On 24 October 2013, the Court of Justice of the European Union issued a judgement in case no. C‑22/12, Katarína Haasová versus Rastislav Petrík and Blanka Holingová, on the question of whether the payment of compensation for non-material damage caused by the death of a loved one in the use of a motor vehicle, is covered by the offender’s compulsory third party insurance.

In the European Union, insurance against liability in respect of the use of motor vehicles (compulsory third party insurance) is principally governed by two directives. Council Directive 72/166/EEC of 24 April 1972 requires Member States to ensure that vehicles registered in their territory are covered by compulsory third party insurance. Member States have relative freedom in determining the extent of liability covered by this insurance, as well as its terms and conditions. However, Council Directive 84/5/EEC of 30 December 1983 lays down limits for minimum insurance coverage for personal injury and material damage.

Under Czech law, general one-off compensation payable to the next of kin for damage resulting from the death of a loved one is governed by Section 444 of the Civil Code, according to which each parent and child, spouse or other person living with the survivors in the same household at the time of death is entitled to a sum of CZK 240,000, and each sibling to CZK 175,000. However, the Court of Justice also concluded that, in addition to this compensation, the next of kin may also be entitled to compensation for an infringement of the right to personal protection pursuant to the provisions of Section 11 and 13 of the Civil Code. Given the fact that the insured’s liability under these provisions derives from his/her liability for the traffic accident and is of a civil law nature, this liability falls within the jurisdiction of the above directives and must therefore also be covered by compulsory third party insurance.

The Court of Justice thus concluded that the concept of personal injury, which is compulsorily covered under the above directives, also encompasses any damage resulting from the unauthorised infringement of personal integrity, which includes both physical and mental suffering. This does not therefore necessarily only include non-material damage resulting from the death of a loved one, but any non-material damage arising from the use of a motor vehicle.

These conclusions will remain effective in the Czech Republic even after the new Civil Code comes into force, as this too gives natural persons the right to seek compensation for non-material damage in the case of an infringement of the right to personal protection (see Section 81 et seq. and Section 2951 et seq. of Act No. 89/2012 Coll., the Civil Code).

Compulsory third party insurance therefore covers not only compensation for damage to property, but also non-material damage, and insurance companies cannot refuse to pay compensation for non-material damage acknowledged by the court.

For more information, please contact K&A partner, Mgr. Jiří Kučera, e-mail: jkucera@kuceralegal.cz; tel.: +420604242241.