The Brussels I Regulation (No 44/2001)

Protective jurisdiction with regard to special contracts

For special contracts it was felt necessary to set specific rules of international jurisdiction in order to protect the weaker party to the contract. Such rules for protective jurisdiction can be found in Section 3 (insurance contracts), Section 4 (consumer contracts) and Section 5 (employment contracts). These Sections limit the possibility for the stronger party (insurer, entrepreneur, employer) to make a choice between different Member States to start legal proceedings against the weaker party (policyholder, consumer, employee). The weaker party may not be forced to defend himself in a court of a Member State that is not easily accessible for him or that makes his defence otherwise more difficult. On the other hand these Sections assure that the weaker party, who wants to sue the stronger party, has the possibility to do so before the court of a Member State that is easily reachable for him.

The rules of Sections 3, 4 and 5 form an independent system on the basis of which jurisdiction must be determined in these specific matters. The other Articles of the Brussels I Regulation regarding jurisdiction do not apply. This means that the Articles of Sections 3, 4 and 5 set aside the general rule laid down in Article 2 and the additional rules of Articles 5 and 6 BR I. However, an exception is made for Article 4 and Article 5, point (5) BR I, which remain applicable in matters related to insurance, consumer contracts and employment (Article 8 for insurance contracts, Article 15, paragraph 1 for consumer contracts, and Article 18, paragraph 1 for employment contracts).

The application of Article 4 BR I means that where the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall not be determined by Section 3, 4 or 5 or any other provision of the Brussels I Regulation, but by the national law of the Member State of the seised court, including its own private international law. Therefore, the seized court of a Member State must decide on the basis of the national rules of international jurisdiction whether it may accept the case against a defendant not domiciled in that or any other Member State of the European Union. As against such a defendant any person domiciled in a Member State may, whatever his nationality, avail himself in that State of the rules of jurisdiction in force there, and in particular those specified in Annex I, in the same way as the nationals of that State (Article 4 BR I). Where the defendant is not domiciled in the European Union, the plaintiff may, provided that he is domiciled in one of the Member States, start legal proceedings in any Member State, irrespective of his nationality or whether he is domiciled there, against such defendant, even when this would mean the application of a rule of exorbitant jurisdiction of the Member State where the seised court is located. The Brussels I Regulation has no impact at all.

Also the rule of Article 5, point (5) BR I, remains applicable in matters covered by Section 3, 4 or 5. An insurer, entrepreneur or employer domiciled in a Member State may be sued by the weaker party in another Member State as regards a dispute arising out of the operations of a branch, agency or other establishment, provided that the legal claim is filed at the courts for the place in which the branch, agency or other establishment is situated.

So a Belgian policyholder who has entered into an insurance agreement with a French insurer, yet through a branch office of that insurer in Antwerp, may start legal proceedings against that French defendant before the courts of Antwerp in Belgium. Where the stronger party (insurer, entrepreneur or employer) is not domiciled in a EU Member State, Article 5, point (5) BR I, however, cannot provide any basis for the weaker party (policyholder, consumer, employee) to initiate legal proceedings in a EU Member State. In agreement with the principal rule this question would be dealt with by Article 4 BR I, even as regards disputes relating to the activities of their branches, agencies or other establishments within the European Union. This would mean that the weaker party could encounter difficulties when calling such a defendant to court. The Belgian policyholder who has entered into an insurance agreement with an American insurance company through the latter’s branch office in Antwerp, would only be able to sue that American insurer before a Belgian court if the national rules of private international law of Belgium would provide such an opportunity. To protect the weaker party in such circumstances, Sections 3, 4 and 5 contain specific rules indicating that the stronger party, who is not domiciled in the European Union, but who has a branch, agency or other establishment in one of the Member States, is deemed to be domiciled in that Member State in disputes arising out of the operations of the branch, agency or establishment, (Article 9, paragraph 2 for insurance contracts, Article 15, paragraph 2 for consumer contracts and Article 18, paragraph 2 for employment contracts). This means that the Belgian policyholder may sue the American insurer before the courts of Belgium on the basis of Article 9, paragraph 2 BR I, since the insurance contract was concluded through the Antwerp branch office of the American insurer, whereas the question where the American insurance company is deemed to be domiciled in Belgium, has to be answered in conformity with Article 60 BR I. Since the statutory seat of the American insurance company is not located in Belgium, the fictitious place of domicile has to be assed on the basis of the central administration or principal place of business in Belgium. When the Belgian policyholder has concluded the insurance contract with the Antwerp branch office, but the central administration of all Belgian branches of this American insurer is located in Brussels, this implies that only the courts in Brussels have jurisdiction. A Belgian court in Brussels faced with such a legal claim of a Belgian policyholder against an American insurer must admit the case, unless a Treaty between Belgian and the United States would indicate otherwise (which is not the case).

The operations of a ‘branch’, ‘agency’ or ‘other establishment’ include both: activities from a branch, agency or other establishment through which the contract was directly concluded between the stronger party (insurer, entrepreneur or employer) and the weaker party (policyholder, insured person, beneficiary, consumer employee) and also the activities of a branch, agency or other establishment which negotiated the contract to conclusion on behalf of the stronger party. Yet, these words explicitly refer to a branch, agency (agent) or other establishment of this specific stronger party. When it concerns, for instance, the intervention of an independent insurance broker or an independent insurance agent offering insurance policies of various insurers, Article 5 point (5) BR I is not applicable.

Especially in matters of insurance it is questionable what constitutes a branch, agency (agent) or other establishment of an insurer domiciled outside or inside the European Union. According to legal history the marketing of insurance contracts through an independent broker, agent or other intermediary cannot be regarded as a branch or agency within the meaning of Article 9, paragraph 2 BR I. Where an agent offers various insurance policies on behalf of different insurers not mutually affiliated, he acts as an intermediary for numerous insurance companies. He is independent and not connected with one specific insurer in the sense of Article 9, paragraph 2 BR I or Article 5, point (5) BR I On the other hand, it was stated that Article 9, paragraph 2 BR I would be superfluous if the case would already fall within the scope of Article 5, point (5) BR I. This would imply that marketing of insurance contracts through an independent broker or agent would fulfil the criteria for a branch, agency or other establishment within the meaning of Article 9, paragraph 2 BR I. This, however, is not a valid argument. Article 5, point (5) BR I concerns the situation that both, the insurer and the policyholder, are domiciled in a Member State. Article 9, paragraph 2 BR I is related to Article 4 BR I, namely to the situation that the insurer is not domiciled in one of the Member States. For this situation Article 9, paragraph 2, BR I explicitly indicates that such an insurer, having a branch, agency or other establishment in one of the Member States, shall, in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that Member State. Article 9, paragraph 2 BR I is by no means superfluous to Article 5, point (5) BR I. It is necessary to make all provisions of the Brussels I Regulation, including Article 5, point (5) BR I and those of Section 3, applicable to an insurer domiciled outside the European Union. There is no reason to assume that an independent broker or agent falls within the scope of Article 9, paragraph 2 BR I (or within that of Article 5, point (5) BR I). Where a broker only appears to be independent, but in fact is tied to one particular insurer, this is different. He then must be regarded as an agent of that specific insurer, in the sense of Article 5, point (5) BR I and of Article 9, paragraph 2 BR I. So, if that insurer is domiciled in one of the Member States, Article 5, point (5) is applicable in connection with Article 8 BR I. If such an insurer is domiciled outside the European Union, Article 5, point (5) BR I becomes applicable through Article 9, paragraph 2 in connection with Article 8 BR I. The European Court has ruled that, where the defendant (in this case the insurer) himself has created the appearance that a (independent) broker or agent is acting as one of its branches, agencies or other establishments, jurisdiction may be based on Article 5, point (5) BR I (ECJ 9 December 1987 'SAR v Parfums Rothschild ', Case 218/86). A claims representative, only dealing with the settlement of insurance claims, is no branch, agency or other establishment within the meaning of Article 9, paragraph 2, BR I.

