Court of Justice 09-02-1984 ECLI:EU:C:1984:54

I — Facts and written procedure

On 18 July 1976, near Fontvieille (Bouches-du-Rhône, France), a car registered in Germany was in collision with another vehicle registered in France. The owner of the French vehicle and a female passenger in that vehicle who had been injured in the accident both commenced proceedings for compensation before the Tribunal de Grande Instance [Regional Court], Tarascón, against an occupant of the German car (who left the scene of the accident but who presented himself to the police next day) and the Bureau Central Français des Sociétés d'Assurance contre les Accidents d'Automobile [French national motor-vehicle accident insurers' bureau, hereinafter referred to as “the Bureau”], relying on an agreement made on 7 October 1972 between the national insurers' bureaux under Article 2 (2) of the Council Directive of 24 April 1972. During the proceedings before that court, it emerged that the German vehicle had been stolen and, consequently, its registration in the Federal Republic of Germany had been cancelled. In a judgment of 9 February 1979, the Tribunal de Grande Instance, Tarascón, decided that the Fonds de Garantie Automobile [Motor Vehicle Guarantee Fund, hereinafter referred to as “the Fund”], set up to meet claims arising out of accidents caused by uninsured vehicles, which the Bureau did not cover, was liable to compensate the owner of the French vehicle.

The Bureau is one of the national bureaux set up in the context of the system of international insurance certificates (“green card”). One of the characteristics of that system is that it is based on agreements under private law entered into bilaterally between the national insurance bureaux using a standard form of contract known as the “uniform agreement between bureaux”. Pursuant to those agreements, each national bureau undertakes, on the one hand, to settle claims arising in its own country out of accidents caused by vehicles registered in other member countries in respect of which a green card has been issued and, on the other, to reimburse foreign bureaux which have settled claims arising out of accidents caused by vehicles insured in its own country.

The Fund appealed against the decision of the Tribunal de Grande Instance. In a judgment of 6 July 1981, the Cour d'Appel [Court of Appeal], Aix-en-Provence, quashed the judgment of the court of first instance to the extent to which it held the Fund liable and declared “that the Bureau Central Français is liable for the damage arising from the accident in question, subject to any right to seek reimbursement from other persons”.

The Council Directive of 24 April 1972 set up a system whose essential characteristics are clearly set out in the last three recitals in the preamble thereto:

“... the abolition of checks on green cards for vehicles normally based in a Member State entering the territory of another Member State can be effected by means of an agreement between the six national insurers' bureaux, whereby each national bureau would guarantee compensation in accordance with the provisions of national law in respect of any loss or injury giving entitlement to compensation caused in its territory by one of those vehicles, whether or not insured;

such a guarantee agreement presupposes that all Community motor vehicles travelling in Community territory are covered by insurance; ... the national law of each Member State should, therefore, provide for the compulsory insurance of vehicles against civil liability, the insurance to be valid throughout Community territory; ... such national law may nevertheless provide for exemptions for certain persons and for certain types of vehicles;

... the system provided for in this directive could be extended to vehicles normally based in the territory of any third country in respect of which the national bureaux of the six Member States have concluded a similar agreement.”

The provisions particularly relevant to the present case are :

Article 1 (4) which defines the “territory in which the vehicle is normally based” as meaning:

“The territory of the State in which the vehicle is registered; or

In cases where no registration is required for a type of vehicle but the vehicle bears an insurance plate, or a distinguishing sign analogous to the registration plate, the territory of the State in which the insurance plate or the sign is issued; or

In cases where neither registration plate nor insurance plate nor distinguishing sign is required for certain types of vehicle, the territory of the State in which the person who has custody of the vehicle is permanently resident;”

and

Article 2 (2), as amended, according to which :

“As regards vehicles normally based in the territory of a Member State, the provisions of this directive, with the exception of Articles 3 and 4, shall take effect:

After an agreement has been concluded between the nine national insurers' bureaux under the terms of which each national bureau guarantees the settlement, in accordance with the provisions of national law on compulsory insurance, of claims in respect of accidents occurring in its territory caused by vehicles normally based in the territory of another Member State, whether or not such vehicles are insured;

From the date fixed by the Commission, upon its having ascertained in close cooperation with the Member States that such an agreement has been concluded;

For the duration of that agreement.”

Pursuant to that directive, a supplementary agreement between national bureaux (mentioned above) was signed on 16 October 1972. Article 2 of that agreement provides as follows :

1. When a motor vehicle normally based in a State whose bureau has signed the present agreement goes into the territory of another Member State, being a member of the EEC, and is there subject to compulsory third-party insurance in force in that territory, the owner, user and/or driver shall be deemed to be insured within the meaning of the Uniform Agreement between Bureaux and to be holders of a valid certificate of insurance issued by the bureau of the country in which such vehicle is normally based, irrespective of whether or not they are in fact holders of such a valid certificate.”

