CELEX: 62008CC0199
Language: en
Date: 2009-05-14
Title: Opinion of Advocate General Trstenjak delivered on 14 May 2009. # Erhard Eschig v UNIQA Sachversicherung AG. # Reference for a preliminary ruling: Oberster Gerichtshof - Austria. # Legal expenses insurance - Directive 87/344/EEC - Article 4(1) - Right of insured persons to choose their own lawyer - Contractual limitation - Multiple insured persons suffering loss as a result of the same event - Selection of the legal representative by the insurer. # Case C-199/08.

OPINION OF ADVOCATE GENERAL
      TRSTENJAK
      14 May 2009 (1)
      
      Case C‑199/08
      Dr Erhard Eschig
      v
      UNIQA Sachversicherung AG
      (Reference for a preliminary ruling from the Oberster Gerichtshof (Austria))
      (Directive 87/344/EEC – Coordination of laws, regulations and administrative provisions relating to legal expenses insurance – Right to choose legal representative in court and administrative proceedings – Permissibility of a mass torts clause)I –  Introduction
      1.        The subject matter of this reference for a preliminary ruling is a question submitted by the Austrian Oberster Gerichtshof
         (Supreme Court) (‘the referring court’) on the interpretation of Council Directive 87/344/EEC of 22 June 1987 on the coordination
         of laws, regulations and administrative provisions relating to legal expenses insurance. (2) The question submitted relates to Article 4(1)(a) of Directive 87/344. Under that provision, where recourse is had to a lawyer
         or other person appropriately qualified according to national law (the generic term of ‘legal representative’ will be used
         hereinafter for both the lawyer and the person otherwise qualified under national law) in order to defend, represent or serve
         the interests of the insured person in any inquiry or proceedings, a person with legal expenses insurance may freely choose
         his legal representative.
      
      2.        The main proceedings originated in the refusal by the defendant in the main proceedings to reimburse to the claimant in those
         proceedings the legal expenses of the lawyer instructed by him in connection with the insolvency of two investment services
         undertakings. It substantiated its refusal on the ground that the general insurance conditions on which the contract was based
         entitled the defendant itself to select a legal representative, because several persons insured with it had suffered losses
         as a result of the insolvency and it was therefore a mass torts case.
      
      3.        The referring court would like to know whether Article 4(1)(a) of Directive 87/344 is to be interpreted as precluding a national
         provision from being interpreted so as to allow a legal expenses insurer to include a clause in the legal expenses insurance
         policy that entitles the insurer to select the legal representative in insurance cases in which a large number of insured
         persons have suffered losses as a result of the same event, thus restricting the right of the individual insured person to
         select a legal representative of his choice (‘mass torts clause’).
      
      II –  Legislation
      A –    Community law
      4.        According to the German language version (3) of the 11th recital of the preamble to Directive 87/344, the interest of persons with legal expenses insurance requires such
         persons to be able themselves to choose a lawyer or other person who has the qualifications recognised according to individual
         Member States’ rules in any inquiry or proceedings, that is to say, whenever a conflict of interests arises.
      
      5.        According to the 12th recital of the preamble to Directive 87/344, Member States should be given the option of exempting undertakings
         from the obligation to give the insured person that free choice of lawyer if the legal expenses insurance is limited to cases
         arising from the use of road vehicles on their territory and if other restrictive conditions are met.
      
      6.        Article 3 of Directive 87/344 provides as follows:
      
      ‘(1)      Legal expenses cover shall be the subject of a contract separate from that drawn up for the other classes of insurance or
         shall be dealt with in a separate section of a single policy in which the nature of the legal expenses cover and, should the
         Member State so request, the amount of the relevant premium are specified.
      
      (2)      Each Member State shall take the necessary measures to ensure that the undertakings established within its territory adopt,
         in accordance with the option imposed by the Member State, or at their own choice, if the Member State so agrees, at least
         one of the following solutions, which are alternatives: 
      
      (a)      the undertaking shall ensure that no member of the staff who is concerned with the management of legal expenses claims or
         with legal advice in respect thereof carries on at the same time a similar activity
      
      –      if the undertaking is a composite one, for another class transacted by it,
      –      irrespective of whether the undertaking is a composite or a specialised one, in another having financial, commercial or administrative
         links with the first undertaking and carrying on one or more of the other classes of insurance set out in Directive 73/239/EEC;
      
      (b)      the undertaking shall 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 paragraph
         1. If the undertaking having separate legal personality has links with an undertaking which carries on one or more of the
         other classes of insurance referred to in point A of the Annex to Directive 73/239/EEC, members of the staff of the undertaking
         who are concerned with the processing of claims or with legal advice connected with such processing may not pursue the same
         or a similar activity in the other undertaking at the same time. In addition, Member States may impose the same requirements
         on the members of the management body;
      
      (c)      the undertaking shall, in the contract, afford the insured person the right to entrust the defence of his interests, from
         the moment that he has the right to claim from his insurer under the policy, to a lawyer of his choice or, to the extent that
         national law so permits, any other appropriately qualified person.
      
      (3)      Whichever solution is adopted, the interest of persons having legal expenses cover shall be regarded as safeguarded in an
         equivalent manner under this Directive.’
      
      7.        Article 4 of Directive provides as follows:
      
      ‘(1)      Any contract of legal expenses insurance shall expressly recognise that:
      (a)      where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent
         or serve the interests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such
         lawyer or other person;
      
      (b)      the insured person shall be free to choose a lawyer or, if he so prefers and to the extent that national law so permits, any
         other appropriately qualified person, to serve his interests whenever a conflict of interests arises.
      
