C-348/98

I — Introduction 2. Essentially, those questions seek to define the rights of victims of road acci- dents who are members of the insured person's family, in the light of Community provisions relating to the insurance against civil liability arising from the use of motor vehicles. 1. In the present case the Tribunal da Comarca de Setúbal (Portugal) has referred t o the Court of Justice a n u m b e r of questions for a preliminary ruling concern- ing the interpretation of the second Council Directive 84/5/EEC of 30 December 1983, 3. Specifically, the questions are primarily regarding harmonisation of the laws of directed to the issues whether the Second Member States in respect of civil liability Directive obliges Member States to ensure arising from the use of motor vehicles. 1 that the compulsory insurance against civil liability arising from the use and movement of motor vehicles covers a loss even where * Original language: Greek. liability is strict, that is to say where there is 1 — OJ 1984 L 8, p. 17, 'the Second Directive'. no fault, or whether, in the case of strict

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liability, a Member State may exclude all 6. Council Directive 72/166/EEC of compensation or whether that directive 24 April 1972, concerning the approxima- merely requires injury caused by error on tion of the laws of Member States relating the part of the driver to be covered, which to insurance against civil liability in respect would be a case of liability arising through of the use of motor vehicles, and to the fault. The question of the need for an enforcement of the obligation to insure interpretation consistent with Community against such liability2 ('the First Direc- law and the direct horizontal effect of the tive'), provides for the abolition of green- directive is also raised. card border checks and the creation of compulsory civil liability insurance in all Member States, covering loss and damage caused throughout the Community terri- tory.

Member States may, in place of the above 9. The Second Directive concerns the minimum amounts, provide for a minimum scope, that is to say the extent of cover amount of ECU 500 000 for personal provided by compulsory insurance, for which it sets maximum limits. More speci- injury where more than one victim is fically, Article 1(1) and (2) of the Second involved in a single claim or, in the case Directive provides: of personal injury and damage to property, a minimum overall amount of ECU 600 000 per claim whatever the number of victims or the nature of the damage.

' 1 . The insurance referred to in Article 3(1) of Directive 72/166/EEC shall cover com- pulsorily both damage to property and personal injuries.

10. Article 3 of that Directive provides: 2. Without prejudice to any higher guaran- tees which Member States may lay

'The members of the family of the insured person, driver or any other person who is liable under civil law in the event of an down, each Member State shall require that accident, and whose liability is covered by the amounts for which such insurance is the insurance referred to in Article 1(1) compulsory are at least: shall not be excluded from insurance in respect of their personal injuries by virtue of that relationship.'

— in the case of personal injury, ECU 350 000 where there is only one victim; 11. The ninth recital of the preamble to the where more than one victim is involved Second Directive refers to that provision . in a single claim, this amount shall be and states that 'the members of the family multiplied by the number of victims, of the insured person, driver or any other I - 6716

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to compulsory insurance, because there later than 31 December 1992. They shall were still significant discrepancies in the forthwith inform the Commission thereof. cover provided by that insurance. 5

2. By way of exception from paragraph 1: 14. According to the fifth recital of the preamble to the Third Directive, 'there are, in particular, gaps in the compulsory insur- ance cover of motor vehicle passengers in certain Member States;... to protect this particularly vulnerable category of poten- — the Hellenic Republic, the Kingdom of tial victims, such gaps should be filled;' Spain and the Portuguese Republic have until 31 December 1995 to com- ply with Article 1 and 2,

15. Article 1(1) of the Third Directive states that 'the insurance referred to in ...' Article 3(1) of Directive 72/166/EEC shall cover liability for personal injuries to all passengers, other than the driver, arising out of the use of a vehicle.'

III— The facts and the relevant national legislation 16. Finally, Article 6 of Directive 90/232 provides:

22. According to the national court, the preamble to Decree-Law 522/85 of 31 December 1985 which transposed the Second Directive into Portuguese law, 19. Mr Mendes Ferreira and his wife states in particular that compulsory motor brought an action before the Tribunal da insurance cover must be extended to pas- Comarca de Setúbal seeking an order sengers carried free of charge. 7Given that, requiring Mundial Confiança to compen- where the driver was at fault, passengers sate them for their loss. Mundial Confiança carried free of charge were protected by maintained that the Portuguese law in force civil liability for tortious conduct, as laid at the material time excluded any obliga- down in Article 483 et seq. of the 1966 tion to pay compensation. Civil Code it was only within the frame- work of strict civil liability that the legis- lature could extend compulsory motor insurance cover to passengers carried free of charge. However, that protection was denied by Article 504(2) of the Civil Code. 20. According to the national court, the version of Article 504(2) of the Portuguese Civil Code ('the Civil Code') in force at the material time provided that, in the case of transport provided free of charge, the person providing it was generally liable only for damage or loss caused by fault on 23. Furthermore, the national court his part. That provision was interpreted by explains that even though domestic law the Portuguese courts as meaning that a recognised the right of a passenger carried passenger carried free of charge was free of charge to obtain compensation in a required to prove fault on the part of the case of no-fault liability, Article 508(1) of driver and that that fault was the cause of the Civil Code limits the amount of com- the accident, in order to obtain any com- pensation for a road traffic accident in the pensation. absence of any fault on the part of the

