cooperation  between  information  centres is essential  if the  registration  number  of the 
vehicle  and  the  name of the  insurer  in the victim's  State  of residence  are  to  be made 
available  since  this  information  is  only  recorded  in  the  State  where  the  vehicle  is 
registered. 

The victim's main objective  in requesting  information  is to enable him to exercise his 
direct right of action, as specified  in Article  1  of this Directive.  Paragraph 3 shows that 
establishing  the  identity  of  the  insurer  is  sufficient  for  the  victim  to  initiate  the 
procedure  against  the  insurer.  Nevertheless,  in  the  case  of  vehicles  that  are  not 
properly  insured  it is essential that the victim should have access to information  on the 
owner or usual driver of the vehicle which has caused the accident. 

Article 5 {Compensation bodies) 

Paragraph  1 improves the victim's position in cases where, although there is a binding 
obligation to appoint a claims representative, no appointment has in fact  been made or 
where  the  insurer,  although  having  appointed  a  representative,  proves  dilatory  in 
settling. 
It  is  unacceptable  that  the  victim  should  have  to  be  content  with  the 
imposition of purely administrative penalties by the supervisory authority if the insurer 
fails  to  meet  the  conditions  laid  down  for  granting  his  authorisation.  Moreover,  in 
order to ensure that compensation bodies take effective  action, this paragraph  specifies 
a  time-limit,  starting  from  the  presentation  of  the  victim's  claim  for  compensation, 
within  which  action  must  be  taken. 
In  addition  this  paragraph  requires  the 
compensation body to which a claim has been presented to notify  the insurer  formally, 
so  that  he  can  prepare  his  defence;  this  is  reasonable  since  the  insurer  may  well  be 
ultimately  responsible  for  payment  of the claim.  This requirement  does not  affect  the 
procedure  applicable  to  the  victim's  claim  (i.e. there  is  no  suspensory  effect),  which 
must be terminated within two months of presentation of the claim. 

Paragraph 2 is intended  to provide an incentive in the form  of the risk, for  the insurer, 
of being bound by decisions taken by third parties to impel him to fulfil  the  obligation 
under  Article 3  of  settling  the  claims  of  visitors  promptly.  In  the  two  typical  cases 
covered  in  paragraph  1 there  is  no  reason  why  anyone  other  than  the  insurer  should 
ultimately  bear  the  cost  of  the  claim  and  the  expenses  incurred  in  settlement.  A 
distinction  should  be  drawn  between  the  objective  in  imposing  penalties  under 
Article 3(6)  and  the  objective  in  this  Article.  In  the  former  case,  the  penalties  are 
purely disciplinary and intended to punish the insurer who fails to meet his obligations 
under Article 3.  In the latter, the objective  is to compensate the victim  irrespective of 

10 

the  consequences  for  the  insurer.  Provisions  intended  to  punish  an  insurer  do  not 
appropriately protect the rights of a victim. 

The  legal  status of the compensation  body, which  in practice will  be  in the form  of a 
network  of  bodies,  corresponds  to  that  of  the  body  referred  to  Article  1(4)  of 
Directive 84/5/EEC.  The victim can present a claim for compensation to the body; the 
body  is not  bound  by the instructions  of the insurer  and  its decisions  bind the  insurer 
unless the insurer can prove that the body failed  to give due notification  in accordance 
with  the  preceding  paragraph,  thereby  preventing  the  insurer  from  preparing  his 
defence,  or  that  the  claim  was  deliberately  settled  in  the  knowledge  that  it  was  not 
justified.  It will be in the insurer's own interest to avoid such a situation arising and it 
may  therefore  be  assumed  that  the  procedure  provided  for  in  Article 5 will  only  be 
applied  in very rare  cases.  The procedure  is in fact  primarily  intended  as a means of 
bringing pressure to bear. 

As  in the  case  of claims representatives  and  information  centres, Member States may 
use  existing  arrangements  which  can  be  readily  adapted  to  the  requirements  of  this 
Article;  examples  of  such  arrangements  would  be  the  guarantee  fund  for  motor 
vehicles  established  under  Article  1(4)  of  Directive 84/5/EEC  or  indeed  green-card 
bureaus.  Moreover,  the  Member States  are  responsible  for  taking  the  decisions 
required  for  the financing of these bodies, i.e. all financial resources  and other means 
of financing. 

