EEA law's entry into the area of motor vehicle liability law

Personal injury compensation law is known to be a dynamic area of law. This applies not least to cases involving motor vehicle liability. Personal injury cases following traffic accidents are affected by the regulations in the Motor Vehicle Liability Act, the Damages Act, the Insurance Contracts Act, the Limitation Act, as well as extensive case law. We have repeatedly seen that Norway's obligations under the EEA Agreement help to interpret and develop the Norwegian regulations in line with the Motor Vehicle Insurance Directive, 2009/103 EEC.

In the following, we will take a closer look at examples of how the Motor Insurance Directive has affected Norwegian tort law, and how it continues to affect this area of law.

FINANGER I AND FINANGER II - STATE LIABILITY FOLLOWING INCORRECT IMPLEMENTATION OF EEA DIRECTIVES

Until the law was amended on 15 June 2001, section 7(3)(b) of the Automobile Liability Act contained a rule that limited passengers' right to compensation for personal injury. The provision applied to cases where the injured party voluntarily travelled with a driver whom he or she knew, or should have known, was intoxicated. It was only in exceptional cases, if there were special reasons, that the passenger could be entitled to compensation.

When the directives on motor vehicle insurance were implemented at the beginning of the 1990s, the legislator made changes to the Motor Vehicle Liability Act. At the time, the Ministry of Justice considered that the EEA rules did not prevent the contributory negligence rule in section 7 third paragraph letter b from being maintained, even though the rule was considered to be a stricter contributory negligence provision than the general contributory negligence rule in section 7 first paragraph of the Motor Vehicle Liability Act.

In 1995, a young woman was seriously injured in a road accident. She had been a passenger in a car where she knew that the driver was under the influence of alcohol. The question of a reduction in compensation for the passenger in the current rule in section 7(3)(b) of the Motor Vehicle Liability Act came to the fore.

In the Supreme Court's decision in Finanger I, reported in Rt-2000-1811, it was ruled that the rule in section 7, third paragraph, letter b of the Automobile Liability Act was contrary to the EEA Agreement.

During the preparation of the case for the Supreme Court, an advisory opinion was obtained from the EFTA Court, which ruled that the Norwegian rule in section 7(3)(b) of the Motor Vehicle Liability Act was contrary to the Motor Vehicle Insurance Directive. The rule was considered to be an unlawful exception to the insurance cover required by the motor vehicle directives. The provision was not to be regarded as a contributory negligence rule that could be regulated under the national compensation rules, as the Norwegian authorities had assumed when implementing the directives.

As the Norwegian authorities had assessed section 7, third paragraph, letter b of the Motor Vehicle Liability Act against the EEA Directives when implementing the EEA Agreement, and chose to maintain the provision, the Supreme Court had to adhere to the Norwegian provision despite the fact that it was considered to be contrary to the Directive. The result was that the injured party had to endure a reduction in compensation. The Supreme Court clearly stated that it was the legislator's task to implement the EEA Directive, and the result was a subsequent legislative amendment.

The injured party then brought an action against the Norwegian State represented by the Ministry of Justice, claiming liability for incorrect implementation of the EU's motor vehicle insurance directives in Norwegian law in connection with accession to the EEA Agreement. In Finanger II, reported in Rt-2005-1365, the Supreme Court in plenary session held that under the EEA Agreement and the EEA Act, the state could be liable for incorrect implementation of a directive if there is a sufficiently qualified infringement on the part of the state. The Supreme Court concluded that the wording and purpose of the three motor vehicle insurance directives of 1972, 1983 and 1990 clearly indicated - when viewed together - that there was no basis for exempting passengers travelling with an intoxicated driver from insurance coverage. The state was therefore found liable for damages.

THE LEGISLATOR'S U-TURN AFTER THE EFTA COURT'S ADVISORY OPINION - SECTION 4 OF THE MOTOR VEHICLE LIABILITY ACT - REDRESS

In the event of compensation under section 4 of the Motor Vehicle Liability Act, the injured party is currently entitled to redress compensation from the responsible insurance company if the conditions in section 3-5 of the Damages Act are met. This has not always been the case.

This right became a reality after 1 July 2009. Prior to this, the Motor Vehicle Liability Act contained a provision expressly stating that the rule on redress in section 3-5 of the Damages Act did not apply in cases concerning compensation under the Motor Vehicle Liability Act. Compensation for redress was considered to be a personal liability that had to be claimed directly by the injured party.

In a case brought before Oslo District Court in September 2006, the plaintiff argued that it was contrary to the EU's Motor Insurance Directive to exclude redress from the compulsory insurance cover under the Motor Liability Act. The background to the case was an injured party who was not awarded redress compensation due to the personal tortfeasor's poor financial situation.

The court decided to obtain an advisory opinion from the EFTA Court. In its opinion of 20 June 2008, the EFTA Court found that the Norwegian scheme was incompatible with EEA law. This triggered a legislative process that ended with a change in the law that gave the injured party the right to claim redress compensation from the motor vehicle liability insurance in cases under the Motor Vehicle Liability Act as of 1 July 2009.

CHALLENGES RELATED TO NEW ELECTRIC VEHICLES - WILL THE CURRENT SCHEME SURVIVE?

