Supreme Court of Greece (Arios Pagos), 4th Division, decision No 1025/2015: The Provisions on the Limitation of Moral Damages Payable by the Auxiliary Fund are Unenforceable

The Supreme Court of Greece (Arios Pagos) issued recently a long expected in the legal circles decision, of high importance and interest, both at national and European level, given the fact that it refers to the implementation of the Motor Insurance Directives on the mandatory civil liability insurance of vehicles.

The decision has been issued with regards to a fatal road traffic accident involving a collision of two cars. The insurance company covering the civil liability of the liable vehicle under the national legislation which implements the Directive 84/5/EEC, went bankrupt pending the litigation, and the Auxiliary Fund was by law substituted as a party in the proceedings.

According to Presidential Decree 237/1986, implementing Directive 84/5/EEC and in force until its amendment in 2012, the Greek Auxiliary Fund (Epikouriko Kefaleo) was obliged to compensate the persons who sustained damage due to personal injury or death in a road traffic accident, in case the damage was caused by an uninsured vehicle or by an unidentified vehicle or by a vehicle insured with an insurer that has gone bankrupt or the operation license of whom has been recalled. The payable compensation by the Auxiliary Fund was determined by a Ministerial Decision to the minimum insurance obligation provided for every insurable risk, whilst for the case where the insurer became insolvent or lost his license, to the insured amount of the specific insurance contract.

The provisions of the Presidential Decree 237/1986 were replaced by Law 4092/2012, whereby restrictions have been set for the Auxiliary Fund’s liability towards secondary victims for non-pecuniary (moral) damages in case of death of a relative, providing that these cannot exceed the sum of 6.000€ for each entitled claimant. The limitation to the compensation has been extended by this law to claims already born at the time the Law was enacted. Furthermore, the payable interest by the Auxiliary Fund remained at 6% per annum (when the usual interest rate for other parties is higher).

The 4th Division of the Supreme Court, by a majority of 4 to 1 judges, held by its decision 1025/2015, that the above provisions of Law 4092/2013 are not enforceable because they are not consistent with Directive 84/5/EEC, with article 1 of the First Protocol of the European Convention on Human Rights (ratified by Law 53/1974) and with art. 25 para 1 of the Constitution of the Hellenic Republic. Specifically:

  1. Concerning the limitation of non-pecuniary (moral) damages to a maximum of 6.000€ per secondary victim, it has been held that the amending provisions of Law 4092/2012:
    1. Are in direct contradiction with par. 4 of the second Directive 84/5/EEC, according to which “Each Member State shall set up or authorize a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in par.1 has not been satisfied”. This provision extends to non-pecuniary damages (moral damages), as per the ECJ jurisprudence (ECJ, c-277/12 of 24.10.2013).
    2. Are also contrary to the principle of proportionality, as this is set by art. 25 para 1 of the Constitution of the Hellenic Republic, because this intervention by the legislator is not appropriate for the purpose of achieving sustainability of the Auxiliary Fund, neither necessary, since this could have been achieved by milder measures, such as exceptional funding from the State Budget or by obliging the Auxiliary Fund to ameliorate its financial status through reduction of its expenses and increase of its income.
  1. Concerning the retrospective extension of the new provisions to already born claims:
    1. It is contrary to art. 1 of the First Protocol of the European Convention on Human Rights and in particular to the right of “property/ownership”. According to art.1 “No one shall be deprived of his possessions except in the public interest…”. The notion of property (ownership) includes pecuniary rights and in particular property rights and demands that are recognized by judgement or can be legally pursued (Supreme Court of Greece Dec. No. 6/2007, 40/1998). Accordingly, the above provisions on radical limitation of the compensation for non-pecuniary (moral) damages, violate the right to property. The financial viability of the Auxiliary Fund does not constitute a public interest excuse.
    2. It is in direct contradiction to the principle of equality, as this is set by art. 4 par. 1 of the Constitution of the Hellenic Republic.
  1. Concerning the reduced interest rate of 6% per annum on the damages to be paid by the Auxiliary Fund:
    1. It is in direct contradiction to the principle of equality, as this is set by art. 4 par. 1 of the Constitution of the Hellenic Republic, because the Auxiliary Fund is granted a preferential treatment over other defendants and debtors.
    2. It is contrary to art. 1 of the First Protocol of the European Convention on Human Rights, since it consists violation of the victim’s right to property, although no public interest reason is present.

