CELEX: 51982PC0043
Language: en
Date: 1982-02-08
Title: AMENDED PROPOSAL FOR A COUNCIL DIRECTIVE ON THE COORDINATION OF LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS RELATING TO LEGAL EXPENSES INSURANCE

30. 3. 82                            Official Journal of the European Communities                                 No C 78/9
freedom rights for a route between Member States to                 administrative     provisions    to   comply  with   this
an air carrier of a third country and in this respect               Directive.
contains provisions incompatible with this Directive,
the Member State shall take at the first opportunity                2.     Such measures shall cover, inter alia, the organ-
all     appropriate      steps      to    eliminate    such         ization of, procedures for and means of control, and
incompatibilities.      Until     such     time    as    the        the penalties for any breach.
incompatibilities have been eliminated this Directive
shall not affect the rights and obligations vis-d-vis
                                                                    3.     The Member States shall communicate to the
third countries arising from such an agreement.
                                                                    Commission all laws and administrative provisions
                                                                    made in furtherance of this Directive.
                          Article 11
1.     The Member State shall, before 1 January 1983,                                        Article 12
and after consultation with the Commission, take the
necessary steps to            amend     their laws      and         This Directive is addressed to the Member States.
                Amended proposal for a Council Directive on the coordination of laws, regulations and
                              administrative provisions relating to legal expenses insurance (')
                (Submitted by the Commission to the Council pursuant to the second paragraph of Article
                                         149 of the EEC Treaty on 22 February 1982)
                     ORIGINAL PROPOSAL                                                     NEW PROPOSAL
THE COUNCIL OF THE EUROPEAN                                         THE COUNCIL OF THE EUROPEAN
 COMMUNITIES                                                        COMMUNITIES
                                                            Citations
 First citation                                                     First, second, third and fourth citations
Having regard to the Treaty establishing the                        (unchanged)
European Economic Community, and in particular
Article 57 (2) thereof,
 Second citation
Having regard to the proposal from the Commission,
 Third citation
Having regard to the opinion of the European Par-
liament,
 Fourth citation
Having regard to the opinion of the Economic and
Social Committee,
(') O J N o C 198,7. 8. 1979, p. 2.
 ---pagebreak---  No C 78/10                          Official Journal of the European Communities                                 30. 3. 82
                    ORIGINAL PROPOSAL                                                   NEW PROPOSAL
                                                          Recitals
                                                        First recital
Whereas Council Directive 73/239/EEC of 24 July                   (unchanged)
 1973 on the coordination of laws, regulations and
administrative provisions relating to the taking up and
pursuit of the business of direct insurance other than
life assurance ('), eliminated, in order to facilitate the
taking-up and pursuit of such activities, certain
differences existing between national laws;
                                                       Second recital
Whereas, however, Article 7 (2) (c) of the said                   (unchanged)
Directive 73/239/EEC provides that
    'Pending further coordination, which must be
    implemented within four years of notification of
    this Directive, the Federal Republic of Germany
    may maintain the provision prohibiting the simul-
    taneous undertaking in its territory of health
    insurance, credit and suretyship insurance or
    insurance in respect of recourse against third
    parties and legal defence, either with one another
    or with other classes';
Whereas there exist therefore at present barriers to
the establishment under effective conditions of
competition of agencies and branches transacting
legal expenses insurance; whereas it is essential to
remedy this situation;
                                                        Third recital
Whereas, in order to protect insured persons, steps               Whereas, in order to protect insured persons, steps
should be taken to prevent any conflict of interests              should be taken to preclude, as far as possible, any
between a person with legal expenses cover and his                conflict of interests between a person with legal
insurer arising out of the fact that the latter is                expenses cover and his insurer arising out of the fact
covering him in respect of any other class of                     that the latter is covering him in respect of any other
insurance referred to in the Annex to the                         class of insurance referred to in the Annex to the
abovementioned Directive or is covering another                   abovementioned Directive or is covering another
person;                                                           person and, should such a conflict arise, to enable it to
                                                                  be resolved;
                                                                  Fourth recital (new)
                                                                  Whereas contracts under which the insurer provides
                                                                  services or bears the cost of defending the insured
                                                                  peson in connection with civil liability actions should,
                                                                  however, be excluded from the scope of the Directive;
O OJ No L 228, 16. 8. 1973, p. 3.