      (2)      Lawyer means any person entitled to pursue his professional activities under one of the denominations laid down in Council
         Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services.’
      
      8.        Article 5 of Directive 87/344 provides as follows:
      
      ‘(1)      Each Member State may provide exemption from the application of Article 4(1) for legal expenses insurance if all the following
         conditions are fulfilled:
      
      (a)      the insurance is limited to cases arising from the use of road vehicles in the territory of the Member State concerned;
      (b)      the insurance is connected to a contract to provide assistance in the event of accident or breakdown involving a road vehicle;
      (c)      neither the legal expenses insurer nor the assistance insurer carries out any class of liability insurance;
      (d)      measures are taken so that the legal counsel and representation of each of the parties to a dispute is effected by completely
         independent lawyers when these parties are insured for legal expenses by the same insurer.
      
      (2)      The exemption granted by a Member State to an undertaking pursuant to paragraph 1 shall not affect the application of Article
         3(2).’
      
      B –    National law
      9.        The relevant national law is to be found in Paragraphs 158k and 158p of the 1958 Law on insurance contracts (VersVG). Paragraph
         158k of the VersVG provides as follows:
      
      ‘(1)      Insured persons have the right to choose a person professionally qualified in the representation of parties to represent them
         in any judicial or administrative proceedings. In addition insured persons have the right to choose a lawyer to serve their
         legal interests in other ways, if a conflict of interests with the insurer has arisen.
      
      (2)      It may be stipulated in the insurance contract that the insured person may select to represent him in judicial or administrative
         proceedings only persons professionally authorised to represent parties who have their chambers at the place of the court
         or administrative authority before which the proceedings at first instance are to be conducted. Where in such place at least
         four such persons do not have chambers the right to choose must extend to persons in the district of the court of first instance
         in which the authority concerned is situated.
      
      (3)      The right conferred on the insured person under the first sentence of subparagraph 1 must be mentioned if the insured person
         requests the attendance of a legal representative in judicial or administrative proceedings; attention is to be drawn to the
         aforementioned right on the occurrence of a conflict of interests. If the insurer has instructed another undertaking in connection
         with the settlement of losses (Paragraph 158j, second sentence), the duty to provide such information passes to that undertaking.’
      
      C –    General conditions applicable to legal expenses insurance
      10.      The general conditions governing legal expenses insurance are standard conditions drawn up by the Austrian insurance association.
         Article 6.7.3 thereof in the version applicable until 1995 (‘the ARB 1995’) provides as follows:
      
      ‘Where several insured persons enjoy insurance cover under one or more contracts of insurance in order to assert their legal
         interests and where their interests are directed against the same opposing party or parties, on the basis of the same or a
         similar cause, the insurer is entitled initially, in the performance of its contractual bargain, merely to assert the legal
         interests of the insured persons extra-judicially and to have test cases brought as necessary by legal representatives selected
         by it.
      
      If or as soon as the insured persons are not adequately protected by those measures against a loss of their claims, in particular
         as a result of an impending time-bar, the insurer shall in addition be liable for the costs of class actions or other ways
         of asserting legal interests by means of joint extra-judicial and judicial action taken by legal representatives selected
         by it.’
      
      III –  Facts, main proceedings and questions referred
      11.      The claimant in the main proceedings, Dr Erhard Eschig, took out legal expenses insurance with the defendant in the main proceedings,
         UNIQA Sachversicherung AG, to which the ARB 1995 was expressed to apply.
      
      12.      The claimant in the main proceedings invested money with two investment services undertakings. These undertakings became insolvent.
         The claimant in the main proceedings and some thousand other investors are affected by these insolvencies. The claimant in
         the main proceedings instructed a law firm established at his place of residence to represent him, in particular in the insolvency
         proceedings initiated in respect of the assets of the undertakings and in a criminal case brought against the executive organs
         of those undertakings and in proceedings against the Republic of Austria for failures in the supervision of the financial
         markets.
      
      13.      The claimant in the main proceedings sought from the defendant an assurance that it would cover legal expenses for action
         already taken by his lawyers and for action to be taken by them in the future. This is resisted by the defendant in the main
         proceedings. It points out that around 180 persons who suffered losses are insured with it against legal expenses. In such
         a case, it argues, Article 6.7.3 of the ARB 1995 provides that instead of conducting individual proceedings persons with legal
         expenses insurance cover can be required to take part in test cases or representative actions, with the defendant having the
         right to select the legal representative. Accordingly, it was not obliged to refund the expenses in connection with the individual
         proceedings incurred by the claimant in the main proceedings.
      
      14.      Thereupon the claimant brought an action against the defendant for a declaration in the main proceedings, first, that the
         defendant was liable to bear the expenses incurred as a result of his lawyers’ activity in the abovementioned and future proceedings
         and, secondly, that Article 6.7.3 of the ARB 1995 was invalid and thus did not form part of the legal expenses insurance policy.
         The claimant in the main proceedings was unsuccessful with his claims at both first instance and on appeal. Both courts adjudged
         Article 6.7.3 of the ARB 1995 to be consistent with Paragraph 158k of the VersVG and an analogous interpretation of Paragraph
         158k of the VersVG to be consistent with Article 4(1)(a) of Directive 87/344.
      
      15.      The referring court hearing the appeal on a point of law has doubts as to the interpretation of Article 4(1)(a) of Directive
         87/344. On the one hand, Article 4(1)(a) of Directive 87/344 gives an insured person the right freely to choose a legal representative.
         That lends support to the view of the claimant in the main proceedings. On the other hand, there are good grounds for upholding
         the permissibility of a mass torts clause where a large number of persons with legal expenses cover have suffered losses as
         a result of the same event. A test case or a class action brought on behalf of several persons with legal expenses cover by
         the same lawyer is much less expensive than if individual actions are brought. This limit on expenditure would appear also
         to be necessary in the interests of the insurance community.
      
