FBTO Schadeverzekeringen NV ?v- Jack Odenbreit Case: C463/06

Preliminary Ruling of the ECJ (Second Chamber) Dated 13th of December 2007

On the 28th of December 2000 Mr Odenbreit, domiciled in Germany, was involved in a road traffic accident in the Netherlands. The negligent driver was insured by FBTO.

Mr Odenbreit brought an action against the insurer before his local court in the place where he was domiciled (Germany). His local court dismissed the action as inadmissible as the court did not consider it had jurisdiction as the RTA had occurred in the Netherlands. This decision was appealed and Mr Odenbreit in his appeal was successful. The insurers, however, then appealed to the Federal Court of Justice in Germany. The Judge of the Federal Court of Justice in Germany decided to sist proceedings in the German Court and refer the matter to the ECJ for a preliminary ruling.

The following question was referred to the ECJ for a preliminary ruling:-

“Is the reference to Article 9 (1) (a) in Article 11 (2) of Regulations number 44/2001 to be understood as meaning that the injured party may bring an action directly against the insurer in the courts for the place in a Member State where the injured party is domiciled, provided that such a direct action is permitted and the insurer is domiciled in a Member State?”

Regulation number 44/2001

Council Regulation (EC) number 44/2001 of 22nd December 2000 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters.

In the preamble to the Regulation it is stated that,” in relation to insurance … contracts …, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules provide for.”

Article 9(1)(a) and (b) of Regulation number 44/2001 provides:-

“1. An insurer domiciled in a Member State may be sued:-

(a) In the Courts of the Member State where he is domiciled, or

(b) In another Member State, in the case of actions brought against the policyholder, the insured, or a beneficiary, in the Courts for the place, where the plaintiff is domiciled …”

Article 11 of that Regulation states:-

“1. In respect of liability insurance, the insurer may also, if the law of the court permits it, be joined in proceedings which the injured party has brought against the insured.”

2. Articles 8, 9 and 10 shall apply to actions brought by the injured party directly against the insurer, where such direct actions are permitted.

3. If the law governing such direct actions provides that the policy holder or the insured may be joined as a party to the action, the same Court shall have jurisdiction over them.”

The ECJ in their determination considered whether Article 9(1)(b) restricted the right to sue in another Member State to the policyholder, insured, or beneficiary of the policy of insurance, or, whether that reference allows the rules of jurisdiction of the Courts for the place where the person is domiciled, set out in article 9(1)(b) to be applied.

When the ECJ interpreted article 11(2) they determined that to restrict the injured party from suing in another Member State would run contrary to the wording of article 11(2).

Therefore the ECJ held that an injured party could raise an action against the insurer in the Member State in which he was domiciled, provided that such a direct action is permitted and the insurer is domiciled in a Member State.

In the UK the permission of a direct action was brought into force by the European Communities (Rights Against Insurers) Regulations 2002 FI 2002/3061.

These Regulations give effect to the 5th Motor Directive. They give the right to the injured party to issue proceedings against the insurer of the person responsible for an accident as well as the driver. These Regulations came into force on the 19th of January 2003.

Governing Laws:-

It will be determined by the National Courts which law applies but the likelihood is that both procedure and quantum will be dealt with by the Law of the Court in which the action is brought, however, the substantive law or liability law will be dealt with by the law where the accident happened.

Summary:-

Odenbreit determines that the injured party has the right to issue proceedings in the Court of his domicile providing that such a direct action is permitted and the insurer is domiciled in the Member State. To be clear currently Odenbreit only applies to RTA's. However, there is of course a possibility that in time a similar right may exist in relation to other, non RTA cases.