Looking at the text of Article 5, point (5) BR I, one could say that a stronger party, domiciled in the European Union, remains entitled as well to sue the weaker party, living in another Member State, before the courts of a third Member State where the branch, agency or other establishment of that insurance company is located, provided that the dispute arises out of the operations of that branch, agency or other establishment. When an English insurer with a branch office in Germany concludes from that office an insurance agreement with a natural person domiciled in the Netherlands, the Dutch policyholder may, according to Article 5, point (5) BR I, start legal proceedings before a German court. But the same goes for the English insurance company that wants to file a claim against the Dutch policyholder. It may, according to Article 5, point (5), as well address a German court for these proceedings against the Dutch defendant. This, however, does not seem to be in line with Article 12 BR I and the grounds for issuing specific rules to protect the policyholder, insured person or beneficiary. Nevertheless, it is assumed still that also a plaintiff insurer may invoke jurisdiction granted under Article 5, point (5) BR I.

See also:

• Section 3 Jurisdiction in matters relating to insurance (Jenard 1968)
• Insurance contracts taken out by policy-holders domiciled outside the Community (Schlosser 1979)
• Matters relating to insurance (Evrigenis 1986)
• Insurance (Pocar 2007)

Section 3  Jurisdiction in matters relating to insurance

Section 3 (Articles 8 – 14) BR I provides for specific rules for matters relating to insurance. These provisions intend to protect the policyholder, insured person and beneficiary. In order to protect that so called weaker party in an insurance relationship, the Brussels I Regulation makes a distinction between the position of the insurer on one side, and that of the policyholder, the insured or a beneficiary, on the other, and providing various criteria for jurisdiction depending on whether one or other assumes the position of plaintiff or defendant (see the Pocar nr. 63, Jenard report, pp. 30-33, and the Schlosser report, paragraphs 136-152). So a difference has to be made depending on the question whether the stronger party (insurer) or the weaker party (policyholder, insured person or beneficiary) wants to start legal proceedings against the other. One has to notice that the weaker party within an insurance contract may be a legal person or even a multinational, provided he is the policyholder, insured person or beneficiary. Articles 8 up to and including 14 do not solely grant protection to natural persons. Although the insurer may as well be a natural person, he will in practice always be a legal person.

See also:

• Section 3 Jurisdiction in matters relating to insurance (Jenard 1968)
• Insurance contracts (Schlosser 1979)
• Matters relating to insurance (Evrigenis 1986)
• Insurance (Pocar 2007)

Article 8 of the Brussels I Regulation

Independant application of Section 3 in matters relating to insurance [Article 8]

The Brussels I Regulation does not define the notion ‘insurance’. Therefore, this must be interpreted autonomously on the basis of the Regulation and its necessary implications. It includes ordinary and special insurance contracts in civil and commercial matters (insurance of health, life, property or liability). The insurance contracts may be concluded voluntarily (life insurance) or compulsory (motor car liability insurance). Public law insurance, however, is excluded (e.g. public health insurance, public employee insurance).

Reinsurance contracts cannot be equated with insurance contracts. Accordingly, Articles 8 to 14 BR I do not apply to reinsurance contracts. Therefore Section 3 has no meaning for the relation between a reinsured and the reinsurer in connection with a reinsurance contract (ECJ 13 July 2000 'Josi Reinsurance v UGIC', Case C-412/98). But the ECJ has expressly stated that Section 3 will apply to actions brought directly by a policyholder, insured person or beneficiary against a reinsurer. The same applies when an injured party directly sues a reinsurer. Section 3 neither applies when an insurer starts legal proceedings against another insurer (ECJ 26 May 2005 'GIE c.s. v Zurich', Case C-77/04). It's possible that two insurers are liable for the same insured event and that one of them pays out more to the insured person than its share according to their mutual relationship. When it seeks recovery from the other insurer for the part that it has paid beyond its own share, it must do so by virtue of Article 6, point (2) BR I, which remains applicable in situations related to matters of insurance that are not covered by Section 3. Claims of a jointly and severally liable policyholder against his co-policyholder, for instance when the first mentioned person has paid all premiums, are not regarded as 'matters relating to insurance'. Therefore, Section 3 does not apply to such internal claims between co-policyholders. Claims of a co-policyholder against the insurer or vice versa, of course, fall within the scope of matters relating to insurence, so that Section 3 is applicable.

With regard to the application of Article 4 and Article 5, point (5) BR I see other comments.

See also:

• Article 7 (Jenard 1968)
• Compulsory insurance (Schlosser 1979)
• Re-insurance (Schlosser 1979)

Article 9 of the Brussels I Regulation

Index Article 9

• Actions of the policyholder, insured person or beneficiary against the insurer [Articles 9 and 10]
• Domicile of the insurer [Article 9, paragraph 1, point (a) BR I]
• Place where the policyholder, insured person or beneficiary is domiciled [Article 9, paragraph 1, point (b) BR I]
• Co-insurers [Article 9, paragraph 1, point (c) BR I]
• Branch, agency or other establishment of the insurer [Article 9, paragraph 2, and Article 5, point (5) BR I]
• Liability insurance or insurance of immovable property: place where the harmful event occurred [Article 10 BR I]

Actions of the policyholder, insured person or beneficiary against the insurer [Articles 9 and 10]

The policyholder, insured person and beneficiary have several options to file a claim against the insurer. For this purpose they may address the courts of the Member State where they themselves are domiciled, where the insurer is domiciled, or where the branch, agency or other establishment is located from which the insurance contract was negotiated (Article 9 BR I). In respect of liability insurance or insurance of immovable property, the insurer may in addition be sued in the courts for the place where the harmful event occurred. The same applies if movable and immovable property are covered by the same insurance policy and both are adversely affected by the same contingency (Article 10 BR I). If the insurer is a co-insurer, he may be sued also in the courts of a Member State in which proceedings are brought against the leading insurer (Article 9, paragraph 1, point (c) BR I).

The policyholder, insured person and beneficiary may choose freely from the various options provided by Articles 9 and 10 BR I. It is not possible to rule (one of) these options out by means of a contractual forum clause in the insurance contract. Nevertheless, the policyholder and insurer who, at the time of the conclusion of a liability insurance contract are domiciled or habitual resident in the same Member State, may include a forum clause in that contract, that has the effect of conferring jurisdiction on the courts of that Member State, even if the harmful event were to occur abroad, provided that such an agreement is not contrary to the law of that Member State (Article 13, point (3) BR I). The policyholder and insured person are bound by such forum clause, just as the insurer is. Such clauses, however, have no effect against third parties, like an injured person with a direct action against the insurer pursuant to Article 11, paragraph 2 BR I.

See also:

• Article 8 (Jenard 1968)
• Insurance contracts (Schlosser 1979)
• Matters relating to insurance (Evrigenis 1986)
• Insurance (Pocar 2007)

Domicile of the insurer [Article 9, paragraph 1, point (a) BR I]

For actions against the insurer, Articles 9 and 10 BR I provide the principal rules. An insurer domiciled in a Member State may first of all be sued in the courts of the Member State where he is domiciled (Article 9(1)(a)). This rule is in agreement with the principal rule of Article 2 BR I, which doesn’t apply in matters relating to insurance, because it is set aside by Section 3 (Article 8 BR I). Therefore a separate rule of similar content had to be imputed independently. When the defendant is domiciled in a Member State, he may be sued before the courts of that Member State in accordance with its national rules for subject-matter and territorial jurisdiction. A difference between the main rule of Article 2 BR I and the specific rule of Article 9, paragraph 1, under (a) BR I, is that Article 2 BR I is non-mandatory, so that parties may derogate from it by means of a choice of jurisdiction under Article 23 BR I, whereas Section 3 contains rules of mandatory law protecting the policyholder, insured person and beneficiary and only allows any contractual derogation within the boundaries of Article 13 BR I.