      16.      In the event that an analogous interpretation of Paragraph 158k of the VersVG is compatible with Article 4(1)(a) of Directive
         87/344, the question arises as to the criteria to be used for distinguishing a mass torts case from other cases. The referring
         court has certain doubts as to whether a clause such as Article 6.7.3 of ARB 1995, which allows the legal expenses insurer
         to select the legal representative once several persons with legal expenses cover are affected, can be reconciled with the
         objectives and requirements of Directive 87/344.
      
      17.      The referring court stayed the national proceedings and referred the following questions to the Court for a preliminary ruling:
      
      ‘(1)      Is Article 4(1) of Council Directive 87/344 … to be interpreted as precluding a clause in the standard terms and conditions
         of insurance of a legal expenses insurer allowing the insurer, in respect of insurance claims concerning losses suffered by
         a large number of insured persons as a result of the same event (for example the insolvency of a investment services undertaking),
         to select a legal representative, thereby restricting the right of the individual insured person to choose his own lawyer
         (so-called “mass torts clause”)?
      
      (2)      If the first question is answered in the negative:
      What are the criteria for determining that a “mass tort” has occurred, allowing the insurer instead of the insured person
         to select the legal representative for the purposes of (or as a complement to) Directive 87/344/EEC?’
      
      IV –  Proceedings before the Court
      18.      The order for reference of 23 April 2008 was registered at the Court Registry on 15 May 2008.
      
      19.      The claimant and the defendant in the main proceedings, the Governments of the Republic of Austria and the Czech Republic,
         and the Commission, submitted written observations.
      
      20.      Representatives of the claimant and defendant in the main proceedings, of the Governments of the Republic of Austria and of
         the Czech Republic and of the Commission, were present at the hearing and expanded on their observations.
      
      V –  Essential arguments of the parties
      21.      All those participating in the proceedings are agreed that Directive 87/344 was intended to remove from the sector of legal
         expenses insurance obstacles to market access that had come about as a result of national legislation to guard against conflicts
         between different interests. In Germany, before Directive 87/344 was adopted, what was known as the sector demarcation rule
         applied, which had the effect of restricting market access by insurance undertakings from other Member States. In order to
         ease market access for insurance undertakings from other Member States, but at the same time to ensure there was a safeguard
         against conflicts between different interests, Article 3(2) of Directive 87/344 made provision for three structural alternative
         solutions for the avoidance of such conflicts of interests: the first alternative is ensuring that members of staff dealing
         with insurance cases in the legal expenses sector are not engaged in other insurance sectors, the second is entrusting management
         of legal expenses insurance claims to another undertaking; and the third is the model under which it is open to the person
         with legal expenses cover to use a legal representative of his choice.
      
      22.      All participants in the proceedings are further agreed that, in order to safeguard the insured person, Article 4(1)(b) of
         Directive 87/344 guarantees him the right to representation by a lawyer of his choice if actual conflicts of interests would
         occur notwithstanding the structural provision in Article 3(2) of Directive 87/344.
      
      23.      However, the participants in the proceedings have differing views as to the interpretation of Article 4(1)(a) of Directive
         87/344.
      
      24.      In the view of the claimant in the main proceedings, the Republic of Austria and the Czech Republic, Article 4(1)(a) of Directive 87/344 guarantees a person’s right to a legal representative of his choice in any inquiry or
         proceedings; that right is not dependent on either a selection of one of the abovementioned alternatives or on the existence
         of an actual conflict of interests. The claimant in the main proceedings considers that the independent nature of the right
         to a legal representative of one’s choice under Article 4(1)(a) of Directive 87/344 is borne out by the fact that it is not
         contingent on the existence of any conflict of interests, but, being limited to inquiries and proceedings, is of narrower
         scope than Article 4(1)(b) of Directive 87/344. The Republic of Austria points out that, as compared with the original draft
         directive, the right to a legal representative of one’s choice had indeed been limited to inquiries and proceedings, but that
         within that limitation the right is meant to be independent.
      
      25.      The claimant in the main proceedings, the Republic of Austria and the Czech Republic submit that the wording of Article 4(1)(a)
         of Directive 87/344 does not permit the legal representative to be selected by the legal expenses insurer instead of by the
         person with legal expenses insurance.
      
      26.      Nor can a possibility of restricting this right be founded on Article 5 of Directive 87/344. Before that directive was adopted,
         automobile clubs in certain Member States granted their members the support of their own legal representatives in legal disputes
         arising out of traffic accidents. Article 5 of Directive 87/344 is an exceptional provision intended to ensure that this practice
         can continue.
      
      27.      To interpret Article 4(1)(a) of Directive 87/344 restrictively or to reduce its scope on teleological grounds to take account
         of mass tort cases would not be acceptable. The claimant in the main proceedings points out that mass tort cases were known
         about when Directive 87/344 was adopted. So the scope of Article 4(1)(a) of Directive 87/344 cannot be limited on grounds
         of the novelty of mass tort cases. In this connection the Republic of Austria points to the vagueness of the concept of a
         mass tort. Finally the claimant in the main proceedings and the Czech Republic point to the numerous disadvantages that might
         be incurred by persons with legal expenses cover as a result of a mass torts clause.
      
