Ultralight aircraft accident

Jolanta Budzowska        20 January 2017        Comments (0)

Aviation accident cases tend to have a cross-border side to them. At times only seemingly, though, as in a recent case which concluded with a judgement of the District Court in Kraków. In said judgment the court declared the jurisdiction of Polish courts and applied Polish substantive law, despite objections raised by the sued insurer: a joint-stock company incorporated under Czech law.

The accident occurred in 2011 at one of the Polish airports. The pilot and a single passenger both died in the ultralight EV-97 Eurostar aircraft’s crash.

In their report, the State Commission on Aviation Accident Investigation of The Ministry of Transport, Construction and Maritime Economy indicated that dragging the aircraft during take-off, which led to the aircraft spinning and subsequently hitting the ground, was the cause of the accident. In addition, the fact that the take-off mass exceeded the limits by at least 10%, as well as the slow reaction, or even a lack of an reaction of the pilot to the inappropriate angle of attack, both contributed to the accident’s occurrence. As such it was found that the sole cause of the accident was an error on the part of the pilot.

The aircrafts’ permanent base was in a Polish town, but both the pilot and the aircraft’s owner were members of the Amateur Aviation Association of the Czech Republic. The aircraft was registered in the Czech Republic and was covered by valid insurance. The insurance policy was issued by a Czech agent of a Czech insurance company. The indemnity sum for damage caused to a passenger under the policy in question was equal to 113.111,00 SDR.

The policy also mentioned a framework agreement between the insurer and the agent. However, the content of this agreement was not known to the insured at the time of the purchase of the policy.

The abovementioned framework agreement provided that, among other things, the insurance contract does not cover liability for damage caused during lengthy exploitation of the aircraft outside of the geographical territory of the Czech Republic in regard to an insured that – if he/she is a natural person – is not a citizen of the Czech Republic, or if it is a legal entity – is based outside the territory of the Czech Republic. „Lengthy exploitation” is defined as an continuous period of more than 90 days during a single calendar year. The agreement also contained a clause stating that any insurance policies issued on its basis are to be governed by the Czech law.

The family of the deceased passenger notified the Czech insurance company of the damage and claimed redress and compensation. However, pre-court proceedings did not result in any kind of decision by the insurer. As such, the case proceeded to trial.

The insurer argued that the Czech law is applicable, that he lacks capacity to be sued in this case (locus standi as a defendant). The insurer also brought forth statutory defence, which included, among others, circumstances such as the fact that the aircraft was stationed outside of the Czech Republic.

The court found that:

– The basis of the claim, and the entire case, is tort, which is a non-contractual obligation, and therefore the Rome II Regulation is relevant in regard to determining the applicable law.

– In respect of the claimants who demanded redress for non-pecuniary damage (harm) as well as compensation for a significant deterioration of their life situation as a result of the death of a close relative, the place where the damage occurred, in accordance with article 4 (1) of the Rome II Regulation, is Poland, that is where the claimants reside. This justifies the standpoint that Polish law should be applicable. In addition, the accident itself occurred in Poland. The court did not find that the case has any closer ties with the Czech Republic;

– While it is true that in the framework agreement between the Czech defendant insurance company and the Czech agent, who issued the policy, there is a clause stating that the insurance contract and any insurance policies issued on its basis are to be governed by the Czech law, the court did not apply said clause due to finding it contradictory to the provisions of the Rome II Regulation;

– The Polish civil law allows direct right of action against the insurer, and therefore the insurance company had locus standi as a defendant. The direct right of action is based on article 18 of the Rome II Regulation in connection with article 822 § 4 of the Polish Civil Code (the person entitled to compensation in connection with the event covered by a third-party civil liability insurance contract may pursue the claim directly from the insurer).