See also:

• Article 8 (Jenard 1968)

Place where the policyholder, insured person or beneficiary is domiciled [Article 9, paragraph 1, point (b) BR I]

In addition an insurer domiciled in a Member State may be sued in another Member State, in the case of actions brought by the policyholder, the insured or a beneficiary, namely in the courts for the place where the plaintiff himself is domiciled (Article 9(1)(b)). This provision makes it possible for the weaker party to bring a claim to the courts of his own Member State, irrespective whether the insurer is domiciled in that Member State or the insurance contract was concluded through a branch office there. When a Belgian policyholder has entered into an insurance agreement with an English insurance company through a branch office of that company in the Netherlands, the Belgian policyholder has several opportunities in addressing a court. First, he may file a claim at an English court (Article 9, paragraph 1, under (a) BR I). Secondly, he may start proceedings in the Netherlands before the court of the place where the branch office is located (Article 5, point (5) BR I in connection with Article 8 BR I). And thirdly, he may go the Belgian court in whose territorial district he himself is domiciled (Article 9, paragraph 1, under (b) BR I). The domicile of the policyholder, insured person or beneficiary which is relevant here, is the domicile (Article 59 or 60 BR I) existing at the time when the proceedings are instituted.

See also:

• Article 8 (Jenard 1968)
• The term policyholder (Schlosser 1979)

Co-insurers [Article 9, paragraph 1, point (c) BR I]

Thirdly, an insurer domiciled in a Member State, if he is a co-insurer, may be sued in the courts of a Member State in which proceedings are brought against the leading insurer. Article 9, paragraph 1, under (c), BR I covers jurisdiction where several co-insurers are parties to a contract of insurance. What usually happens is that one insurer acts as leader for the other co-insurers and each of them underwrites a part of the risk, possibly a very small part. In such cases, however, there is no justification for permitting all the insurers, including the leader, to be sued in the courts of each State in which any one of the many co-insurers is domiciled. The only additional international jurisdiction which can be justified would be one which relates to the circumstances of the leading insurer, either because that leading insurer is domiciled there (under a) or the policyholder has started legal proceedings against him before the court where the policyholder, insured person or beneficiary himself is domiciled (under b). Yet, an additional jurisdiction based on the leading insurer’s circumstances is justifiable if it leads to a concentration of actions arising out of an insured event. Article 9, paragraph 1, under (c), BR I therefore refers to the court where proceedings are brought against the leading insurer. Co-insurers may thus be sued for their share of the insurance in that court, at the same time as the leading insurer or subsequently. However, the provision does not impose an obligation for proceedings to be concentrated in one court. There is nothing to prevent a policyholder from suing the various co-insurers in different courts. If the leading insurer has settled the claim out of court, the policyholder, insured person or beneficiary must bring any action against the other co-insurers in one of the courts having jurisdiction under (a) or (b) of the first paragraph of Article 9 BR I. This provision is similar to (but not the same as) that in Article 6 point (1) BR I, which does not apply here since Section 3, relating to insurance, applies independently from the rest of the Regulation. If a co-insurer that has paid more than its share to the insured person or beneficiary wants to recover a part thereof from another co-insurer, Section 3 has no relevance, because this is not seen as a matter relating to insurance. Consequently it has to return to Article 6 point (2) BR I in order to access where the claim must be brought in court.

See also:

• Article 8 (Jenard 1968)
• Co-insurance (Schlosser 1979)

Branch, agency or other establishment of the insurer [Article 9, paragraph 2, and Article 5, point (5) BR I]

An insurer, irrespective whether he is domiciled in the European Union, but having a branch, agency or other establishment in a Member State, may be sued as well in the courts of the Member State where this branch, agency or other establishment is located (Articles 5(5) and 9(2) BR I).

Where the insurer is domiciled in a Member State, Article 5 point (5) in conjunction with Article 8 BR I indicates that he may be sued in another Member State as regards a dispute arising out of the operations of a branch, agency or other establishment of that insurer situated in that other Member State. An insurer who is not domiciled in a Member State, but who has a branch, agency or other establishment of its own in one of the Member States shall, in disputes arising out of the operations of that branch, agency or establishment, be deemed to be domiciled in that Member State (Article 9, paragraph 2). Given the fact that such insurer is subjected to the rules on jurisdiction of the Brussels I Regulation, he also enjoys the protection provided by Article 3, paragraph 2 BR I, so that the rules of national exorbitant jurisdiction set out in Annex I shall not be applicable as against him. The question in which town such an insurer is deemed to be domiciled, has to be answered on the basis of Article 60 BR I. Again, it has to be noticed that the expressions ‘branch’, ‘agency’ or ‘other establishment’ include both a branch, agency or establishment through which the insurance contract was directly concluded between the insurance company and the policyholder and also a branch, agency or establishment which negotiated the contract to conclusion on behalf of the insurance company. Yet again, it has to be an intervention of a branch, agent or establishment of that insurer itself. When it concerns the intervention of an independent insurance broker or an independent insurance agent offering insurance policies of various insurers, Article 9, paragraph 2 is not applicable (neither as Article 5 point (5) BR I).

See also:

• Article 8(2) (Jenard 1968)
• Insurance agents, the setting up of branches (Schlosser 1979)

Article 10 of the Brussels I Regulation

Liability insurance or insurance of immovable property: place where the harmful event occurred [Article 10 BR I]

Article 10 BR I enlarges the possibilities for the policyholder of a liability insurance to file a claim against the insurer. It allows an insurer to be sued in a Member State other than that in which he is domiciled (Article 9, under (a) BR I) or where he has a branch, agency or other establishment (Article 5, point (5) BR I) or where the plaintiff himself is domiciled (under b), if this happens before the courts of the place where the harmful event occurred, but without prejudice to the application of Article 13, paragraph 3 BR I (this means that it is possible to derogate from it under agreement). Such jurisdiction applies only in respect of liability insurance and insurance of immovable property.

Liability insurance is any kind of insurance providing indemnification of the insured person in the event that he becomes liable to third parties. Sometimes the State where the harmful event occurred is not the same State as where this event results in damage. In tort cases the European Court has ruled that in such situations both places are to be seen as locus delicti commissi, meaning that Article 5, point (3) BR I offers the plaintiff the choice between the courts of the two involved States (ECJ 30 November 1976 'Handelskwekerij Bier v Mines de potasse', Case 21-76, ECR 1976 p. 01735). In the application of Article 10 BR I the same rule has to be applied.

Article 10 BR I applies as well to insurance agreement related to immovable property, like a fire insurance. Usually this means that Article 10 BR I provides the policyholder the opportunity to start legal proceedings before a court of the Member State where the damaged immovable property is located. The harmful event has occurred there and the damage is suffered as well in that place. Again, it is not inconceivable that the harmful event, for which the insurance policy offers protection, stretches over two or more Member State, for instance when a building is smashed by a major storm torturing Europe. This doesn’t imply that the policyholder now has to choice between the courts of all Member States where the storm has raged. The harming event is restricted to the place where the damage occurred.

Article 10 BR I extends to movable property in cases where a building and the movable property it contains are covered by the same insurance policy. This is the case when movables are covered by an endorsement to the policy covering the immovable property.

See also:

• Article 9 (Jenard 1968)
• Remaining scope of Articles 9 and 10 (Schlosser 1979)

Article 11 of the Brussels I Regulation

Index Article 11

• Actions of a third - injured - person against the liable person or his insurer [Article 11 BR I]
• Actions of the injured person against the insured person liable: calling the insurer to court [Article 11, paragraph 1 BR I]
• Direct action of the injured person against the insurer: calling the insured person to court [Article 11, paragraph 2 and 3 BR I]

Actions of a third - injured - person against the liable person or his insurer [Article 11 BR I]

Where a person gets harmed or (physically) injured as a result of an accident or other tortious act caused by someone else, he only has a claim against that other person. Only the latter has caused the damage or is legally responsible for it. Even when the liable person has an insurance which covers the damage caused, the injured person has no direct claim against the insurance company. Sometimes this is different, especially when the liable person is compelled by law to take out a liability insurance, for instance a motor vehicle liability insurance. The law of a Member State may indicate in such event that the injured person has an additional claim against the insurer of the liable person. In the Netherlands, for instance, the owner of a car is obliged to take out a liability insurance. When the insured owner of the car becomes liable for damage caused by a traffic accident, the injured party not only has a direct claim against the insured owner of the car, but also against this owner’s insurance company. He may immediately claim compensation from that insurance company and, when the insurer refuses to pay compensation, sue that company itself as a liable party. Article 11 BR I contains several provisions for such triangulated relations.