Under  the first indent  of paragraph 2, the compensation  body  in the  victim's  State  of 
residence proceeds automatically not against the person responsible for the accident or 
the  company  providing  his  motor  vehicle  liability  insurance  but  against  the  body's 
opposite number in the State of the insurer who has failed  to appoint  a representative. 
This  indent  is  based  on  the  principle  that  a  compensation  body  must  compensate 
victims residing its own Member State for accidents occurring in a Member State other 
than that where the victim resides and thus other than the State in which the body itself 
is situated; consequently, the second indent of paragraph 2 provides that the body has a 
claim against the compensation body in the State where the insurer is established. 

With  a  view  to  ensuring  that  the  system  of  automatic  claims  functions  properly,  the 
first  indent  of  paragraph  2  prescribes  a  precise  time-limit  within  which  the 
In 
compensation  body  in  the  State  where  the  insurer  is  established  must  settle. 
addition,  under  paragraph  3,  Member States  are  under  an  obligation  to  define  the 
procedures  and technicalities  involved in settlement.  It should be noted that Article 5 
and the preceding articles are not intended to alter the rules on liability as such. 

With the establishment  of this system of automatic  claims in which the  compensation 
body  of the  State in which the insurer  is established  is subrogated  to the rights of the 
victim, reimbursement  from  the insurer ultimately  liable can be easily  secured for  two 
reasons. 
is 
geographically  situated  in the  same Member State  as  the  insurer,  with  the  advantage 
that  all  disputes  will  be  settled  before  the  national  courts  according  to  national  law. 
Second,  in  most  cases  it will  be the  guarantee  fund  of the  State  where  the  insurer  is 

First,  the  compensation  body  with  a  claim  against 

the  insurer 

11 

established  which  will  be  appointed  the  compensation  body  and  that  fund  is  financed 
by  insurers  established  and  operating  in  the  country.  A  great  deal  of  pressure  will 
therefore  be brought  to bear  on the  insurer  by the other  insurers  in the  State where he  is 
established  since  they  have  an  interest  that  the  failure  of  a member  of a guarantee  fund 
to fulfil  his obligations  should  not result  in a charge  on the  fund. 

Article  6 (Cases where  the insurer cannot be  identified) 

If  the  insurer  proves  impossible  to  identify,  the  system  set  up  (direct  right  of  action, 
claims  representative,  compensation  body)  cannot  operate.  The  objective  of  this 
Article  is  therefore  to  ensure  that,  although  one  of  the  conditions  for  the  operation  of 
the  arrangements  established  by  the  Directive  is  not  fulfilled,  the  victim  will  in  any 
event  be  compensated.  In  this  case  the  guarantee  fund  in  the  Member  State  where  the 
victim  resides  will  be  responsible  for  compensating  the  victim.  Subsequently,  when 
that  guarantee  fund  applies,  the  guarantee  fund  in the  Member  State  where  the  vehicle 
is  normally  based  will  have  ultimate  liability  for  the  compensation  paid  to  the  victim. 
Under  Article  1(4)  of  Directive  84/5/EEC,  read  in  conjunction  with  Article  3(1)  of 
Directive  72/166/EEC,  it  is the  Member  State  where  the  vehicle  is  normally  based  that 
is responsible  for  ensuring  that  each  vehicle  is required  to  have  civil  liability  insurance 
in  accordance  with  the  latter  Directive.  It  follows  that  if  a  vehicle  not  fulfilling  that 
condition  causes  an  accident  it  is  the  guarantee  fund  of  the  Member  State  where  that 
vehicle  is normally  based  that  is  liable for  the costs of compensating  the  victim. 

