Opinion of Advocate General Saugmandsgaard Øe delivered on 11 December 2019

1. Directive 87/344/EEC repealed

6. Council Directive 87/344/EEC of 22 June 1987 on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance,⁽⁵⁾ which was repealed by Directive 2009/138,⁽⁶⁾ provided, in Article 4(1)(a):

‘1.

Any contract of legal expenses insurance shall expressly recognise that:

1. where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve the interests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such lawyer or other person.’

2. Directive 2009/138

7. Recital 16 of Directive 2009/138 provides:

‘The main objective of insurance and reinsurance regulation and supervision is the adequate protection of policy holders and beneficiaries. The term beneficiary is intended to cover any natural or legal person who is entitled to a right under an insurance contract. Financial stability and fair and stable markets are other objectives of insurance and reinsurance regulation and supervision which should also be taken into account but should not undermine the main objective.’

8. Title II of that directive, entitled ‘Specific provisions for insurance and reinsurance’, includes Chapter II, concerning ‘provisions specific to non-life insurance’, Section 4 of which, entitled ‘Legal expenses insurance’, contains Articles 198 to 205.⁽⁷⁾

9. Article 198 of that directive, entitled ‘Scope of this Section’, provides, in paragraph 1:

‘This Section shall apply to legal expenses insurance referred to in class 17 in Part A of Annex I whereby an insurance undertaking promises, against the payment of a premium, to bear the costs of legal proceedings and to provide other services directly linked to insurance cover, in particular with a view to the following:

…

1. defending or representing the insured person in civil, criminal, administrative or other proceedings or in respect of any claim made against that person.’

10. Article 200(1) and (4) of Directive 2009/138 provides:

‘1.

The home Member State shall ensure that insurance undertakings adopt, in accordance with the option chosen by the Member State, or at their own choice, where the Member State so agrees, at least one of the methods for the management of claims set out in paragraphs 2, 3 and 4.

Whichever solution is adopted, the interest of persons having legal expenses cover shall be regarded as safeguarded in an equivalent manner under this Section.

…

4.

The contract shall provide that the insured persons may instruct a lawyer of their choice or, to the extent that national law so permits, any other appropriately qualified person, from the moment that those insured persons have a claim under that contract.’

11. Article 201 of that directive, entitled ‘Free choice of lawyer’, provides, in paragraph 1(a):

‘1.

Any contract of legal expenses insurance shall expressly provide that:

1. where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve the interests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such lawyer or other person.’

1. The Law on insurance before the entry into force of the Law of 9 April 2017

12. Prior to the entry into force of the Law of 9 April 2017, Article 156(1) of the wet betreffende de verzekeringen (Law on insurance)⁽⁸⁾ of 4 April 2014, was worded as follows:

‘Any insurance contract relating to legal expenses shall explicitly provide at least that:

• when it is necessary to proceed to judicial or administrative proceedings, the insured person can freely choose a lawyer or any other person who, under the law applicable to the proceedings, has the necessary qualifications to defend, represent or serve his interests.’

2. The Law of 9 April 2017

13. Article 2 of the Law of 9 April 2017 provides:

‘In Article 156 of the Law … on insurance, paragraph 1 shall be replaced by the following:

• the insured person shall be free to choose, when it is necessary to proceed to judicial, administrative or arbitration proceedings, a lawyer or any other person who, under the law applicable to the proceedings, has the necessary qualifications to defend, represent or serve his interests and, in the case of arbitration, mediation or any other recognised non-judicial method for settling disputes, a person who has the necessary qualifications and is appointed for that purpose”.’

3. The Judicial Code

14. It is apparent from the documents in the case file that the Gerechtelijk Wetboek (Judicial Code), as last amended by the wet houdende diverse bepalingen inzake burgerlijk recht en bepalingen met het oog op de bevordering van alternatieve vormen van geschillenoplossing (Law containing various civil law provisions and provisions with a view to promoting alternative ways of settling disputes)⁽⁹⁾ of 18 June 2018, provides for two forms of mediation, extrajudicial or judicial, the former being governed by Articles 1730 to 1733 of that code and the latter by Articles 1734 to 1737. The general principles are set out in Articles 1723/1 to 1729 of the Judicial Code.

1. If the insured person exercises his rights in court proceedings

47. In its judgment in Eschig,⁽²¹⁾ the Court, in the first place, identified three principles which form the foundations of the case-law on legal expenses insurance, now governed by Directive 2009/138.