      28.      The claimant in the main proceedings, the Republic of Austria and the Czech Republic propose that the reply to the first question
         submitted should be that under Article 4(1) of Directive 87/344 the right of a person with legal expenses cover to a legal
         representative of his choice may not be limited in the manner at issue in the main proceedings.
      
      29.      The defendant in the main proceedings contends that it is not the purpose of Directive 87/344 to grant a person with legal expenses cover the right to a legal representative
         of his choice.
      
      30.      As Article 3 of Directive 87/344 provides three alternative ways of avoiding conflicts of interest and no preference is to
         given to one over the others, Article 4(1)(a) of Directive 87/344 cannot be interpreted as giving a right in every case to
         a legal representative of one’s choice.
      
      31.      This is already borne out by the wording of the 11th recital in the preamble to Directive 87/344 under which this right is
         recognised whenever a conflict of interests occurs. The inference to be drawn a contrario is that where no such conflict of interests arises there is in principle no right to a legal representative of one’s choice.
      
      32.      This is also borne out by the exception in Article 5 of Directive 87/344. That provision shows that exceptions to freedom
         of choice of legal representative are permissible. Article 5 of Directive 87/344 is not an absolute exception but only an
         example. The omission of mass torts makes it necessary, in the interests of the person with legal expenses insurance, to interpret
         Article 5 of Directive 87/344 analogously. Austria has already made an exception in Paragraph 158k(2) of the VersVG in regard
         to local restrictions on the right to choose one’s own legal representative.
      
      33.      This also serves to ensure the effectiveness of the directive. What is relevant is to determine which interpretation is capable
         of achieving the greatest practical utility. In the insurance sector the starting point is always the interests of persons
         with legal expenses cover as a whole. With that in mind, the objective must be to ensure as far as possible that insured persons
         are treated equally and to make the available capital accessible to all persons with legal expenses cover on the basis of
         equal rights and as effectively as possible. In order to ensure that legal expenses cover is affordable by every consumer,
         it is absolutely essential to make special arrangements for mass tort cases.
      
      34.      Furthermore, mass tort cases were not contemplated at the time when Directive 87/344 was enacted in 1987.
      
      35.      Moreover, the defendant in the main proceedings points to the effects that would ensue were a mass torts clause to be invalid.
         In that connection it considers first the competitive relationship between legal expenses insurance and the financing of the
         legal costs of proceedings. Secondly, it points out that the extent of cover of legal expenses insurance is not governed by
         Directive 87/344. Therefore, if mass torts clauses were unlawful the result could be the exclusion of certain risks and the
         laying down of maximum limits of cover.
      
      36.      Finally, the defendant in the main proceedings points to the advantages of a mass torts clause to persons with legal expenses
         cover.
      
      37.      The defendant in the main proceedings proposes that the Court’s reply to the first question submitted should be that Article
         4(1)(a) of Directive 87/344 should be interpreted in mass tort cases as permitting the right to choose the legal representative
         to be transferred from the person with legal expenses cover to the legal expenses insurer.
      
      38.      In regard to the second question submitted, the defendant in the main proceedings contends that mass tort cases are events
         in which several persons suffer losses that, at least in abstract terms, lend themselves to being dealt with in the interests
         of procedural economy in one single set of proceedings or by means of a test case. In this regard it has to considered whether
         these are cases in which the injurious event is of far-reaching significance, whether the losses affected the individual insured
         persons directly and are of the same nature, whether the legal basis is the same, and whether the parties opposing the claim
         are essentially the same.
      
      39.      In the Commission’s view the principle of freedom of choice of one’s legal representative under Article 4(1)(a) of Directive 87/344 cannot be
         regarded in itself as an aim of the directive. Otherwise the first two structural alternatives in Article 3(2) of Directive
         87/344 would be meaningless. They would then no longer be alternative solutions but would only be making additional provision.
      
      40.      The Commission points out that Directive 87/344 departs on this point from the Commission’s original proposal for a directive.
         This originally provided for a right to a lawyer of one’s choice. However, the Community legislature did not entirely follow
         this proposal. In particular, the freedom to choose one’s own legal representative was restricted to inquiries and proceedings.
      
      41.      This interpretation is also supported by the 11th recital of the preamble to the directive. The interest of a person with
         legal expenses insurance requires that that person may himself choose a legal representative, that is to say, in all cases
         where there is a conflict of interests.
      
      42.      The Commission is of the view that Directive 87/344 does not provide for an absolute right to a legal representative of one’s
         choice. The right under Article 4(1)(a) of Directive 87/344 may therefore be subject to restrictions if that is in the interests
         of the individual with legal expenses insurance.
      
      43.      There are no indications that consideration was given to mass tort cases at the time the directive was drafted. Therefore
         Directive 87/344 does not prohibit the use of mass tort clauses provided that the insured persons are safeguarded.
      
      44.      As to the question about the criteria for establishing when a mass tort has occurred, there can certainly be no doubts about
         the present case with at least 16 000 persons suffering losses; thus, a reply to this question is not necessary.
      
      45.      The Commission suggests that the reply to the first question submitted should be that Article 4(1) of Directive 87/344 must
         be interpreted as not precluding a clause that entitles a legal expenses insurer, in insurance cases in which a large number
         of persons with legal expenses insurance have been harmed by the same event, to choose a legal representative, thus limiting
         the right of the individual with legal expenses insurance to a legal representative of his choice.
      
      VI –  Legal assessment
      A –    First question submitted
      46.      By its first question, the referring court raises a question of interpretation in regard to Article 4(1)(a) of Directive 87/344.
         It wishes to know whether it is to be so construed as to preclude a national provision, such as Paragraph 158k of the VersVG,
         under which, in legal expenses insurance contracts, a mass torts clause is permissible.
      