The  reasoning  behind  this  Article  is  in  line  with  that  of  Article  5  of  the  proposed 
Directive.  A  victim  of  an  accident  occurring  outside  his  State  of  residence  has  an 
interest  in  securing  compensation  on  the  same  conditions  as  those  applicable  to  the 
functioning  of  the  compensation  body  provided  for  in  Article  5  in  his  State  of 
residence.  Thereafter,  the  guarantee  fund  of the  victim's  State  of residence  has  a  claim 
against  the  guarantee  fund  of  the  State  where  the  vehicle  causing  the  accident  is 
normally  based  on the  same  conditions  as those  laid  down  in Article  5 (2)  (subrogation 
to  the  victim's  rights,  time-limit  of  two  months  for  reimbursement  by  the  guarantee 
fund  of  the  Member  State  where  the  vehicle  is  normally  based,  etc.)  and  by  reference 
to that  Article. 

insurer, 

in  certain  cases 

the  party  ultimately 

Failing  an 
the 
compensation  paid  by  the  guarantee  fund  of  the  State  of  residence  of  the  victim 
claiming  damages  will  be  the  guarantee  fund  of  the  State  where  the  accident  occurred 
if  the  other  party's  vehicle  is  registered  there,  or  the  green-card  bureau  of  the  State 
where  the  accident  occurred  if  the  other  party's  vehicle  is  registered  (i.e.  is  normally 
based)  in a third  country,  with  a right  of recourse  for  the  bureau  against  its  counterpart 
in the  State where the vehicle  is normally  based. 

responsible 

for 

Nevertheless,  it is important  to distinguish  between  the  case  in view  in this  Article  (the 
vehicle  is  identified  but  the  insurer  is  unidentified)  and  the  case  where  the  vehicle  is 
unidentified.  The  latter  cases  are  specifically  dealt  with  by  the  existing  green-card 
arrangements  and  it  is  logical  that,  under  Article  1(4)  of  Directive  84/5/EEC,  ultimate 

12 

liability  for  payment  should  rest  with  the  guarantee  fund  of  the  State  where  the 
accident occurred. 

Articles 7 and 8 (Implementation  and Entry  into force) 

These  Articles  contain  the  standard  provisions  on  the  time  for  implementation  and 
determining the addressees of the proposed Directive. 

Article 9 (Penalties) 

For some time now this clause has been introduced  into all of the Commission's  draft 
proposals  and  reflects  its  policy,  as  guardian  of  the  Treaties,  of  seeing  to  it  that  the 
legislative measures it puts forward are properly transposed and applied.7 

See COM(95)  162 final, 3.5.1995. 

13 

Proposal 
for 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 92/49/EEC 

(Fourth Motor Insurance Directive) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN 
UNION, 

Having  regard  to the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles 57(2) and  100a thereof, 

Having regard to the proposal from  the Commission,1 

Having regard to the opinion of the Economic and Social Committee,2 

Acting in accordance with the procedure referred to in Article  189b of the Treaty, 

Whereas, differences  currently  exist  between  provisions  laid  down  by  law,  regulation 
or  administrative  action  in  the  Member States  relating  to  insurance  against  civil 
liability  in respect of the use of motor vehicles and these differences  form  an obstacle 
to the free  movement of persons and of insurance services, 

Whereas, it is therefore  necessary to approximate those provisions  in order to promote 
the functioning  of the single market, 

Whereas,  by  Directive 72/166/EEC,3  as  last  amended  by  Directive 90/232/EEC,4  the 
Council  adopted  provisions  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; 

Whereas,  by  Directive 88/357/EEC,5  as  last  amended  by  Directive 92/49/EEC,6  the 
Council adopted provisions 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; 

1  OJNoC... 
2  OJNoC... 
3  OJ No L 103,2.5.1972, p. 1. 
4  OJ No L 129, 19.5.1990, p. 33. 
5  OJ No L 172,4.7.1988, p. 1. 
6  OJ No L 228, 11.8.1992, p. 1. 