person responsible. Specifically, where seeking a preliminary ruling from the Court there is death or injury, the maximum of Justice on the following questions: amount of compensation payable in the event of first death or injury is twice the amount that may be awarded by the Portuguese courts of second instance which, since 1987, has been ESC 2 000 000. 8 In other words, where there is no fault, it is the double of that '(1) Does Article 3 of Directive 84/5/EEC amount, that is to say, ESC 4 000 000, that require compulsory civil liability motor may be awarded by way of compensation. vehicle insurance to cover injury caused to the members of the family of the insured person or of the driver of the vehicle even where they are carried free of charge and where only civil liability, without fault, for materialisa- 24. The national court asks whether, hav- tion of risk arises, or may the Member ing regard to Article 1(2) and Article 5(2) State exclude the award of compensa- of the Second Directive, as amended by the tion in such cases? Act of Accession, Member States may fix maximum limits for the compensation of victims of road traffic accidents where the driver responsible was not at fault that are lower than the minimum amounts of com- pulsory insurance cover laid down by that directive. The national court takes the view (2) Do the amounts of minimum cover laid that the Second Directive makes no distinc- down by Article 1(2) of Directive 84/5/ tion between civil liability on the basis of EEC also apply to cases where strict fault on the part of the driver and strict, no- civil liability, without fault, for materi- fault liability. alisation of risk arises, or may the Member State lay down maximum limits for compensation in cases where there is no fault on the part of the driver of the vehicle responsible for the accident, that are lower than the mini- mum amounts laid down in Arti- cle 1(2)? IV — The questions referred to the Court

(4) Must national courts interpret domes- tic law in such a way as to render it consistent with a Community directive even where such interpretation is con- trary to the normal meaning and scope of its provisions of domestic law, or V — Replies to the questions referred to where such interpretation is consistent the Court with the intention of the national legislature but that intention has not properly been expressed in the legal text in question? 26. As a preliminary point, it must be observed that the accident which gave rise to the dispute in the main proceedings occurred on 12 February 1995, that is to say, after the first two directives became (5) Must national courts interpret domes- operative but before expiry of the transpo- tic law in such a way as to render it sition period allowed to the Portuguese consistent with a Community directive Republic under the Third Directive. 9 even in disputes involving only private individuals?

27. The questions referred must be exam- ined in two groups. First, it is necessary to (6) Must national courts interpret domes- clarify the system established by the three tic law in a way which is consistent directives for civil liability insurance in with the provisions of Article 1 of respect of the use of motor vehicles, as Directive 90/232/EEC, even with emerges from their provisions and to reply regard to an accident which occurred to the first two questions relating to that before the expiry of the period allowed issue (A). Second, if need be, I shall for transposition of that provision into examine the five other questions, which domestic law? relate to the issue of the interpretation of domestic law in a manner consistent with Community law and to the horizontal effect of the directives (B).

A — The system established by the three protection as that accorded to third parties. directives In · accordance with the First Directive, Member States retain competence to deter- mine the extent of the third-party cover and the terms and conditions thereof, within the framework of the conditions laid down by both the First and the Second Directive. (a) General However, whatever the degree of protec- tion accorded to third parties, 10 the pur- pose of the Second Directive was to prevent the family relationship from constituting a ground for exclusion, that is to say, to grant 28. First, the First Directive makes civil members of the family of the insured liability insurance arising from the use of person, driver or any other liable person, motor vehicles compulsory. The Commu- the same protection as that accorded to nity legislature requires all Member States third parties, as the Commission rightly to take all appropriate measures to ensure points out at point 12(b) of its written that civil liability is covered by insurance, observations. but leaves them with a discretionary power to determine, at national level, the extent of the liability covered and the terms and conditions of the insurance. 31. Consequently, where in a Member State, compulsory cover extends to third- party passengers, passengers who are mem- bers of the family of the insured person, 29. Second, the Second Directive, which driver or any other liable person must also essentially forms part of the framework be covered. However, in a Member State established by the First, concerns the scope which has not made the cover of third- of the discretionary power left to Member party passengers compulsory, passengers States to determine the extent of the who are members of the family would not liability covered and the terms and condi- be covered by the insurance under the tions of the insurance. It provides that Second Directive, since in that situation members of the family of the insured the protection is the same and the degree of person, driver or any other person whose relationship cannot be used as a means of civil liability for an accident has been exclusion. incurred and who is covered by the insur- ance cannot, by virtue of that relationship, be excluded from the insurance cover for their personal injuries. 32. Finally, the Third Directive resolved the problem of personal injury cover for pas- sengers in a vehicle, whoever they may be, with the exception of the driver. As stated

