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Cite as: [1999] EUECJ C-397/96

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JUDGMENT OF THE COURT (Fifth Chamber)

21 September 1999 (1)

(Social security - Institution responsible for benefits - Right of action against liable third party - Subrogation)

In Case C-397/96,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234 EC) by the Landgericht Trier, Germany, for a preliminary ruling in the proceedings pending before that court between

Caisse de Pension des Employés Privés

and

Dieter Kordel,

Rainer Kordel,

Frankfurter Allianz Versicherungs AG,

on the interpretation of Article 93(1)(a) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6),

THE COURT (Fifth Chamber),

composed of: J.-P. Puissochet, President of the Chamber, P. Jann, D.A.O. Edward (Rapporteur), L. Sevón and M. Wathelet, Judges,

Advocate General: A. Saggio,

Registrar: H. von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

- the Caisse de Pension des Employés Privés, by Frank Peter, Rechtsanwalt, Trier,

- the German Government, by Ernst Röder, Ministerialrat in the Federal Ministry of Economic Affairs, acting as Agent,

- the Luxembourg Government, by Claude Ewen, Social Security Inspector, First Class, acting as Agent,

- the Commission of the European Communities, by Peter Hillenkamp, Legal Adviser, acting as Agent,

having regard to the Report for the Hearing,

after hearing the oral observations of the Caisse de Pension des Employés Privés and the Commission at the hearing on 18 March 1999,

after hearing the Opinion of the Advocate General at the sitting on 4 May 1999,

gives the following

Judgment

By order of 29 November 1996, received at the Court Registry on 12 December 1996, supplemented by order of 24 October 1997, received on 30 October 1997, the Landgericht Trier (Regional Court, Trier) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) two questions on the interpretation of Article 93(1)(a) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the
Community, as amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6, hereinafter 'the Regulation').

Those questions were raised in proceedings between the Caisse de Pension des Employés Privés (the Pension Fund for Private Sector Employees, hereinafter 'the Pension Fund'), a Luxembourg institution, and the defendants Dieter and Rainer Kordel and the German motor insurance company Frankfurter Allianz Versicherungs AG, concerning the recovery of sums paid by the Pension Fund on the death of one of its insured in an accident.

The relevant legislation

Article 93(1)(a) of the Regulation, which appears under the heading 'Rights of institutions responsible for benefits against liable third parties', provides:

'If a person receives benefits under the legislation of one Member State in respect of an injury resulting from an occurrence in the territory of another State, any rights of the institution responsible for benefits against a third party bound to compensate for the injury shall be governed by the following rules:

(a) where the institution responsible for benefits is, by virtue of the legislation which it administers, subrogated to the rights which the recipient has against the third party, such subrogation shall be recognised by each Member State;

...'

Article 232 of the Luxembourg Social Insurance Code (Loi du 27 juillet 1987 concernant l'assurance pension en cas de vieillesse, d'invalidité et de survie (the Law of 27 July 1987 on Old-age, Invalidity and Survivors' Pension Insurance), Mémorial No 60 of 28 July 1987, p. 1102) provides:

'If a person entitled to a pension under this Part has a legal right, exerciseable against a third party, to compensation for loss or damage caused to him by reason of an invalidity or death which gives rise to his right to receive the pension, the right to compensation for loss or damage of the type covered by the pension shall pass to the pension fund up to the amount of the benefits paid. If the pension is a permanent pension, such right of recourse shall apply to the amount of the cover capital less accrued rights. The detailed rules for giving effect to this provision may be the subject of a Grand-Ducal regulation.'

Articles 3 and 4 of the Règlement Grand-ducal du 18 novembre 1992 ayant pour objet de fixer les modalités d'application du recours contre tiers responsable prévu à l'article 232 du code des assurance sociales (Grand-Ducal Regulation of 18 November 1992 laying down detailed rules for giving effect to the recourse against
liable third parties under Article 232 of the Social Insurance Code, Mémorial No 89 of 3 December 1992, p. 2545, hereinafter 'the Grand-Ducal Regulation') state as follows:

'Article 3. Where a person dies who is not entitled to a pension, the right of recourse shall relate to the net amount of survivors' pensions paid during the thirty-six months following the date of the death of the insured and shall be exercised annually on the basis of an account to be established by the pension fund.