See also:

• Article 10 (Jenard 1968)
• Remaining scope of Articles 9 and 10 (Schlosser 1979)

Actions of the injured person against the insured person liable: calling the insurer to court [Article 11, paragraph 1 BR I]

Article 11, paragraph 1, BR I indicates that, in respect of liability insurance, the insurer may, if the law of the court permits so, be joined in proceedings which the injured party has brought against the insured person (Article 11(1) BR I). This provision enables the insured person, who is held liable by the injured person, to call his insurer to the same court in the same proceedings, even when the injured person doesn’t have a direct claim against that insurer. It is similar to Article 6, paragraph 2, BR I, regarding actions on a warranty or guarantee or other third party proceedings.

At a hunting party in England a Dutch hunter accidentally shoots a French hunter in his leg. The Dutch hunter has covered his liability for such accidents under an insurance policy concluded with an Austrian insurance company. The claim of the French hunter against the liable Dutchman does not fall within the scope of Section 3, since it is in itself no 'matter relating to insurance'. The French hunter may start legal proceedings against the Dutch hunter before a court in the Netherlands (Article 2 BR I: domicile of the defendant) or before an English court (Article 5, point (3) BR I: place where the harmful event occurred). The French hunter decides to bring his claim against the Dutch defendant to an English court. Because the Dutch defendant may recover his liability from his Austrian insurer, he is allowed pursuant to Article 11, paragraph 1, BR I to call that insurance company to the same English proceedings in order to obtain an enforceable judgment against it.

This possibility only exists insofar as the law of the forum court permits so. Austria, Germany and Hungary have stipulated that Article 11, paragraph 1, BR I does not apply to them (see Article 65 BR I). Therefore, when the injured person has brought his claim against the liable person to an Austrian, German or Hungarian court, that liable person cannot summon his insurer to appear as a party in the same proceedings before a court of one of these Member States.

At a hunting party in Bavaria a Polish hunter, domiciled in Warsaw, has accidently shot a Dutch hunter in his leg. The Polish hunter has covered his liability under an insurance policy concluded with a French insurance company. The Dutch hunter may sue the Polish defendant before a Polish court (Article 2 BR I: domicile of the defendant) or a Bavarian court (Article 5, point (3) BR I: court for the place where the harmful event occurred). In view of the fact that the claim is subject to German liability law, the Dutch plaintiff chooses for a Bavarian court. Germany, however, does not permit the Polish defendant to call his French insurer to the same proceedings. Therefore Article 11, paragraph 1, BR I has no meaning in this particular case. The Polish hunter has to apply other provisions of the Brussels I Regulation, in particular those mentioned in Section 3, in order to assess independently where he may file his legal claim against his French insurer. He may choose between a court in France (Article 9(1)(a) BR I: domicile of the insurer), a court in Warsaw (Article 9(1)(b) BR I: the courts for the place where he is domiciled as plaintiff) or a court in Bavaria (Article 10 BR I: court for the place where the harmful event occurred).

One has to be aware that the exclusion of the applicability of Article 11, paragraph 1, BR I only has relevance when the injured person has brought his claim to an Austrian, German or Hungarian court, irrespective of the domicile of the involved parties (injured person, liable person, insurer). So when the claim of the injured person against the liable defendant is considered by a court of another Member State than the ones mentioned before, Article 11, paragraph 1, BR I may effect also persons (insurers) domiciled in Austria, Germany or Hungary. Furthermore, where a court in another Member State has given a judgment based on its jurisdiction derived from Article 11, paragraph 1, BR I, that judgment must be recognized and enforced all the same in Austria, Germany or Hungary, even against an insurer domiciled there.

In the before mentioned example of a Dutch hunter who could recover his liability from an Austrian insurance company, Article 11, paragraph 1, BR I made it possible for the Dutch defendant to call that Austrian insurer to an English court in the proceedings initiated against him by the injured person. The fact that Austria has not recognized the application of Article 11, paragraph 1, BR I is only of importance when the injured party has brought his claim against the liable person to an Austrian court, in the sense that the defendant then is unable to call an insurer, irrespective of where it is domiciled, to the Austrian proceedings. The judgment of the English court, rendered on behalf of the Dutch defendant against his Austrian insurer, is enforceable in Austria.

The problem arose whether consolidation of the two actions (action of the injured person against the liable person and action of the liable person against his own insurer) should be allowed even where the insurer and the insured (liable person) are both domiciled in the same Member State, which it must be assumed for the purposes of this argument, is different from the Member State of the court seised by the injured person. For example, where an accident is caused in France by a Dutchman domiciled in the Netherlands who is insured with a Dutch company, should third party proceedings, which are recognized under French law, be possible even though the litigation concerns a contract of insurance between a Dutch insured person and a Dutch insurer? As it is subject to Dutch law, should this contract not be litigated in a Dutch court? In this example, the legal claim of the injured person against the Dutch defendant is dealt with by a French court. Subsequently, Article 11, paragraph 1, BR I allows the Dutch defendant to call his Dutch insurer as a party to those French proceedings, even though the insurance contract between him and his Dutch insurer is governed by Dutch insurance law. The contractual relationship between the insurer and the policyholder, governed by Dutch insurance law, would then differ from the proceedings relating to personal liability governed by French tort law. The compromise solution is found by the creation of a contractual option to reduce the scope of Article 11, paragraph 1, BR through a forum clause in the insurance agreement (Article 13, point (3) BR I). If the policyholder and insurer, at the time of conclusion of the insurance contract, both are domiciled or habitually resident in the same Member State (like the Netherlands), they may by agreement confer jurisdiction on the courts of that Member State (the Netherlands) even if the harmful event were to occur abroad (like in France). Such an agreement must not, however, be contrary to the law of that Member State (here: of the Netherlands).

Direct action of the injured person against the insurer: calling the insured person to court [Article 11, paragraph 2 and 3 BR I]

Sometimes the injured person not only has a direct claim against the person who caused the damage, but also against this person’s liability insurer. Direct actions against the insurer are for instance recognized under Belgian, French and Luxembourg law. Under German and Netherlands law they are recognized with regard to compulsory insurance against civil liability in respect of motor vehicles. Article 11, paragraph 2, BR I makes clear before which court the injured person may start legal proceedings directly against the insurer. Under that provision the insurer may also, in respect of liability insurance, be sued directly by the injured person outside the Member State in which the insurer is domiciled in any court which, under Articles 8 to 10 BR I, would have had jurisdiction over actions if these would have been brought by the policyholder (liable person) against that insurer. A statutory representative of the injured person, like a social security institution, that wants to sue the insurer of the liable person directly, cannot be equited with the injured person for the purpose of Article 11, paragraph 2, BR I (ECJ 17 September 2009 'Gebietskrankenkasse v Allgemeine Versicherung', Case C-347/08, OJ C 267). A direct action of the injured person against the insurer of the liable person is at all times only possible where the law of the seised court permits such direct actions against the insurer. The phrase 'where such direct actions are permitted' in Article 11, paragraph 2, BR I is used specifically to include the conflict of laws rules of the court seised of the matter. The rules of conflict must be used to decide whether the law to be applied is the law of the place where the harmful event occurred, the law governing the insurance contract or the lex fori. In principal the seised court must assess on the basis of its own private international law which law governs the non-contractual obligation between the injured person and the liable person. Yet, the Rome II Regulation applies to all EU Member States. Under Article 18 of the Rome II Regulation the person having suffered damage may bring his claim directly against the insurer of the liable person to provide compensation if the law applicable to the non-contractual obligation or the law applicable to the insurance contract so provides. Therefore, the injured person may ground his direct action either on the law applicable to tort or the law applicable to the insurance contract, depending on whether the applicable law provides for a direct action against the insurer.

