Landesversicherungsanstalt Rheinland-Pfalz v Henriette Töpfer, née Dontenwill, Jean-Pierre Weber and 'le Phénix' insurance company (72/76)

II —Written observations submitted to the Court

The LVA points out that Article 52 lays down a rule on conflict of laws designed to enable the social security institutions of the Member States to bring actions for repayment to which they are entitled under their national law on the territory and before the courts of all the Member States and within the framework of the provisions which govern extra-contractual liability in each Member State. This is expressed in the judgment of the Court of 12 November 1969 (Case 27/69, Entr'aide Médicale v Assurances Générales [1969] ECR 405) and of 9 December 1965 (Case 44/65, Hessische Knappschaft v Maison Singer et Fils [1965] ECR 965).It cannot reasonably be accepted that the rule on conflict enacted by Article 52 is limited to the mere recognition by the Member States of the legal procedure for bringing an action established by another Member State in favour of its social security institutions.Certainly, the action by subrogation can only be brought within the framework of the claim which the victim can assert against the third party liable under private international law. But within that limit, which guarantees that the legislation of each Member State on extra-contractual liability is observed, it is essential that an action by an institution liable to pay benefits can be brought according to the rules of the legislation under which the said institution is established. In other words, once the existence and the limits of the victim's right to compensation have been determined according to the rules of the national law governing that right, the substantive content of the right by way of subrogation referred to in subparagraph (a) of Article 52 is determined by the rules of the legislation under which the institution liable to pay the benefits is established. This, moreover, is expressed by Article 93 (2) of Regulation No 1408/71.Mrs Töpfer asserts that Article 52 of Regulation No 3 refers to the national legislation of the social security institution for the purpose of determining, whether, in the Member State where the injury was sustained, that instituion may seek to rely upon subrogation to the rights of the victim of the victim's legal successors, or upon the enforcement of the direct right referred to in subparagraph (b). However it does not modify the system of extra-contractual liability which remains subject only to the rules of the national law. Moreover, since Article 52 speaks simply of ‘recognition’ of the subrogation, there is nothing to indicate that the Community legislature intended to alter the content of the rights which could be enforced or to separate the right of the insurance institution from that which can be asserted by the beneficiary.The subrogated institution may not claim from the third party liable any payment other than that to which the victim or his legal successors are entitled, which implies that the institution must formulate its claim in accordance with the rules of the national law governing the victim's right to compensation. The Court of Justice gave this interpretation to the article which is in dispute in the main action in its judgments of 9 December 1965 (cited above) and of 16 May 1973 (Case 78/72, L'Étoile Syndicat Général v W. E de Waal [1973] ECR 499). This interpretation finds support in Article 93 (2) of Regulation No 1408/71 and in Article 111 of Regulation No 574/72.Mr Weber and Le Phénix insurance company assert first of all that the amount of the compensation payable by the person responsible for the accident or his insurance company, as the case may be, in respect of the injury and the damage caused, is res judicata.Under Paragraph 1542 of the RVO, the social security institution is bringing an action by subrogation and not a direct action in its own right, so that the person responsible for the accident is not liable to the social security institution beyond the amount of the damages awarded to the victim.As regards the person responsible for the accident, the relationship between the social security institution and the victim or his legal successors is res inter alios acta. The appeal by the LVA does not appear capable of having any effect on the liability of the defendants.The Commission asserts that in reality the problem before the Court is, first, whether, by virtue of Article 52, the extent of the LVA's right of action against the third party liable is governed by German legislation, and, secondly, whether, once the French court has fixed the amount of damages by way of compensation, the portion thereof which is due to the LVA by virtue of its subrogation must be assessed in accordance with German legislation.The Court has given an answer to the first point in its abovementioned judgment in Case 78/72, in which it held that ‘the substantive content of the direct right referred to under letter (b) of Article 52 of Regulation No 3 of the Council of the European Communities is determined by the rules of the national law defining the source and limits of the right of compensation vested in the victim or his dependants vis-à-vis the third party responsible’. The same conclusion can be drawn a