C-64/83

o n the interpretation of Council Directive N o 7 2 / 1 1 6 / E E C of 24 April 1972 o n the approximation of the laws of the M e m b e r States relating t o insurance against civil liability in respect of the use of m o t o r vehicles, a n d to the enforcement of the obligation to insure against such liability (Official J o u r n a l , English Special Edition 1972 (II), p. 360) a n d in particular of the concept of the territory "in w h i c h the vehicle is n o r m a l y b a s e d " ,

T H E C O U R T (First C h a m b e r )

composed of: T . K o o p m a n s , President of Chamber, A. O'Keeffe and G. Bosco, J u d g e s ,

Advocate G e n e r a l : Sir G o r d o n Slynn Registrar: P . H e i m

gives the following

JUDGMENT

registered in Germany was in collision vehicles registered in other member with another vehicle registered in France. countries in respect of which a green The owner of the French vehicle and a card has been issued and, on the other, female passenger in that vehicle who had to reimburse foreign bureaux which have been injured in the accident both settled claims arising out of accidents commenced proceedings for com- caused by vehicles insured in its own pensation before the Tribunal de Grande country. Instance [Regional Court], Tarascón, against an occupant of the German car (who left the scene of the accident but who presented himself to the police next The Fund appealed against the decision day) and the Bureau Central Français of the Tribunal de Grande Instance. In a des Sociétés d'Assurance contre les judgment of 6 July 1981, the Cour Accidents d'Automobile [French national d'Appel [Court of Appeal], Aix-en- motor-vehicle accident insurers' bureau, Provence, quashed the judgment of the hereinafter referred to as "the Bureau"], court of first instance to the extent to relying on an agreement made on 7 which it held the Fund liable and October 1972 between the national declared "that the Bureau Central insurers' bureaux under Article 2 (2) of Français is liable for the damage arising the Council Directive of 24 April 1972. from the accident in question, subject to During the proceedings before that any right to seek reimbursement from court, it emerged that the German other persons". vehicle had been stolen and, con- sequently, its registration in the Federal Republic of Germany had been cancelled. In a judgment of 9 February The Council Directive of 24 April 1972 1979, the Tribunal de Grande Instance, set up a system whose essential charac- Tarascón, decided that the Fonds de teristics are clearly set out in the last Garantie Automobile [Motor Vehicle three recitals in the preamble thereto: Guarantee Fund, hereinafter referred to as "the Fund"], set up to meet claims arising out of accidents caused by uninsured vehicles, which the Bureau did " . . . the abolition of checks on green not cover, was liable to compensate the cards for vehicles normally based in a owner of the French vehicle. Member State entering the territory of another Member State can be effected by means of an agreement between the six national insurers' bureaux, whereby each national bureau would guarantee The Bureau is one of the national compensation in accordance with the bureaux set up in the context of the provisions of national law in respect of system of international insurance cer- any loss or injury giving entitlement to tificates ("green card"). One of the compensation caused in its territory by characteristics of that system is that it is one of those vehicles, whether or not based on agreements under private law insured; entered into bilaterally between the national insurance bureaux using a standard form of contract known as the "uniform agreement between bureaux". such a guarantee agreement Pursuant to those agreements, each presupposes that all Community motor national bureau undertakes, on the one vehicles travelling in Community hand, to settle claims arising in its own territory are covered by insurance; . . . country out of accidents caused by the national law of each Member State

"The territory of the State in which the vehicle is registered; or Pursuant to that directive, a sup- plementary agreement between national In cases where no registration is required bureaux (mentioned above) was signed for a type of vehicle but the vehicle bears on 16 October 1972. Article 2 of that an insurance plate, or a distinguishing agreement provides as follows : sign analogous to the registration plate, the territory of the State in which the insurance plate or the sign is issued; or "(a) When a motor vehicle normally based in a State whose bureau has In cases where neither registration plate signed the present agreement goes nor insurance plate nor distinguishing into the territory of another sign is required for certain types of Member State, being a member of vehicle, the territory of the State in the EEC, and is there subject to which the person who has custody of the compulsory third-party insurance in vehicle is permanently resident;" force in that territory, the owner, user and/or driver shall be deemed to be insured within the meaning of the Uniform Agreement between and Bureaux and to be holders of a