A Belgian citizen has concluded a liability insurance with a Dutch insurance company. The insurance agreement is governed by Dutch insurance law. The Belgian citizen causes a work accident when performing an assignment in Germany. As a result a German citizen gets injured. The German citizen wants to claim financial compensation directly from the Dutch insurer of the Belgian tortfeasor. According to the principal rule in Article 4 of the Rome II Regulation, German law applies to the tort case. For this kind of liability, however, German law does not provide a direct action against the insurer. The injured German citizen therefore turns, in agreement with Article 18 of the Rome II Regulation, to the law that is governing the insurance agreement between the Belgian tortfeasor and his Dutch insurance company. This appears to be Dutch law. But also Dutch law does not provide in such cases for a direct action against the insurer. This means that the German citizen is not able to file a legal claim directly against the Dutch insurer. He has to summon the Belgian tortfeasor himself to appear in court. In principal he may choose for this purpose between the courts of Belgium (Article 2 BR I: domicile of the defendant) or the courts of Germany (Article 5, point (3), BR I: the courts for the place where the harmful event occurred). When the injured German has filed a claim against the Belgian tortfeasor at a court in Belgium, the Belgian defendant may call his Dutch insurer as a party to these proceedings on the basis of Article 11, paragraph 1, BR I. This, however, is not a claim of the German injured person directly against the Dutch insurer of the liable person, but a claim of the Belgian insured person against his own insurance company. Where the German injured party would file a claim at a German court, the Belgian tortfeasor would not be able to call the Dutch insurer to the proceedings on the basis of Article 11, paragraph 1, since Germany has excluded this possibility in Article 65 BR I.

Important in this respect is the so called EU Motor Insurance Directive 2009/103/EC, ensuring the free movement of vehicles in the European Union and establishing a single market in the field of motor insurance. The Directive obliges all motor vehicles in the EU to be covered by compulsory third party insurance and ensures the abolition of border checks on insurance so that vehicles can be driven as easily between Member States as within one country. The EU Motor Insurance Directive 2009/103/EC (OJ L 263, 07/10/2009) codified all previous five EU Motor Insurance Directives, which consequently are no longer in force. In point (32) of the consideration of this Directive it is stated that injured parties may bring legal proceedings against the civil liability insurance provider in the Member State in which they (i.e. the injured persons) are domiciled, and this on the basis of Article 11, paragraph 2, in conjunction with Article 9, paragraph 1, under (b), BR I. Therefore a direct action against the liability insurance is ascertained for damages within the scope of the Directive. All EU Member States are bound by this Directive.

Where direct actions of the injured person against the insurer are permitted, Articles 8, 9 and 10 BR I apply, in determining jurisdiction of the courts, to the actions brought by the injured party directly against the insurer. The result of this provision is that the injured party has the same opportunities as the insured person to bring his claim against the insurer in court. The injured person may therefore sue the insurer of the liable person before the courts of the Member State where the insurer is domiciled, where the policyholder or insured person is domiciled, where the branch, agency or other establishment of the insurer is located from which the insurance with the policyholder or insured person is concluded or where the harmful event occurred. One has to be aware, however, that an injured person cannot start legal proceedings at the courts of the Member State where he himself is domiciled. Article 9, paragraph 1, under (b) BR I, explicitly mentions that when the action is brought by the policyholder, the insured or a beneficiary, the courts for the place where the plaintiff is domiciled have jurisdiction. In general it was believed that the injured person cannot be seen as a plaintiff with a similar status. So he was not allowed to file a lawsuit on that basis at the courts of the Member State where he himself is domiciled. This view seems to have been abandoned, taking into account what is stated in point (32) of the consideration of the EU Motor Insurance Directive 2009/103/EC: ‘(32) Under Article 11(2) read in conjunction with Article 9(1)(b) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, injured parties may bring legal proceedings against the civil liability insurance provider in the Member State in which they are domiciled’. This means that injured parties (‘they’) may file – on the basis of the mentioned Articles of the Brussels I Regulation - a direct claim against an insurer in the Member State where the injured person himself is domiciled, irrespective where the policyholder, insured person or beneficiary has his domicile.

Where parties to the insurance contract (i.e. the insurer and the policyholder) have validly, in agreement with Article 13, paragraph 3, BR I, enclosed a forum clause, indicating that a dispute between them has to be trialled in a court of the Member State where they both are domiciled, this has no meaning for the injured party. He remains entitled to choose a court on the basis of the provisions of Section 3 of the Brussels I Regulation, whether he wants to file a claim against the insured liable person or, if possible, against his insurer. Nevertheless, the insurance contract between the policyholder and the insurer may have some consequence for the injured person, namely with regard to the law applicable to that contract (stipulated by clause) and, with that, with regard to the effect of Article 11, paragraph 2 BR I.

Where an injured person has filed a claim directly against the insurer of the liable person, he may still want the liable person (policyholder or insured person) to appear as party in the same proceedings as well. Article 11, paragraph 3, BR I makes it possible for the injured person to call the liable person as a party to the same proceedings. The court, which initially just handled the claim against the insurer, now also has jurisdiction over the claim of the injured person against the liable person. Such joining of proceedings, however, is only possible if the law applicable to the direct action against the insurer permits so.

Article 12 of the Brussels I Regulation

Jurisdiction relating to legal actions of an insurer against another person (defendant) and counter claims [Article 12 BR I]

Where an insurer acts as plaintiff, he may in general bring an action only in the courts of the Member State in which the defendant is domiciled, irrespective of whether the latter is the policyholder, the insured person or a beneficiary (Article 12, paragraph 1 BR I) or whether he is a legal or natural person. Decisive is the Member State where the defendant himself is domiciled at the time when the action is filed. The domicile if the insurer is of no importance. Again, this is a provision dealing with international jurisdiction; local jurisdiction within each Member State will be determined by the internal law of that State.

Article 12 BR I has no relevance where the defendant is domiciled outside the European Union. In such cases Article 4 BR I applies.

This principal rule applies as well when the insurer has two claims against two different policyholders. The insurer then must sue each defendant before the courts of the Member State where that particular defendant is domiciled himself. If one of them is living in Belgium and the other in the Netherlands, the insurer has to start two independent proceedings, one in the courts of Belgium and one in the courts of the Netherlands. This is even the case when the policyholders are jointly and severally liable for the obligations (premiums) imposed on them by the insurance contract, since the insurer cannot avail himself of Article 6, paragraph 1 BR I (Article 8 BR I). When the insurer sues one of the jointly and severally liable policyholders before a court of his domicile (Article 12, paragraph 1 BR I), that policyholder may claim compensation from his co-policyholders of the part that he has paid beyond his internal share to the insurer. Such a claim of a policyholder against his co-policyholders is not subject to Section 3 (not a ‘matter related to insurance’), so that the court with jurisdiction may be chosen from the fora provided by Articles 2, 5 and 6 BR I. Where a jointly and severally liable policyholder is sued by the insurer for the entire debt, he may also call his co-policyholders immediately as a party to the same proceedings (Article 6, point (2) BR I). If the insurer sues two or more defendants domiciled in the same Member State, he must turn with two independent claims to the courts of that State. It depends on the internal law of that State whether he is allowed to bring the claims jointly in one court of that Member State. According to the Dutch Code of Civil Procedure this is possible if the defendants are domiciled in the Netherlands.

Article 12, paragraph 1, BR I corresponds to the principal rule of Article 2 BR I. Yet, there are two differences. First of all, Article 12, paragraph 1, BR I is of mandatory law, in the sense that it is only possible to derogate from it within the boundaries set by Article 13 and 14 BR I. Secondly, the insurer cannot appeal to rules for special jurisdiction, because Article 5 and 6 BR I are excluded where it concerns disputes falling within the scope of Section 3 (Article 8 BR I).