14 

Whereas,  the  European  Parliament,  by  its  Resolution  of  26 October  1995  on  the 
settlement  of  claims  arising  from  traffic  accidents  occurring  outside  the  claimant's 
country of origin,7 took an initiative under the second paragraph of Article  138b of the 
EC Treaty  calling on the Commission to submit a proposal for  a European  Parliament 
and Council Directive on this matter, 

Whereas,  it  is  in  fact  appropriate  to  supplement  the  arrangements  established  by 
Directives 72/166/EEC,  84/5/EEC8  and  90/232/EEC  in  order  to  guarantee  motor 
vehicle accident victims comparable treatment irrespective of where in the Community 
accidents occur; whereas, for accidents occurring in a Member State other than that of 
the victim's residence, there are gaps with regard to the settlement of victims' claims; 

Whereas  in  order  to  fill  such  gaps  at  least  in  part,  it  should  be  provided  that  the 
Member State where  the  insurance  undertaking  is established  require  the  undertaking 
to appoint representatives resident or established  in the other Member States to collect 
all  necessary  information  in  relation  to  claims  resulting  from  such  accidents  with 
sufficient  powers to represent the undertaking  in relation to persons suffering  damage 
from  such accidents, including the payment of compensation therefor,  and to represent 
it or, where necessary, have it represented in relation to such claims before  the courts, 
in  so  far  as  this  is  compatible  with  the  rules  of  private  international  law  on  the 
determination of jurisdiction, and before the authorities of the other Member States; 

Whereas the appointment of representatives responsible for settling claims is one of the 
conditions  for  access to and carrying on the activity  of insurance listed  in class 10 of 
title A of the Annex to Directive 73/239/EEC; whereas that condition is covered by the 
single  official  authorisation  issued  by  the  authorities  of  the  Member State  where  the 
insurance  undertaking  establishes  its  head  office,  as  specified 
in  Title II  of 
Directive 92/49/EEC; whereas this condition  also applies to undertakings  having their 
head office  outside the Community which have secured an authorisation granting them 
access  to  a  Member State  of  the  Community;  whereas  Directives  73/239/EEC 
and 92/49/EEC should be amended and supplemented  accordingly; 

Whereas the existence of a direct right of action against the insurer  for the party  who 
has  suffered  loss  or  injury  is  a  logical  precondition  for  the  institution  of  such 
representatives  and moreover  improves the legal position of victims of road  accidents 
occurring outside that party's Member State of residence; 

Whereas,  in  addition  to  ensuring  that  there  is  an  intermediary  representing  the 
insurance  undertaking  in  the  State  where  the  victim  resides,  it  is  appropriate  to 
guarantee the specific right of the victim to have the claim settled promptly; whereas it 
is therefore necessary to include in national law appropriate penalties to be imposed on 
the  insurer  if  his  representative  fails  to  fulfil  his  obligation  of  making  an  offer  of 
compensation  within  a reasonable  time-limit;  however,  it  is  a condition  that  liability 

7  OJ No C 308, 20.11.1995, p. 108. 
8  OJ No L 8,  11.1.1984, p. 17. 

15 

and the damage and injury  sustained should not be in dispute, so that the insurer is able 
to make an appropriate offer  within the prescribed time-limit; 

involved 

in  an  accident;  whereas 

Whereas  victims  of  traffic  accidents  sometimes  have  difficulty  in  establishing  the 
name of the undertaking  providing  insurance against civil  liability  in respect  of motor 
vehicles 
interest  of  such  victims, 
Member States  should  set  up  information  centres  to  ensure  that  such  information  is 
made  available  promptly;  whereas  those  information  centres  should  also  make 
available to victims information  concerning claims representatives; it is necessary  that 
such  centres  should  cooperate  with  each  other  and  respond  rapidly  to  requests  for 
information  on claims representatives made by centres in other Member States; 

in  the 

Whereas it is necessary  to make provision for a body to guarantee that the victim  will 
not  remain  without  compensation  where  the  insurer  has  failed 
to  appoint  a 
representative  or is manifestly  dilatory  in settling a claim and to provide  that,  in  such 
cases, the victim should be able to apply directly to that body; whereas it is justified  to 
confer  on that  body a right  of subrogation  in so far  as it has compensated  the  victim; 
whereas,  in  order  to  facilitate  enforcing  that  claim  against  the  insurer,  the  body 
providing  compensation  in  the  victim's  State  should  enjoy  an  automatic  right  of 
reimbursement  with subrogation to the rights of the victim by the corresponding  body 
in the State where the insurer is established; whereas the latter body is the best placed 
to institute proceedings for redress against the insurer; 