      47.      In my view this question must be answered affirmatively for the following reasons. First, the wording of Article 4(1)(a) of
         Directive 87/344 does not exclude mass tort cases (1). Secondly, the overall structure of Directive 87/344 suggests that the
         freedom to choose a legal representative in inquiries and proceedings under Article 4(1)(a) of Directive 87/344 is an independent
         freedom (2). Thirdly, Article 5 of Directive 87/344 cannot be applied by analogy to mass tort cases (3). Fourthly, the conditions
         for a teleological restriction of the terms of Article 4(1)(a) of Directive 87/344 are not met (4).
      
      1.      The wording of Article 4(1)(a) of Directive 87/344
      48.      According to Article 4(1)(a) of Directive 87/344 any legal expenses insurance agreement must expressly recognise that if a
         legal representative is called upon to defend, represent or serve the interests of the insured person in any inquiry or proceedings,
         the person with legal expenses insurance is free to choose that legal representative.
      
      49.      Pursuant to the wording of Article 4(1)(a) of Directive 87/344, the right to choose is indeed restricted to inquiries or proceedings.
         But within that limitation no exception in the case of mass tort cases is discernible. Under the principle ubi lex non distinguit, nec nos distinguere debemus, the wording of Article 4(1)(a) of Directive 87/344 thus militates against a differentiation between mass tort cases and
         other cases. The wording of Article 4(1)(a) of Directive 87/344 therefore does not permit a mass torts clause that gives the
         legal expenses insurer and not the person with legal expenses insurance the right to choose the legal representative.
      
      2.      The independent freedom to choose the legal representative in inquiries and proceedings
      50.      The defendant in the main proceedings and the Commission take the view that the freedom to choose a legal representative under
         Article 4(1)(a) of Directive 87/344 is not an independent freedom. As they rely on the scheme, objectives and genesis of Directive
         87/344 in support of their view, I would first like to investigate the genesis, objectives and content of this directive.
      
      51.      Directive 87/344 is one of several directives (4) intended to ease market access in the sector of direct insurance. (5) In regard to legal expenses insurance, market access restrictions resulted from the various provisions of Member States intended
         to avoid conflicts of interests. (6)
      
      52.      Conflicts of interests may in particular arise where an insurance undertaking offers insurance from several insurance branches.
         If for example an insurance undertaking offers liability insurance and legal expenses insurance, it may act in a dispute both
         on the side of the person causing the loss and on the side of the person suffering the loss. (7)
      
      53.      In order to avoid conflicts of interests, in Germany the sectoral demarcation rule applied. Since insurance undertakings in
         most other Member States were organised as multi-sectoral undertakings, those undertakings were not in compliance with the
         sectoral demarcation rule. For these insurance undertakings the rule therefore operated as a restriction on market access.
      
      54.      This restriction on market access was intended to be removed by Directive 87/344 through the creation of safeguards to prevent
         conflicts of interests. (8) That is the background to Article 3(2) of Directive 87/344, which provides for three structural alternative solutions for
         the avoidance of conflicts of interests:
      
      –        The first solution under subparagraph (a) essentially provides that a member of the staff of the insurance undertaking must
         be specifically responsible for the management of legal expenses claims or for giving legal advice in respect thereof and
         must not at the same time carry on any similar activity (specific-responsibility model);
      
      –        Under the second solution, in (b), the management of legal expenses claims must be entrusted to a legally separate undertaking
         (outsourcing model).
      
      –        Under the solution at (c), the insurance undertaking must provide in the contract that the insured person has the right to
         entrust the defence of his interests, once he has the right to claim from his insurer under the policy, to a lawyer of his
         choice (legal representative model).
      
      55.      Each of these solutions is regarded under Article 3(3) of Directive 87/344 as affording equivalent protection for the interests
         of persons with legal expenses insurance. Member States must ensure that insurance undertakings established in their territory
         apply at least one of these alternative solutions. But they have the choice as to which one to apply and whether to leave
         undertakings free to choose more than one alternative solution.
      
      56.      Over and above the structural measures for avoiding conflicts of interests under Article 3(2) of Directive 87/344, Article
         4(1)(b) of Directive 87/344 provides for safeguards against specific conflicts of interests. Under this provision, a person
         with legal expenses insurance is entitled to a legal representative of his choice, if a conflict of interests arises.
      
      57.      The defendant in the main proceedings and the Commission have argued that this right is not an independent right. Yet that
         cannot be inferred from the relationship between the right to a legal representative of one’s choice in proceedings and inquiries
         under Article 4(1)(a) and the structural measures for the avoidance of conflicts of interests (a); nor can it be inferred
         from the way it relates to the right to legal representation of one’s choice in the event of a conflict of interests (b),
         or from the objectives of Directive 87/344 (c), or from the genesis of Directive 87/344 (d).
      
      a)      The relationship between the right to a legal representative of one’s choice under Article 4(1)(a) of Directive 87/344 and
         the structural measures for the avoidance of conflicts of interest under Article 3(2) of Directive 87/344
      
      58.      The defendant in the main proceedings and the Commission contend that the right to a legal representative of one’s choice
         under Article 4(1)(a) of Directive 87/344 is to be read in connection with Article 3(2)(c) of Directive 87/344 and is merely
         one specific form of the legal-representative model. They argue that if independent significance were to be attached to the
         right to a legal representative of one’s choice then the legal-representative model under Article 3(2)(c) of Directive 87/344
         would ultimately always apply. That would undermine the significance of the two other alternative solutions, that is to say
         the specific-responsibility model under Article 3(2)(a) of Directive 87/344 and the outsourcing model under Article 3(2)(b)
         of Directive 87/344.
      