The principal rule of Article 12, paragraph 1, BR I has the result that, when the proceedings against the policyholder, insured person or beneficiary are instituted by the insurer, the courts of the Member State in which the defendant is domiciled have exclusive jurisdiction. There are, nevertheless, two exceptions to this rule.

1. a liability insurer sued directly by an injured party, where this is permitted, may call the policyholder or the insured person as a party to the same proceedings, on the condition that the law which is governing that direct action against the insurer provides for the joining of such proceedings (Article 11, paragraph 3 BR I);

The text of Article 11, paragraph 3 BR I as well as the remarks of Jenard (Jenard Report C 59/32) indicate that also the insurer, who is directly sued by the injured person, has the right to call the policyholder or insured person as a party to the same proceedings. This means that the protection, granted under Article 12, paragraph 1, BR I to the policyholder and insured person can be undermined by the choice of forum of the injured party. The injured party is, for example, pursuant to Article 11, paragraph 2 in connection with Article 9 BR I allowed to file a direct action against the insurer at the courts of the Member State where the harmful event occurred or where the injured person himself is domiciled (for instance France). This doesn’t necessarily has to be the same Member State as where the liable person (policyholder, insured person or beneficiary) is domiciled (for instance the Netherlands). Nevertheless, the insurer may under Article 11, paragraph 3, BR I file a claim at that same court (France) against that policyholder (domiciled in the Netherlands), meaning that the Dutch policyholder has to defend himself against the claim of his insurer before a French court. To make this possible, Article 12, paragraph 1, BR I explicitly says that it is applicable without prejudice to Article 11, paragraph 3 BR I. In the interests of the proper administration of justice, it was felt desirable that actions may be brought in the same court in order to prevent different courts from giving judgments which are irreconcilable. This procedure will in addition protect the insurer against fraud (Jenard Report C 59/32). Yet, one has to be aware that the possibility of such joining only exists if the law governing the direct action of the injured person against the insurer provides that the policyholder or the insured may be joined as a party to the action.

2. the provisions of Section 3 shall not affect the right of the insurer to bring a counterclaim in the court in which, in accordance with this Section, the original claim is pending (Article 12, paragraph 2 BR I).

   The second paragraph of Article 12 BR I corresponds to the provisions of Article 6 point (3) BR I. When the policyholder has filed a claim against the insurer at a court available to him pursuant to Section 3, the insurer may file a counterclaim against that policyholder at the same court. This right, granted under Article 6, point (3) BR I, is not affected, which means that the insurer is only able to file a counterclaim which meets the criteria set in Article 6, point (3) BR I. The counterclaim of the insurer has to be arisen from the same contract or facts on which the original claim of the policyholder against the insurer was based. The same applies when an insured person or beneficiary has initiated proceedings against the insurer under Section 3. The counterclaim must be filed against the same person that started the legal proceedings against the insurer. Otherwise, the insurer’s claim cannot be seen as a counterclaim within the meaning of Article 12, paragraph 2 BR I. So, when the policyholder has brought a claim against the insurer in court, the insurer cannot file a ‘counterclaim’ in the same proceedings against a co-policyholder, insured person or beneficiary. Where an injured person has brought a direct action against the insurer, the insurer can neither bring a counterclaim in the same proceedings against the policyholder or insured person. In the event of a liability insurance he is nevertheless able to call the policyholder or insured person to the same proceedings by virtue of Article 11, paragraph 3 BR I.

Article 8 BR I stipulates that Article 5, point (5) BR I stays applicable in matters relating to insurance. We have seen that therefore, where a dispute arises out of the operations of a branch, agency or other establishment of the insurer, that insurer may be sued in the courts for the place in which his branch, agency or other establishment is situated. If the insurer is not domiciled within the European Union, Article 9, paragraph 2 BR I specifies that in disputes arising out of the operations of such an insurer’s branch, agency or establishment, which itself is located in a Member State, the insurer shall be deemed to be domiciled in that Member State. Nothing indicates that Article 5, point (5) BR I is not applicable in the same way to a policyholder with a branch, agency or other establishment in a Member State. So if an insurance dispute arises out of an insurance contract concluded with the policyholder through one of his branches, agencies or other establishments, the insurer may sue that policyholder also in the courts for the place in which the policyholder’s branch, agency or other establishment is situated. When a Belgian multinational has entered into an insurance contract with a Dutch insurer through intervention and assistance of a branch of that Belgian multinational in the Netherlands, the insurer may file a claim against this Belgian policyholder at the Dutch court within whose legal territory that branch is located. This, however, is only the case when the policyholder himself is domiciled within a Member State. There is no provision similar to Article 9, paragraph 2 BR I, indicating that a policyholder from outside the European Union with a branch, agency or other establishment in a Member State, is deemed to be domiciled in that Member States for insurance disputes arising out of the operations of that branch, agency or other establishment of the policyholder.

See also:

• Article 11 (Jenard 1968)

Article 13 and 14 of the Brussels I Regulation

Index Article 13 and 14

• Contractual derogation from the provisions of Section 3 [Article 13 and 14 BR I]
• Forum clause concluded after the dispute has arisen [Article 13, point (1) BR I]
• Forum clause extending the possibilities of the weaker party to sue the insurer [Article 13, point (2) BR I]
• Forum clause between a policyholder and insurer domiciled in the same Member State [Article 13, point (3) BR I]
• Forum clause between the insurer and a policyholder not domiciled in the European Union [Article 13, point (4), BR I]
• Forum clause related to the insurance of large risks [Article 13, point (5) and Article 14 BR I]

Contractual derogation from the provisions of Section 3 [Article 13 and 14 BR I]

Section 3 largely contains mandatory law. The insurer and policyholder are not able to depart from it, unless Section 3 itself provides the opening to do so. This rule is inserted too in order to protect the policyholder, insured person and beneficiary against the stronger insurer, here by restricting the general principle allowing parties to derogate from the rules of jurisdiction of the Brussels I Regulation except in the case of exclusive jurisdiction.

Again, this protection makes no distinction between insurance contracts concluded by consumers and contracts entered into in the course of industrial, commercial or professional activities, and allowing the latter a choice of forum. The preferred option was that the contracts in respect of which the parties could be allowed greater freedom of contract should be identified by reference not to the policyholder, but to the risks covered by the contract, with additional risks being added to those that already appeared in the 1968 Brussels Convention. This solution has the advantage that it does not modify the structure of the Brussels I Regulation, so that Section 3 on insurance remains separate from Section 4 on consumer contracts. Furthermore, it avoids any reference to a policyholder who is a consumer, so that it continues to offer protection not just to consumers but to individual entrepreneurs, to small and medium-sized enterprises, and to professionals who, even though they carry on an industrial, commercial or professional activity, deserve the same protection in matters of insurance as that given to consumers.

The provisions of Section 3 may be departed from only by an agreement. One has to be aware that the Brussels I Regulation does not apply to arbitration agreements, not even where it concerns matters related to insurance (Article 1, paragraph 2, point (d) BR I). Therefore, the policyholder and insurer may include an arbitration clause concerning insurance disputes in their insurance contract that departs from the provisions on jurisdiction of Section 3. Third parties, however, are not bound by such arbitration agreements.