Whereas  it  is  necessary  to  have  a  body  to  ensure  that  the  victim  will  not  remain 
without compensation if it is impossible to identify  the insurer of the vehicle; whereas 
provision  must be made  so that the ultimate  debtor  in respect of  the damages  paid  to 
the victim is a body situated in the Member State where the non-insured vehicle which 
has caused the accident is normally based, 

HAVE ADOPTED THIS DIRECTIVE: 

16 

Article 1 

Scope 

The objective of this Directive is to lay down special provisions applicable to victims 
of accidents 

occurring in a Member State other than the State of residence of the 

(a) 
victim, and 

(b) 

caused by a vehicle 

than 

insured by an undertaking established in a Member State other 
the State of residence of the victim, and 

registered in a Member State other than the State of residence 
of the victim. 

Article 2 

Direct right of action 

Each  Member State  shall  ensure  that  victims  of  accidents  as  defined  in  Article  1 of 
this  Directive 
enjoy  a direct right of action against the insurer  covering  other the 
party against civil liability. 

Article 3 

Claims representatives 

Each  Member State  shall  take  all  measures  necessary  to  ensure  that  all 

1. 
insurance undertakings authorised in accordance with 

Article 6  of  Directive 73/239/EEC, 

amended  by  Article 4  of 
Directive 92/49/EEC, to cover the risks classified  in class  10 of point A of the  Annex 
to Directive 73/239/EEC, other than carrier's liability, or 

as 

Article 23(2) of Directive 73/239/EEC, 

freely appoint  in  each  Member State  other  than  that  in  which  they  are  established  a 
body (hereinafter  referred to as "the claims representative").  The claims representative 
shall be responsible  for  handling  and  settling  claims arising from accidents  occurring 
in  a  Member State  other  than  the  State  where  the  victim  resides  and  caused  by  a 
vehicle  insured by  such undertakings  and registered  in a Member State other than the 

17 

State  where  the  victim  resides.  The  claims  representative  shall  be  resident  or 
established  in the Member State where the victim resides. 

2. 

Directive 73/239/EEC shall be amended as follows: 

(a)  The following  subparagraph  shall be added to Article 8(1): 

"(0 
communicate the name and address of the claims representative they appoint in 
each of the Member States if the risks to be covered  are classified  in class  10 of title A 
of the Annex." 

(b)  The following  subparagraph shall be added to Article 23(2): 

communicate the name and address of the claims representative they appoint in 
"(h) 
each of the Member States if the risks to be covered are classified  in class  10 of title A 
of the Annex.". 

The  claims  representative  shall,  in  relation  to  such  claims,  collect  all 
3. 
information  necessary  in  connection  with  compensation  and  shall  take  the  measures 
necessary  to negotiate a settlement of claims in accordance  with the instructions  of the 
insurer,  the  rules  on  compulsory  insurance  against  civil  liability  as  these  rules  are 
defined  in  the  last  indent  of  Article 2 of  Directive 90/232/EEC  and  the  rules  on  civil 
liability  applicable  to  the  accident.  The  requirement  of  appointing  a  claims 
representative  shall  not  preclude  the  right  of  the  victim  or  his  insurer  to  institute 
proceedings directly against the person responsible for the accident or his insurer. 

The  claims  representative  shall  be  appropriately  qualified.  His  facilities  shall 

4. 
be such as to enable him to discharge the duties provided for in this Article. 

5. 
The  claims  representative  shall  possess  sufficient  powers  to  represent  the 
undertaking  in relation  to persons  suffering  damage  who pursue  claims,  including  the 
payment  in  full  of  such  claims,  and  to  represent  it  or,  where  necessary,  to  have  it 
represented, before  the courts concerning  such claims  in so far  as compatible  with the 
Brussels  Convention  of  27 September  1968  on  jurisdiction  and  the  enforcement  of 
judgments  in  civil  and  commercial  matters9  and  with  the  other  rules  of  private 
international  law on the determination  of jurisdiction,  and before  the authorities of the 
Member State where he represents the insurer. 

OJ No L 299, 31.12.1972. 