...

Article 4. Where a person dies who is entitled to a pension, no recourse shall be exercised against a liable third party.'

The main proceedings

Alfons Ginsbach, who was insured with the Pension Fund, died after being run over on 27 December 1991, near Trier, Germany, by a motor car driven by Dieter Kordel and owned by Rainer Kordel.

The Pension Fund paid survivors' benefits to Mr Ginsbach's widow and daughter in the form of a widow's and an orphan's pension with cover capital of LUF 4 003 236.

Acting in pursuance of its subrogation, under Article 232 of the Luxembourg Social Insurance Code, to Mr Ginsbach's widow's and daughter's rights to compensation for damage, the Pension Fund brought an action before the Landgericht, Trier, for damages, in the sum of one half of the capital, against Dieter and Rainer Kordel and Frankfurter Allianz Versicherungs AG, the latter's civil liability insurer.

The Pension Fund argues that, as regards the amount claimed under the rights it is asserting, the Landgericht is bound by Article 232 of the Luxembourg Social Insurance Code and that the right to which it is subrogated must be recognised in the Federal Republic of Germany in accordance with Article 93(1)(a) of the Regulation.

The Landgericht, uncertain as to the scope of Article 93(1)(a) of the Regulation and as to whether Luxembourg law can be applied to the case in the main proceedings, decided to stay proceedings and refer the following question to the Court of Justice for a preliminary ruling:

'How is Article 93(1)(a) of Regulation (EEC) No 1408/71 to be interpreted? Does recognition by the Member States extend to the content of the subrogated right, as defined in another Member State (in this case, by the second sentence of Article
232 of the Luxembourg Social Insurance Code which, in conjunction with the relevant Grand-Ducal regulation, provides that the claim to which the Pension Fund is subrogated is to amount to the cover capital less accrued statutory rights), or merely to the subrogation as such?'

By letter of 24 July 1997, the Court sent the Landgericht a copy of the judgment in Case C-428/92 DAK v Lærerstandens Brandforsikring [1994] ECR I-2259, asking whether or not, in the light of that judgment, the Landgericht wished to reformulate its question.

The Landgericht then supplemented the question referred to the Court as follows:

'Do provisions which prevent an institution of a Member State responsible for benefits, within the meaning of Article 93(1)(a) of Regulation (EEC) No 1408, from being subrogated to the right of a person in receipt of benefits to claim damages against a person liable for causing injury in another Member State, or prevent such an institution from asserting such a right, not also exclude the institution's right of recourse against the third party where the provisions in question are those of the Member State to which the institution belongs (the provision in this case being Article 4 of the regulation implementing Article 232 of the Social Insurance Code, under which, on the death of a person entitled to a pension, no right of recourse is to be exercised against liable third parties)?'

The questions referred

By these questions, which it is appropriate to examine together, the national court is essentially asking the Court to interpret Article 93(1)(a) of the Regulation so that it may ascertain whether, and to what extent, subrogation of a social security institution within the meaning of the Regulation to the rights which an injured party, or those entitled under such a party, have against the person responsible for causing, in another Member State, an injury which gave rise to the payment by that institution of social security benefits, is to be determined in accordance with the law of the Member State to which the institution belongs, and whether the extent of the rights so subrogated is also to be determined in accordance with that law. More specifically, the national court asks whether it is necessary to apply the legislative provisions of the Member State to which the institution responsible for benefits belongs which, like Article 4 of the Grand-Ducal Regulation, would result in the exclusion or limitation of the subrogation of that institution to the beneficiary's rights or the exclusion or limitation of the assertion of those rights by that institution before the courts of the Member State where the injury occurred.

In order to give an answer that may be of assistance to the national court, it is appropriate to consider in turn the rights enjoyed by the victim of the accident, or those entitled under him, the possibility of subrogation of the institution responsible
for benefits to those rights and the extent of such subrogation, and lastly, any limitations which the legislation of the Member State to which the institution belongs imposes upon the exercise of rights to which that institution is subrogated.