(b) Nature of the civil liability

37. However, legal systems also have to deal with cases of strict liability, that is to 34. As the Italian Government and the say unconnected with fault. A special type Commission both point out in their written of strict liability is liability for materialisa- observations, it follows from the wording tion of risk. The characteristic feature of of the First Directive and from the follow- that liability is that the creation or failure ing two directives that although they deal to remove a source of danger is used as a with cover for civil liability, they are not, criterion for attributing blame. That criter- however, concerned with the fundamental ion thus enables the obligation to compen- question of what form that liability might take, that is to say, they make no distinction 11 — See in particular, P.K. Kornilákis, Ή ενθυνη απο between liability due to fault and strict διακιδυνευση. Δογματιχη και (Risk liability. Dogmatic liability or liability in the event of materi- and I politico-legal approach). Thessalonica, 1982, in the collection' (Law and social issues), No. 1 (227 pages), p. 36 alisation of risk. et seq. and p. 113 et seq.

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14 — See A. Georgiadis, cited above, paragraph 65, points 1 et 39. In many legal systems, this liability seq. arising from the use of a vehicle is strict 15 — For a presentation of the system in force in French law, see Y. thLambert-Faivre, 'Insurance law', Paris, Précis Dalloz, 10 edition, 1998 (in the collection 'Private law', 837 pages), p. 509 et seq., paragraphs 724 et seq. and p. 539 et seq., paragraphs 754 et seq. 12 — Accordingly, the event giving rise to that liability may be a 16 — For a comparative analysis of risk liability in contempor- physical event (for example, the behaviour of an animal or ary legal systems, see, for example, A. Georgiadis, cited the collapse of a building) or a technical event (for above, paragraph 65, points 9 et seq. and P-K. Kornilákis, example, the operation of a motor vehicle); see, in cited above, passim. particular, A.S. Georgiadis, '(Law of obligations, General 17 — See, in particular, R.F.V. Heuston and R.A. Buckley, p art), Athens, P.N. Sakkoulas, 1999 (in the collection' Law and economy!, 779 pages); paragraph 65, points 1 et Salmond and Heuston on the law of torts, London, Sweet and Maxwell, 21 st edition, 1996 (592 pages), p. 223 et seq. seq. and P. Kornilákis, already cited, p. 127 et seq. and B.S. Markessinis and S.F. Deakin, Tort law, Oxford, 13 — See A. Georgiadis, cited above, paragraph 65, point 2. 3 rd edition, 1994 (758 pages), p. 268 et seq.

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18 — It should be borne in mind that at point 34 of his Opinion in Case C-129/94 Ruiz Bernáldez [1996] ECR I-1829, Advocate General Lenz drew attention to the following: 'Upon reading the directives, one is struck by the fact that they do not lay down any specific requirements regarding the relationship between the parties to the contract of 44. The Community legislature did not insurance. The directives are silent as to the consequences intend to require Member States to adopt of a breach of a duty of care by the insured or by the person causing the damage. It can be concluded from this a particular type of liability (liability for that the Member States or the contracting parties are relatively free to define the relationship between the parties to the contract of insurance, but their freedom may, of course, be exercised only in compliance with the other provisions of the directives. Consequently it seems to be 19 — See in that respect, point 25 of the Opinion of Advocate wholly permissible for legal consequences to be linked to General Lenz in Ruiz Bernáldez, cited above, p. 18. the failure of the insured party or the driver to observe a 20 — Paragraph 15 of the judgment in Ruiz Bernáldez, cited in duty to take due care.' footnote 18.