BUREAU CENTRAL FRANÇAIS ν FONDS DE GARANTIE AUTOMOBILE

The judgment containing the reference II — W r i t t e n o b s e r v a t i o n s sub- was received at the Court Registry on m i t t e d to the C o u r t 22 April 1983. The written procedure followed the normal course. 1. The Bureau observes in the first place that the territory in which a vehicle In accordance with Article 20 of the which has caused an accident is Protocol on the Statute of the Court of "normally based" must be defined as Justice of the EEC, written observations precisely as possible.

JUDGMENT OF 9. 2. 1984 — CASE 64/83

Thus, if a paying bureau contests the validity of a registration and, con- sequently, refuses to recognize that a vehicle is normally based in its territory The two objectives which the Council because the registration which attests was seeking to achieve when it drew up that fact has expired, and if as a result

BUREAU CENTRAL FRANÇAIS ν FONDS DE GARANTIE AUTOMOBILE

JUDGMENT OF 9. 2. 1984 — CASE 64/83

handling bureau if national law allows The formula used by the directive does this, the bureau of the country of not allow any distinction to be drawn origin being thus free from any between the various reasons for the lack obligation; of insurance. Hence, it is difficult to understand why the directive should prevent a national bureau from relying 2. Whether, on the contrary, the on situations in which there is no handling bureau is obliged by the insurance such as the nullity of the guarantee which it has given pursuant contract, the suspension of the guarantee to the directive, to guarantee the risk, for non-payment of the premium or the though only on behalf of the bureau absence of any insurance whatsoever, but of the country of origin, so that the should allow it to rely on special latter must indemnify the handling exceptions provided for by some law of bureau, subject to being reimbursed the country being visited. by its own guarantee fund or any other body provided for by national law. It is not the purpose of the directive to •harmonize the content of the different national laws, which it must take as they To make these alternatives clearer, a are. It would thus be contrary to both its distinction must be drawn between on letter and its spirit to rely upon such the one hand events which the applicable differences to argue that a national law places outside the scope of bureau's obligation to guarantee settle- compulsory insurance and, on the other ment of claims may be reduced if the law hand, those which, while being within of the place where the accident occurs is the scope of the requirement to insure, less demanding than that of the country may be the subject of an exemption at in which the vehicle is normally based. the discretion of the insurer. Only events of the second type are iri question here.

of 1 March 1971) and to those of the The problem facing the French courts Economic and Social Committee (Journal cannot be resolved by them because it is Officiel, C 36, 1971), which proposed the not for them to say whether the cost of a repeal of Article 4 so as to avoid all claim should be borne abroad by an reference to the intervention of the insurer, a guarantee fund or a bureau. guarantee fund. The choice of solution is a matter for each State, but only internally. Inter­ nationally, there is now only one basic principle: claims are borne by the vehicle's country of origin, in exchange for free passage at frontiers and payment It is thus clear that as regards the of claims in the first instance by the victims, the handling bureau guarantees bureau of the country in which the the settlement of claims without the accident takes place. That principle has national bureau's being able to rely upon the advantage of helping the victims by exemptions under the national law of the allowing them to avoid having to take handling bureau. If the national law of part in litigation in which they have no the handling bureau provides for certain direct interest but which delays the exemption clauses, the guarantee fund settlement to which they are entitled, takes the place of the insurer when they because their ultimate debtors cannot apply. What does not change from one agree among themselves. country to another is the guarantee of total cover deriving from joint and complementary obligations entered into by the insurers and the guarantee body. In conclusion, therefore, the Bureau states that the expression "in accordance with the provision of national law on compulsory insurance" in the directive The logic of the system implies that the refers only to the binding rules of national bureau of the country in which national law defining the scope of the a vehicle is normally based covers all obligation to insure and determining the claims in respect of damage caused minimum amount of the guarantee. It abroad by that vehicle and recovers from does not refer to any optional its guarantee body the sums paid by it in exemptions which the said national law the absence of insurance cover. It is not may allow so as to refuse the insurance for the handling bureau to arbitrate in guarantee. that way.