As regards, first of all, the rights of the victim, or those entitled under him, against the person who caused the injury, Article 93(1)(a) of the Regulation is intended only to ensure that any right of action which an institution responsible for benefits may enjoy by virtue of the legislation which it administers is recognised by the other Member States. That provision does not purport to alter the applicable rules for determining whether and to what extent non-contractual liability on the part of the third party who caused the injury is to be incurred. The third party's liability continues to be governed by the substantive rules which are normally to be applied by the national court before which proceedings are brought by the victim or those entitled under him, that is to say, in principle, the legislation of the Member State in whose territory the injury was sustained (see, on this point, Case 44/65 Hessische Knappschaft v Maison Singer et Fils [1965] ECR 965, Case 78/72 L'Etoile-Syndicat général v De Waal [1973] ECR 499, paragraph 6, and DAK v Lærerstanders Brandforsikring, cited above, paragraph 21).

It follows that the rights that the victim or those entitled under him have against the person who caused the injury and the requirements to be satisfied to enable an action in damages to be brought before the courts of the Member State where the injury was sustained must be determined in accordance with the law of that State, including any applicable rules of private international law.

It is to such rights alone, thus determined, that the institution responsible for benefits can be subrogated. Subrogation such as that provided for in Article 93(1)(a) of the Regulation cannot have the effect of creating additional rights for the recipient of the benefits against third parties.

Next, as regards the subrogation of the institution responsible for benefits to the rights of those entitled under the victim, the referring court states that, under German law, a social insurance institution is subrogated to the rights of such persons against a liable third party only to the extent that they were entitled to demand maintenance from the person who was killed. However, the referring court does not make it clear whether, under German law, it is only if the survivors of the victim of a fatal accident had been entitled to demand maintenance from him that they have a right of action against a liable third party or whether, on the contrary, the rule in question applies only to the subrogation of the institution responsible for benefits.

If German law makes any right of action of a victim's survivors against the liable third party subject to the existence, for their benefit, of a present or future obligation of the victim, if in life, to pay them maintenance, such a rule, which governs the very principle of the survivors' right of action, would, in accordance with the principles outlined in paragraphs 15 to 17 of this judgment, have the effect
of depriving the survivors, if they had no right to maintenance, of any right to which the institution responsible for benefits could have been subrogated.

Nor does the referring court make it clear whether, under German law, it is necessary for the victim to have been paying maintenance immediately before his death to those who claim a right of action, or whether it was sufficient for those persons to have been entitled, in the future, to demand the payment of maintenance. On this point, it is sufficient to point out that it is not necessarily the national law of the court before which the action is brought that determines the nature and extent of the victim's obligation towards his survivors in the matter of maintenance. The rules of private international law may designate the law of another jurisdiction as being applicable.

In so far as the rule of German law mentioned by the referring court affects only the subrogation of the institution responsible for benefits to the rights of recipients of benefits, it should be recalled that Article 93(1)(a) of the Regulation provides that each Member State is to recognise the subrogation of the institution responsible for benefits to the rights which the recipient of the benefits has against the third party bound to compensate for the injury, where that institution is so subrogated under the legislation of the Member State to which it belongs (DAK v Lærerstanders Brandforsikring, paragraph 17).

That provision is thus to be regarded as a conflict-of-laws rule which requires the national court hearing an action for compensation brought against the party liable for the injury to apply the law of the Member State to which the institution responsible belongs, not only to determine whether that institution is subrogated by law to the rights of the injured party or those entitled under him, but also to determine the nature and extent of the claims to which the institution responsible for benefits is subrogated (DAK v Lærerstanders Brandforsikring, paragraph 18).

It follows that the institution responsible for benefits which is subrogated, and the national courts of each Member State, are bound by the legislation of the Member State to which the institution belongs, provided always that the exercise of the right to subrogation provided for by that legislation cannot exceed the rights that the victim, or those entitled under him, have against the person who caused the injury.