Article 1 (e) of the Uniform Agreement between Bureaux provides that:

“Notwithstanding the terms of such policy it shall be deemed to be a policy giving exactly the indemnity required by the compulsory motor insurance law of the country in which an accident occurs and no more and to be subject to such conditions and limitations as are contained in the policy and are permitted by such law.”

By a judgment of 22 February 1983, the Cour de Cassation stayed proceedings in the appeal brought by the Bureau against the judgment of the Cour d'Appel, Αίx-en-Provence, and decided to ask the Court for a preliminary ruling under Article 177 of the Treaty on the meaning of the expression “provisions of national law on compulsory insurance” contained in Article 2 (2) of the directive of 24 April 1972, as amended, and also, as to whether a vehicle which has been taken out of circulation in a Member State of the European Economic Community in which it had been registered may be regarded as still normally based in the territory of that State within the meaning of Article 1 (4) of the directive of 24 April 1972.

The judgment containing the reference was received at the Court Registry on 22 April 1983. The written procedure followed the normal course.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted on 13 July 1983 by the Bureau, represented by R. Funck-Brentano of the Paris Bar, on 6 July 1983 by the Fund, represented by Jean-Claude Vincent, avocat at the Conseil d'Etat and the Cour de Cassation, on 19 July 1983 by the Government of the French Republic, represented by the Deputy Secretary-General of the Comité Interministériel pour les Questions de Coopération Économique Européenne [Interdepartmental Committee for European Economic Co-operation], François Bersani, acting as Agent, on 21 July 1983, by the Government of the Italian Republic, represented by O. Fiumara, Avvocato dello Stato, on 26 July 1983 by the United Kingdom, represented by J. D. Howes of the Treasury Solicitor's Department, acting as Agent, and on 24 June 1983 by the Commission of the European Communities, represented by J. Delmoly, a member of its Legal Department, acting as Agent.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.

Since no Member State or institution taking part in the proceedings had requested that the case be decided in plenary session, the Court, by order of 5 October 1983, assigned the case to the First Chamber pursuant to Article 95 (1) and (2) of the Rules of Procedure.

II — Written observations submitted to the Court

1. The Bureau observes in the first place that the territory in which a vehicle which has caused an accident is “normally based” must be defined as precisely as possible.

To avoid difficulty in settling accounts between national bureaux, the national bureau of the country in which the accident has taken place, in this case the Fund, must, in an action before its national courts, support the position of the national bureau of the country from which the vehicle comes, on behalf of which it is acting. In this case, however, because the Court is being asked to interpret the law, the Bureau feels entitled to take an impartial position and raise the debate to the level of the Community and to that of the interests of the victims of accidents caused by vehicles registered, lawfully or otherwise, in a Member or acceding State.

No solution having been found by the General Meeting of the Council of Bureaux to the question as to how to interpret “territory in which the vehicle is normally based”, six bureaux, namely, those of Austria, the Federal Republic of Germany, Luxembourg, the Netherlands, Switzerland and the United Kingdom signed a Protocol, on 19 October 1977, whose effect was to limit the period of liability of the bureau of the country of registration of a given vehicle. The period was fixed at one year “from the date of an event to be determined individually by each bureau, in the context of its own law with regard to registration and insurance procedures ...”. This illustrates the disagreement between national bureaux caused by the lack of harmonization in the national laws relating to vehicle registration.

The two objectives which the Council was seeking to achieve when it drew up the directive were the abolition of all frontier checks on insurance cover against civil liability in respect of the use of motor vehicles so as to bring about the free movement of goods and persons, and to safeguard the interests of persons who might be the victims of accidents caused by such vehicles. Those objectives should have been achieved by the system established by the agreements concluded between the national bureaux pursuant to the directive, but that has not been the case as regards the second objective. Compulsory civil liability insurance, the keystone of the system, is deemed to have been issued by the national bureau in the country in which the vehicle is normally based, whether or not the owner, driver or user in fact holds a valid certificate of insurance. Thus, the guarantee of cover exists only when the vehicle in question was normally based in a State acceding to the system, whether or not a member of the European Community.

Since, under the terms of the directive and the supplementary agreement, vehicles which are registered in a Member State or signatory State are considered to be normally based in that State, registration is the sole and necessary criterion for determining the territory in which a vehicle is normally based.

Thus, if a paying bureau contests the validity of a registration and, consequently, refuses to recognize that a vehicle is normally based in its territory because the registration which attests that fact has expired, and if as a result the presumption that the vehicle whose registration is illegal or has expired is covered by insurance is inoperative, the victim of an accident caused by that vehicle is likely to be compensated only after lengthy proceedings, which is the very opposite of the second objective which the directive sought to achieve. Furthermore, such a position would have the effect of transferring definitive responsibility for the accident from the country of origin and of registration of the vehicle to the country in which the accident took place.