 ---pagebreak---  30. 3. 82                        Official Journal of the :>pean Communities                       N o C 78/11
                    ORIGINAL PROPOSAL                                           NEW PROPOSAL
Fourth recital                                             Fifth recital
Whereas the system of compulsory specialization at         (former fourth recital unchanged)
present applied by one Member State, the Federal
Republic of Germany, precludes the majority of such
conflicts; whereas, however it does not appear
necessary, in order to obtain this result, to extend
that system to the entire Community, which would
require the splitting up of composite undertakings;
Fifth recital                                              Sixth recital
Whereas the desired result can equally well be            (former fifth recital unchanged)
achieved by requiring such composite undertakings to
adopt a separate management comprising in particular
separate accounting and a separation of contracts or
of the cover provided under a single contract;
whereas the management of claims in respect of legal
expenses cover by an entity having separate legal
personality is also an appropriate way of precluding
the risk of a conflict of interests;
 Sixth recital                                            Seventh recital
Whereas in order to attain this same objective,           (former sixth recital unchanged)
specialized undertakings must also comply with
certain provisions; whereas members of their staff
who deal with the management of claims ought not
to carry on at the same time a similar activity in an
undertaking transacting another class of insurance;
Seventh recital                                           Eighth recital
Whereas the conflict of interests which may arise         Whereas the conflict of interests which may arise
between an insurer and an insured person implies          between an insurer and an insured person implies that
that the latter must be free to choose his lawyer;        the latter must be free to choose his lawyer and an
                                                          independent expert or second expert;
Eighth recital                                            Ninth recital
Whereas conflicts may nevertheless arise between          (former eighth recital unchanged)
insurer and insured; whereas it is important that they
be settled in the fairest and speediest manner possible;
whereas it is appropriate therefore that provision be
made in legal expenses insurance policies for an arbi-
tration or equivalent procedure;
Ninth recital                                             Tenth recital
Whereas the second paragraph of point C of the            (former ninth recital unchanged)
Annex to the abovementioned Directive 73/239/EEC
 ---pagebreak--- No C 78/12                            Official Journal of the European Communities                              30. 3. 82
                      ORIGINAL PROPOSAL                                              NEW PROPOSAL
provides that the risks included in classes 14 and 15 in
point A may not be regarded as risks ancillary to
other classes; whereas an insurance undertaking
should not be able to cover legal expenses as a risk
ancillary to another risk without having obtained an
authorization in respect of the legal expenses risk;
whereas a reference to class 17 should therefore be
inserted in point C of the said Annex,
HAS ADOPTED THIS DIRECTIVE:                                   HAS ADOPTED THIS DIRECTIVE:
Article 1,firstparagraph                                      Article 1,firstparagraph
The purpose of this Directive is to coordinate the            The purpose of this Directive is to coordinate the
provisions laid down by law, regulation or                    provisions laid down by law, regulation or
administrative action concerning legal expenses               administrative action concerning legal expenses
insurance as referred to in paragraph 17 of point A of        insurance as referred to in paragraph 17 of point A of
the Annex to Council Directive 73/239/EEC, here-              the Annex to Council Directive 73/239/EEC, here-
 inafter called 'first coordination Directive' in order to    inafter called the 'first coordination Directive', in
 eliminate any possible conflicts of interest between a       order to facilitate the effective exercise of freedom of
person with legal expenses cover and his insurer              establishment and preclude as far as possible any
 arising out of the fact that the latter is covering him      conflict of interest between a person with legal
 in respect of any other class of insurance referred to       expenses cover and his insurer arising out of the fact
 in that Annex or is covering another person.                 that the latter is covering another person, and, should
                                                              such a conflict arise, to enable it to be resolved.