In referring to the guarantee which each national bureau gives to settle claims "in Each vehicle is therefore essentially accordance with the provisions of linked to the State in which it is national law on compulsory insurance", registered. The rule laid down in the the provision in question does no more directive is equivalent to a legal than echo the eighth recital in the presumption of such a link and it is clear preamble to the directive, which, after that the draftsmen intended to avoid . stating that the national law of each altogether otiose and delicate research in Member State should provide for each dispute by laying down the compulsory insurance, adds that "such equation: "territory in which the vehicle national law may nevertheless provide is normally based = the territory in for exemptions for certain persons and which it is registered". for certain types of vehicles".

any accidents caused by such a vehicle deprive the directive of a part of its will be compensated in accordance with usefulness. In such a case, the victims of the provisions of the national law of the accidents caused in France by vehicles State on whose territory the accident registered in other Member States, under took place and that claims will be settled circumstances in which a French insurer on the basis of an agreement between the might be able to avail himself of an national insurers' bureaux whether or exemption, would risk receiving no not those vehicles are insured. compenstion for the damage suffered whether from the Fund or from the Bureau, acting in the name of and on behalf of its opposite number in the State in which the vehicle was registered. The "provisions" referred to in the directive are those dealing with the settlement of claims. In concrete terms, claims are to be settled within the limits laid down by the compulsory insurance scheme of the State in which the As regards the concept of "territory in accident takes place, and, regard being which the vehicle is normally based", the had to the scope of that legislation, French Government states that in order irrespective of any exemptions from that vehicles coming from other Member liability which may be included in the States may be exempt from checks on contract under the terms of the the green card, they must be easily applicable legislation. identifiable and, from that point of view, the registration plate must be the only appropriate criterion, since it is common ground that verification of the regularity of the plate is a matter for the State The interpretation suggested above is in which issued it. That interpretation is conformity with the principle laid down reinforced moreover by the fact that the by the directive and it was on the basis only vehicles for which checks on of it that the applicable legislation was insurance have been maintained by way drafted. Thus, the French Law of of derogation (Article 4 (b)) are easily 21 December 1972 extended the identifiable either by their nature or territorial jurisdiction of the Fund so as because they have special plates of which to enable it to pay compensation in the list has been communicated to the respect of accidents caused abroad by Member States and to the Commission. uninsured vehicles registered in France, such compensation having previously been paid by the national bureau of the country in which the accident took place. Correspondingly, the Fund is exempted from compensating the victims of accidents caused in France by uninsured 4. The Government of the Italian vehicles registered in a Member State of Republic contends, as regards the the Community. concept in Article 2 (2) of the directive, that that provision must also be interpreted in the light of what is provided for in the agreement entered into in execution of it and by the It should be emphasized that the result agreement between bureaux referred to of any other interpretation would be to in that agreement.