The objective which the directive sought to achieve requires that the territory in which the vehicle is normally based may be identified without any possible doubt. The registration plate is the only simple and effective criterion. To require above and beyond that that the registration be both legal and valid — which the directive neither requires nor provides for — would lead to the re-establishment of frontier checks and to replacement of the green card check, abolished by the directive, by a systematic check on the validity of the registration. The objective which the directive sought to achieve ought therefore to lead to an interpretation of the expression “registration of the vehicle” in a much wider, non-administrative sense as referring to any registration plate, whether valid or not, which the vehicle bears and which links the vehicle to the country whose authorities have issued the plate.

As regards the interpretation of Article 2 (2) of the directive of 24 April 1972, as amended, the question raised by the Cour de Cassation has its origin in an apparent contradiction caused by the way in which that provision is drafted. That article provides for the conclusion of an agreement between the national insurers' bureaux of the signatory countries by which :

“Each national bureau guarantees the settlement, in accordance with the provisions of its own national law on compulsory insurance, of claims in respect of accidents ... caused by vehicles normally based in the territory of another Member State, whether or not such vehicles are insured ...”

This means that the bureau of the country in which the accident takes place (handling bureau) does not have to inquire, when it is settling such a claim, whether or not the vehicle was insured. The case of an uninsured vehicle is assimilated to that of an insured one.

It may be noted that settlement is to be :

“In accordance with the provisions of national law on compulsory motor insurance”.

Some national bureaux have interpreted that part of the sentence as allowing them, in the case of an uninsured vehicle normally based in their territory, to guarantee no more than the minimum required by the law of the place where the accident occurred, so that all the exemptions which that law allows may be systematically relied upon.

The Cour de Cassation's request for an interpretation thus amounts to raising the question of the ultimate responsibility for settlement of the claim. It is therefore necessary to decide:

1. Whether the handling bureau is entitled to rely on the exemptions provided for in national law and, if so, whether the guarantee fund of the country in which the accident took place is obliged to reimburse the handling bureau if national law allows this, the bureau of the country of origin being thus free from any obligation;

2. Whether, on the contrary, the handling bureau is obliged by the guarantee which it has given pursuant to the directive, to guarantee the risk, though only on behalf of the bureau of the country of origin, so that the latter must indemnify the handling bureau, subject to being reimbursed by its own guarantee fund or any other body provided for by national law.

To make these alternatives clearer, a distinction must be drawn between on the one hand events which the applicable law places outside the scope of compulsory insurance and, on the other hand, those which, while being within the scope of the requirement to insure, may be the subject of an exemption at the discretion of the insurer. Only events of the second type are iri question here.

The scheme set up by the directive and the supplementary agreements provides for:

Compulsory civil liability insurance;

The abolition of the green card and of all checks at the frontiers of a Member or acceding State;

A presumption that all vehicles crossing the frontier of one of the Member or acceding States are insured;

Cover in respect of damage caused in the territory of other Member or acceding States, whether or not the person responsible for the damage is insured.

The formula used by the directive does not allow any distinction to be drawn between the various reasons for the lack of insurance. Hence, it is difficult to understand why the directive should prevent a national bureau from relying on situations in which there is no insurance such as the nullity of the contract, the suspension of the guarantee for non-payment of the premium or the absence of any insurance whatsoever, but should allow it to rely on special exceptions provided for by some law of the country being visited.

It is not the purpose of the directive to harmonize the content of the different national laws, which it must take as they are. It would thus be contrary to both its letter and its spirit to rely upon such differences to argue that a national bureau's obligation to guarantee settlement of claims may be reduced if the law of the place where the accident occurs is less demanding than that of the country in which the vehicle is normally based.

Consequently, the national bureau must reimburse the handling bureau for the amount of the claim which the latter has settled, leaving it to national law to decide, in the light of the law of the country in which the vehicle which has caused the accident is normally based, whether it is the national bureau or the guaranteeing body which should ultimately bear that cost.

That interpretation results directly from the working documents preceding the adoption of the directive. The Bureau refers to Article 4 of the proposed directive submitted to the Council on 24 June 1970(Journal Officiel, C 105, p. 17), to the proceedings of the European Parliament (Report of the Sitting of 8 February 1971, Journal Officiel, C 19 of 1 March 1971) and to those of the Economic and Social Committee (Journal Officiel, C 36, 1971), which proposed the repeal of Article 4 so as to avoid all reference to the intervention of the guarantee fund.

It is thus clear that as regards the victims, the handling bureau guarantees the settlement of claims without the national bureau's being able to rely upon exemptions under the national law of the handling bureau. If the national law of the handling bureau provides for certain exemption clauses, the guarantee fund takes the place of the insurer when they apply. What does not change from one country to another is the guarantee of total cover deriving from joint and complementary obligations entered into by the insurers and the guarantee body.