Dissenting/Minority opinion: Directive 84/5/EEC does not mandatorily provide for substitution of the Auxiliary Fund in cases of insolvency or recall of the operation license of the insurer. This is left to the discretion of the national legislators, who are entitled to rule differently in case of public interest, such as, in this instance, the survival of the Greek public Auxiliary Fund.

Concerning the lower interest rate obligation of the Fund of 6% per annum on the payable compensation, this is also justified for reasons of public interest, i.e. for the survival of the Auxiliary Fund. It is not imposed by cash flow reasons and therefore it is a legitimate limitation according to art.25 par.1 of the Constitution of Hellenic Republic and art.1 of the First Protocol of the European Convention on Human Rights.

The 4th Division of the Supreme Court referred the case to the Plenary Session of the Supreme Court, according to the national legislation. The decision of the Plenary is awaited with great interest.

NORMAN ATLANTIC: Extraction of audio tracks from the VDR of the vessel

Οn 6 October 2015, in the course of the technical investigations procedures on the causes and circumstances of the maritime tragedy of NORMAN ATLANTIC, there has been a meeting in Pisa of the appointed by the court in Bari technical experts,  with the presence of our own experts, during which they have succeeded in extracting audio tracks and data from the ship’s VDR. This has been accomplished with the use of a different software than the one that had been used in the previous unsuccessful operations, when access was denied to the audio tracks.

The experts listened to part of the audio tracks, from which issues raised already appear to be confirmed, concerning the drencher system failure, dense smoke presence on car deck no 4 and others. Audio tracks for certain periods of time on the day of the tragedy have been extracted, with satisfactory audio quality. Data of electronic codified data have also been extracted, which will be analyzed by the experts by use of special tools.

This is a positive development in the technical investigation procedure, which undoubtedly is lasting long. We anticipate that the indications and more importantly the proven evidence that will derive from the analysis of these data extracts will contribute to the explanation of the maritime tragedy, will answer many questions, will enable the interested parties to substantiate the liability of those who had the duty to provide a seaworthy and safe ship. The technical investigations are continuing, with the presence of our experts. This is a critical and important stage of the whole case. It is however still early to deduct and express full conclusions. 

Volkswagen Scandal: Update

Following the latest developments and specifically the official announcement of the VW Group that it intends to recall and repair /fix all defective models which have been circulated in the market, our office would like to advise all involved vehicle owners to be very careful and cautious, to check and ask to be informed in detail about “repairs” and “fixing” to be done to their car, whether these will have any impact on the vehicle’s technical characteristics and to avoid signing any release of liability before confirming that their cars comply with the promised characteristics and specifications.

NORMAN ATLANTIC: Meeting of Investigators in Genoa, Italy, on July 2nd 2015

The next meeting of the investigators, in the context of their investigation for the causes and circumstances of the fire onboard NORMAN ATLANTIC, is on the 2nd July 2015. They will meet in Genoa, Italy, in order to examine the alarm panel of the ship i.e. the panel where the fire alarms during the incident have (or should have been) recorded. The examination will take place at the specialist laboratory Ship System Srl. The main aim is to extract the data from the data recorder and create digital copies. Experts appointed by our office will attend. During this meeting it is expected that the experts will also determine the schedule for the next actions of the investigation, both onboard the ship as well as for the examination of equipment and crucial machinery of the vessel. It is also expected that at the same above meeting it will be determined when and how the vehicles in the lower garages of the ship, which have not sustained total destruction by the fire, will be removed and their condition will be examined.