The principle involved seems to be that eliminating those inconsistencies, the the national bureau of the country in second directive dealing with this subject, which the accident took place, when it the drafting of which is now almost settles a claim in respect of damage complete, provides that certain con- caused by a vehicle normally based in the tractual clauses which at present limit other country, is required to act like one insurance cover in certain countries, may of the undertakings authorized to no longer be relied upon as against a conduct the business of compulsory third party who has suffered damage; insurance against civil liability in the among such clauses are those relating to same country. In other words, the accidents caused by stolen vehicles. national bureau which handles the claim must act like the national insurers and therefore guarantees to settle claims in accordance with the provisions of national law on compulsory insurance. As regards the question of the "territory If, in a case in which the accident has in which the vehicle is normally based", been caused by a national vehicle, the the Government of the Italian Republic national insurance undertakings did not guarantee to settle the claim solely on contends that it follows from Article 1 the basis of the provisions dealing with (4) of the directive that the Council compulsory insurance, there is no reason intended to refer to the distinguishing to believe that the national bureau would sign (be it a registration plate, insurance be obliged to settle the same claim if the plate or other sign) which the vehicle accident has been caused by a foreign vehicle. This is precisely because the bears, regardless of any validity which directive provides that a vehicle normally that sign may have in the State in which based in another country is not in a it was issued. The directive is concerned different situation from that in which the with assigning each vehicle to a territory compulsory insurance scheme places and not with the lawfulness of its use, vehicles from the country in which the which might be lost for many reasons, accident took place. not necessarily related to the distinctive sign- It is only by the adoption of that interpretation that the directive can be applied in specific cases and can have the The Community provision must there- effect of liberalizing the international fore be interpreted as referring to the movement of persons and vehicles. If it entire system of compulsory insurance in force in a country and not, more were otherwise, it would be necessary, restrictively, solely to the legal maxima each time a vehicle crossed a frontier, to provided for or other special conditions. check the validity of the document auth- orizing its use and thus to demand the insurance document in every case, which would make the directive pointless.

authorization to use the vehicle bearing risks or the circumstances required to be it, should none the less be regarded as covered, the classes of persons or types being of significance for 'the determi­ of vehicles required to be covered or any nation of the country in which the monetary limits as to the cover required. vehicle is normally based. Furthermore, the directive provides, in Article 2, for the settlement of a claim by the national bureaux in the case of an accident caused by a vehicle from another Member State, whether or not that vehicle is insured. The fact is that when a country requests, pursuant to the directive and the agreement, that its vehicles be allowed to enter another Member country and be used therein without having their green cards checked, that country must also take responsibility for the consequences, that The supplementary agreement fully is, it must bear the costs resulting from implements the requirements of Articles any accidents which vehicles carrying its 2 (2) and 7 (2) of the directive as an plates may cause abroad, even if their agreement which guarantees the settle­ use is not authorized because they are ment of all claims for which insurance is uninsured. required by national law, whether or not vehicles are in fact insured. Given that the Uniform Agreement between Bureaux was also adopted by non- member countries which are not a party to the directive arrangements it is inconceivable that the Council in adopting the directive intended that the national bureaux of the Member States and non-member countries which chose to adhere pursuant to Article 7 (2) should enter into agreements to meet claims which their national laws did not require to be covered by insurance. 5. The United Kingdom replies as Pending a requirement for harmo­ regards the first question that it is the act nization of motor-insurance law it of guaranteeing the settlement of claims should remain open to the Member State which is subject to any limitations upon to decide whether to extend the scope of the requirement for compulsory in­ compulsory insurance of its own accord surance which may exist in the national thus putting the obligation on the law of the Member State where the bureaux. Furthermore, if the bureaux of accident occurs. It is not realistic to the Member States (and adhering non- make a distinction between the national member countries) are to be under an law as to settlement of claims covered by obligation to meet claims which are not compulsory insurance and the national required by law to be covered by law as to compulsory insurance. The compulsory insurance in the case of settlement of claims has to take account vehicles normally, based in other Member of any limitations in the national law as States (or such non-member countries) to the scope of the requirement for they would still not be obliged by the compulsory insurance either as to the Uniform Agreement between Bureaux to