Finally, on the question whether the rights of the Pension Fund must be determined by reference to Article 4 of the Grand-Ducal Regulation, the Pension Fund disputes that the application of that provision has any relevance to the main proceedings.

In this connection, suffice it to recall that, according to settled case-law, it is not for the Court, in proceedings under Article 177 of the Treaty, to interpret national law or assess its effects (see, inter alia, Case 52/76 Benedetti v Munari [1977] ECR 163, paragraph 25).

It is for the court hearing the action to identify and apply the relevant provisions of the legislation of the Member State to which the institution responsible for benefits belongs, even if those provisions exclude or limit the subrogation of such an institution to the rights of the recipient of the benefits against the person who caused the injury, or exclude or limit the exercise of those rights by the institution so subrogated.

In those circumstances, the questions referred to the Court must be answered as follows:

- on a proper construction of Article 93(1)(a) of the Regulation, where an injury has been sustained in the territory of a Member State and has given rise to the payment of social security benefits to the victim or those entitled under him by a social security institution (within the meaning of the Regulation) of another Member State, the rights of the victim, or those entitled under him, against the person who caused the injury and to which that institution may be subrogated, and the requirements which must be satisfied to enable an action in damages to be brought before the courts of the Member State where the injury was sustained, are to be determined in accordance with the law of that State, including any applicable rules of private international law;

- on a proper construction of Article 93(1)(a) of the Regulation, the subrogation of a social security institution (within the meaning of the Regulation) governed by the law of a Member State to the rights of the victim or those entitled under him against a person who, in the territory of another Member State, caused an injury which gave rise to the payment by that institution of social security benefits, and the extent of the rights to which that institution is subrogated, are to be determined in accordance with the law of the Member State to which the institution belongs, provided always that the exercise of the right to subrogation provided for by that law cannot exceed the rights, under the law of the Member State where the injury was sustained, of the victim, or those entitled under him, against the person who caused the injury;

- it is for the court hearing the action to identify and apply the relevant provisions of the legislation of the Member State to which the institution responsible for benefits belongs, even if those provisions exclude or limit the subrogation of such an institution to the rights of the recipient of the benefits against the person who caused the injury, or exclude or limit the exercise of those rights by the institution so subrogated.

Costs

On those grounds,

THE COURT (Fifth Chamber),

in answer to the question referred to it by the Landgericht Trier by order of 29 November 1996, supplemented by order of 24 October 1997, hereby rules:

1. On a proper construction of Article 93(1)(a) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983, where an injury has been sustained in the territory of a Member State and has given rise to the payment of social security benefits to the victim or those entitled under him by a social security institution (within the meaning of that regulation) of another Member State, the rights of the victim, or those entitled under him, against the person who caused the injury and to which that institution may be subrogated, and the requirements which must be satisfied to enable an action in damages to be brought before the courts of the Member State where the injury was sustained, are to be determined in accordance with the law of that State, including any applicable rules of private international law.

2. On a proper construction of Article 93(1)(a) of Regulation No 1408/71, as amended and updated by Regulation No 2001/83, the subrogation of a social security institution (within the meaning of that regulation) governed by the law of a Member State to the rights of the victim, or those entitled under him, against a person who, in the territory of another Member State, caused an injury which gave rise to the payment by that institution of social security benefits, and the extent of the rights to which that institution is subrogated, are to be determined in accordance with the law of the Member State to which the institution belongs, provided always that the exercise of the right to subrogation provided for by that law cannot exceed the rights, under the law of the Member State where the injury was sustained, of the victim, or those entitled under him, against the person responsible for causing the injury.

3. It is for the court hearing an action to identify and apply the relevant provisions of the legislation of the Member State to which the institution responsible for benefits belongs, even if those provisions exclude or limit the subrogation of such an institution to the rights of the recipient of the benefits against the person who caused the injury, or exclude or limit the exercise of those rights by the institution so subrogated.

PuissochetJann Edward

SevónWathelet

Delivered in open court in Luxembourg on 21 September 1999.

R. Grass J.-P. Puissochet

Registrar President of the Fifth Chamber

1: Language of the case: German.