48. First, the objective of Directive 87/344 and, in particular, Article 4 thereof, is to protect in a broad manner the interests of insured persons.⁽²²⁾ Secondly, Article 4(1) has general application and is obligatory in nature.⁽²³⁾ Thirdly, Directive 87/344 does not seek to completely harmonise the rules applicable to the Member States’ legal expenses insurance contracts, with the result that, as EU law currently stands, the Member States remain free to determine the body of rules applicable to those contracts, on condition that they exercise their powers in this field in compliance with EU law and, in particular, Article 4 of Directive 87/344.⁽²⁴⁾

49. In the second place, the Court emphasised that the right of the insured person to choose ‘his representative’ is ‘restricted to legal and administrative procedures’⁽²⁵⁾ and that this is the ‘minimum level of freedom which must be granted to the insured person whatever the option provided for in Article 3(2) of [Directive 87/344] with which the insurance undertaking complies’.⁽²⁶⁾ The Court specified that ‘the solution provided for in Article 3(2)(c) of Directive 87/344 grants more extensive rights to insured persons than Article 4(1)(a) of that directive. Thus, the latter provision provides for the right to freely choose a representative only where an inquiry or proceedings are initiated. By contrast, according to the solution provided for in Article 3(2)(c) of that directive, the insured person has the right to entrust the defence of his interests to a representative from the moment that he has the right to claim from his insurer under the insurance policy, therefore prior to any legal or administrative procedure’.⁽²⁷⁾

50. In two subsequent judgments of 26 May 2011, Stark,⁽²⁸⁾ and of 7 November 2013, Sneller,⁽²⁹⁾ the Court reiterated the principles set out in the judgment in Eschig in order to conclude, in the first judgment, that the insured person may face geographical restrictions on his choice of lawyer, provided that his freedom to choose is not rendered meaningless,⁽³⁰⁾ and, in the second judgment, that that freedom cannot be restricted to situations in which the insurer decides that recourse should be had to a lawyer external to the insurance undertaking.⁽³¹⁾

51. Thus, in the first three judgments, the Court gave a ruling on the scope of the insured person’s rights in the context of court proceedings without having to interpret the terms ‘proceedings’ or ‘inquiry’.⁽³²⁾

52. In two subsequent judgments, delivered on 7 April 2016, in Massar and in AK, the Court interpreted the term ‘inquiry’ within the meaning of Article 4(1)(a) of Directive 87/344, now Article 201(1)(a) of Directive 2009/138.

2. If the insured person exercises his rights before an administrative body

53. In the case which gave rise to the judgment in Massar, the request for a preliminary ruling sought to determine whether the principle of the free choice of lawyer or representative could apply where the holder of legal expenses insurance wished to defend himself during the examination by an independent public body of the request, made by his employer, for his dismissal to be authorised, since that procedure was not before a court.⁽³³⁾

54. In the case which gave rise to the judgment in AK, the same question was raised in respect of a holder of legal expenses insurance who wished to file a complaint against a centre, entrusted by law to monitor exceptional medical expenses, following the refusal by that centre of his request for authorisation of care. In that second case, the procedure was also not before a court.

55. However, a significant difference between those two cases must be pointed out at the outset. While in the case which gave rise to the judgment in AK an action could have been brought before an administrative court with jurisdiction in matters relating to social security and the civil service⁽³⁴⁾ against the administrative decision, that was not the case in the procedure at issue in the case which gave rise to the judgment in Massar. No appeal could be brought, or an objection made, against the administrative decision. Only an action for damages could have been brought before a civil court.⁽³⁵⁾

56. The Court ruled that Article 4(1)(a) of Directive 87/344 must be interpreted as meaning that the term ‘inquiry’ referred to in that provision includes, in respect of the judgment in Massar, ‘a procedure at the end of which a public body authorises an employer to dismiss an employee who is covered by legal expenses insurance’⁽³⁶⁾ and, in respect of the judgment in AK, ‘the stage of an objection before a public body during which that body gives a decision against which an action may be brought before the courts’.⁽³⁷⁾

57. It is in the light of those decisions, and, in particular, their grounds, that, in the case in the main proceedings, the Grondwettelijk Hof (Constitutional Court) considers that the term ‘proceedings’ may be interpreted as meaning that mediation falls within the scope of Article 201(1)(a) of Directive 2009/138.

58. However, since the term ‘proceedings’ must be interpreted in accordance with the Court’s usual method, I consider that the analysis of the scope of the judgments in Massar and in AK is merely ancillary to the Court’s usual methods for interpreting a provision of EU law.

1. The wording of Article 201(1)(a) of Directive 2009/138

61. It should be recalled, with regard to the wording of Article 4(1)(a) of Directive 87/344, that the Court has held that it ‘follows … that the term “inquiry” must be read in opposition to the term “proceedings”’.⁽³⁹⁾ That finding must be extended to Article 201(1)(a) of Directive 2009/138, which is worded identically in that regard.

