What is 4D?
EU Directive 2000/26/EC, more commonly known as the "4th Motor
Insurance Directive" came into force on the 20th January 2003. But
what is it?
Traditionally, people involved in an accident in the UK where the
Third Party was insured in another EU Country could claim
compensation from the Motor Insurers' Bureau which guaranteed the
liability of the Third Party driver within the UK. This was
referred to as the "Green Card Scheme" (because in years gone by
vehicles travelling outside their own country were obliged to
extend their insurance cover for foreign travel by obtaining a
Green Card from their insurer and would not be allowed into the
other country without one), and the MIB would deal with the claim
according to English, Scottish or Irish Law, depending upon where
in the UK the accident happened. They would also accept service of
proceedings within the relevant jurisdiction.
"4D" now provides that an EU or EEA citizen, who is the victim of a
road traffic accident in a Green Card state, other than his own,
which is caused by the driving of a vehicle normally based in
another EU or EEA state may require that his claim for compensation
be investigated, negotiated and settled within his own state. Every
EU/EEA insurer must have nominated a representative in each other
EU/EEA state to handle such a claim. "4D" has traces of the pre
action protocol within its drafting. It provides that the victim is
entitled to confirmation of the insurers' cover and the
representatives' involvement within 21 days of presenting the
claim. Within three months, a reasoned offer of compensation must
be made where liability is not contested. Where liability is in
dispute, a reasoned reply or quantified damages must be provided.
Failure to comply with these time limits will lead to an imposition
of a fine upon the insurer, to be determined by its own National
Authority.
If the insurer concerned has not nominated a representative,
does not respond within the initial 21 day time limit or the long
stop of 3 months, or alternatively if the vehicle is not insured,
then the victim is entitled to have his claim handled by the
Compensation Body, which in the UK is the MIB. The Regulations also
give victims of road traffic accidents in Green Card states
involving an EU or EEA based vehicle an entitlement to information
about the vehicle involved. A Bureau to deal with these requests
must be set up in each EU/EEA state. In the UK, the Motor Insurers'
Information Centre has been set up in Milton Keynes. For a fee of
£10.00, the centre will provide the victim with the details of the
name, address and policy number of the insurer of the vehicle, the
identity of its UK representative and the registered keeper of the
vehicle.
"4D" is not without its limitations. Although it covers accidents
in all Green Card states, it only applies where EU or EEA state
based vehicles are involved. It is not clear whether the
Regulations are retrospective, or only apply to those accidents
occurring after the 20th January 2003. Although "4D" is in force in
most European Countries, where it is not in force then insurers may
refuse to deal with claims until it is enacted. The major problem
however is that the Regulations state that the system of
representatives effects neither the substantive law to be applied
in each individual case nor the matter of jurisdiction. Thus, if
you were German, are holidaying in Greece, in a Greek hire car and
were involved in a road traffic accident with a Greek local,
driving a Greek registered vehicle, you could request that the
accident was investigated, negotiated and settled back in the UK by
the appointed UK representative for the Greek insurer concerned,
but your claim would be settled according to Greek law in respect
of damages and costs. Thus all representatives must be familiar
with the law appertaining to the particular place in which the
accident has occurred. However if you were a UK citizen in the
above example, then you would fall within the only exception to
this rule within the Regulations, which provides that the UK
compensating body pays damages that are properly recoverable under
the laws applying to that part of the UK in which the injured party
resided at the time of the accident.
If your claim cannot be settled, and your only recourse is to issue
Court proceedings then that would have to be done within the
Country in which the accident occurred. It is queried, now that the
Claimants can sue insurers direct by virtue of the European
Communities (Rights against Insurers) Regulations 2002, whether the
Claimant can get round this provision by suing the appointed
representative direct. For most European Countries, this will not
be a problem as the Civil Law systems in those countries
uniformally apply the substantive law and damages at the place
where the accident occurred. Taking the example of the German
driver above who had his accident in Greece, if he were permitted
to sue the German appointed representative direct and the matter
proceeded to trial, then the German Court would apply the Greek law
as to the question of damages and costs. It is only in the UK where
common law dictates that the Courts will apply their own level of
damages and costs to all cases before them.
The limitations and difficulties and more importantly whether the
Claimant could escape the question of jurisdiction by suing the
representative direct is currently being addressed in an advisory
opinion from the European Commission. Whether "4D" does represent a
step forward will remain to be seen.