18 

6. 
The Member States  shall  create a duty, backed by penalties, to  the effect  that, 
within a time-limit of three months from the date when the victim presented his claim 
for compensation either directly to the insurer or to the claims representative, 

- 

- 

the insurer of the person causing the accident or his claims representative is required 
to make an offer  of compensation,  in cases where  liability  is not contested  and the 
damages have been quantified, and 

the  insurer  to  whom the claim  for  compensation  has been  addressed  or his  claims 
representative  is required to provide an appropriate  reply to the points  made in the 
claim,  in  cases  where  liability  has  not  been  clearly  determined  and  the  damages 
have not been fully  quantified. 

7. 

The last subparagraph of Article  12a(4) of Directive 88/357/EEC shall apply. 

Article 4 

Information centres 

1. 
Each Member State shall establish or approve a body (hereinafter  referred  to as 
"the  information  centre")  responsible  for  keeping  a  register  of  motor  vehicles 
registered  in the territory of that  State, insurance undertakings providing  civil  liability 
cover for  such vehicles and the claims representatives  appointed  by such  undertakings 
in accordance with Article 3 whose name shall be notified  to the information  centre in 
accordance  with  paragraph 2  below,  or  for  coordinating  the  compilation  and 
dissemination of that information;  the information  centre shall also be responsible  for 
assisting  victims  in  identifying  the  name  of  motor  insurance  undertakings  providing 
cover  for  vehicles  registered  in  that  Member State  and  of  the  claims  representatives 
notified  to it. 

2. 
Insurance  undertakings  providing  cover against  civil  liability  in respect  of the 
use  of  motor  vehicles  shall  notify  to  the  information  centre  in  the  Member State  in 
whose territory they are established the registration numbers of the vehicles they insure 
which are registered in that State, the number of the insurance policy and the name and 
address  of  the  insured. 
It  shall  notify  to  the  information  centres  of  the  other 
Member States  the  name  and  address  of  the  claims  representative  which  they  have 
appointed  in  accordance  with  Article 3  in  each  of  the  Member States  and  the 
corresponding  information  concerning  vehicles  registered  in  those  countries  which 
they insure by way of provision of services. 

The  Member States  shall  ensure  that  the  victim  of  an  accident  occurring  in  a 
3. 
Member State other than the State where he resides shall be entitled to obtain from the 
information  centre  of the  State  where  he  resides  or  of  the  State  where  the  vehicle  is 
registered the name and address of the insurer, the number of the insurance policy and 
the name of the insurer's claims representative  in the State of residence  of the victim. 

19 

If the vehicle is not duly insured, the information  centre shall provide the victim with 
the name and address of the owner or usual driver of the vehicle. 

Articles 

Compensation bodies 

Each Member State shall establish or approve a body (hereinafter  referred  to as 
1. 
"the  compensation  body")  responsible  for providing  compensation  where  damage  to 
property  or  personal  injury  is  caused  to  a  victim  resident  in  a  Member State  by  a 
vehicle  registered  and  insured  in  a Member State other  than  the  State  of residence  of 
the  victim  and  the  accident  giving  rise  to  such  damage  or  injury  occurs  in  a 
Member State other than the State of residence of the victim. 

The  compensation  body  in  the  State  of  residence  of  the  victim  shall  take  action  if, 
within a period of 2 months from the date when the victim presents to the body a claim 
for compensation, 

- 

- 

the  insurer  of  the  vehicle  causing  the  accident  has  failed  to  appoint  a  claims 
representative in accordance with Article 2, or 

the insurer or the claims representative has failed to make an offer  of compensation, 
or has not provided a reply answering, with reasons, the points raised by the victim 
in  his  claim  for  compensation  or  has  refused  the  claim  for  compensation  without 
specifying  the  reasons  on  which  the  refusal  is  based  within  a  time-limit  of  three 
months from  the date when the victim presented his claim for  compensation,  either 
directly to that insurer or to the claims representative, within the limits imposed by 
insurance  obligations,  as  specified 
indent  of  Article 2  of 
in 
Directive 90/232/EEC,  and  in  accordance  with  the  national  rules  on  civil  liability 
applicable to the accident. 

last 

the 

The compensation body in the State of residence of the victim shall inform the insurer 
of the person responsible for the accident or the claims representative that it has 
received a claim from the victim and that it will respond to that claim within a period 
of two months from the presentation of that claim. 