      59.      This argument is not convincing.
      
      60.      First, both the specific-responsibility model under Article 3(2)(a) of Directive 87/344 and the outsourcing model under Article
         3(2)(b) of Directive 87/344 retain their own sphere of validity even where an independent right to a legal representative
         in proceedings and inquiries is derived from Article 4(1)(a) of Directive 87/344.
      
      61.      The legal-representative model under Article 3(2)(c) of Directive 87/344 goes substantively beyond Article 4(1)(a) of Directive
         87/344. Article 4(1)(a) of Directive 87/344 provides for a right to a legal representative of one’s choice only in the event
         of inquiries or proceedings. In contrast, under the legal-representative model in Article 3(2)(c) of Directive 87/344, the
         person with legal expenses insurance has the right to entrust the defence of his interests, once he has the right to claim
         from his insurer under the policy, to a lawyer of his choice, that is to say before inquiries and proceedings. (9)
      
      62.      The scope of the specific-responsibility model and of the outsourcing model is, it is true, restricted if it is accepted that
         there is an independent right to a legal representative of one’s choice in proceedings and inquiries; but they do retain an
         independent sphere of validity.
      
      63.      Conversely, on the interpretation favoured by the defendant in the main proceedings and the Commission, Article 4(1)(a) of
         Directive 87/344 would no longer have any independent sphere of validity. If the legal-representative model is opted for,
         the right to a legal representative of one’s choice arises even before an inquiry or proceedings are begun. If Article 4(1)(a)
         of Directive 87/344 were to apply only if the legal-representative solution is opted for, there would be nothing in that provision
         which could still apply. (10)
      
      64.      In the light of the principle of Roman law ut magis valeat quam pereat, whereby an interpretation that allows each article an independent significance is to be preferred to one that denies such
         significance to individual articles, the interrelationship between Article 3(2) and Article 4(1)(a) of Directive 87/344 favours
         an interpretation under which Article 4(1)(a) of Directive 87/344 is construed as an independent right to choose one’s legal
         representative.
      
      b)      The right to a legal representative of one’s choice under Article 4(1)(a) of Directive 87/344 in order to safeguard against
         specific conflicts of interests under Article 4(1)(b) of Directive 87/344
      
      65.      Article 4(1)(b) of Directive 87/344 granting a right to a legal representative of one’s choice in the case of a specific conflict
         of interests in my view also points to an independent right to choose one’s own legal representative in proceedings and inquiries
         under Article 4(1)(a) of Directive 87/344. If the latter provision were confined to cases in which there is an actual conflict
         of interests, it would no longer have independent significance alongside Article 4(1)(b) of Directive 87/344.
      
      c)      The objectives of Directive 87/344
      66.      Nor can the independence of the right under Article 4(1)(a) of Directive 87/344 be called in question by invoking the objectives
         pursued by Directive 87/344.
      
      67.      The defendant in the main proceedings relies first on the argument that the main aim of Directive 87/344 was to eliminate barriers to market access; to that end rules to safeguard
         persons with legal expenses insurance from conflicts of interests had to be harmonised and no additional rights or guarantees
         were intended to be created in favour of such persons. That does not convince me.
      
      68.      True, the main aim of Directive 87/344 is no doubt to eliminate barriers to market access by harmonising rules safeguarding
         against conflicts of interest. But this does not per se mean that the directive cannot make provision for matters that go beyond safeguards against conflicts of interests.
      
      69.      Secondly, the defendant in the main proceedings and the Commission mentioned in their pleadings that in the recitals in the preamble
         to Directive 87/344 reference is merely made to the aim of safeguarding against conflicts of interests.
      
      70.      However this argument is not convincing either. It should first be pointed out that the objectives of the directive, which
         are binding on the Member States under Article 249(3) EC, are to be found in the relevant articles of the directive. To have
         binding effect those objectives do not have to be referred to individually in the recitals in the preamble to the directive.
      
      71.      Nor, moreover, can a restrictive interpretation of Article 4(1)(a) of Directive 87/344 be justified by referring to the German
         language version of the 11th recital in the preamble to Directive 87/344, because that language version differs from the others.
         Under other language versions, the interest of the person with legal expenses insurance requires that he be free to choose
         a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve his interests
         in any inquiry or proceedings, and whenever a conflict of interests arises. (11) Thus, in the other language versions the 11th recital in the preamble refers explicitly also to the need for the person with
         legal expenses insurance to be able to choose a lawyer in the context of inquiries and proceedings, irrespective of the issue
         of safeguards against conflicts of interests. (12)
      
      d)      Drafting history of Directive 87/344
      72.      The Commission further argues that it is apparent from the drafting history of Directive 87/344 that, unlike under the original
         proposal for a directive, there are no grounds for assuming a comprehensive right to a legal representative of one’s choice.
         That draft provided for an unlimited right to a legal representative of one’s choice. (13)
      