– In accordance with article 209 (2) of the Polish Aviation Law, in cases of non-commercial exploitation of aircrafts with a maximum take-off mass of 2700 kg, the minimum indemnity sum in respect of third-party civil liability insurance in respect of each single passenger during a single flight and in connection with a single event, the consequences of which are covered by the insurance policy, without prejudice to the provisions based on article 33 (2), is the equivalent of 100.000 SDR. The indemnity sum of the policy in question was equal to 113.100 SDR, and the claim did not exceed that amount;

– The court also did not apply another clause contained in the framework agreement, namely that the insurance contract does not cover liability for damage caused during lengthy exploitation outside of the geographical territory of the Czech Republic in regard to an insured that – if he/she is a natural person – is not a citizen of the Czech Republic, or if it is a legal entity – is based outside the territory of the Czech Republic. „Lengthy exploitation” is defined as an continuous period of more than 90 days during a single calendar year. The court explained that in spite of the framework agreement, in the insurance policy and the certificate it is explicitly stated that the insurance covers the territory of the entire world, and there are also no time restrictions to be found. In addition the court pointed out that the provisions of European law do not stipulate any such limitations;

– The court explained that there are also other factors which justify the standpoint that the aforementioned clause is unlawful, and should not be applied. The reason for the existence of obligatory third-party civil liability insurance stems from the fact that aviation accidents may result in severe damage, both pecuniary and non-pecuniary. The potential consequences of such accidents may in fact be so severe that compensating the harm and the damage will exceed the capabilities of the tortfeasor. In such an event the injured party may be left without any reliable means of obtaining compensation. The legislator’s intention was to prevent such situations from occurring, thus obligatory third-party civil liability insurance was introduced, in accordance to which the user of an aircraft pays a premium, and the insurance company is liable for the damage. In such a way it can be guaranteed that the harm and the damage of the injured party will be compensated. Therefore, any attempts to limit the liability of the insurance company on the basis of imprecise final dates should be considered unacceptable. In the case at hand it is not possible to determine on what day exactly the 90-day period, mentioned in the framework agreement, should commence. If the clause in question would be applied, the possibility of claiming compensation by the injured party would depend on when the user of the aircraft began the continuous period of exploitation of the aircraft outside of the territory of the Czech Republic, which can only be evaluated ex post. Moreover, it is an highly questionable and unverifiable event, not subject to any form of registration. Approving of such limitation would practically result in a situation where there is no valid insurance on the territory of Poland, which in turn would mean that the aircraft, in accordance with the provisions of the law, could not be used.

– The court also stated that the aforementioned clause is contradictory to the rule of non-discrimination of citizens of other Member States on grounds of nationality, which can be found in article 18 of the Treaty on the Functioning of the European Union. In accordance with said provision, Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may adopt rules designed to prohibit such discrimination.

Article 18 of the Treaty on the Functioning of the European Union has direct effect (see for example: the judgments of the European Court of Justice in cases C-122/96 Saldanha, point 15; C-274/96 Bickel, point 31; C-234/99 Niels Nygard, point 51; C-17/91 Lornoy et. al., point 24). The doctrine is not uniform in regard to whether said provision also finds application to private entities in the horizontal aspect, however in the judgment in case C-281/98 Angonese, point 35 and point 36 the European Court of Justice stated that it does, and in case C-411/98, Ferlini, point 50, the Court found that it does in respect of entities that exercise some form of power over an individual, and are able to impose certain conditions on that individual which impact the execution of the fundamental rights stipulated by the Treaty in a negative way. The Regional Court agreed with the European Court of Justice and found that the general terms of insurance or framework agreements on the basis of which insurance contracts are concluded cannot contain clauses that discriminate individuals on grounds of their nationality.

– All of the participants of the accident and the claimants are citizens of Member States, the defendant is a Czech-based entity, which is a Member State, and on top of that the accident occurred on the territory of Poland.