In recent years, EEA law and the Motor Vehicle Insurance Directive have continued to challenge the provisions of the Motor Vehicle Liability Act. New motorised means of transport such as electric bicycles and self-balancing vehicles fall under a natural linguistic understanding of the motor vehicle definition in the Motor Vehicle Liability Act and the Motor Vehicle Insurance Directive.

In Norway, however, the legislator has taken a clear stand on self-balancing vehicles and has exempted these vehicles from the insurance obligation in separate regulations. This arrangement means that self-balancing vehicles are covered by the Norwegian Motor Insurers' Association's liability in accordance with section 2, second paragraph of the Road Traffic Insurance Regulations. However, the same does not apply to electric bicycles, as these have not been exempted from the insurance obligation pursuant to section 3, fourth paragraph, of the Motor Vehicle Liability Act, and will therefore not be covered by the liability of the Norwegian Road Traffic Insurance Association pursuant to section 2, second paragraph, of the Road Traffic Insurance Regulations.

In a letter dated 12 June 2014, the Ministry of Transport and Communications requested an assessment from the Legislation Department as to whether the Motor Vehicle Insurance Directive precludes exempting electric bicycles from the Road Traffic Insurance Association's obligation to cover damage caused by motor vehicles that are exempt from the insurance obligation pursuant to section 2, second paragraph, of the Road Traffic Insurance Regulations. In an interpretation statement from the legal department included in JDLOV-2014-636B of 3 November 2014, it is stated that «Whether, in addition to the insurance obligation under the Motor Vehicle Liability Act, it is also possible to exempt bicycles with electric auxiliary motors and self-balancing vehicles from the Traffic Insurance Association's liability under section 2, second paragraph of the Traffic Insurance Regulations, depends on whether the vehicles are covered by the Motor Vehicle Insurance Directive».

The issue has not been dealt with by either the European Court of Justice or the EFTA Court. The Legal Department also notes that the member states have chosen different solutions to the problem; Sweden has exempted electric bicycles and self-balancing vehicles from the insurance obligation and the collective compensation scheme, and Denmark has chosen a similar solution as a trial scheme. Germany, on the other hand, has introduced a requirement for valid liability insurance. The conclusion in 2014 was that «The Law Department therefore considers the question to be uncertain, but such that there is a risk that any exemption from the insurance companies' obligation to jointly cover damage caused by these vehicles could be considered to be in breach of the Motor Insurance Directive if the question is brought before the courts or the EFTA Surveillance Authority or the EFTA Court.»

The legal situation appears to be unclear, and the closest we have come to a legal treatment of the issue was the Supreme Court's judgement in HR-2016-2228-A. The case concerned the question of whether driving a two-wheeled self-balancing vehicle while under the influence of alcohol is covered by section 22(1) of the Road Traffic Act.

The Supreme Court stated that it is clear that self-balancing vehicles are included in the motor vehicle definition in section 2 of the Road Traffic Act as it is a device intended to run on the ground without rails, and it is driven by an electric motor. In paragraph 22, however, the Supreme Court wrote that whether in the circumstances there is reason to make a restrictive interpretation of the motor vehicle concept in section 22 of the Road Traffic Act must be considered «the significance of the facility in terms of traffic, its size, speed and weight. In other words, an overall assessment must be made of the facility's danger to the driver and third parties.»

In paragraph 28, the Supreme Court concluded that «The potential for danger when using self-balancing vehicles is clearly less than for cars, motorcycles and mopeds, but it can hardly be said to be negligible. In no way does it seem pointless to require drivers of self-balancing vehicles to be sober. The fact that the ban should not be unnecessarily and unreasonably broad cannot justify a restrictive interpretation of section 22 of the Road Traffic Act for such vehicles.»

However, in relation to the Motor Vehicle Liability Act, the legislator has, as mentioned above, chosen to exempt self-balancing vehicles from the insurance obligation pursuant to section 3(4) of the Motor Vehicle Liability Act, which applies to «motor vehicles when he believes that the vehicles themselves or their use pose little danger to road traffic». The Supreme Court's ruling of 31 October 2016 did not aim to clarify Norway's obligations under the Motor Vehicle Insurance Directive, but the Supreme Court's conclusion may suggest that the facility's use, size, speed and weight may indicate the need for an insurance obligation. However, developments have gone in the opposite direction. Commissioned by the Ministry of Transport and Communications, in January 2017 the Directorate of Public Roads proposed amendments to a number of regulations which mean that both electric bicycles and small electric vehicles, including two-wheeled wheelchairs with self-balancing technology, will be treated as ordinary bicycles. This means that the owner is not obliged to take out liability insurance and that the Norwegian Motor Insurers' Association is not obliged to cover damage caused by such vehicles.

The solution chosen by the Norwegian authorities in relation to self-balancing vehicles harmonises with Article 5(2) of the Motor Insurance Directive. It is therefore questionable why the Norwegian authorities have not chosen the same scheme for electric bicycles and small electronic vehicles, when this creates doubt as to whether Norway fulfils its obligations under the EEA Agreement. As long as it is unclear how to classify electric bicycles and small electric vehicles in relation to Article 1 of the Motor Vehicle Insurance Directive, it is uncertain whether the scheme chosen by the Norwegian authorities today will stand up under EEA law.