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Coris News February 2006

Welcome to the first edition of the quarterly Coris newsletter for our British Client companies. With the technical skills and experience of our foreign motor claims handlers coupled with the close ties with the foreign Coris network we aim to provide readers a bridge into other jurisdictions and a regular update on any developments within the network.
Together with some light hearted material provided by the Coris team here in London and our offices throughout Europe, our intention is to help explain key differences in foreign law, foreign legal systems and culture.

MOTOR INSURANCE IN SPAIN
The function of Statutory Motor Insurance in Spain is to award compensation to victims of RTA's for the injuries and/or material damages caused. In this respect, Spain has one of the lowest covers for personal injury in Europe under its Statutory Motor Insurance, i.e. Compulsory Insurance, (€350,000), as opposed to countries such as the United Kingdom, France or Finland where there is unlimited motor liability for personal injury. However, it is very important that, before we reach any conclusions, we bear in mind that in Spain this Statutory Motor Insurance is generally complemented by a Voluntary Motor Insurance which in practice tends to provide the insured with unlimited cover.
This means that when damages are due to a victim of a RTA where they exceed the maximum level of cover provided under the Spanish Statutory Motor Insurance, €350000, the excess would be covered under the Voluntary Motor Insurance by the insurance company.
This Voluntary Insurance is in Spain, as a general rule, contracted together with the Statutory Motor Insurance, sometimes even with a different insurance company, in order to avoid the situation where the insured driver has to pay with his own assets any damages that exceed the threshold of €350,000.
The Fifth Motor Insurance Directive, which will not be in force until 2007, will be bringing some changes in this regard, as the Statutory Motor Insurance cover will be raised to €1,000,000 for personal injury. This development may have an impact on the current existence of the Voluntary Motor Insurance in Spain and the current level of premiums.
With the way things stand at present and despite the limited statutory cover in Spain, we can generally assume that any driver held liable for an RTA accident in Spain will have unlimited cover for any personal injury caused even though this will be subject to calculations carried out in accordance with the Spanish Baremo.

HIRE CAR EXPENSES IN SPAIN 

The question of recoverability of expenses incurred for hiring a replacement car as a consequence of an accident in Spain is considered quite differently from the approach in this country. The general rule is that this is an item of claim which is extremely difficult to recover from a responsible party.
Extensive case law in Spain follows very restrictive criteria in relation to the recoverability of hire car expenses incurred during the time a damaged vehicle is under repair following a road traffic accident. The link between hire car expenses and the accident needs to be clearly established. In this respect, case law concerning recoverability of hire car expenses whilst the car is being repaired clearly establishes that the claimant will have to show evidence that the hiring of an alternative vehicle was a necessity i.e. for professional reasons.It will be left to the entire discretion of the judge to decide on the specific circumstances of the case. The evidence provided by the victim regarding the reality of the expenses incurred and the extent of these will need to be taken into account for this purpose. Following general principles in Spain, it will be for the victim to prove the extent of the expenses incurred and it will not be sufficient to provide the court with possibilities or mere unsupported allegations. Only original documentation establishing the repair period at the garage, the time during which it was repaired, the work done and any other evidence to justify the length of time during which an alternative vehicle was rented, will be sufficient to support this kind of claim.  It will also be necessary to establish that the victim has acted promptly in repairing his vehicle so as not to extend the period during which he hired an alternative vehicle.
In summary, the judge will consider all the evidence provided establishing the extent of the expenses  and the cause of these and decide whether in the light of the specific circumstances of the case, the amounts claimed are reasonable and justified and could not have been avoided by the victim. The general tendency of Spanish insurers is to refuse to settle hire expenses in out of court settlements and only to pay  following a court decision.No doubt English insurers would welcome the introduction of this part of foreign law!

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