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Brussels, 18 October 2017

Comments of the International Association of Legal Protection Insurance (RIAD) on
Consultation: Review of Directive 2009/103/EC on Motor Insurance

 

RIAD is the only body worldwide representing the unique interests of legal protection insurers and of service providers in this field from Europe, Canada, South Africa and Japan. The Association defends the interests of legal protection insurers and advocates the high potential of legal protection insurance as an easy, affordable and high-quality solution for access to justice and the law.

In connection with the review of Directive 2009/103/EC on motor insurance, RIAD seizes the opportunity to comment and provide information which shows that, just like liability insurers, legal protection insurers play an important part in ensuring the protection of victims of motor accidents.

 

1.      The importance of legal protection insurance

The relatively small size of the legal protection insurance market[1] reflects the fact that it is a niche product, usually added on to another insurance, e.g. motor or house insurance. Furthermore, unlike motor insurance, it is not a mandatory insurance and, consequently, not as common as motor insurance.

Legal protection insurance offers great benefits to insured persons: it defends and enforces policyholders’ rights in case of a dispute out-of-court or in-court, whether the insured is the victim of a motor accident or the faulty person and, most importantly, it even defends the insured person against motor insurers as opponents. Legal protection insurers defend and represent policyholders in-court or out-of-court or cover the costs incurred by legal assistance or proceedings. In general, if a legal protection insurance is added on to motor insurance, both, the policyholder and the driver, are covered and in Austria, the Czech Republic, Greece, Hungary, Poland and Spain, legal protection insurers provide cover even for passengers.

 

To show and demonstrate the benefits, please see the overview below presenting the services legal protection insurers provide.

Services provided by legal protection insurers via in-house staff in the different countries

 

FR

HU

CH

NL

PL

IE

ES

SK

UK

AT

IT

BE

CZ

GR

EE

DE

NO

Other services


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assessment of liquidity of business partners, e.g. tenants


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal representation in-court


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mediation


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drafting contracts or wills


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ancillary services


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Providing standard forms


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal representation out-of-court


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal advice


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal Information


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provided       Source: RIAD members

Besides the services offered, legal protection insurers also pay most costs incurred by litigation and legal assistance. Here is an overview of the most common expenses covered.

Types of costs covered in different countries

 

AT

CH

CZ

DE

NL

BE

ES

FR

GR

SK

UK

HU

IT

PL

EE

IE

NO

Bailiffs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bail (security to allow person to leave custody)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mediation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Witness

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt collection

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enforcement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Out-of-court negotiation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Experts

 

1)

 

 

 

 

 

 

 

 

1)

 

 

 

 

Court

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lawyers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1) Covered if part of a litigation and expert is appointed by order of a judge

Covered       Source: RIAD members

 

2.      Specific issues raised by the consultation

Points A.1/ A.2.4/ B.2.2/ B.2.5 of the consultation: victims’ problems in receiving compensation

-       An accident happens in a EU Member State different from the one where the victim resides (visitor). Or the driver, causing the accident, is insured in another Member State:

In these cases, a legal protection insurer pursues the claims or defends the rights of the policyholder cross-border. The assistance can consist in identifying the insurance company or even the driver, filing a claim the other Member State, negotiating with the adverse party, or just in funding the costs of a legal action. The legal protection insurer also supports policyholders to recover from the liable person uninsured losses, e.g. legal expenses, out-of-pocket expenses, costs of car hire, taxi, public transport, phone calls, damage to clothes etc.

-        An accident is caused by an uninsured vehicle or a vehicle that cannot be traced. Or the motor insurer is insolvent:

Under these circumstance, legal protection insurers help identifying the responsible authority which must be addressed and take all steps necessary to pursue the claims.

 

3.      Distinction between legal protection insurance and motor insurance

It is important to understand the different scopes, purposes, and targets of third-party motor liability and legal protection insurance.

Motor insurance is mandatory due to the fact that driving a car is considered to be a dangerous activity and the risk of causing injuries or damages to third parties is generally considered to be high. Consequently, motor insurance assures that third parties do not suffer any losses caused by the activities of the insured and reinstates the situation as it would exist without the damaging incident.

In this respect motor insurance serves and preserves the public good by compensating the hazardous but accepted behaviour of the policyholder. Motor insurance, in principle, does not protect the interests of the policyholder but the interests of the victim and the public as such. Legal protection insurers, by contrast, assist the policyholder (also when she or he is the faulty driver) in the pursuit and protection of his own rights, if necessary, also against another insurance company, in particular motor third-party liability insurers: legal protection insurers guarantee that their policyholders can defend their rights and have access to law and justice.

 


[1] Presently, the gross written premiums for legal protection in the EU amount to some €8bn compared to around €133bn of motor premiums per annum.