The logic of the system implies that the national bureau of the country in which a vehicle is normally based covers all claims in respect of damage caused abroad by that vehicle and recovers from its guarantee body the sums paid by it in the absence of insurance cover. It is not for the handling bureau to arbitrate in that way.

That is the way in which the legislature understood the directive, and it was with that in mind that the Law of 21 December 1972, supplemented by the Decree of 29 June 1973, implementing it, was adopted. The guarantee of compulsory insurance was extended to all the countries acceding to the agreements between bureaux.

The problem facing the French courts cannot be resolved by them because it is not for them to say whether the cost of a claim should be borne abroad by an insurer, a guarantee fund or a bureau. The choice of solution is a matter for each State, but only internally. Internationally, there is now only one basic principle: claims are borne by the vehicle's country of origin, in exchange for free passage at frontiers and payment of claims in the first instance by the bureau of the country in which the accident takes place. That principle has the advantage of helping the victims by allowing them to avoid having to take part in litigation in which they have no direct interest but which delays the settlement to which they are entitled, because their ultimate debtors cannot agree among themselves.

In conclusion, therefore, the Bureau states that the expression “in accordance with the provision of national law on compulsory insurance” in the directive refers only to the binding rules of national law defining the scope of the obligation to insure and determining the minimum amount of the guarantee. It does not refer to any optional exemptions which the said national law may allow so as to refuse the insurance guarantee.

2. The Fund, commenting on the meaning to be given to the expression contained in Article 2 (2) of the directive, points out that the result of that provision is that “as regards vehicles of the type referred to which have come on to the territory of another Member State and caused an accident, there is no longer any need to inquire whether or not the vehicle is insured. The victims in that territory are compensated directly and without any debate (except as to liability) by the national bureau”.

Since that article expressly provides that the national bureau's guarantee is valid “whether or not” the vehicle is insured, it would be paradoxical to say that because a stolen vehicle is not covered by compulsory insurance, it cannot be affected by that provision.

In referring to the guarantee which each national bureau gives to settle claims “in accordance with the provisions of national law on compulsory insurance”, the provision in question does no more than echo the eighth recital in the preamble to the directive, which, after stating that the national law of each Member State should provide for compulsory insurance, adds that “such national law may nevertheless provide for exemptions for certain persons and for certain types of vehicles”.

Thus, the aforementioned Article 2 must clearly be interpreted as excluding from the obligation to settle claims undertaken by the handling bureau only claims “against which the owner of the vehicle is not obliged to insure”. For this reason, an agreement was entered into between the French State, the Fund and the Bureau providing for compensation in the case of accidents for which the State, which is not obliged to insure, is liable.

The expression in question means therefore that the agreement between the national insurers' bureaux provides that each national bureau guarantees the settlement of the claims in question where they were caused by vehicles which, according to national law, must be covered by insurance, without there being any need to establish whether they were in fact insured.

As regards the question of the “territory in which the vehicle is normally based”, the Fund thinks that the directive was clearly not intended to distinguish between vehicles which are still in use and those which are not. A vehicle does not cease to be registered simply because it is no longer in regular use.

Each vehicle is therefore essentially linked to the State in which it is registered. The rule laid down in the directive is equivalent to a legal presumption of such a link and it is clear that the draftsmen intended to avoid. altogether otiose and delicate research in each dispute by laying down the equation: “territory in which the vehicle is normally based = the territory in which it is registered”.

A vehicle should therefore be regarded as being normally based, within the meaning of Article 1 (4) of the directive, in the State in which it has been registered without any necessity to inquire whether that registration has remained from the beginning valid in the eyes of the national law of that State.

3. The Government of the French Republic points out in the first place that it is clear that, in accordance with the principles set out in the directive, the removal of frontier checks on insurance is linked by the directive itself to the fundamental guarantee given to the Member State on vehicles normally based in other Member States which enter their territory, that the victims of any accidents caused by such a vehicle will be compensated in accordance with the provisions of the national law of the State on whose territory the accident took place and that claims will be settled on the basis of an agreement between the national insurers' bureaux whether or not those vehicles are insured.

The “provisions” referred to in the directive are those dealing with the settlement of claims. In concrete terms, claims are to be settled within the limits laid down by the compulsory insurance scheme of the State in which the accident takes place, and, regard being had to the scope of that legislation, irrespective of any exemptions from liability which may be included in the contract under the terms of the applicable legislation.

The interpretation suggested above is in conformity with the principle laid down by the directive and it was on the basis of it that the applicable legislation was drafted. Thus, the French Law of 21 December 1972 extended the territorial jurisdiction of the Fund so as to enable it to pay compensation in respect of accidents caused abroad by uninsured vehicles registered in France, such compensation having previously been paid by the national bureau of the country in which the accident took place. Correspondingly, the Fund is exempted from compensating the victims of accidents caused in France by uninsured vehicles registered in a Member State of the Community.