The compensation body which has compensated the victim in his Member State 
2. 
of residence shall be entitled to claim the reimbursement from the compensation  body 
in the State where the insurer is established  of the sum paid as compensation  within a 
period of two months of the date when the former  body  applied to the latter body  for 
reimbursement. 

Consequently,  the  compensation  body  in  the  Member State  where  the  insurer  is 
established shall be subrogated to the victim in his rights against the person responsible 
for the accident or his insurer  in so far  as the compensation body  in the Member State 
of residence of the victim has provided compensation for the loss or injury  suffered.  If 

20 

the  insurer's  compensation  for  the  victim  is  fixed  by  a  court ruling,  acknowledgement 
of  the  debt  or  mutual  agreement,  the  insurer  may  only  challenge  the  reimbursement  if 
he  adduces  evidence  that  the  body  has  failed  to  inform  him  of  the  complaint  in 
accordance  with  paragraph  1  hereof  or  that  it  has  mistakenly  accepted  unfounded 
claims  for  compensation  or  has  overvalued  the  loss  or  injury.  The  compensation  body 
in  the  State  of  residence  of  the  victim  and  the  compensation  body  in  the  State  where 
the  insurer  is  established  may  also  claim  reimbursement  of  expenses  reasonably 
incurred. 

Each  Member  State  shall  take  the  measures  necessary  to  ensure  that  the 
3. 
compensation  body  in  its  territory  provides  reimbursement  within  the  time-limit 
specified 
in  another 
Member  State  which  has  reimbursed  the  victim  of  an  accident  caused  by  a  vehicle 
covered  by  an  insurance  undertaking  established  in the  first  Member  State  in  the  cases 
provided  for  in the second  subparagraph  of paragraph  1 of this Article. 

to  a  compensation  body 

in  paragraph  2  of 

this  Article 

Article  6 

Cases  where  the  insurer  cannot  be  identified 

the  body  within 

If  it  is  impossible  to  identify  the  insurer,  the  vehicle  shall  be  treated  as  uninsured. 
Compensation  for  damage  to  property  or  personal  injury  caused  to  the  victim  shall  be 
in  Article  1(4)  of 
provided  by 
Directive  84/5/EEC. 
the 
Member  State  where  he  resides.  The  body  shall  then  have  a  claim,  on  the  conditions 
laid  down  in Article  5(2) of this  Directive, against the body  in the Member  State  where 
the  vehicle  in  question  is  normally  based  or,  depending  on  the  circumstances,  against 
the green-card  bureau  in that  Member  State. 

The  victim  shall  be  compensated  by 

laid  down 

that  body 

limits 

the 

in 

Article  7 

Implementation 

1. 
The  Member  States  shall  adopt  and  promulgate  the  provisions  necessary  to 
comply  with  this  Directive  within  18  months  of  its  notification  and  shall  forthwith 
inform  the  Commission  thereof.  They  shall  apply  these  provisions  within  24  months 
of the  date  of the notification  of this  Directive. 

2. 
The  Member  States  shall  communicate  to  the  Commission  the  texts  of  the 
necessary  provisions  of  national  law  which  they  adopt  in  the  fields  covered  by  this 
Directive. 

21 

Article 8 

Entry into force 

This Directive  shall enter into force on the ... day following  that of its publication in 
the Official Journal of the European Communities. 

Article 9 

Penalties 

The  Member States  shall  fix  penalties  for  breaches  of  the  national  provisions  they 
adopt in implementation of this Directive and take the steps necessary to secure their 
application.  The  penalties  shall  be  effective,  proportional  and  dissuasive.  The 
Member States shall notify these provisions, together with any amendments thereof, to 
the Commission not later than the date mentioned in Article 7. 

Article 10 

Addressees 

This Directive is addressed to the Member States. 

Done at Brussels, 

For the European Parliament 

The President 

For the Council 

The President 

22 

ISSN 0254-1475 

COM(97) 510 final 

DOCUMENTS 

EN 

10  07  05  06 

Catalogue  number  :  CB-CO-97-520-EN-C 

ISBN  92-78-25706-0 

Office  for Official  Publications of the European Communities 

L-2985  Luxembourg 

£2