6. The Commission contends that the effect of the provisions in question is that only vehicles normally based in another Member State or in certain other countries are exempt from checks on insurance. This presupposes that such vehicles are easily identifiable. The registration plate is the only appropriate It should also be noted that if Article 2 criterion. T o require further that that (2) is interpreted as envisaging that the plate should be legal and in force bureaux in the Member States would amounts to replacing the green card agree to guarantee all claims in respect checks with a systematic verification of of civil liability, they would be bound to -the registration. meet claims without applying any upper limit or other limitation prescribed by the relevant national law. Indeed the words "in accordance with national law on compulsory insurance" would be without object because any condition or re- The interpretation proposed does not striction in national law amounts to the mean that the national insurers' bureaux limitation of the scope of compulsory are not free to agree among themselves insurance. Furthermore, such a re- that claims in respect of an accident quirement would not only go beyond the caused by a vehicle whose registration intention underlying the setting-up of the has been cancelled are to be settled by green card system but would also be the handling bureau. In fact, certain outside the scope of the Uniform bureaux (though not the French bureau) Agreement between Bureaux which the signed an agreement called the Luxem- supplementary agreement adopts, if bourg Protocol on 19 October 1977 despite this the Court were to interpret setting up such a system. In any event, Article 2 (2) as envisaging that the however, a scheme of this type set up by bureaux in the Member States would agreement has no effect on the guarantee settlement of claims in respect obligation referred to in Article 2 (2) of of civil liability which were not required the directive which requires the bureau by national law to be covered by of the country in which the accident insurance, the supplementary agreement, took place to guarantee settlement of the which is limited to claims required by claim, whether or not the vehicle is national law to be covered by insurance, insured. would not be an agreement in conformity with Article 2 (2). This would result in the directive's being considered not to have taken effect, in view of the way in which Article 2 (2) is The directive and the supplementary formulated, and Member States would agreement of 16 October 1972 introduce be at liberty to reintroduce checks on a legal fiction. For the purposes of the insurance at their frontiers. guarantee given by the bureau, the fact

The other argument, which assimilates the exemption from liability under the guarantee to a lack of insurance, and which was adopted by the Cour d'Appel, "National law on compulsory insurance" Aix-en-Provence, is so wide that, in must be taken to mean the law which practical terms, it cannot be accepted imposes the obligation to insure and not, simply as a mere interpretation of in a wider sense, the law concerning existing provisions. It is for this reason compensation by an insurer, or that the Commission, on 30 July 1980, otherwise, for damage caused by motor presented to the Council a proposal for a vehicles. In other words, the guarantee second directive "on the approximation given by the bureau of the country in of the laws of the Member States relating which the accident took place relates to insurance against civil liability in only to claims which, in that country and respect of the use of motor vehicles" in the circumstances of the accident, are (Doc. COM(80) 469 definitive). required to be covered by motor-vehicle insurance against civil liability.

Decision

1 By j u d g m e n t of 22 February 1983, received at the C o u r t o n 22 April 1983, the French C o u r de Cassation [ C o u r t of Cassation] referred to the C o u r t for a preliminary ruling p u r s u a n t to Article 177 of the E E C T r e a t y a question on the interpretation of Article 2 (2) of Council Directive N o 7 2 / 1 1 6 of 24 April 1972 o n the approximation of the laws of the M e m b e r States relating to insurance against civil liability in respect of the use of m o t o r vehicles, and to the enforcement of the obligation to insure against such liability (Official J o u r n a l , English Special Edition, 1972, (II), p. 360).

2 T h a t question was raised in the context of proceedings between the Bureau Central Français des Sociétés d'Assurance contre les Accidents d'Automobile, hereinafter referred to as " t h e B u r e a u " , and the Fonds de Garantie Automobile, hereinafter referred to as " t h e F u n d " , which was set up to cover claims in respect of accidents caused by uninsured vehicles, for which the Bureau was n o t liable.

3 T h e Bureau is one of the national b u r e a u x set up in the framework of the international insurance card system ("green card system"). O n e of the c h a r a c - teristics of the system is that it is based u p o n agreements u n d e r private law concluded bilaterally between the national insurers' b u r e a u x according to a standard form called the " U n i f o r m A g r e e m e n t between B u r e a u x " . By virtue of those agreements, each national bureau u n d e r t a k e s , o n the one h a n d , to settle, in its o w n country, claims in respect of accidents caused by vehicles

8 The Tribunal de Grande Instance, Tarascón, by interlocutory judgment, invited the Fund to intervene in the proceedings and the Fund did so; the Tribunal, by a judgment of 9 February 1979, dismissed the claim for compensation against the Bureau as being without foundation, regard being had to the terms of Article 2 (2) of Directive No 72/166 and to French law. It decided furthermore that the body which was to compensate the plaintiff could only be the Fund.