– The court therefore found that that the aforementioned clause contained in the framework agreement is contradictory to the non-discrimination rule of citizens of other Member States, since for the same price a citizen of the Czech Republic is provided a different scope of insurance protection than a citizen of any other Member State. The only differentiating criteria in this case is the citizenship. Approving of such a clause would result in a situation where a citizen of another country than the Czech Republic would have to obtain additional insurance, provided that he or she uses the aircraft outside of the territory of the Czech Republic for more than 90 days. What is more, he or she would not be refunded for the premiums for the period of time that is not covered by insurance (there is no grounds for that under the provisions of the agreement). Meanwhile a citizen of the Czech Republic for the same price would not have to buy additional insurance, and would be covered by insurance at all times. Due to the above the court found that said clause is invalid in relation to citizens of Member States.

– The claim itself was quantified on the basis of Polish substantive law. The court awarded the wife of the deceased passenger a total of 43.067 SRD as both redress and compensation for a significant deterioration of her life situation. The son of the deceased passenger was awarded 34.996 SRD along with statutory interest which ran after 30 days passed from the day on which the insurer was called to fulfil the obligation.

Compensation for severe brain injury in a road traffic accident

Dorota Kulig        03 January 2017        Comments (0)

The human life has a tendency to surprise us with unexpected changes. Unfortunately, one of our Clients is the best example that you should always expected the unexpected. Our Client made a decision to change something in his life, to have a fresh start. In his case the said change involved moving to the United Kingdom in aim to find a brighter future. However, he did not get the chance to enjoy this change for too long. Just after a few days of his stay in the UK he was involved in the car accident which resulted in the severe brain injury that made him incapable of having a fully independent life. Our Client required and still requires assistance in managing his affairs. Accordingly our Client was partially incapacitated and his mother acts as his guardian.

Our Client demanded a compensation for his injury from the insurer in the United Kingdom. His mother instructed one of the biggest law firms in the United Kingdom to handle the relevant proceedings. Our law firm was supporting them with the Polish aspects of the case.

The numerous experts reports, issued during the proceedings, confirmed vast and serious damage of our Client. As a result of the abovementioned reports and after protracted negotiations the insurer agreed to compensate our Client on a 100 % basis. Our Client was obliged to obtain the relevant approval of the proposed compromise with the insurer from the Polish Family Court. Therefore we have filed the appropriate petition, which resulted in obtaining the positive court decision in respect of the approval of the terms of settlement. Then, after gaining the approval of the UK Royal Court, the insurer paid various lump sums for compensation, for a total about £1,800,000 plus a yearly payment of about £60,000 until the rest of our Client’s life. We are delivering legal support to our Client and his mother, particularly we assist him in managing his financial situation.

Many of us may think that the amount of our Client’s compensation is significant and it will satisfy him fully. I would probably agree with them if I just saw the amount without knowing the impact of the accident in our Client’s life. However, we need to ask ourselves if we can put the price on a human’s life which in this case has changed so drastically. Of course the money will not restore his health, but it will most probably make his life a little bit easier.

(IN)CAPACITY AFTER BRAIN INJURY

Jolanta Budzowska        01 December 2016        Comments (0)

Serious accidents resulting in brain injury may cause disturbances in the victims’ mental health, which are often atypical. If the deterioration of mental health is grave enough to impede the ability to manage affairs, under the Polish law the victim will lose the capacity to perform acts in law.

What does this mean in practical terms? For example, that a contract with a law firm, or a settlement, signed by the victim, would be null and void. This is an instance of the absolute nullity of a legal action.

In order to avoid this, one needs to obtain a court ruling on the full incapacitation of the injured party. Only then his or her interests – including those relating to their representing law firm or to other third parties – are protected by the guardian. However, the guardian is required to obtain the prior consent of the Family Court in all important matters concerning the incapacitated person or his or her assets. The guardian, who is treated as the incapacitated person’s statutory representative, is obliged to obtain consent of the Family Court in actions that exceed daily management of the assets. There is no definition of the aforementioned actions that exceed daily management, therefore it should be always interpreted on an individual basis, and it will typically depend on the value of the transaction at hand. An action taken without such consent is null and void.