It should be emphasized that the result of any other interpretation would be to deprive the directive of a part of its usefulness. In such a case, the victims of accidents caused in France by vehicles registered in other Member States, under circumstances in which a French insurer might be able to avail himself of an exemption, would risk receiving no compenstion for the damage suffered whether from the Fund or from the Bureau, acting in the name of and on behalf of its opposite number in the State in which the vehicle was registered.

As regards the concept of “territory in which the vehicle is normally based”, the French Government states that in order that vehicles coming from other Member States may be exempt from checks on the green card, they must be easily identifiable and, from that point of view, the registration plate must be the only appropriate criterion, since it is common ground that verification of the regularity of the plate is a matter for the State which issued it. That interpretation is reinforced moreover by the fact that the only vehicles for which checks on insurance have been maintained by way of derogation (Article 4 (b)) are easily identifiable either by their nature or because they have special plates of which the list has been communicated to the Member States and to the Commission.

4. The Government of the Italian Republic contends, as regards the concept in Article 2 (2) of the directive, that that provision must also be interpreted in the light of what is provided for in the agreement entered into in execution of it and by the agreement between bureaux referred to in that agreement.

The principle involved seems to be that the national bureau of the country in which the accident took place, when it settles a claim in respect of damage caused by a vehicle normally based in the other country, is required to act like one of the undertakings authorized to conduct the business of compulsory insurance against civil liability in the same country. In other words, the national bureau which handles the claim must act like the national insurers and therefore guarantees to settle claims in accordance with the provisions of national law on compulsory insurance. If, in a case in which the accident has been caused by a national vehicle, the national insurance undertakings did not guarantee to settle the claim solely on the basis of the provisions dealing with compulsory insurance, there is no reason to believe that the national bureau would be obliged to settle the same claim if the accident has been caused by a foreign vehicle. This is precisely because the directive provides that a vehicle normally based in another country is not in a different situation from that in which the compulsory insurance scheme places vehicles from the country in which the accident took place.

The Community provision must therefore be interpreted as referring to the entire system of compulsory insurance in force in a country and not, more restrictively, solely to the legal maxima provided for or other special conditions.

That conclusion leads to different results in different countries, but this is due to the lack of harmonization of the various national laws dealing with compulsory insurance. Precisely with a view to eliminating those inconsistencies, the second directive dealing with this subject, the drafting of which is now almost complete, provides that certain contractual clauses which at present limit insurance cover in certain countries, may no longer be relied upon as against a third party who has suffered damage; among such clauses are those relating to accidents caused by stolen vehicles.

As regards the question of the “territory in which the vehicle is normally based”, the Government of the Italian Republic contends that it follows from Article 1 (4) of the directive that the Council intended to refer to the distinguishing sign (be it a registration plate, insurance plate or other sign) which the vehicle bears, regardless of any validity which that sign may have in the State in which it was issued. The directive is concerned with assigning each vehicle to a territory and not with the lawfulness of its use, which might be lost for many reasons, not necessarily related to the distinctive sign.

It is only by the adoption of that interpretation that the directive can be applied in specific cases and can have the effect of liberalizing the international movement of persons and vehicles. If it were otherwise, it would be necessary, each time a vehicle crossed a frontier, to check the validity of the document authorizing its use and thus to demand the insurance document in every case, which would make the directive pointless.

As distinct from a false plate, an out-of-date plate, regardless of the effect on the authorization to use the vehicle bearing it, should none the less be regarded as being of significance for the determination of the country in which the vehicle is normally based. Furthermore, the directive provides, in Article 2, for the settlement of a claim by the national bureaux in the case of an accident caused by a vehicle from another Member State, whether or not that vehicle is insured. The fact is that when a country requests, pursuant to the directive and the agreement, that its vehicles be allowed to enter another Member country and be used therein without having their green cards checked, that country must also take responsibility for the consequences, that is, it must bear the costs resulting from any accidents which vehicles carrying its plates may cause abroad, even if their use is not authorized because they are uninsured.

5. The United Kingdom replies as regards the first question that it is the act of guaranteeing the settlement of claims which is subject to any limitations upon the requirement for compulsory insurance which may exist in the national law of the Member State where the accident occurs. It is not realistic to make a distinction between the national law as to settlement of claims covered by compulsory insurance and the national law as to compulsory insurance. The settlement of claims has to take account of any limitations in the national law as to the scope of the requirement for compulsory insurance either as to the risks or the circumstances required to be covered, the classes of persons or types of vehicles required to be covered or any monetary limits as to the cover required.