62. The only difference in wording in the French-language version⁽⁴⁰⁾ in respect of those concepts of ‘proceedings’, which concerns the determiner (‘toute procedure’ is replaced by ‘une procedure’), does not in itself have any impact in my view.⁽⁴¹⁾ Moreover, the Court has used the expression ‘in the context’ of an or any inquiry or proceedings by referring to the 11th recital of Directive 87/344.⁽⁴²⁾

63. In the French-language version, the expression ‘procédure judiciaire ou administrative’ appears only in Article 201(1)(a) of that directive, with regard to the insured person’s choice of lawyer. Article 198 of Directive 2009/138, which is identical to Article 2 of Directive 87/344 and which contains, in the French version, the expression ‘procedure judiciaire’, is drafted differently.

64. Although the latter provision states that the insurer is obliged to bear the costs of legal proceedings (‘frais de procédure judiciaire’), this is defined very broadly in the French version, as can be seen from the following wording: ‘notamment en vue … de défendre ou de représenter l’assuré dans une procédure civile, pénale, administrative’, followed by ‘ou autre’.⁽⁴³⁾

65. This difference in the wording of the two provisions can also be seen in its various language versions. By way of illustration, in the English-language version of Article 198 of Directive 2009/138, the expressions ‘legal proceedings’ and ‘defending or representing the insured person in civil, criminal, administrative or other proceedings’ are used, whereas, in Article 201(1)(a) of that directive, ‘dans une procédure judiciaire ou administrative’ is translated as ‘in any inquiry or proceedings’.

66. Similarly, in the German-language version, Article 198 of Directive 2009/138 uses the expressions ‘die Kosten des Gerichtsverfahrens’ and ‘den Versicherten in einem Zivil-, Straf-, Verwaltungs- oder anderen Verfahren’ and Article 201(1)(a) uses ‘in einem Gerichts- oder Verwaltungsverfahren’.

67. I infer from examining the documents on the drafting of Directive 87/344, which I have been able to consult, that the lack of harmonisation in the wording is not the result of a specific intention on the part of the EU legislature. Neither the Proposal for a Council Directive on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance⁽⁴⁴⁾ nor the other preparatory acts⁽⁴⁵⁾ contain any explanations in that regard. It can only be noted, with regard to the origin of Article 4 of Directive 87/344, that, first, in the Commission’s explanatory memorandum, it is argued, in essence, that ‘under legal expenses insurance contracts, the costs and fees of the lawyer responsible for defending the interests of the insured person are borne by the insurer. It is inadvisable that this lawyer should be the usual lawyer of the insurance company, above all if it is a composite company. This would place the lawyer concerned in a difficult position. Thus, the Directive lays down that the insured person must be free to choose his own lawyer’. Secondly, the Economic and Social Committee had asked that ‘it be expressly stated on what terms a lawyer may be instructed’ but it had not proposed a drafting amendment specifying the type of proceedings.⁽⁴⁶⁾

68. It was only in the report from the ad hoc Working Party of Counsellors to the Permanent Representatives Committee, dated 26 May 1987, on the amended proposal for a Council Directive on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance⁽⁴⁷⁾ that it was explained that ‘the minimum level of freedom in the free choice of a lawyer is defined by reference to the relevant enquiries or proceedings’, without giving further details with regard to the choice of different wording in Article 2 of Directive 87/344 and in particular the scope of the terms ‘in particular’ and ‘or other’ used in that provision.

69. That legislative history, in my view, confirms that the term ‘proceedings’ may be interpreted broadly, as the Court has already held in the judgments in Massar and in AK in respect of the term ‘inquiry’. The Court held that that term cannot be limited to legal proceedings in administrative matters only, that is to say, those that take place before a court in the strict sense,⁽⁴⁸⁾ and that the text of Article 4(1) of Directive 87/344 does not contain any distinction between the preparatory stage and the decision-making stage in an inquiry or proceedings.⁽⁴⁹⁾

70. I shall therefore turn to analysing the scope of those judgments, which is decisive for the purposes of interpreting Article 201(1)(a) of Directive 2009/138, as the referring court has noted.

2. The scope of the judgments in Massar and in AK

71. If the grounds of those judgments are followed to the letter, it must be inferred from them that the term ‘proceedings’ within the meaning of Article 201(1)(a) of Directive 2009/138 is autonomous and includes a stage which precedes a judicial stage, which may be an extension of it.

72. Consequently, in my view, it could be inferred from this at the outset that mediation falls under that term,⁽⁵⁰⁾ as it is a method of settling disputes.

73. Therefore, I do not share the view that the scope of the judgments in Massar and in AK must be limited to the specific circumstances which formed the basis of those judgments, which would result in an organic criterion relating to the power of the authorities to take decisions which affect the rights of a holder of legal expenses insurance being applied. The term ‘proceedings’ would therefore cover only procedures which end with a court giving a final judgment on the legal position of the person concerned.