      73.      Nor is this argument convincing. As already mentioned above, in the final version the terms in which the right to a legal
         representative of one’s choice is couched were indeed modified, with the right being restricted to representation in inquiries
         and proceedings. Yet that fact alone cannot support an inference that the choice of a legal representative limited to proceedings
         and inquiries is not intended to be an independent aim in addition to the objective of avoiding conflicts of interests. On
         the contrary the drafting history of the directive can just as much support the conclusion that even though the original objective
         of freedom to choose one’s legal representative was limited to inquiries and proceedings, it is not dependent, as so limited,
         on the occurrence of a conflict of interests. There are no indications either in the original Commission proposal for a directive (14) or in other documents in the legislative procedure (15) that Article 4(1)(a) of Directive 87/344 was intended merely to create a further mechanism for the avoidance of a conflict
         of interests and not an independent right to choose one’s legal representative. (16)
      
      e)      Interim conclusion
      74.      My interim conclusion is therefore that the position of Article 4(1)(a) within the overall structure of Directive 87/344,
         and the aims of the directive, indicate that the right to a legal representative of one’s choice in proceedings and inquiries
         is intended to be an independent right; at the very least, the drafting history of the directive does not militate against
         that interpretation. (17)
      
      3.      Application by analogy of Article 5 of Directive 87/344 to mass tort cases
      75.      The defendant in the main proceedings contends that the right to a legal representative of one’s choice under Article 4(1)(a)
         of Directive 87/344 can be restricted by inference from Article 5 of Directive 87/344. That argument cannot be upheld either.
         No support may be derived from Article 5 of Directive 87/344 either directly or by analogy in favour of restricting the freedom
         to choose one’s own legal representative in mass tort cases.
      
      76.      First, Article 5 of Directive 87/344 provides for a narrowly defined exception to the right to a legal representative of one’s
         choice. It is expressly stated in Article 5 of Directive 87/344 that a Member State can restrict that right only if the conditions
         in Article 5 are all met. From its wording Article 5 of Directive 87/344 cannot therefore be construed as an illustrative
         list.
      
      77.      Furthermore, that provision is intended to govern a single issue and thus is not capable of being applied by analogy. It was included
         at the behest of certain Member States in order to maintain the status quo for legal expenses insurance for traffic accident claims offered by British and Dutch automobile clubs. (18)
      
      78.      Finally, a narrowly defined single issue provision that is not capable of being applied by analogy in my view militates against the
         general possibility of restricting the right conferred in Article 4(1)(a) of Directive 87/344 rather than tending to support
         it.
      
      4.      Teleological interpretation restricting the right under Article 4(1)(a) of Directive 87/344 to a legal representative of one’s
         choice in mass tort cases
      
      79.      Finally, the defendant in the main proceedings and the Commission contend that at the time when Directive 87/344 was adopted
         mass tort claims were as yet unknown. So the right to choose one’s legal representative under Article 4(1)(a) of Directive
         87/344 cannot be applied to mass tort cases.
      
      80.      This argument must also be rejected. As the wording of Article 4(1)(a) of Directive 87/344 does not provide an exception for
         mass tort cases, the defendant in the main proceedings and the Commission seek in the final alternative a teleological interpretation
         restrictive of the terms of the provision. But that presupposes that the wording of Article 4(1)(a) of Directive 87/344 went
         further than the legislature intended it to. That is not the case here.
      
      81.      First, it cannot, in fact, be assumed that mass torts were unknown to the Community legislature. The phenomenon of mass torts
         is not confined to the financial sector. The claimant in the main proceedings has correctly pointed out that the adoption
         of the directive occurred after the Contergan/Thalidomide cases. (19)
      
      82.      The defendant in the main proceedings contends, in law, that account must be taken of the fact that class actions may be introduced
         as part of the Austrian law of civil procedure; yet this submission concerns a potential future event (20) and therefore for that reason cannot justify a teleological interpretation restricting its scope in the present case. Also
         the fact that the Commission has identified options to promote collective actions in the area of competition law (21) and consumer protection (22) does not justify a teleological interpretation. In as much as an amendment to Directive 87/344 might be considered necessary
         in the future, it would be for the Community legislature to make the appropriate amendments to Directive 87/344.
      
      83.      I also doubt very much whether Article 4(1)(a) of Directive 87/344 can be regarded as going further than intended.
      
      84.      First, the matters governed in Article 4(1)(a) of Directive 87/344 are limited. That provision provides only for a right to
         a legal representative of one’s choice where recourse is had to a legal representative in order to defend, represent or serve the interests of the insured person in any
         inquiry or proceedings. Conversely, the circumstances under which a person with legal expenses insurance has a right against
         his legal expenses insurer to engage a legal representative are not laid down in Article 4(1)(a) of Directive 87/344, and
         are thus governed by the legal expenses insurance contract, subject to other relevant Community or national provisions.
      
      85.      Secondly, Directive 87/344 contains only a few specific pointers to the substantive content of legal expenses insurance policies.
         In particular, there is no provision saying which sectors must be covered by legal expenses insurance. Subject to national
         pointers, it is open to the insurance undertakings to exclude sectors susceptible to mass torts or to demand higher premiums
         to cover these sectors. (23)
      
      86.      Thus, it is not necessarily by restricting the insured person’s freedom of choice of legal representative that the protection
         of the insurance community demanded by the defendant and reflected in stable premiums and transparent costs structures may
         be attained.
      
      5.      Conclusion
      87.      Article 4(1)(a) of Directive 87/344 is to be construed as precluding a national provision such as Paragraph 158k of the VersVG,
         under which a legal expenses insurance contract can provide that, in cases in which a large number of insured persons suffer
         losses owing to the same event, the legal expenses insurer and not the insured person is entitled to choose a legal representative.
      
      B –    Second question
      88.      As the second question was submitted only in the alternative it does not need to be answered.
      
      VII –  Conclusion
      89.      In light of the foregoing I propose that the Court should reply to the questions submitted by the referring court as follows:
      
      Article 4(1)(a) of Directive 87/344/EEC of 22 June 1987 on the coordination of laws, regulations and administrative provisions
         relating to legal expenses insurance is to be interpreted as precluding an interpretation of a national provision, such as
         Paragraph 158k of the Austrian Law on insurance contracts, which permits a clause in a legal expenses insurance contract entitling
         the insurer, in insurance cases in which a large number of insured persons suffer losses as a result of the same event, to
         select the legal representative to defend, represent or serve the interests of the insured person in any inquiry or proceedings.
      