Article 1, second paragraph                                    Article 1, second paragraph
This Directive shall not apply to legal expenses               This Directive shall not apply to legal expenses
 insurance where such insurance is linked with that in         insurance where such insurance concerns disputes or
respect of liability arising out of the use of ships,          risks arising out of, or in connection with, the use of
vessels or boats on the sea, as referred to in                 sea-going vessels.
paragraph 12 of point A of the Annex referred to
 above.
                           Article 2                                                    Article 2
This Directive shall apply to those various elements in        This Directive shall apply to those various elements in
 a contract of legal expenses insurance whereby the            a contract of legal expenses insurance whereby the
insurer provides services or bears costs for the               insurer primarily provides services or bears costs (the
purpose, in particular, of:                                    rest unchanged)
 — securing compensation for the loss, damage or
     injury suffered by the insured person, whether by
     settlement out of court or through civil or
     criminal proceedings,
— defending the insured person in civil, criminal,
     administrative or other proceedings or in respect
     of any claim made against him otherwise than
     through such proceedings.
 ---pagebreak---   30. 3. 82                        Official Journal of the European Communities                            No C 78/13
                      ORIGINAL PROPOSAL                                              NEW PROPOSAL
                                                               The Directive shall not, however, apply to cover
                                                               provided by an insurer providing liability cover, within
                                                               the limits of that cover, for the purpose of defending
                                                               the insured person in civil proceedings.
 Article 3 (1)                                                 Article 3 (1)
 All undertakings which transact at the same time legal        (unchanged)
 expenses insurance and insurance in one or more
 other classes set out in the first coordination
 Directive shall manage legal expenses insurance
 separately from the other classes insurance.
Article 3 (2)                                                  Article 3 (2)
The separate management shall be organized in such             (unchanged)
 a way that the simultaneous transaction of legal
expenses insurance and one or more of the other
classes set out in the first coordination Directive shall
not prejudice the interests of the insured person with
regard to the cover of legal expenses.
This shall mean in particular that:
— separate accounts shall be kept in respect of the           — separate accounts shall be kept in respect of legal
     legal expenses business,                                      expenses business,
— legal expenses cover shall be the subject of a              — legal expenses cover shall be the subject of a
     contract separate from that drawn up for the                  contract separate (the rest unchanged)
     other classes of insurance or shall be dealt with in
     a separate section of a single policy in which the
     nature of the legal expenses cover and the amount
     of the relevant premium shall be specified.
Article 3 (3), first subparagraph
 Furthermore, Member States may require under-                (This paragraph, slightly amended, becomes the first
 takings which transact or wish to transact within their      paragraph of Article 4)
 territory at the same time legal expenses insurance
 and insurance in one or more other classes set out in
 the first coordination Directive to entrust the
 management of claims in respect of legal expenses
 insurance to an undertaking having separate legal
personality. That company shall be mentioned in the
 contract or separate section referred to in the second
indent of paragraph 2. Member States which make
use of this option shall so inform the Commission and
the other Member States.
Article 3 (3), second subparagraph
Article 4 of this Directive shall apply by analogy to          (This paragraph, slightly amended,        becomes    the
the relations between the undertaking which transacts         second paragraph of Article 5)
both legal expenses and other insurance and the
company which is entrusted with the management of
claims.
 ---pagebreak--- No C 78/14                           Official Journal of the European Communities                                30.3.82
                    ORIGINAL PROPOSAL                                                 NEW PROPOSAL
Article 3 (4)                                                 Article 3 (3)
Every contract of legal expenses insurance entered            (former Article 3 (4) as amended)
into by an undertaking which transacts such insurance
and one or more other classes of insurance, but does          Every contract of legal expenses insurance entered
not entrust the management of claims in respect of its        into by an undertaking which transacts such insurance
legal expenses business to an entity having separate          and one or more other classes of insurance shall
legal personality, shall provide that where the person        provide that:
enjoying legal expenses cover calls upon the insurer
to meet obligations in respect thereof, the latter shall      — the insurer shall advise the insured person with
advise him of any factor liable to bring about a                   legal expenses cover, on the signing of the
conflict of interests between them and shall at the                contract, of the possibility of a conflict of interests
same time give him the possibility of entrusting the               between them;
defence of his interests to a lawyer of his choice. Any
insurer not fulfilling this obligation shall compensate
                                                              — where the insured person calls upon the insurer to
the insured person for any resultant loss.
