A Case Initiated Regarding a Norm in the Cabinet of Ministers Regulation, which Limits the Amount of Insurance Indemnity due to the Death of a Breadwinner
On 14 February 2014 the 1st Panel of the Constitutional Court initiated a case “On Compliance of Para 7 of the Cabinet of Ministers Regulation of 17 May 2005 No.331 “Regulation on the Amount of Insurance Indemnity and the Procedure for Calculating it for Non-Material Losses Caused to Person” with the third sentence of Article 92 of the Satversme of the Republic of Latvia and Para 1 of Section 15(1) of Compulsory Civil Liability Insurance of Motor Vehicles”.
Contested Norm
Para 7 of the Cabinet of Ministers Regulation of 17 May 2005 No.331 “Regulation on the Amount of Insurance Indemnity and the Procedure for Calculating it for Non-Material Losses Caused to Person” envisaged that the amount of indemnity for pain and mental suffering in the case of the death of a breadwinner shall be 100 lats (currently 150 euro) for each person claiming insurance indemnity.
Norm of Higher Legal Force
The third sentence of Article 92 of the Satversme provides that everyone, where his or her rights are violated without basis, has a right to commensurate compensation.
Section 15 of Compulsory Civil Liability Insurance of Owners of Motor Vehicles Law (hereinafter – OCTA Law) sets the limit to insurance indemnity. Para 1 of the first part of this section provided that the limit for indemnification of personal losses shall be up to 250 000 lats.
The Facts
The case was initiated having regard to an application submitted by the Department of Civil Cases of the Supreme Court (hereinafter – SC). SC was examining a case regarding collection of insurance indemnity. The claimant – a minor – had lost both parents in a road traffic accident. He had received the insurance indemnity for the loss of a breadwinner in the amount stipulated by the contested norm, i.e., 100 lats for each breadwinner. However, the claimant’s representative turned to court, demanding insurance indemnity in the amount of 200 000 lats.
SC notes in the application that usually the court has the discretion to set the amount of indemnity for moral damages. However, the contested norm limits a person’s right to receive commensurate indemnity, assessing the facts of the particular case. The amount of indemnity for pain and mental suffering in all cases has been limited to a concrete and inadequately small sum.
SC, referring the European Union law and the case law of the Court of Justice of the European Union, notes that Section 15(1) of OCTA Law should be interpreted in the way that the insurer has the obligation to pay to the victim indemnity for pain and moral suffering within the set limit of liability, without restricting the amount of indemnity to be disbursed with the amount set in the contested norm.
Legal Proceedings
The Constitutional Court has asked the Cabinet of Ministers to provide a reply on the facts of the case and legal substantiation by 14 April 2014.
The term for preparing the case is 14 July 2014. The Court shall decide upon the procedure and the date for hearing the case after the case has been prepared.
Linked case: 2014-06-03