The supplementary agreement fully implements the requirements of Articles 2 (2) and 7 (2) of the directive as an agreement which guarantees the settlement of all claims for which insurance is required by national law, whether or not vehicles are in fact insured. Given that the Uniform Agreement between Bureaux was also adopted by non-member countries which are not a party to the directive arrangements it is inconceivable that the Council in adopting the directive intended that the national bureaux of the Member States and non-member countries which chose to adhere pursuant to Article 7 (2) should enter into agreements to meet claims which their national laws did not require to be covered by insurance. Pending a requirement for harmonization of motor-insurance law it should remain open to the Member State to decide whether to extend the scope of compulsory insurance of its own accord thus putting the obligation on the bureaux. Furthermore, if the bureaux of the Member States (and adhering non-member countries) are to be under an obligation to meet claims which are not required by law to be covered by compulsory insurance in the case of vehicles normally, based in other Member States (or such non-member countries) they would still not be obliged by the Uniform Agreement between Bureaux to meet such claims in the case of vehicles normally based in non-member countries which do not adhere to the directive under Article 7 (2).

It should also be noted that if Article 2 (2) is interpreted as envisaging that the bureaux in the Member States would agree to guarantee all claims in respect of civil liability, they would be bound to meet claims without applying any upper limit or other limitation prescribed by the relevant national law. Indeed the words “in accordance with national law on compulsory insurance” would be without object because any condition or restriction in national law amounts to the limitation of the scope of compulsory insurance. Furthermore, such a requirement would not only go beyond the intention underlying the setting-up of the green card system but would also be outside the scope of the Uniform Agreement between Bureaux which the supplementary agreement adopts, if despite this the Court were to interpret Article 2 (2) as envisaging that the bureaux in the Member States would guarantee settlement of claims in respect of civil liability which were not required by national law to be covered by insurance, the supplementary agreement, which is limited to claims required by national law to be covered by insurance, would not be an agreement in conformity with Article 2 (2). This would result in the directive's being considered not to have taken effect, in view of the way in which Article 2 (2) is formulated, and Member States would be at liberty to reintroduce checks on insurance at their frontiers.

In relation to the second question the United Kingdom adopts the view expressed by the Commission.

6. The Commission contends that the effect of the provisions in question is that only vehicles normally based in another Member State or in certain other countries are exempt from checks on insurance. This presupposes that such vehicles are easily identifiable. The registration plate is the only appropriate criterion. To require further that that plate should be legal and in force amounts to replacing the green card checks with a systematic verification of-the registration.

The interpretation proposed does not mean that the national insurers' bureaux are not free to agree among themselves that claims in respect of an accident caused by a vehicle whose registration has been cancelled are to be settled by the handling bureau. In fact, certain bureaux (though not the French bureau) signed an agreement called the Luxembourg Protocol on 19 October 1977 setting up such a system. In any event, however, a scheme of this type set up by agreement has no effect on the obligation referred to in Article 2 (2) of the directive which requires the bureau of the country in which the accident took place to guarantee settlement of the claim, whether or not the vehicle is insured.

The directive and the supplementary agreement of 16 October 1972 introduce a legal fiction. For the purposes of the guarantee given by the bureau, the fact that a vehicle is normally based in a Member State is assimilated to the fact of being insured. It is important to emphasize, furthermore, that neither the directive nor the supplementary agreement intended to extend the scope of the uniform agreement between bureaux, which is still the basis of the “green card system”.

“National law on compulsory insurance” must be taken to mean the law which imposes the obligation to insure and not, in a wider sense, the law concerning compensation by an insurer, or otherwise, for damage caused by motor vehicles. In other words, the guarantee given by the bureau of the country in which the accident took place relates only to claims which, in that country and in the circumstances of the accident, are required to be covered by motor-vehicle insurance against civil liability.

In France, the Code des Assurance [Insurance Code] defines the insured as the policy-holder, the owner of the vehicle and “any person using or having possession of the vehicle with his authority”. According to the case-law and the prevailing legal opinion, where a vehicle is stolen, “the thief clearly has unauthorized possession of it, which is therefore not insured”. Because of that provision, difficulties have arisen in France as to whether the Bureau or the Fund is to be finally responsible for compensation awarded to the victims in cases to which the exemption from the guarantee applies.

In the main proceedings, the Tribunal de Grande Instance, Tarascón, has correctly deduced from the provisions in question that the body which must compensate the (French) victim of an accident caused by a stolen (German) vehicle “can only be the Fonds de Garantie Automobile”.

The other argument, which assimilates the exemption from liability under the guarantee to a lack of insurance, and which was adopted by the Cour d'Appel, Aix-en-Provence, is so wide that, in practical terms, it cannot be accepted simply as a mere interpretation of existing provisions. It is for this reason that the Commission, on 30 July 1980, presented to the Council a proposal for a second directive “on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles” (Doc. COM(80) 469 definitive).

