The principle that an offender must be punished for causing personal injury and must compensate the victim or his family for such injury knows its origin in the ancient world.

Historically, Babylonian law contained extensive provisions on compensation for personal injuries, while later Roman laws preserved this principle and regulated different types of compensation for personal injuries.

Since that time, the action brought by the injured person against the person responsible for the injury was not based purely on economic loss, and the ensuing compensation could thus be payable not only for pecuniary expenses but also for pain and distress of mind or body.

This long-standing principle paved the way for that type of compensation which is dubbed ‘non-material damage’ in our civil laws on liability. This type of compensation has become widely accepted although not all member states of the EU have embraced the concept of compensation for all damages suffered, irrespective of whether the interests harmed have a material or non-material dimension.

According to recent case law of the Court of Justice of the European Union (CJEU), motor accidents liability insurance policies must cover all the damages for which an insured motorist may be held responsible by the applicable national law, within the quantitative limits set by the relevant EU directives. These lay down a minimum coverage for personal injuries of €1 million per victim or €5 million per claim, irrespective of the number of victims.

In the first case, the Court of Justice addressed the compatibility with EU law of the exclusion or limitation of certain heads of non-pecuniary damages suffered by family members of road traffic accident victims.

This case related to a Slovakian-insured motorist who had caused a fatal car accident in the Czech Republic. Pursuant to the law of the latter country, non-pecuniary damages were also awarded to a victim’s family members. The insurance issued by Slovakia refused to cover this head of damage because it was excluded by the policy.

The Luxembourg Court in its preliminary ruling referred to the importance of ensuring the free movement of vehicles based in the EU and of persons travelling in those vehicles, and the corollary guarantee that the victims of accidents caused by those vehicles receive comparable treatment irrespective of where in the EU the accident occurs.

Referring to the protective aim of the EU directives, the court held that non-material damage, compensation for which is provided for as part of the civil liability of the insured person under the applicable national law, features among the types of damage in respect of which compensation must be provided and, if afforded under national law, must be covered by compulsory insurance.

In the second case, a Latvian claimant, the minor child of two road traffic accident victims, could not recover from the insurance of the responsible motorist the non-pecuniary losses suffered as a consequence of his parents’ death. While such damages are available under Latvian Law, these are not covered in full by insurances. In the same vein of the Slovak case, the Court of Justice held that if national law allows family members of the victim of a road traffic accident to seek compensation for non-material damages suffered, that compensation must be covered by compulsory insurance against civil liability in respect of the use of motor vehicles.

In a third referral made to the Court of Justice, an Italian court sought clarification as to whether a national provision, which sets the amount of compensation for non-pecuniary damages in the event of road traffic accidents, is compatible with EU rules on motor liability insurance.

The case concerns a claim brought by an insured against his Italian insurer for pecuniary and non-pecuniary damages. In his recent opinion, the Advocate General considered that Italian rules setting out the criteria for quantifying compensation for non-pecuniary damage were in line with EU law. The latter only requires compensation for this kind of damage, the quantification of which can be decided by national rules.

While the EU legislature has consciously chosen not to undertake any harmonisation of the criteria for quantifying damages in motor vehicle accidents, it is established that non-material damage is recognised as deserving protection, and must be covered by compulsory insurance where national law affords it to the victim of road traffic accidents, whether the policy holder himself or a third party is the victim.

Josette Grech is adviser on EU law at Guido de Marco & Associates.

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