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German rules on non-material damages for relatives comply with European law

The European Court of Justice (ECJ) has ruled in its recent judgment that German rules on non-material damages for relatives of victims of traffic accidents are in conformity with European law.

A Bulgarian couple came to Germany in 2013 to work there. They left their two daughters in Bulgaria. A year later, the father drunkenly caused a car accident in which the mother, who was not wearing a seat belt, died. As a result, the insurer of the car paid EUR 5,000 each to the daughters. The insurer did not pay immaterial damages, citing German law. This was because the psychological consequences described by the daughters did not reach the level of a pathological disorder. Under German law, however, such a pathological condition would be necessary to be able to claim immaterial damages. Thereupon, the daughters turned to the Sofia City Court, which saw itself hindered in its decision by the German law, which was to be applied. The Bulgarian court therefore appealed to the ECJ to clarify the question of whether German law inadmissibly restricted the relatives' right to compensation.

The main issue was whether German law is compatible with the Motor Insurance Directive (Directive 2009/13/EC).
The Directive obliges the Member States to provide for a general obligation to insure vehicles in their legal systems. This is intended to ensure the free movement of all vehicles normally based in the Union and to guarantee comparable treatment for persons injured in an accident involving a motor vehicle, irrespective of the Member State in which the accident occurred.

In doing so, the judges of the ECJ clarified that it does not follow from the purpose and wording of the Directive that the liability rules of the Member States are to be harmonized with each other and that the Member States are still free to regulate their own liability for damages arising from traffic accidents with motor vehicles. However, it does give the member states certain requirements. For example, it must be regulated that liability for vehicles normally based in the country is covered by insurance, what types of damage this insurance must cover, and which injured third parties it must compensate. But a distinction must be made between the obligation to cover damage caused to third parties in an accident and the scope of compensation. The scope of compensation is essentially governed by national law. In this regard, the freedom of the Member States is restricted, since the national legal system must ensure, among other things, that the non-material damage suffered by close family members because of a traffic accident is covered to the minimum amounts established by the Directive. Moreover, national rules on compensation for traffic accident damage must not deprive the Directive of its practical effectiveness.

German law regulates compensation for damages from third parties in the event of accidents. This also relates to immaterial damage, such as the pain and suffering suffered by a child because of the death of a parent and defines such a claim. For such a claim to arise, three conditions must be met. The person must have suffered an impairment to his or her own health, he or she must be a close family member of the person directly injured, and there must be a causal connection between the misconduct of the person responsible for the accident and this impairment. In this context, psychological impairments are only considered to be an injury to health if they are pathologically tangible.
The ECJ judges saw this as a rule that provides an objective criterion based on which, if necessary, in the context of a case-by-case examination carried out by a national court called upon, the compensable non-material damage of a close family member of the person directly injured in a traffic accident can be determined. For this reason, they saw no danger that the liability law practiced in Germany was likely to jeopardize the objectives pursued by the Motor Insurance Directive (Directive 2009/13/EC) of protecting the victims of traffic accidents.
The German regulations are therefore compatible with EU law and the daughters are not entitled to any additional claim for non-material damages in the present case.