After amendments proposed by the Parliament, the new version of Article 2 expressly provides that certain exemptions cannot be relied upon as against third parties: unauthorized use, driving without a licence, failure to observe the rules relating to the reliability of the vehicle. In other words, that provision, once adopted, will prevent the insurer's taking advantage of the existence of an exemption clause relating to one of those circumstances as a ground for refusing to pay the victim. Furthermore, the Commission considered it indispensable to maintain the principle of assimilation to a complete lack of insurance in the residual cases in which the insurer may avoid paying any compensation to the victim: nullity because of false declaration, deliberate damage in France.

In view of the importance of the provisions contained in Article 2 of the proposal for a second directive, the Commission does not believe that it is possible to interpret the first indent of Article 2 (2) of the directive of 24 April 1972 otherwise than according to the strict letter of the law.

III — Oral procedure

The Bureau Central Français, represented by R. Funck-Brentano of the Paris Bar, the Government of the Italian Republic, represented by O. Fiumara, Avvocato dello Stato, the United Kingdom, represented by Mr Bellis of the Treasury Solicitor's Department, and the Commission of the European Communities, represented by J. Delmoly, acting as Agent, presented oral argument at the sitting on 10 November 1983.

The Advocate General delivered his opinion at the sitting on 24 November 1983.

The first part of the question

15 The first part of the question seeks to ascertain whether the guarantee which each national bureau must give concerns the settlement of claims in respect of accidents caused on its territory by vehicles normally based in the territory of another Member State, on the basis of the provisions relating to compulsory insurance applicable in the State in which it carries on its activities or on any other basis which does not take account of cases of exclusion from insurance provided for in the law of that State.

16 The Bureau, the Fund and the French Government contend that the purpose of the directive was to allow free circulation throughout the Community of vehicles insured in a Member State. They claim that, whilst taking account of any upper limits of liability, the bureau of the State in which the accident took place must treat the vehicle as being insured in respect of any accident which might occur as long as insurance is compulsory for vehicles of that type in that State. A claim for compensation in respect of an accident cannot be rejected on the basis of specific exemptions from compulsory insurance provided for in national law. The bureau responsible for settling the claim pays it and recovers an equivalent sum in the State in which the vehicle is normally based, either from the national bureau if the vehicle is insured or from the Guarantee Fund if it is not.

17 Before the Court, the Bureau took a different position from that which it had taken before the national court. It states that in the context of litigation before its national courts, the bureau of the country in which the accident took place is in fact obliged to support the position of the national bureau of the vehicle's country of origin on behalf of which it is acting. On the other hand, once the Court has been asked for a preliminary ruling, it may adopt an impartial position and raise the debate to the level of the interests of the Communities and of the victims of accidents caused by a vehicle registered in a Member State or an acceding State whether or not that registration is lawful and whether or not the vehicle is stolen.

18 It states that in each Member State there is a national bureau and a guaranteeing body. What is consistent from one country to another is the guarantee of total cover arising from the joint and complementary obligations of the insurers and the guaranteeing body. If the national law of the handling bureau (the bureau of the country in which the accident took place) provides for certain exemption clauses, the guaranteeing body of the country in which the vehicle is normally based takes the place of the insurer when those clauses apply. The link between the insurer's obligation and the Guarantee Fund's obligation is peculiar to each legal system and forms a whole which allows the victim to be guaranteed a settlement in all cases. The logic of the system implies that the national bureau of the country in which the vehicle is normally based covers all accidents caused abroad by that vehicle and recovers from its guaranteeing body the sums paid by it in the absence of insurance cover. The handling bureau does not have to make that sort of decision. By establishing an irrebuttable presumption of insurance, the directive necessarily establishes that interpretation.

19 According to the Bureau, Article 4 of the proposal for a directive submitted to the Council on 24 June 1970(Journal Officiel, C 105, p. 17) provided that each State should designate a body responsible for the ultimate settlement of claims in respect of accidents caused abroad by uninsured vehicles registered in that State. Later, all reference to a body in the country of origin responsible for settling claims disappeared from the directive, as did Article 4 of the proposal, but the solution did not change in practice. In fact, the European Parliament considered Article 4 inappropriate because it did not clearly designate the body to which it referred and its inclusion in the system might undermine the functioning of the agreements between bureaux.

20 The Bureau adds that the Economic and Social Committee also proposed to eliminate Article 4 of the proposal so as to avoid any reference to the intervention of the Guarantee Fund. The Committee explained its attitude as follows:

“In any event, the agreements between national bureaux guarantee the settlement of victims' claims for damages by the bureau of the territory in which the accident took place, for which that bureau is reimbursed by the bureau of the State of which the person liable is a national.

Where there is no insurance, it is for the latter bureau to find, where appropriate, a convenient means of recovering its disbursements.”

