This article appeared online on 8 November in Insurance Insight from Post Magazine.
As the European Commission seeks to consult on the impact of Rome II, Kelvin Farmaner and Paul Lavelle explain the options for further harmonisation of limitation periods.
It is now almost four years since the implementation of European Regulation 864/2007, better known as Rome II.
Against this background the European Commission has launched a consultation aimed at seeking opinions on possible measures that could address perceived difficulties that victims of road traffic accidents, occurring in member states other than in that of their domicile, may face in obtaining compensation owing to differences in limitation periods between member states.
The commission is also seeking feedback on the assessment of the scale of any problem.
To recap, Rome II is one of the most important developments in international personal injury claims for many years. The regulations set out the conflict of law rules applicable to non-contractual obligations in civil and commercial matters.
The aim was not to harmonise substantive law across Europe, but rather the conflict of law rules. The idea was that, no matter where in the EU an action is brought, the rules determining applicable law will always be the same.
Rome II is a European Union regulation and is, therefore, directly applicable to all member states.
Under Rome II generally, and in order of importance under Article 4, the applicable law is first the law of the country where the damage occurs; second the law of the country where both parties were habitually resident; and third the law of the country in relation to which the case is manifestly more closely connected than the other countries.
Scope of law
The regulations also allow parties to choose, under Article 14, by mutual agreement, the law that will apply to their obligation. Under Article 15 the scope of the law applicable includes the basis and extent of liability, as well as the existence, nature and assessment of damage or the remedy claimed.
Rome II made it easier to identify which law would apply in various situations. However, it did not harmonise the rules on claims as such. It is clear from the above that a claim will normally be quantified, for example, by reference to the laws of the country where the accident happened.
This does mean, however, that different rules will still apply across the EU. This is also the case for limitation in relation to which different countries have various differing rules.
There are a large number of variations in the limitation rules which apply across the EU. As well as differences in the basic periods which apply such as, for example, one year in Spain and 10 years in France, there are a raft of different rules governing questions such as what starts and stops the clock for limitation purposes as well as whether courts have discretion to extend those periods.
Cross-border conflict of law issues is clearly an area where the non-specialist can still slip up. A harmonisation of limitation periods may go some way to providing clarity for claimants and insurers, if implemented correctly, and if areas of dispute on that point can be reduced. Certainly improving information to claimants would be beneficial.
The EU is considering four possible remedies for the perceived problem. The first relates to the improvement of the information provided to victims about the time limits to make the compensation claim in each member state.
An option would be to encourage insurance companies to make such information available on a voluntary basis. This could be the liable party's insurer or the victim's own insurer.
Voluntary or mandatory
Another option would be to oblige insurance companies to make information about the applicable limitation periods available to the victim in the case of a cross-border accident.
This would not necessarily replace the need of the victim to seek professional legal advice but may prevent the victim seeking advice too late.
Besides case specific information, a third option could be to make more general information easily available concerning the national limitation rules for compensation claims for damages caused by traffic accidents.
The EU could draw up country fiches describing the national limitation period system for each member state and publish them on its website.
Finally, the EU could harmonise national laws of limitation for cross-border traffic accidents at EU level. Such harmonisation could be partial, for example addressing only the reasons for suspending or interrupting the running of time, or full, in the sense that all relevant aspects - period, commencement, grounds of suspension/interruption - would be harmonised.
The scope of the harmonisation could be limited to personal injury claims for cross-border accidents or may extend to any delictual claim arising in a cross-border context.
However, given that limitation periods are generally established for broader categories of claims in national legal systems, this option would interfere more than the other options with the integrity of national legal systems, thereby increasing the risk of greater complexity.
The outcome of this consultation will affect many stakeholders, and improving information to claimants would a beneficial outcome, so interested parties should make a point of responding to the consultation, which will ultimately have an impact on European RTA claims.