See also:

• Article 12 (Jenard 1968)

Forum clause concluded after the dispute has arisen [Article 13, point (1) BR I]

The provisions of Section 3 may be departed from by an agreement which is entered into after the dispute has arisen. As a starting point, therefore, agreements concluded before a dispute arises will have no legal force if they are contrary to the rules of jurisdiction laid down in the Brussels I Regulation (see, however, the other exceptions of Article 13 BR I). So, choice of forum clauses in the insurance agreement or in the applicable general terms and conditions are invalid as far as they are in conflict with jurisdiction conferred pursuant to Section 3. The purpose of this rule is to prevent parties from limiting the choice of forum offered by the Regulation to the policyholder, insured person or beneficiary and to prevent the insurer from avoiding the restrictions imposed under Article 12 BR I. After a dispute has arisen, that is to say 'as soon as the parties disagree on a specific point and legal proceedings are imminent or contemplated', the parties completely regain their freedom. They then may agree on a forum as they please, with binding effect, also for the courts of the Member States seised in accordance with that agreement. Agreements on jurisdiction cover all legal proceedings between insurer and policyholder, even where the latter wishes, pursuant to Article 11, paragraph 1, BR I to join the insurer in the court in which he himself is sued by the injured party. However jurisdiction clauses in insurance contracts cannot be binding upon third parties. The provisions of Article 11, paragraph 2, BR I concerning a direct action by the injured party are thus not affected by such jurisdiction clauses. The same is true of Article 11, paragraph 3, BR I (Schlosser nr. 148).

Forum clause extending the possibilities of the weaker party to sue the insurer [Article 13, point (2) BR I]

The provisions of Section 3 may be departed from by an agreement which allows the policyholder, the insured person or a beneficiary to bring proceedings in courts additional to those indicated in Section 3. Article 13, point (2), BR I allows parties, even before a dispute has arisen, to depart from the provisions of Section 3 as far as this is done to the advantage of the policyholder, the insured person or a beneficiary. Where the weaker party is allowed to bring proceedings in courts other than those specified in Section 3, he cannot be harmed as long as he is still able to choose for a court available to him under Section 3.

Forum clause between a policyholder and insurer domiciled in the same Member State [Article 13, point (3) BR I]

The provisions of Section 3 may be departed from by an agreement which is concluded between a policyholder and an insurer, both of whom are at the time of conclusion of the contract domiciled or habitually resident in the same Member State, and which has the effect of conferring jurisdiction on the courts of that State even if the harmful event were to occur abroad, provided that such an agreement is not contrary to the law of that State (Article 13, point (3) BR I).

Under Article 11, paragraph 1, BR I, in an action brought by the injured party against the insured person, the latter may call the insurer as a third party to the proceedings if the court seised of the matter has jurisdiction in such a case under its own law. This could have the effect that the liable person (policyholder) domiciled in one Member State (Netherlands), but sued by the injured person before the courts of another Member State (for instance France where the harmful event occurred), may file a claim against his insurer at the courts of that other Member State (France), even though the insurer and liable person both are domiciled in the same Member State (the Netherlands) and their insurance contract is governed solely by this Member State’s law (Dutch insurance law). Article 13, point (3) BR I opens the opportunity for the insurer and policyholder to agree up front in their insurance contract that the courts of the Member State where they are both domiciled or habitual resident at the time of conclusion of the contract, shall have (exclusive) jurisdiction over disputes between them, even if the harmful event were to occur abroad. As a result the policyholder, who is sued by the injured person before a court of another Member State, is unable to call the insurer to those same proceedings under Article 11, paragraph 1 BR I. He has to turn to a court of the agreed Member State, where he and the insurer were domiciled or habitual resident, to file a claim against his insurer. On the other hand, also the insurer no longer has the right to call the policyholder as a third party to proceedings initiated by the injured party under a direct action against the insurer in another Member State than the one agreed between the policyholder and insurer. Such forum clauses in the insurance contract therefore also block the way of Article 11, paragraph 3 BR I. In both cases such forum clauses, stipulated in the insurance contract even before an insurance dispute has arisen, only have effect when they are not contrary to the law of the Member State where parties both were domiciled or habitual resident at the time of conclusion of the insurance contract. Dutch law permits such forum clauses between the policyholder and the insurer.

Forum clause between the insurer and a policyholder not domiciled in the European Union [Article 13, point (4), BR I]

The provisions of Section 3 may be departed from by an agreement which is concluded with a policyholder who is not domiciled in a Member State, except in so far as the insurance is compulsory or relates to immovable property in a Member State (Article 13, point (4) BR I). In view of the great importance for the United Kingdom of the question of agreements on jurisdiction with policyholders domiciled outside the European Community, it was necessary to incorporate the admissibility in principle of such agreements on jurisdiction expressly in the 1968 Brussels Convention and, later, in the Brussels I Regulation. If, therefore, a policyholder domiciled outside the European Community insures a risk in England exclusive jurisdiction may be conferred by agreement on English courts as well as on the courts of the policyholders domicile or others.

This basic rule, though, had to be limited again in two ways in Article 13, paragraph 4, BR I. First with regard to compulsory insurances in a Member State. Where a statutory obligation exists to take out an insurance, no departure from the provisions of Section 3 on compulsory insurance can be permitted, even if the policyholder is domiciled outside the European Community. If a person domiciled in Russia owns a motor car which is normally based in Germany, then the car must, under German law, be insured against liability. Such an insurance contract may not contain provisions for jurisdiction by consent concerning accidents occurring in Germany. The second exception concerns non-compulsory insurances related to immovable property, like fire insurance for owners of buildings which are subject to a charge or for usufructuaries, warehouse occupiers, pawnbrokers or goods insurance for pawnbrokers. This exception is particularly designed to ensure that Article 9 BR I continues to apply even when the policyholder is domiciled outside the Community. However, this exception has further implications. It prohibits jurisdiction agreements conferring exclusive jurisdiction on the courts mentioned in Article 9 BR I. This applies even where the national law of the Member State in which the immovable property is situated allows agreements conferring jurisdiction in such circumstances (Schlosser Report nr. 139).

Forum clause related to the insurance of large risks [Article 13, point (5) and Article 14 BR I]

The provisions of Section 3 may be departed from by an agreement which relates to a contract of insurance in so far as it covers one or more of the risks set out in Article 14 (Article 13, point (5), BR I) The United Kingdom requested for special rules for the insurance of large risks. The request was based on the realization that the concept of social protection underlying a restriction on the admissibility of provisions conferring jurisdiction in insurance matters is no longer justified where the policyholders are powerful undertakings themselves. The problem was one of finding a suitable demarcation line. Discussions on the second Directive on insurance had already revealed the impossibility of taking as criteria abstract, general factors like company capital or turnover. The only solution was to examine which types of insurance contracts were in general concluded only by policyholders who did not require social protection. On this basis, special treatment could not be conceded to industrial insurance as a whole. Accordingly, the attention was directed to the various classes of insurance connected with the transport industry. In this area there is an additional justification for special treatment for agreements on jurisdiction: the risks insured are highly mobile and insurance policies tend to change hands several times in quick succession. This leads to uncertainty as to which courts will have jurisdiction and the difficulties in calculating risks are thereby greatly increased. On the other hand, there are here, too, certain areas requiring social protection. Particular complications were caused by the fact that there is a well integrated insurance market for the transport industry. The various types of risk for different means of transport are usually covered under one single policy. The British insurance industry in particular has developed standard policies which only require for their completion a notification by the insured that the means of transport (which can be of many different types) have set off. The result of a consideration of all these matters is the solution which figures in Article 12, paragraph 5, BR I, as supplemented by Article 14 BR I: agreements on jurisdiction are in principle to be given special treatment in marine insurance and in some sectors of aviation insurance. In the case of insurance of transport by land alone no exceptional rules of any kind appeared justified.

In order to avoid difficulties and differences of interpretation, a list had to be drawn up of the types of policy for which the admissibility of agreements on jurisdiction was to be extended. The idea of referring for this purpose to the list of classes of insurance appearing in the Annex to the First Council Directive of 24 July 1973 (73/239/EEC) proved inadequate. The classification used there took account of the requirements of State administration of insurance, and was not directed towards a fair balancing of private insurance interests. There was thus no alternative but to draw up a separate list for the purposes of the 1968 Brussels Convention and the Brussels I Regulation.