                                                                   meet his obligations the latter shall afford him the
                                                                   opportunity of entrusting the defence of his
                                                                   interests to a lawyer of his choice.
                                                               Any insurer not fulfilling this obligation shall
                                                               compensate the insured person for any resultant loss.
                                                              Article 4, first paragraph
                                                               (former Article 3 (3), first subparagraph as amended)
                                                               Member States may require undertakings which
                                                               transact or wish to transact within their territory at
                                                               the same time legal expenses insurance and insurance
                                                               in one or more other classes set out in the first
                                                               coordination Directive to entrust the management of
                                                               claims in respect of legal expenses insurance to an
                                                               undertaking having separate legal personality. That
                                                               undertaking shall be mentioned in the separate
                                                               contract or separate section referred to in the second
                                                               indent of Article 3 (2).
                                                               Member States which make use of this option shall so
                                                               inform the Commission and the other Member States.
                                                               Article 4, second paragraph
                                                                Article 3 (3) shall not apply to undertakings which
                                                                entrust such management to an undertaking having
                                                                separate legal personality.
                         Article 4                              Article 5, first paragraph
 Where an undertaking transacting only legal expenses          (former Article 4 unchanged)
 insurance has financial, commercial or administrative
 links with an undertaking which transacts one or
 more of the other classes of insurance set out in the
 first coordination Directive, no member of the
 ---pagebreak---  30.3.82                            Official Journal of the European Communities                            N o C 78/15
                      ORIGINAL PROPOSAL                                                 NEW PROPOSAL
 management of the indoor or outdoor staff of either
 company who is concerned with the management of
 claims or with legal adivce in respect thereof may at
 the same time carry on a similar acitvity in the other
 company.
                           Article 5                            Article 5, second paragraph, (new)
                                                                This provision shall apply by analogy to the
                                                                relationships referred to in the first paragraph of
                                                                Article 4, between an undertaking which transacts at
                                                                the same time legal expenses insurance and insurance
                                                                in one or more other classes and an undertaking
                                                                having separate legal personality to which it entrusts
                                                                the management of claims in respect of legal expenses
                                                                insurance.
                                                                Article 6, first paragraph
On each occasion when it is necessary to instruct a             Every time that occasion arises to instruct a lawyer
lawyer to represent or defend the interests of a person         either to represent or to defend the interests of a
with legal expenses cover, the latter must be free to           person with legal expenses cover, or both, the latter
choose his lawyer. The insured person shall not have            must be free to choose his lawyer. The insured person
the capacity to surrender this right by contract.               shall not have the capacity to surrender this right by
                                                                contract.
                                                                Article 6, second paragraph, (new)
                                                                Lawyer means any person entitled to pursue his pro-
                                                                fessional activities under one of the denominations laid
                                                                down in Directive 77/249/EEC intended to facilitate
                                                                the effective exercise by lawyers of freedom to provide
                                                                services (').
                                                                Article 6, third paragraph, (new)
                                                                Furthermore, where recourse is had to an expert, the
                                                                insured person shall be free to choose the expert or a
                                                                second expert.
Article 6, first paragraph                                      Article 7, first paragraph
Member States shall adopt all appropriate measures               (former Article 6, first paragraph)
to ensure that legal expenses insurance policies
provide for an arbitration or equivalent procedure
whereby, where there is a difference of opinion
between a legal expenses insurer and his client as to
what action should be taken, the dispute shall be
resolved by one or more persons who shall be lawyers
or arbitrators.                                                O OJ No L 78, 16. 3. 1977, p. 17.
 ---pagebreak--- No C 78/16                             Official Journal of the European Communities                             30. 3. 82
                      ORIGINAL PROPOSAL                                              NEW PROPOSAL
Article 6, second paragraph                                    Article 7, second paragraph, (new)
The insured person shall not be required to bear more          (former Article 6, second paragraph, as amended)
than one half of the costs resulting from such
procedure.
                                                               The costs resulting from such procedure shall be feed
                                                               by those persons, lawyers or arbitrators, and the
                                                               insured person shall not be required to bear more than
                                                               one half of such costs.
