A case initiated with regard of a provision in the Cabinet of Ministers Regulation, which limits the amount of insurance indemnity to be disbursed for pain and mental suffering inflicted upon a person
On 7 March 2014 the 2nd Panel of the Constitutional Court initiated a case “Compliance of Para 3, Sub-para 5.5 and Para 10 of “Regulation on the Amount of Insurance Indemnity and the Procedure for Calculating it for Non-material Losses Caused to a Person” with Article 105 of the Satversme of the Republic of Latvia and Para 1 of Article 15(1) of the Law on Compulsory Insurance of the Civil Liability of Owners of Motor Vehicle”.
Contested Norms
The contested norms of the Cabinet of Ministers Regulation (in the wording, which was in force from 21 May 205 until 31 December 2013) set out the procedure for calculating the amount of insurance indemnity for the victim’s pain and mental suffering caused by the physical trauma to the victim, and also defined the amount of compensation. The norms, inter alia, provided insurance indemnity from 250 to 400 lats, if the victim had suffered grave bodily injuries, and the total amount of compensation up to 1000 lats to every person, who had suffered in a traffic incident.
Norms of Higher Legal Force
Article 105 of the Satversme provides that everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases on the basis of a specific law and in return for fair compensation.
Section 15 of the Law on Compulsory Insurance of the Civil Liability of Owners of Motor Vehicle (hereinafter – OCTA Law) defines the limits of insurance indemnity. Para 1 of the first part of this section provides that the limit of indemnity for damages caused to a person is 250 000 lats.
The Facts
The case is initiated with regard to a constitutional complaint submitted by limited liability company “Autofavorīts”. In 2007 a road traffic accident occurred, it was caused by a driver driving a car owned by Ltd. “Autofavorīts”. The victim suffered grave bodily injuries. The insurer compensated to the victim non-material losses, paying approximately 300 lats. The court ruled that Ltd. “Autofavorīts” must pay compensation to the victim: 5000 lats for maiming injury and 7000 for moral damages.
The submitter of the constitutional complaint notes that the contested norms ungroundedly decrease the amount of indemnity envisaged by OCTA law. Since the applicant had insured its civil liability, it would have been the insurers obligation to pay indemnity to the victim, if the contested norms had not envisaged limits to the indemnity. This restricts the applicant’s right to own property; moreover, no legitimate aim for the restriction to the right can be identified.
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 7 May 2014.
The term for preparing the case is 7 August 2014. The Court shall decide upon the procedure and the date for hearing the case after the case has been prepared.
Linked case: 2014-07-03