74. I note, in the first place, that, if such an analysis were accepted, this would exclude mediation in administrative matters⁽⁵¹⁾ from the scope of Article 201(1)(a) of Directive 2009/138, which, in my view, would be contrary to the Court’s interpretation resulting from the judgments in Massar and in AK.

75. In the second place, I observe that the Court did not limit its interpretation by using an organic criterion, since it confirmed the need to protect, broadly, the interests of insured persons⁽⁵²⁾ and it applied that principle in specific cases whose differences must be pointed out.

76. As the Court noted in the judgment in AK, the ‘procedure … constitute[d] the indispensable preliminary stage for the bringing of an action before the administrative court’,⁽⁵³⁾ without specifying whether it was obligatory or not, whereas, in the judgment in Massar, no appeal could be brought against the administrative decision. At most, it could serve as a basis for proceedings for the purposes of obtaining compensation for damage before the civil courts.⁽⁵⁴⁾

77. Moreover, in that judgment, the Court gave a ruling with regard to an administrative procedure granting authorisation to dismiss, requested by the employer,⁽⁵⁵⁾ during which the employee concerned does not raise any objection. He is merely heard⁽⁵⁶⁾ and cannot bring any form of appeal. This is significantly different from the case which gave rise to the judgment in AK.

78. This comparative analysis of the judgments in Massar and in AK, in my view, enables the key criteria used by the Court to be established. Whilst there is the need to protect the interests of the insured person whose rights are affected,⁽⁵⁷⁾ according to the wording of those judgments, this must be either in a ‘stage’,⁽⁵⁸⁾ or in a ‘procedure’⁽⁵⁹⁾ which may be linked to a subsequent judicial stage.

79. No condition that the assistance must be provided by a lawyer or that there must be a preliminary stage is established.

80. In other words, the Court reached the same conclusion in circumstances which also concerned the desire of a holder of legal expenses insurance to obtain an administrative decision in his favour before a court decides on a possible challenge, which is not limited to a review as to whether the administrative decision is well founded.

81. I infer from this that the term ‘proceedings’ now covers not only the appeal stage ‘before a court in the strict sense’,⁽⁶⁰⁾ that is to say, the judicial stage as soon as proceedings are underway or in the process of being brought, but also a stage that precedes those proceedings, or, in other words, an extrajudicial stage.⁽⁶¹⁾

82. Such an interpretation has the effect of aligning the various language versions of the French expression ‘procédure judiciaire ou administrative’ with the general meaning of the term ‘inquiry’, contained in the English-language versions of Directives 87/344 and 2009/138, in Articles 4 and 201 respectively.⁽⁶²⁾

83. It remains to be established whether that interpretation is in line with the objectives pursued by the provisions relating to legal expenses insurance contained in Directive 2009/138.

3. The objectives pursued by the provisions relating to legal expenses insurance

84. The question to be decided is the extent to which the objectives to be achieved, set out in the section of Directive 2009/138 devoted to legal expenses insurance, justify interpreting the term ‘proceedings’ using the same approach as that adopted by the Court in respect of the term ‘inquiry’ in the judgments in Massar and in AK.

85. It must be recalled that the Court has constantly reiterated the obligation not to interpret restrictively Article 4(1)(a) of Directive 87/344 with regard to the free choice of lawyer or representative, given the objective pursued by that directive,⁽⁶³⁾ and noted that that provision is of general application and is obligatory in nature.⁽⁶⁴⁾

86. In my view, as illustrated by the circumstances in the judgments in Massar and in AK, which justified that, on the basis of those principles, the term ‘procedure’ is understood not in its strict sense, namely as the pending lawsuit, but as any stage that precedes a decision-making stage, the freedom of the holder of legal expenses insurance to choose a lawyer or representative must be guaranteed in all situations in which issues relating to the interests of insured persons are to be resolved without recourse to the administration of justice by the State.

87. The method is of little importance since it is a stage which is liable to culminate in a judicial measure, namely a measure which determines the rights of each person or entity and has the force of res judicata, or is binding, or is even enforceable.

88. It is precisely because of the consequences of that preliminary stage, during which, as the bar associations have pointed out, the insured person is presented with the wide range of procedural options available to him in the event of his rights being infringed and the legal and factual assessment of their prospects of success, that the free choice of lawyer addresses the concern of broadly protecting the interests of the insured person.⁽⁶⁵⁾

89. Consequently, since it concerns relations between natural persons or those in which the authorities exercise their powers and formalise them in a decision, that preliminary stage must be characterised by the use, with a view to protecting the rights of the insured person, of a method which aims, first, to avoid court proceedings, but which, secondly, if necessary, will be useful if court proceedings are brought, such as, in addition to the objection, the sending of letters of formal notice or, more generally, any measure capable of interrupting the limitation period.

90. Since the scope of Article 201(1)(a) of Directive 2009/138 has therefore been determined in line with the objective pursued by that provision, what consequences are to be drawn from it with respect to mediation?