 What is the moral of all of the above?

In cross-border cases we must remember that if the victim is a Polish citizen, his lex patriae will govern the matter. This means that in respect of legal capacity, capacity to perform acts in law, as well as incapacity, Polish law will be applicable. In addition, under article 11061 § 2 of the Polish Code of Civil Procedure, if the person who is to be incapacitated is both a Polish citizen and is domiciled or habitually resident in Poland, the jurisdictions of the Polish courts is exclusive.

Let’s talk about skiing after Bombardino…

Jolanta Budzowska        21 November 2016        Comments (0)

Like many Polish skiing enthusiasts, in November I usually spend a week at one of the Austrian glaciers. Italian Dolomites are very busy from December until March, leaving France and Switzerland a little less occupied by the Poles.

I was catching up on my reading on the way to Sölden - crooked lawyer style, that is with no other than the October issue of American Association for Justice’s magazine ’Trial’. An article about a settlement concluded in respect of liability for an accident on the slope caught my eye. It ended with this sentence: ’The parties settled for $3.25 million, paid by the negligent teenager’s parents’ insurer’.

Of course, this is Europe and we are not used to the level of punitive damages awarded in the US. Nevertheless, this amount is still impressive. How does that relate to one of the Poles’ favorite sports, as well as to civil liability in their private life?

Statistics show that nearly 200 thousand Poles ski on Austrian slopes every year. In Italy, the Trentino region alone is visited by almost 80 thousand Polish skiing enthusiasts every season. This amounts to over 20% of all foreign visitors. We are the largest nation among all foreigners who visit Trentino during winter.

But, are all skiers aware of the responsibility for accidents on the slopes and their consequences – especially in terms of civil liability?

Not in my opinion.

Firstly, FIS Ski Slope Rules may be common knowledge, but the adrenaline rush often prevails over good sense and one’s awareness of rules.

Poles’ top ’peccadillos’ include:

– skiing off-piste (without additional insurance),

– skiing after a few beers / Feige Vodka / Prugna liguore or Bombardino,

– failure to comply with the signs, i.e. ignoring the ’route closed’ sign.

Secondly, I listed these specific violations on purpose: according to most insurance policies available on the Polish market, they exclude the insurer’s liability for causing an accident in such conditions. It is very rarely though that anyone pays attention to the general terms of insurance.

Thirdly, few people – if they even purchase a specialist ski insurance in the first place  - know the exact amount of the indemnity sum under the policy. It usually ranges from approx. 10 to 50 thousand EUR, with the most expensive policies providing liability coverage up to approx. 300 thousand EUR. Considering the possible scope of responsibility for causing personal injury, including redress for bodily injury and health disorder, the costs of increased needs and lost profit… even the highest coverage limit may be insufficient.

What then? The injured party’s lawyers – if they are not able to obtain compensation directly from the insurer – will most likely reach for the wrongdoer’s estate.

My law firm acts on behalf of the injured party. We also cooperate with the injured party’s lawyers when the claim is pursued in accordance with the law of the country in which the accident occurred, but there are some actions that need to be undertaken in Poland – such as an analysis of the third-party liability insurance policy, or the  wrongdoer’s estate search (if based in Poland). The insurance contract is also worth examining for abusive clauses. Are we certain that the conclusive provision the insurer relies on when denying liability or reducing the compensation is not, in fact, an abusive clause?

As an example, a quote from clause number 1291 on the Office of Competition and Consumer Protection’s list of abusive clauses: “Compensa will not be liable for damages  that occurred in circumstances other than those specified in the notification of damage”.  According to the Office of Competition and Consumer Protection, the insurer cannot reserve the right to exclude their liability if the client exercised their due diligence and good faith – even if his description of the circumstances of the accident was different than actual.