fortiori in respect of the substantive content of the action by subrogation referred to under letter (a) of article 52. Therefore the extent of the action by subrogation available to the LVA under Article 52 must be assessed according to French law.The problem of the amount and the apportionment of the claim by the social security institution is more complicated here than when it is a purely internal matter, since the benefits were paid under the legislation of one Member State and the extent of liability was assessed according to the common law of another Member State.The LVA claims that, under German law, it is entitled to repayment of all the pension payments which it made to Mrs Töpfer. Both academic lawyers and the case-law of the Bundesgerichtshof are very divided in this respect. On the other hand, under French law, the social security institution is ‘permitted to seek repayment of the benefits which it is liable to pay, up to the amount of the compensation payable by the third party, who shall indemnity the physical injury to the victim, excluding such portion of the compensation as is of a personal nature …’ (Article L 397 of the Code de la Sécurité Sociale (Social Security Code)). According to the case-law of the Cour de Cassation, this definition excludes benefits which do not compensate for the consequences of the accident and which the institution would have had to pay even if the injury had not occurred (for example, old-age pensions).In the case of the main action, the application of German law as envisaged by the LVA would entail for the victim's legal successors a reduction of the supplementary compensation to which they are entitled from the third party liable so as to obtain complete compensation for the damage suffered. It is possible to imagine a case in which the same problem arises in reverse.Keeping to the actual wording of Article 52, it is possible validly to take the view that the Community legislature intended to limit the basis of any legal action by an institution liable to pay benefits solely to those benefits which that institution has paid out following the injury, and which arose out of the consequences of the accident, the event which gave rise to the liability of a third party. This interpretation also finds support in the fact that the rights conferred on the national social security institutions by Article 52 constitute ‘a logical and fair counterpart to the extension of the obligations of the said institutions throughout the entire Community as a result of the provisions of Regulation No 3’, as the Court stated in its judgment of 11 March 1965 (Case 31/64, Bertholet [1965] ECR 81).Can it be accepted that the right of institutions to the repayment of the benefits which they were liable to pay, by reason of the damage caused to the person insured with them, is conferred upon them autonomously by Article 52, irrespective of such rights as are conferred upon them by the legislation which applies to them or which applies to the law on liability? Such an answer would entail conflicts with certain national rules, in particular when at common law the amount of the compensation payable by the third party for the material damage is less than the amount of the benefits paid by the LVA on account of the damage. Hence, such an answer appears unlikely, since Regulation No 3 does not even amend the national legislations, but only coordinates the application thereof.Therefore there is no alternative but to find that Article 52 does not settle the problems raised by the triangular situation between the victim, the social security institution and the third party liable. It has no effect on the basis and the apportionment of the action by the social security institutions and none upon the substance of the extra-contractual liability.Consequently, the Commission proposes that the Court should answer in the following terms:‘The action by subrogation which may be available, under the terms of Article 52 of Regulation No 3 of the Council, to a social security institution in a Member State following an accident in the territory of another Member State involving a person insured with such institution, is governed, as regards its extent, by the rules of the national law defining the source and limits of the right to compensation vested in the victum or his legal successors vis-à-vis the third party liable. Although the wording of the abovementioned Article 52 enables the view to be taken that only such benefits as have been paid as a result of the injury may form the subject-matter of an action by the social security institution, the aim of that provision is exclusively to obtain recognition by each Member State of all rights of action against a third party liable established by the other Member States in favour of a social security institution liable to pay benefits, by way of subrogation or any other legal procedure.’The LVA, represented by P. Harnist, Advocate of the Colmar Bar, Mr Weber and Le Phénix insurance company, represented by Y. Dissler, Advocate of the Colmar Bar, and the Commission of the European Communities, represented by its Legal Adviser, M.J. Jonczy, acting as Agent, presented oral argument at the hearing on 9 December 1976.The advocate-General delivered his opinion at the hearing on 25 January 1977.