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9 The Fund appealed against that decision and the Cour d'Appel, Aix-en- Provence, decided, by a judgment of 6 July 1981, that the damages in question should be paid by the Bureau on the grounds that the reference in Article 2 (2) of Directive No 72/166 to "the provisions of national law" related to the settlement of claims and not to insurance and, consequently, concerned only the upper limit of compulsory insurance cover which, at the time, was 1 000 000 francs for material damage.

10 The Bureau appealed to the Cour de Cassation which, by a judgment of 22 February 1983, asked the Court of Justice to give a preliminary ruling on the meaning of the expression "provisions of national law on compulsory insurance" contained in Article 2 (2) of the directive of 24 April 1972, and in addition to rule whether a vehicle which has been taken out of circulation in a Member State of the European Economic Community in which it was registered may be regarded as still normally based in the territory of that State within the meaning of Article 1 (4) of the directive of 24 April 1982.

13 With regard to vehicles of the type in question in this case, Article 1 (4) provides that "territory in which the vehicle is normally based" means "the territory of the State in which the vehicle is registered".

1 4 In compliance with that directive, a supplementary agreement between national bureaux (mentioned above) was signed on 16 October 1972. Article 2 of that agreement provides that:

"(a) When a vehicle normally based in a State whose bureau has signed the present agreement goes into the territory of another Member State, being a member of the EEC, and is there subject to compulsory third- party insurance in force in that State, the owner, user and/or driver shall be deemed to be insured within the meaning of the Uniform Agreement between Bureaux and to be holders of a valid certificate of insurance issued by the bureau of the country in which such vehicle is normally based, irrespective of whether or not they are in fact holders of such a valid certificate."

With regard to the Uniform Agreement between Bureaux, Article 1 (e) provides that:

"Notwithstanding the terms of such policy it shall be deemed to be a policy giving exactly the indemnity required by the compulsory motor insurance law of the country in which an accident occurs and no more and to be subject to such conditions and limitations as are contained in the policy and are permitted by such law."

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BUREAU CENTRAL FRANÇAIS ν FONDS DE GARANTIE AUTOMOBILE

18 It states that in each Member State there is a national bureau and a guaranteeing body. What is consistent from one country to another is the guarantee of total cover arising from the joint and complementary obligations of the insurers and the guaranteeing body. If the national law of the handling bureau (the bureau of the country in which the accident took place) provides for certain exemption clauses, the guaranteeing body of the country in which the vehicle is normally based takes the place of the insurer when those clauses apply. The link between the insurer's obligation and the Guarantee Fund's obligation is peculiar to each legal system and forms a whole which allows the victim to be guaranteed a settlement in all cases. The logic of the system implies that the national bureau of the country in which the vehicle is normally based covers all accidents caused abroad by that vehicle and recovers from its guaranteeing body the sums paid by it in the absence of insurance cover. The handling bureau does not have to make that sort of decision. By establishing an irrebuttable presumption of insurance, the directive necessarily establishes that interpretation.

19 According to the Bureau, Article 4 of the proposal for a directive submitted to the Council on 24 June 1970 (Journal Officiel, C 105, p. 17) provided that each State should designate a body responsible for the ultimate settlement of claims in respect of accidents caused abroad by uninsured vehicles registered in that State. Later, all reference to a body in the country of origin responsible for settling claims disappeared from the directive, as did Article 4 of the proposal, but the solution did not change in practice. In fact, the European Parliament considered Article 4 inappropriate because it did not clearly designate the body to which it referred and its inclusion in the system might undermine the functioning of the agreements between bureaux.