21 The Government of the French Republic states that the system established by the directive is based upon a basic underlying principle according to which a country which wishes to have its vehicles enter the territory of another Member State without being subject to green-card checks must accept the consequences which may result and in particular the consequences which vehicles bearing its registration plate may cause in another Member State, even though their use was unauthorized because they were uninsured. In return for the host Member State's obligation to refrain from making checks on the green card, the directive imposed two related obligations on the Member States in which vehicles are normally based. The first, laid down in Article 3, requires them to take “all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance” and “that the contract of insurance also covers, according to the law in force in other Member States, any loss or injury which is caused in the territory of those States”. The second, provided for in Article 4, requires Member States which wish to derogate from the provisions of Article 3, within the limits provided for in Article 4 (a), to take the appropriate measures to ensure that compensation is paid in respect of any loss or injury caused in the territory of other Member States by vehicles not required to be insured.

22 The interpretation suggested by the French Government was, it states, that which inspired the drafting of the applicable French provisions and in particular, those relating to intervention by the Guarantee Fund. The Law of 21 December 1972, which was designed to incorporate into French law the rules laid down in the directive, extended the territorial powers of that body, so as to allow it to accept responsibility for damages in respect of accidents caused abroad by an uninsured vehicle registered in France, such damages having already been paid by the national bureau of the country in which the accident occurred. Correspondingly, the Guarantee Fund was exempted from having to compensate victims of accidents caused in France by uninsured vehicles registered in a Member State of the Community.

23 The Italian and British Governments and the Commission all consider that the directive can be interpreted only as meaning that claims for compensation against vehicles coming from other Member States must be treated on the same basis as claims made against vehicles covered by compulsory insurance in the State of the bureau responsible for settling them. Such an interpretation would also be in accordance with the Uniform Agreement between Bureaux and the aforementioned supplementary agreement.

24 It should be noted that the seventh recital in the preamble to the directive makes clear that the abolition of checks on green cards is to be effected only by means of an agreement between the national insurers' bureaux under which each national bureau guarantees compensation in accordance with the provisions of national law in respect of any loss or injury giving entitlement to compensation caused in its territory by a vehicle normally based in another Member State, whether or not insured.

25 In accordance with that recital, Article 2 (2) of the directive, as amended, provides that the relevant provisions of the directive are to take effect:

“After an agreement has been concluded between the nine national insurers' bureaux under the terms of which each national bureau guarantees the settlement, in accordance with the provisions of national law on compulsory insurance, of claims in respect of accidents occurring in its territory caused by vehicles normally based in the territory of another Member State, whether or not such vehicles are insured.”

26 Thus, the effect of the directive is to assimilate any vehicle normally based in the territory of another Member State to a vehicle properly insured in accordance with the provisions of the national law of the State in which the accident occurred, at the time at which it occurred. The fact that the directive provides for that consequence whether or not the vehicles are insured indicates that frontier checks must not relate to the validity of the insurance as regards the person having charge of the vehicle at the time at which it crosses the national frontier, and, a fortiori, during its stay in the national territory.

27 The directive's eighth recital states that the guarantee agreement between bureaux presupposes that all Community motor vehicles travelling in Community territory are covered by insurance. In accordance with that idea, the directive does not provide for the intervention of the various guarantee funds but only of the national bureau of each Member State. The latter must settle the claims, seeking reimbursement of the sums it has paid from the bureau of the Member State in which the vehicle is registered. If the vehicle is not insured, the bureau of the country in which the vehicle is normally based may in turn claim reimbursement from the guarantee fund of that country.

28 It follows that, as regards vehicles to which the directive applies, the national bureau of the Member State in which the accident has occurred guarantees the settlement of claims in respect of accidents which are required to be covered under the compulsory insurance scheme of that country, within the limits and in accordance with the provisions of its national law, whether or not the driver is actually insured.

29 It follows from the foregoing considerations that the first part of the question submitted may be answered by stating that the expression “provisions of national law on compulsory insurance” contained in Article 2 (2) of Directive No 72/166 must be understood as referring to the limits and conditions of civil liability applicable to compulsory insurance, provided always that the driver of the vehicle at the time at which the accident occurred is deemed to be covered by valid insurance in conformity with that legislation.

The second part of the question

30 For the reasons set out in the judgment of the Court (First Chamber) in Case 344/82 (Gambetta), the answer to the second part of the question submitted must be that when a vehicle bears a properly issued registration plate, that vehicle must be regarded as being normally based, within the meaning of the directive, in the territory of the State in which it is registered, even if at the relevant time the authorization to use the vehicle had been withdrawn, irrespective of the fact that the withdrawal of the authorization renders the registration invalid or entails its revocation.

Costs

31 The costs incurred by the Government of the French Republic, the Government of the Italian Republic, the Government of the United Kingdom, and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.