The EFTA Court to consider jurisdictional issue in relation to cross-border recourse claims between insurance companies
Author: Partner | Lawyer Christian Kjellby Nesset and associate Heidi Magnussen
The fundamental question is whether it is German or Norwegian law that determines which claims “German NAV” has against a Norwegian insurance company. More specifically, the questions concerns the interpretation of EEA rules on the coordination of social security systems as they apply to a scenario where a person has been injured in one EEA State (here Norway) and the injured person is covered by mandatory health insurance in his home country (here Germany).
Requests for advisory opinions from the EFTA Court
In circumstances where an EEA national court is unable to give judgment in a specific case due to uncertainty relating to the meaning of a rule of EEA law, such national court may ask the EFTA Court to give an advisory opinion on the interpretation of such rule. In the present case Oslo District Court has asked the EFTA Court for advice on the interpretation of Article 85(1) of Regulation No 883/2004 on the coordination of social security systems. The proceedings in Oslo District Court have been stayed pending the statement from the EFTA Court. Once the Court issues their opinion the Oslo District Court will then give their judgment.
The facts of the Oslo District Court case
The case before Oslo District Court concerns the settlement of recourse claims between Mobil Betriebskrankenkasse (a German insurance company) and Tryg Forsikring (a Norwegian insurance company) after a German national was injured in a car accident in Norway in 2011. More precisely, the legal issue in the case is whether Tryg Forsikring is obliged to pay compensation to Mobil Betriebskrankenkasse as assessed under German law, given that the latter was obliged under German law to cover the costs in question without regard to their compensability under Norwegian law.
The accident occurred on 6 May 2011, while the injured person was on holiday in Norway, driving his German-registered car. The driver of the other car, which was registered in Norway and covered by liability insurance taken out with Tryg Forsikring, was found responsible for the injury.
Immediately following the accident, the injured person was taken to hospital in Kristiansand, where he received emergency treatment for a number of injuries. He was offered surgery for an arm injury and a knee injury at the hospital, but requested to be transferred to a hospital in Germany to have the surgeries performed there. Complications arose in connection with the surgery in Germany, and his hospital stay there was therefore longer than planned.
Tryg Forsikring accepted liability under Section 8 of the Norwegian Act relating to liability for damage caused by motor vehicles (bilansvarslova) for the ailments and losses sustained by the injured person as a consequence of the traffic accident.
In addition, the injured person was covered by mandatory German health insurance provided by Mobil Betriebskrankenkasse. Mobil Betriebskrankenkasse made a number of payments under this insurance scheme and subsequently filed recourse claims against Tryg Forsikring. Tryg accepted several of the recourse claims, but rejected others on the basis that the remaining expenses did not warrant compensation to the directly injured person under Norwegian law.
Which country’s law is applicable to the claims?
Article 85(1) of the Social Security Regulation provides that if a person receives benefits under the legislation of one Member State in respect of an injury resulting from events occurring in another Member State, any rights of the institution responsible for providing benefits against a third party liable to provide compensation for the injury shall be governed by the following rules:
(a) where the institution responsible for providing benefits is, under the legislation it applies, subrogated to the rights which the beneficiary has against the third party, such subrogation shall be recognised by each Member State;
(b) where the institution responsible for providing benefits has a direct right against the third party, each Member State shall recognise such rights.
As mentioned above, the specific question for the Court to consider in this case is whether it is German or Norwegian law which governs (1) whether a recourse claim exists and (2) the substantive content and scope of such claim.
Both the European Commission and EFTA Surveillance Authority (“ESA”) have given statements to the Court in relation to the interpretation of Article 85(1). In short the consensus appears to be that when an institution in the injured party’s home country that is responsible for providing benefits, under that country’s legislation is subrogated to the injured party’s right against a third party, other EEA States must recognise the institution’s subrogation to the claim. However, the exercise of the right of subrogation cannot exceed the rights that the victim would have against the person who caused the accident pursuant to the law of the EEA State where the accident occurred. Lastly, both institutions have emphasised that the application or interpretation of the domestic law must not deprive Article 85(1)(a) of the Social Security Regulation of its practical effect.
Firstly, this means that the possibility of the subrogation of an institution to the rights of the injured person is governed by the law of the EEA State of the competent institution (in this case Germany). Therefore, if the domestic legislation of an EEA State provides in a purely internal situation that a social security institution is subrogated to any entitlement to compensation the injured person has against the person liable or confers on that institution direct rights against the person liable, such subrogation or direct rights apply also in cross-border situations.
Secondly, this means that the enforcement of such subrogation rights in the EEA State where the injury occurred is governed by the law of that State (here Norway). Norwegian law governs the rights that the injured person has against the person who caused the accident. Consequently, the exercise of the subrogated rights of the institution cannot exceed the rights that the injured person has against the person who caused the injury.
Thirdly, domestic law cannot be applied in a manner which undermines or nullifies the very substance of the obligation to recognise subrogation rights as provided for in Article 85(1). One of the disputed claims in the present case serves as an example of circumstances that, in the Commission’s view, would undermine the very existence of Article 85(1). The claim concerns expenses for hospital treatment in Norway. Tryg Forsikring has argued that the injured person is not liable to pay these expenses due to the European Health Insurance Card scheme. Nonetheless, Mobil Betriebskrankenkasse is obliged to pay the expenses pursuant to German law.
The Commission has submitted that the existence of national legislation denying recognition to the subrogation right of an institution responsible for providing a benefit, on the ground that the individual was insured with that institution, would essentially nullify the right of subrogation provided for in Article 85 of the Social Security Regulation.
The final judgment of the Court on the matter is expected in May this year.