21 The Government of the French Republic states that the system established by the directive is based upon a basic underlying principle according to which a country which wishes to have its vehicles enter the territory of another Member State without being subject to green-card checks must accept the consequences which may result and in particular the consequences which vehicles bearing its registration plate may cause in another Member State, even though their use was unauthorized because they were uninsured. In return for the host Member State's obligation to refrain from making checks on the green card, the directive imposed two related obligations on the Member States in which vehicles are normally based. The first, laid down in Article 3, requires them to take "all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance" and "that the contract of insurance also covers, according to the law in force in other Member States, any loss or injury which is caused in the territory of those States". The second, provided for in Article 4, requires Member States which wish to derogate from the provisions of Article 3, within the limits provided for in Article 4 (a), to take the appropriate measures to ensure that compensation is paid in respect of any loss or injury caused in the territory of other Member States by vehicles not required to be insured.

22 The interpretation suggested by the French Government was, it states, that which inspired the drafting of the applicable French provisions and in particular, those relating to intervention by the Guarantee Fund. The Law of 21 December 1972, which was designed to incorporate into French law the rules laid down in the directive, extended the territorial powers of that body, so as to allow it to accept responsibility for damages in respect of accidents caused abroad by an uninsured vehicle registered in France, such damages having already been paid by the national bureau of the country in which the accident occurred. Correspondingly, the Guarantee Fund was exempted from

26 Thus, the effect of the directive is to assimilate any vehicle normally based in the territory of another Member State to a vehicle properly insured in accordance with the provisions of the national law of the State in which the accident occurred, at the time at which it occurred. The fact that the

JUDGMENT OF 9. 2. 1984 — CASE 64/83

directive provides for that consequence whether or not the vehicles are insured indicates that frontier checks must not relate to the validity of the insurance as regards the person having charge of the vehicle at the time at which it crosses the national frontier, and, a fortiori, during its stay in the national territory.

27 The directive's eighth recital states that the guarantee agreement between bureaux presupposes that all Community motor vehicles travelling in Community territory are covered by insurance. In accordance with that idea, the directive does not provide for the intervention of the various guarantee funds but only of the national bureau of each Member State. The latter must settle the claims, seeking reimbursement of the sums it has paid from the bureau of the Member State in which the vehicle is registered. If the vehicle is not insured, the bureau of the country in which the vehicle is normally based may in turn claim reimbursement from the guarantee fund of that country.

28 It follows that, as regards vehicles to which the directive applies, the national bureau of the Member State in which the accident has occurred guarantees the settlement of claims in respect of accidents which are required to be covered under the compulsory insurance scheme of that country, within the limits and in accordance with the provisions of its national law, whether or not the driver is actually insured.

31 The costs incurred by the Government of the French Republic, the Government of the Italian Republic, the Government of the United Kingdom, and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

T H E C O U R T (First Chamber),

in answer to the question referred to it by the French Cour de Cassation by a judgment of 22 February 1983, hereby rules:

1. The expression "provisions of national law on compulsory insurance" contained in Article 2 (2) of Council Directive No 72/166/EEC of 24 April 1972 (Official Journal, English Special Edition 1972 (II), p. 360) must be understood as referring to the limits and conditions of civil liability applicable to compulsory insurance, provided always that the driver of the vehicle at the time at which the accident occurred is deemed to be covered by valid insurance in conformity with that legislation.

2. When a vehicle bears a properly issued registration plate, that vehicle must be regarded as being normally based, within the meaning of the directive, in the territory of the State in which it is registered, even if

My Lords, 2. 5. 1972, p. 1)) "and on the other hand as to whether a vehicle which has been taken out of circulation in a Member The Cour de Cassation in Paris has State of the EEC where it has been referred to the Court under Article 177 registered may be regarded as still of the EEC Treaty a request "for a pre- normally based in the territory of that liminary ruling on the one hand as to the State in the context of Article 1 (4) of meaning of the phrase 'provisions in the directive of 24 April 1972". its own national law on compulsory insurance' contained in Article 2(2) of These questions have been referred in the directive of 24 April 1972" (Council proceedings before the Cour de Directive No 72/166/EEC (OJ, L 103, Cassation arising out of an automobile