See also:

• Insurance of large risks, in particular marine and aviation insurance (Schlosser 1979)

The following are the risks referred to in Article 13, point (5), as described by Article 14 BR I:

1. any loss of or damage to:

1. seagoing ships, installations situated offshore or on the high seas, or aircraft, arising from perils which relate to their use for commercial purposes;

   This provision applies only to hull insurance and not to liability insurance. The term 'seagoing ships' means all vessels intended to travel on the sea. This includes not only ships in the traditional sense of the word but also hovercraft, hydrofoils barges and lighters used at sea. It also covers floating apparatus which cannot move under its own power, e.g. oil exploration and extraction installations which are moved about on water. Installations firmly moored or to be moored on the seabed are in any event expressly included in the text of the provision. The provision also covers ships in the course of construction, but only in so far as the damage is the result of a maritime risk. This is damage caused by the fact that the ship is on the water and not therefore damage which occurs in dry-dock or in the workshops of shipyards (Schlosser nr. 141).

2. goods in transit other than passengers' baggage where the transit consists of or includes carriage by such ships or aircraft;

   In the same way as (1) (a) covers the value of the hull of a ship or of an aeroplane, (1) (b) covers the value of goods destroyed or lost in transit, but not liability insurance for any loss or damage caused by those goods. The most important single decision taken on the provision was the addition of the words 'consists of or includes'. The reason for this is that goods in transit are frequently not conveyed by the same means of transport right to their final destination. There may be a sequence of journeys by land, sea and air. There would be unwarranted complications for the insurance industry in drafting policies and settling claims, if a fine distinction had always to be drawn as to the section of transit in which loss or damage had occurred. Moreover it is often impossible to ascertain this. One has only to think of container transport to realize how easily a loss may be discovered only at the destination. Practical considerations therefore required that agreements on jurisdiction be permitted, even where goods are carried by sea or by air for only part of their journey. Even if it can be proved that the loss occurred in the course of transport on land agreements on jurisdiction permitted by Article 13, paragraph 5, BR I remain effective. The provision applies even if the shipment does not cross any national border (Schlosser nr. 142).
   

2. any liability, other than for bodily injury to passengers or loss of or damage to their baggage:

   The exception in respect of injury to passengers and loss of or damage to their baggage, which is repeated in Article 14 (2) (a) and (b), is justified by the fact that such persons as a group tend to have a weaker economic position and less bargaining power (Schlosser nr. 143).

   1. arising out of the use or operation of ships, installations or aircraft as referred to in point 1(a) in so far as, in respect of the latter, the law of the Member State in which such aircraft are registered does not prohibit agreements on jurisdiction regarding insurance of such risks;

      Whether these provisions also cover all liability arising in connection with the construction modification and repair, of a ship; whether therefore the provision includes all liability which the shipyard incurs towards third parties and which was caused by the ship; or whether the expression 'use or operation' has to be construed more narrowly as applying only to liability arising in the course of a trial voyage all these are questions of interpretation which still await an answer. The exception for compulsory aircraft insurance is intended to leave the Member States free to provide for such protection as they consider necessary for the policyholder and for the victim (Schlosser report nr. 144).

   2. for loss or damage caused by goods in transit as described in point 1(b);

      As there is no reason to treat combined transport any differently for liability insurance than for hull insurance, it is equally irrelevant during which section of the transport the circumstances causing the liability occurred (Schlosser report nr. 145 referring to nrs. 142 and 143).
3. any financial loss connected with the use or operation of ships, installations or aircraft as referred to in point 1(a), in particular loss of freight or charter-hire;

   The most important application of this provision is stated in the text itself. In the absence of a provision to the contrary in the charter party, an air crash would cause the carrier to lose his entitlement to freight and the owner his charter-fee from the charterer. Another example might be loss caused by the late arrival of a ship. For the rest the notion is the same as that used in Directive 73/239/EEC (Schlosser nr. 146).
   

4. any risk or interest connected with any of those referred to in points 1 to 3;

   Insurance against ancillary risks is a familiar practice, especially in United Kingdom insurance contracts. An example would be 'ship-owner disbursements consisting of exceptional operational costs, e.g. harbour dues accruing whilst a ship remains disabled'. Another example is insurance against 'increased value, providing protection against loss arising from the fact that a destroyed or damaged cargo had increased in value during transit'. The provision does not require an ancillary risk to be insured under the same policy as the main risk to which it relates. The provision under (4) therefore deliberately uses a somewhat different wording from that in Directive 73/239/EEC for the 'ancillary risks' referred to in that Directive. The definition in that Directive could not be used since it is concerned with a different subject, the authorization of insurance undertakings (Schlosser nr. 147).
   

5. notwithstanding points 1 to 4, all ‘large risks’ as defined in Council Directive 73/239/EEC, as amended by Council Directives 88/357/EEC ( 8 ) and 90/618/EEC ( 9 ), as they may be amended.

   Point (5) of Article 14 BR I is cumulative to points (1) - (4). Therefore, the risks already listed in Article 14 , point (1) - (4), BR I (to which reference is made in Article 13(5) BR I) remain as they are, and to these point (5) adds ‘all large risks’. The expression in Article 14 of the Lugano Convention 2007, used to define the risks which, when they are covered by an insurance contract, allow the parties to depart from the otherwise compulsory provisions of Section 3 of that Convention, differs from the corresponding Article 14, point (5) of the Brussels I Regulation. The latter speaks of all large risks ‘as defined in Council Directive 73/239/EEC, as amended by Council Directives 88/357/EEC and 90/618/EEC, as they may be amended’, and thus refers to Community legislation both present and future. The wording in the Lugano Convention is different because it would not have been appropriate to make a precise reference to Community rules in a Convention to which States that are not members of the European Community are party. Effectively, however, the general reference to ‘large risks’ in Article 14, point (5) of the Lugano Convention is to be understood to designate the same risks as those referred to in the Directives listed.
   These large risks are defined in Article 5 of Directive 1988/357/CEE [3] , which refers to point A in the Annex to Directive 73/239/EEC (Second Council Directive 88/357/EEC of 22 June 1988 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Directive 73/239/EEC (OJ L 172, 4.7.1988)), and specifically to risks classified under classes 4 to 7 (damage to or loss of railway rolling stock, aircraft, sea, lake and river and canal vessels, and goods in transit or baggage, irrespective of the form of transport), and under classes 11 and 12 (aircraft liability and liability for sea, lake and river and canal vessels including carrier’s liability); risks classified under classes 14 and 15 (credit and suretyship), where the policyholder is engaged professionally in an industrial or commercial activity or in one of the liberal professions, and the risks relate to such activity; and risks classified under classes 8 and 9 (fire and natural forces and other damage to property), 13 (general liability) and 16 (miscellaneous financial loss), in so far as the policyholder exceeds the limits of at least two of three criteria relating to balance-sheet total, net turnover and average number of employees during the financial year.
   Of the risks classified under point A of the Annex, therefore, those considered ‘large risks’ are essentially those where the policyholder is a business of a certain size, or at any rate one that is engaged in an industrial, commercial or professional activity, and exclude the risks classified under the classes accident, sickness, motor vehicles and legal expenses, where the policyholder is usually acting as a private individual. Also the Lugano Convention, although not so expressly as the Brussels I Regulation, establishes a connection between jurisdiction and the freedom to provide services, for firms and for the classes of insurance other than life assurance covered by the First Directive, even in the States bound by the Convention that are not members of the European Community.
   As has been pointed out, the Brussels I Regulation defines large risks by making an express reference to Community directives which includes potential future amendments. There is no such reference in the Lugano Convention, but the bare words ‘all large risks’ in Article 14, point (5) of that Convention have to be interpreted in the light of the Community rules, present and future, at least in so far as the Community rules do not make radical changes to the approach to the handling of large risks. This view is supported by the recital in the preamble that states that the Lugano Convention is based on the extension of the principles laid down in the Brussels I Regulation to the contracting parties, and by Protocol 2, which seeks to arrive at as uniform an interpretation as possible of the Convention and of the Brussels I Regulation (Pocar nr. 76-77).