      1 –	Original language: German.
      
      2 –	OJ 1987 L 185, p. 77.
      3 –	The German language version of the 11th recital in the preamble diverges considerably from the other language versions.
         I will deal with this divergence below at point 71 of this Opinion.
      
      4 –	See First Council Directive 73/239/EEC of 24 July 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 (OJ 1973 L 228 p. 3);
         Second Council Directive 88/357/EEC of 22 June 1988 on the coordination of laws, regulations and administrative provisions
         relating to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of
         freedom to provide services and amending Directive 73/239/EEC; Second Council Directive 90/619/EEC of 8 November 1990 on the
         coordination of laws, regulations and administrative provisions relating to direct life assurance, laying down provisions
         to facilitate the effective exercise of freedom to provide services and amending Directive 79/267/EEC (OJ 1990 L 330, p. 50).
      
      5 –	On the objectives pursued see the third recital of the preamble to Directive 87/344; see also Bähr, G.W. ‘Der Rechtsrahmen
         für Niederlassungen von europäischen Versicherungsunternehmen in Deutschland – zugleich Anmerkungen zur Corporate Compliance
         für Niederlassungen’, in: Liber amicorum für Gerrit Winter, Verlag Versicherungswirtschaft, 2007, pp. 191 to 208.
      
      6 –	See the fourth recital in the preamble to Directive 87/344.
      
      7 –	Cf. Cerveau, B., and Margeat, H., ‘Commentaire de la directive du Conseil des Communautés européennes portant coordination
         des dispositions législatives réglementaires et administratives concernant l’assurance protection juridique’, Gazette du Palais, 1987, p. 580, 581.
      
      8 –	See the eighth recital in the preamble to Directive 87/344.
      
      9 –	On the issues of interpretation of the concept of ‘proceedings’, see Blundell, H: ‘Free to choose? Before the event legal
         expenses insurance and freedom of choice’, Journal of Personal Injury Law, 2004, p. 93 et seq.
      
      10 –	See Cerveau, B. and Margeat, H. (already cited at footnote 7 of this Opinion), p. 584.
      
      11 –	There is much evidence that the German language version is founded on an initial mistake and a consequential mistake. The
         initial mistake was in not taking the phrase about being represented in any inquiry and proceedings to express a self-standing
         alternative (as also stated in Article 4(1)(a)) but as an additional element of the qualifications of the ‘other person’.
         Then, the words expressing in the other language versions that two possibilities are being enumerated (for example, ‘et chaque fois’ in the French language version and ‘and whenever’ in the English language version) was mistakenly translated by the words
         ‘und zwar immer’ (‘that is to say whenever’).
      
      12 –	See the French and English language versions mentioned at footnote 11 above. The same result emerges from a study of the
         Italian, Portuguese, Romanian, Slovenian and Spanish language versions.
      
      13 –	See Article 5 of the Commission proposal for a directive of 19 July 1979 COM (79) 396(final), OJ 1979 C 198, p. 2.
      
      14 –	See footnote 13.
      
      15 –	See Opinion of the Economic and Social Committee on the proposal for a Council Directive on the coordination of laws, regulations
         and administrative provisions relating to legal expenses insurance of 19 November 1980, OJ 1980 C 348, p. 22; Opinion of the
         European Parliament on the Commission proposal to the Council for a directive on the coordination of laws, regulations and
         administrative provisions relating to legal expenses insurance of 17 September 1981, OJ 1981 C 260, p. 78; amended proposal
         for a Council Directive on the coordination of laws, regulations and administrative provisions relating to legal expenses
         insurance COM(82) 43 final of 8 February 1982, OJ 1982 C 78, p. 9.
      
      16 –	See Fenyves, A., ‘Zur Zulässigkeit der “Massenschadenklausel” in der Rechtsschutzversicherung’, Versicherungsrundschau, 2006, p. 22 et seq., at p. 25, who points out that a historical interpretation yields little.
      
      17 –	See in the result also Paris, C., ‘Le régime de l’assurance protection juridique’, Édition Larcier, 2004, p. 67: Article 4(1)(a) of Directive 87/344 is an independent guarantee and not to be confused with
         the structural measures under Article 3(2) of Directive 87/344. 
      
      18 –	Cerveau, B. and Margeat, H. (already cited in footnote 7 of this Opinion), p. 584; Fenyves, A. (already cited in footnote
         16 of this Opinion), p. 23.
      
      19 –	A medicine with the active ingredient thalidomide brought into use at the end of the 1950s particularly in Germany and
         the United Kingdom and the cause of malformations in unborn babies.
      
      20 –	On the procedural-law requirements to be met by actions brought by several injured persons: Rechberger, W.H., ‘Zur Einführung
         eines “Gruppenverfahrens” in Österreich’ (on the introduction of class actions in Austria) in: Rechtsschutz gestern, heute, morgen, Festgabe zum 80. Geburtstag von Rudolf Machacek und Franz Matscher, Neuer Wissenschaftlicher Verlag, 2008, pp. 861 to 869.
      
      21 –	White paper on damages actions for breach of the EC antitrust rules, COM(2008) 165 final.
      
      22 –	Green paper on consumer collective redress, COM(2008) 794 final.
      
      23 –	Cf. Paris, C. (already cited in footnote 15 above) p. 70.