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45. In Case 64/83 Bureau Central Fran- çais 21 a question arose concerning the interpretation of Article 2(2) of the First Directive, which provides that for vehicles which are normally based in the territory of a Member Sate, the provisions of that directive, except for Articles 3 and 4, are to take effect after an agreement has been concluded between national insurance bureaux, under the terms of which 'each national bureau guarantees the settlement, in accordance with the provisions of its own national law on compulsory insur- ance, of claims in respect of accidents occurring in its territory caused by vehicles 47. In its judgment in the same case, the normally based in the territory of another Court followed its Advocate General in Member State, whether or not such vehicles ruling 2 3 that 'the expression "provisions of are insured' (emphasis added). national law on compulsory insurance" contained in Article 2(2) of Directive No. 72/166 must be understood as referring to the limits and conditions of civil liability applicable to compulsory insurance, provi- ded always that the driver of the vehicle at the time at which the accident occurred is 46. In an effort to define the scope of that deemed to be covered by valid insurance in provision of Article 2(2), Advocate General Sir Gordon Slynn drew attention to the 22 — See the Opinion in Bureau Central Français, cited above, in footnote 21. 23 — Paragraph 29 of the grounds and paragraph 1 of the 21 — [19841 ECR 689. operative part of the judgment.

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In such a situation, the protection afforded by the directives and the harmonisation sought would in all essential respects be non- existent and Article 3(1) of the First Direc- tive would be deprived of all practical effect. Therefore, where civil liability under 48. Moreover, a ideological interpretation national law is established, the protection of the abovementioned provision provides afforded by the directives constitutes the further support for my conclusion that the unavoidable 2 7 consequence of this. Community legislature requires cover for all civil liability arising from the use of motor vehicles, whether that liability be objective or subjective, yet without impos- ing the adoption of a particular type of

However, the sixth recital in the preamble to the Second Directive, Court continued (paragraph 19): 'Any other interpretation according to which 'it is necessary to make provision for a would have the effect of allowing Member States to limit body to guarantee that the victim will not remain without payment of compensation to third-party victims of a road compensation where the vehicle which caused the accident traffic accident to certain types of damage, thus bringing is uninsured or unidentified', although the Member States about disparities in the treatment of victims depending on remain free to make the compensation payable by that where the accident occurred, which is precisely what the body subsidiary or non-subsidiary. As the Court pointed directives are intended to avoid. Article 3(1) of the First out in paragraph 17 of its judgment in Ruiz Bernaldez, Directive would then be deprived of its effectiveness.' It cited in footnote 18, Article 1(4) of the Second Directive concluded (paragraph 20): 'That being so, Article 3(1) of strengthened the protection of victims by requiring Mem- the First Directive precludes an insurer from being able to ber States to create or approve bodies responsible for rely on statutory provisions or contractual clauses to refuse paying compensation for damage to property or personal to compensate third-party victims of an accident caused by injury caused by unidentified or uninsured vehicles. the insured vehicle.'

51. To accept the contrary solution would raise the question whether the Community directives require Member States which do not prescribe strict liability for damage caused by the use of vehicles to alter the conditions under which civil liability is 54. Those considerations lead me to con- incurred and to envisage in those situations clude that Community law regarding the introducing strict, or risk, liability. insurance against civil liability has not completely harmonised individual civil lia- bility regimes. The Community legislation is concerned with compulsory insurance but not civil liability. That is why none of the three directives contains any provision taking account of the possible existence of different sets of rules governing civil liabi- lity, that is to say, national rules governing liability for an event that is not due to fault 52. However, as I have pointed out, in so (strict or risk liability) the terms and far as that requirement results neither from conditions of which may differ, primarily the letter or the spirit of the Community with regard to the amounts of compensa- legislation, the harmonising obligation laid tion, from those of a parallel set of rules down by the directives has not, in my view, governing civil liability based on fault on become hostage to the particularities of the part of the driver.

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59. The Commission wonders whether a reply to that question is really of assistance 57. Furthermore, where the national law in deciding the case in the main proceed- applicable requires passengers who are not ings. members of the family of the insured person or driver of the vehicle to be covered, it follows from Article 3 of the Second Directive that, as from the date on which the period allowed for transposing 60. In my view, although the reply to the the directive into Portuguese law expired, first question itself contains many elements any contractual or legislative provision of the reply to the second question, the

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VI — Conclusion

65. I therefore propose that the Court reply to the questions referred by the Tribunal da Comarca de Setúbal as follows:

(1) Article 3 of the second Council Directive 84/5/EEC of 30 December 1983on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles must be interpreted as meaning that such insurance must provide passengers who are members of the family of the insured person or driver of the vehicle the same protection as that provided for by national legislation for passengers who are not members of the family.

(2) Article 1(2) of the Second Directive must be interpreted as meaning that the minimum amounts of cover laid down in that article are applicable to situations where civil liability on the part of the insured person has been incurred, regardless of whether there are different national regimes governing civil liability based on the existence or non-existence of fault.