A most expensive trip to the supermarket: “the use of vehicles” under the Motor Insurance Directives (Michael McParland QC)

Articles Michael McParland QC 16th November 2018

On 15 November 2018, in case C-648/17 BTA Baltic Insurance Company, the European Court of Justice (“CJEU”) ruled on whether the concept of the “use of vehicles” in the Motor Insurance Directives included an accident between two stationary cars in a supermarket car park.

The facts of BTA Baltic Insurance Company

The basic facts could not have been simpler or more commonplace. On 24 October 2008, a passenger of a motor vehicle (the first car), parked in a supermarket car park in Latvia, opened their car door and scratched the side of a nearby parked car (the second car). The owner of the second car and the driver of the first car filled out an accident report at the scene of the accident. The driver of the first car acknowledged that he was to blame and confirmed that his passenger had scratched the second car with the back door of the first car. The owner of the second car then made a claim on their own insurance policy. After deducting the policy excess, his Latvian motor insurer paid him a princely sum of approximately €67.47. The second car’s insurer then decided to ask the insurer of the first car (another Latvian motor insurer) to reimburse those costs.

Few would have guessed that ten years later this tiny claim between two motor insurers about a car being scraped in a Latvian supermarket would end up troubling the CJEU in Luxembourg.

Litigating on a point of principle?

The problem arose because the second car’s insurer refused to reimburse the €67.47 on the ground that an accident which occurred when both vehicles were stationary was not an “insurable event” within the meaning of the Latvian law on compulsory civil liability insurance for owners of motor vehicles, a law which had transposed the requirements of the Motor Insurance Directives into Latvian domestic law. An “insurable event” was defined in that law as “a road traffic accident giving rise to payment of the insurance compensation”.

The first insurer won at first instance and on appeal, but in 2014 the Latvian Supreme Court set aside those judgments on the grounds of inadequate reasons. Second time around, the second insurer won, with the Riga District Court holding that there was no road traffic accident unless one of the vehicles involved is moving, and that, consequently the insurable event covered by the first insurer did not occur. Furthermore, the court held that it was the passenger rather than the driver who was civilly liable.

The Latvian Supreme court referred the case to the CJEU, as they were uncertain whether:

• The concept of “use of vehicles” in the Motor Insurance Directives covered the opening of the doors of a stationary vehicle; and
• If so, did it cover a situation in which damage to the property is caused by use of the vehicle by a passenger?

The CJEU’s judgment

In their judgment, the CJEU reaffirmed their earlier rulings that the concept of the “use of vehicles” in the Motor Insurance Directives is not limited to road use, i.e. to travel on public roads, but that it covers any use of a vehicle that is consistent with its normal function. The Court also noted that the concept covers any use of a vehicle as a means of transport.

Turning to the facts of this case, the Court observed that:

• The act of opening a car door is consistent with its function as a means of transport “… inasmuch as, among other things, it allows persons to get in or out of the vehicle or to load and unload goods which are to be transported in the vehicle or which have been transported in it”;
• The fact the first car was both stationary and in a car park when the accident occurred does not mean that it was not being used as a vehicle; and
• The fact that the passenger caused the accident did not change the position, because the provisions of the Motor Insurance Directives do not limit the coverage of compulsory insurance to a particular category of person, such as the driver of the vehicle.

The CJEU concluded that the answer to the Latvian Supreme Court’s questions were that the concept of “use of vehicles” in Article 3(1) of the First Directive must be interpreted as covering a situation in which the passenger of a vehicle parked in a car park, in opening the door of that vehicle, scraped against and damaged the vehicle parked next to it.

The CJEU’s findings are equally applicable to the current Motor Insurance Directive

Because of the facts of this case took place in 2008, the Court’s judgment referred to the use of these concepts in the First Directive and Second Council Directive 85/5/EEE of 30 December 1983 on the approximation of the laws of Member States relating to insurance against civil liability in respect of the use of motor vehicles (OJ 1984 L 8, p. 17), which was repealed by Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability (OJ 2009 L 263, p.11). However, the CJEU’s ruling in this case is equally applicable to the concepts used in the current Motor Insurance Directive 2009/103/EC.

Michael McParland QC

16th November 2018

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Michael McParland QC