To sum up, there is a Polish proverb that can be roughly translated to: ’it is easy to be wise after the event’. Let’s hope this doesn’t relate to future skiing vacations…

Happy skiing, and just as a reminder:

FIS SKI SLOPE RULES

1. Respect for other skiers

You are responsible for your own safety and that of other skiers and snow boarders. Be aware of people around you and take necessary action to avoid skiing dangerously or causing a hazard to yourself or others.

2. Control of speed and manner of skiing

Control your direction and speed of travel, taking account of the terrain, snow, weather and traffic conditions.

3. Choice of path

Select an appropriate path. If you are skiing behind someone it’s your responsibility to ski around them without causing any danger to them.

4. Overtaking

You can over-take from either left or right but you must leave enough distance between yourself and other skiers to allow them to manoeuvre properly.

5. Joining and starting

Before starting off or pulling out you must look up and down the slope and choose an appropriate moment to execute your manoeuvre, so as not to endanger yourself or other skiers.

6. Stopping

Avoid stopping at blind corners or narrow or enclosed places unless you have to i.e. you’re injured. In the case of an injury you must vacate the spot as soon as practicable, to avoid further danger (to yourself or others). You should always stop at the side of the slope.

7. Ascending and descending

You must always use the side of the slope to walk up or down, whether wearing skis or not.

8. Observing the signs

Pay attention to and follow the signs, markings and notices on the slope.

9. Offering assistance

You are obliged by law to offer help and assistance in the event of any accident.

10. Duty to identify yourself

You are also obliged by law to give your personal details in the event of an accident, whether you caused it, witnessed it or assisted at it.

XVIIth annual European Traffic Law Days

Jolanta Budzowska        07 November 2016        Comments (0)

This year’s XVIIth annual European Traffic Law Days conference was held in Warsaw, and I couldn’t be happier to finally be able to walk to ‘work’!

On that note, I believe the Institute for European Traffic Law’s choice of the debate’s location was not coincidental.

On one hand, the number of accidents and collisions caused by drivers using vehicles on Polish registration plates on the Green Card System roads has been steadily growing over the years. On the other hand, the number of injured parties that took part in an accident on the territory of Poland, and pursuant to the Brussels I Regulation* have the right to seek compensation from a Polish insurer in their country of residence, has also risen. The trouble is, even in a trial before a court in their country of residence, Polish substantive law will be applicable (‘the law of the country in which the damage occurs’).**

The law offices from Great Britain, Germany and Holland which we cooperate with are getting much better at understanding ‘the Polish rules of the game’ in terms of compensation,  redress and pension. What still causes problems, however, are certain institutions of the law that function completely differently in various legal systems, and at the same time are often crucial in the feud between the injured party and the insurer. Prominent examples of the above include joint and several liability in the case of complicity, limitation, entitled persons (especially in the case of the direct victim’s death) or inheritance claims.

Invariably the most sought after is the answer to one key question: what should an ‘adequate’ (in line with the civil code’s definition) redress, according to Polish law, amount to? Court decisions do not have precedential value in Polish law, therefore they may only bring us closer to the correct answer. What further complicates the issue is the ‘cross-border factor’. For example:

“Redress meets its compensatory function if it is actual – i.e. its amount presents an economically noticeable value to the injured party. The benchmark for such estimate should therefore be financial relations and the cost of living in their country of residence, where their business life is focused‘ – judgement of the Supreme Court of 15 January 2014, ref. No. I CSK 215/13.

Why, then, would only a few Polish lawyers attend such an important conference, that focused on the biggest issues concerning cross-border road traffic accidents litigation? Honestly I have no clue.

What I know is that without the understanding of various law systems, as well as exchanging experiences and knowledge – during conferences such as those organised by the Institute for European Traffic Law – it would be difficult to responsibly deliver expert advice for foreign law firms, or advise individual clients who had the misfortune of becoming injured in a cross-border accident.

*Regulation of the European Parliament and of the Council (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition of judicial decisions and their enforcement in civil and commercial matters (Brussels I)

**Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II)