                                                               Article 8, (new)
                                                               The Member States shall be responsible for the
                                                               establishment or adaptation and the effective
                                                               operation of a supervisory body on which insurers and
                                                               insured persons are represented. That body shall
                                                               supervise compliance with the provisions contained in
                                                               this Directive. It shall grant authorizations, impose
                                                               fines on insurance undertakings, where necessary, and
                                                               receive complaints from insured persons, without
                                                               prejudice to the authority of national judicial bodies.
                           Article 7                                                   Article 9
Member States shall abolish all provisions which               (former Article 7 unchanged)
prohibit an insurer from carrying on within their
territory legal expenses insurance and other classes of
insurance at the same time.
                           Article 8                                                   Article 10
The second paragraph of point C of the Annex to the            (former Article 8 unchanged)
first coordination Directive shall be replaced by the
following text:
     'However, the risks included in classes 14, 15 and
     17 in point A of this Annex may not be regarded
     as risks ancillary to other classes'.
                          Article 9                                                    Article 11
Member States shall amend their national provisions             Member States shall amend their national provisions
so as to comply with this Directive within 12 months            so as to comply with this Directive before 1 July 1984
of its notification and shall forthwith inform the              and shall forthwith inform the Commission thereof.
Commission thereof.                                            The provisions thus amended shall be applied before
                                                                1 January 1985.
The provisions thus amended shall be applied within
18 months of the date of notification.
                          Article 10                                                   Article 12
Following notification of this Directive, Member               (former Article 10 unchanged)
States shall communicate to the Commission the texts
 ---pagebreak---  30. 3. 82                        Official Journal of the European Communities                                    No C 78/17
                     ORIGINAL PROPOSAL                                                      NEW PROPOSAL
 of the main provisions of the laws, regulations or
 administrative provisions adopted by them in the field
 covered by this Directive.
                         Article 11                                                          Article 13
This Directive is addressed to the Member States.                     (former Article 11 unchanged)
               Amendment of the proposal for a second Council Directive on the approximation of the
               laws of the Member States relating to insurance against civil liability in respect of the use
                                                   of motor vehicles (')
               (Submitted   by the Commission to the Council pursuant to the second paragraph of
                                    Article 149 of the EEC Treaty on 3 March 1982)
                    ORIGINAL PROPOSAL                                                       NEW PROPOSAL
THE COUNCIL OF THE EUROPEAN                                           THE COUNCIL OF THE EUROPEAN
COMMUNITIES                                                            COMMUNITIES
                                                citations unchanged
                                           first five r e c i t a l s u n c h a n g e d
                                                       sixth recital
Whereas it is necessary to make provision for a body                 Whereas it is necessary to make provision for a body
to bear secondary liability for the payment of                       to bear secondary liability for the payment of
compensation in cases where the vehicle responsible is               compensation in cases where the vehicle responsible is
unidentified or uninsured, or where the insurer is                   uninsured or unidentified; whereas in the latter case,
entitled to disclaim liability; whereas this latter case             however, it is permissible that compensation should
must be treated in the same way as a case of non-                    not be paid in respect of damage to property, or
insurance;                                                           should be paid only within certain limits, for example
                                                                     by applying an excess;
                                                        new recital
                                                                     Whereas it is in the interest of victims that the effects
                                                                     of exclusion clauses be limited to the relationship
                                                                     between the insurer and the insured person responsible
                                                                     for the accident; whereas it is necessary to provide
                                                                     that all other instances in which the insurer is entitled
                                                                     to disclaim liability must be treated as instances of
                                                                     non-insurance;
                                                      seventh recital
Whereas the members of the family of the insured                      Whereas the members of the family of the insured
person, driver or person liable are deserving of                      person, driver or person liable are deserving of
consideration as potential injured parties and should                 consideration as potential injured parties and should
be afforded protection comparable to that of other                    be afforded protection comparable to that of other
third parties;                                                        third parties, in any event in respect of their personal
                                                                     injuries;
O OJ No C 214, 23. 8. 1980, p. 9.