NORMAN ATLANTIC: Commencement of Official Technical Investigation

The Court and the Public Prosecutor’s Office of Bari served us on 24/4 2015, on behalf of the passengers and families of missing passengers of NORMAN ATLANTIC represented by our office, a notice on the preliminary meeting to be held on May 22, 2015 in Bari. During this meeting, official appointment of the technical experts to perform inspection and investigation of the causes and circumstances of the maritime accident will take place, who will take oath. Lawyers from our office will attend the meeting.

Following an unusually long for such serious maritime accidents waiting period, boarding on the damaged vessel and entry into its interiors will take place, for the purpose of: (a) thorough search for remains of still missing passengers, (b) performance of due technical inspection, surveys and investigations on the causes and circumstances of this unprecedented accident, and (c) determine and verify the condition of the vehicles on board the vessel and the extent of the damages.

We are worried and sometimes appalled by the exchange, through social media and electronic or other press releases, of texts related to the NORMAL ATLANTIC case which are produced or reproduced as being announcements, updates, comments, observations, and often “legal advice”, relating the facts, causes, judicial and other procedures. Most of them lack credibility and gravity, and very often do not correspond to reality, but in fact spread inaccuracies and unsubstantiated rumors of persons who are unaware of the facts of the accident, the investigation proceedings and the legal procedures and developments. We urge the victims of this maritime tragedy to disregard such reports and publications, and turn only to their lawyers for responsible information and updating. The investigation of the marine accident on the one hand and the due prosecution of the victims’ rights will not be done by or through the media, but by qualified and experienced technical experts and lawyers, within the context of officially prescribed procedures.

NORMAN ATLANTIC: Towed to Bari – Investigation of causes of accident about to begin

On Saturday, February 14, 2015, NORMAN ATLANTIC was towed from Brindisi to the port of Bari. Within the next few days fire experts and other technical experts and forensics will enter the ship in order to begin the investigation on the causes of the fire and the maritime tragedy. Independent technical experts and advisors appointed on our part will participate in the investigation process in order to ensure that all details with regards to the fire and the causes of the disaster come to light and that the rights of our clients, rescued passengers and families of the missing passengers, are protected and pursued in the best possible way.

NORMAN ATLANTIC: Meeting with the Italian Public Prosecutors in Bari

Lawyers from our office, on January 30, 2015, met with the Italian Prosecutors in Bari who are in charge of the investigation of the NORMAN ATLANTIC tragedy, and were updated, to the extent permitted by the procedural rules, on the progress and status of the investigation and the existing findings, primarily as far as the missing passengers are concerned, but also regarding vehicles, that are probably not considerably damaged in the lower decks/garages of the vessel. We officially notified the Prosecutors that our office intends to participate, in the name and on behalf of our principals, in all technical surveys and investigations, and have received confirmation that we shall be notified and invited accordingly, as soon as the vessel is towed to Bari in the next few days and before any action is initiated.

Moral Damages Award by the Piraeus Administrative Court of Appeal in Medical Malpractice Lawsuit

Following a diagnosis of multinodular goiter, a 17 year old girl was admitted to a specialized public hospital for a thyroidectomy operation. During the surgery, she suffered unilateral vocal chord paralysis, which resulted to a change in the girl’s voice timber and volume. Pavlakis – Moschos & Associates filed a medical malpractice lawsuit against the public hospital on behalf of the 17 year old girl, claiming for moral damages and for special compensation under article 931 of the Greek Civil Code.

The Piraeus Administrative First Instance Court held that the damage to the vocal cords of the patient has been the result of medical negligence, and particularly the surgeon’s negligent failure to identify and preserve the vocal chords during the operation. The Court (Decision No. 2023/2010) awarded moral damages to the victim for the psychological distress suffered as a result of the injury, as well as special compensation under article 931 of Greek Civil Code for physical deformation and impairment, on the basis that the change in the girl’s voice timber and volume will have an adverse effect on her personal, social and economic development which although not specifically quantifiable in terms of economic loss, should be compensated.

An appeal was filed against the decision of the Court of First Instance by both parties. The Piraeus Administrative Court of Appeal, by means of decision no. 2098/2013, upheld the judgment of the Court of First Instance as far as liability of the operating doctors was concerned, and doubled the amount awarded on the basis of article 931 of the Greek Civil Code.