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Insurance Compensation (Procedural Payment) Particularities by Motor (Transport) Insurance Bureau of Ukraine (MTSBU) in Case of Damnification by Foreign Vehicles
Author article
Vladymyr Marinich

The damnification to your vehicle by the foreigner’s vehicle, which is registered in another state and moves within the territory of Ukraine on the basis of the "Green Card", is the most common reason for a claim to the MTIBU.

The "Green Card" is a unified form insurance certificate, which is applied in the member states of the international automobile insurance system "Green Card". These member states shall be indicated in the insurance certificate and not stroked out from it. In a real sense the mentioned certificate has the form of green blank, which shall be compulsory submitted to a foreigner in case of entering the territory of Ukraine on his/her vehicle.

In accordance with the provisions of the Article 39 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”, dated July 01, 2004 No 1961-IV, the Motor (Transport) Insurance Bureau of Ukraine is the only association of insurers that carries out the mandatory insurance of civil liability of the owners of vehicles for damage, which is caused to the third parties. The insurers’ membership in the MTIBU is prerequisite for the implementation of obligatory insurance of civil liability of the owners of vehicles.

The MTIBU is a non-profit organization and operates in accordance with the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”, legislation of Ukraine and Charter of the MTIBU.

Under the provisions of the Article 22 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”, in case of the event occurrence, which is the basis for the procedural payment, the MTIBU in accordance with the procedure established by the foregoing Law restitutes the assessed personal injuries and property damages, which are caused by the traffic accident. Such restitution shall be performed within the limits of the insured amount, which is in force on the date of the insurance event occurrence.

Whereas, under the provisions of the Article 40 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”, the MTIBU is a guarantor of the damage restitution, when:

  • the damage was caused by the vehicle owners and/or users within the territory of the member states of the international automobile insurance system "Green Card", and such owners and/or users provided the foreign competent authority with the insurance certificate "Green Card", which was issued on behalf of the MTIBU insurers-members;
  • the damage was caused by non-resident drivers within the territory of Ukraine. In this case the damage restitution shall be performed under the conditions and in the amount, which are established by the legislation on the insurance of civil liability and principles of mutual settlement of damages within the territory of the member states of the international automobile insurance system "Green Card" and under the other conditions, which are established by the current civil liability legislation.

In accordance with the provisions of the Article 41 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”, the MTIBU shall restitute the damage at the expense of the Victims Protection Fund under the conditions, which are established by the mentioned Law, and in case that the damage is caused by:

  1. a vehicle, the owner of which has not insured his/her civil liability. The exception in this case is the damage, which is caused to the vehicle (as well as to the property that is in such a vehicle), which is not secured (in other words which is not specified in any current contract of mandatory insurance of civil liability). The other exception is the vehicle operation, which was performed by the individuals, whose liability is not insured. As a matter of fact, it is compensation for damage, which is caused by the owner of the uninsured vehicle to the owner of the insured vehicle;
  2. an unidentified vehicle, except for damage, which is caused to property and environment;
  3. a vehicle that came out of the possession of the owner in result of unlawful actions of another individual;
  4. war veterans and disabled war veterans, who are specified by the law, disabled person of group I, who personally operate their vehicles, as well as individuals, who operate the vehicle of the disabled person of group I, in the presence of the mentioned owner;

as well as in the following cases:

  1. to fulfill contractual obligations under the mandatory insurance of civil liability of the insurer-member of the MTIBU, which is declared bankrupt and/or eliminated, in case of insufficiency of its funds and property of such an insurer;
  2. in case of granting the vehicle by the insurant or individual, whose responsibility is insured, to police officers (police) and healthcare institutions workers that is performed under the current legislation.

The MTIBU shall restitute the damage at the expense of the Insurance Guarantee Fund under the conditions, which are established by the mentioned Law, in the following cases:

  1. а) to fulfill contractual obligations under the mandatory insurance of civil liability of the insurer-full member of the MTIBU, which is declared bankrupt and/or eliminated, in case of insufficiency of its funds and property of such an insurer;
  2. the damage is caused to the vehicles’ owners and such owners provided the competent foreign authorities with the insurance certificate "Green Card", issued on behalf of the MTSBU insurers-members and under the condition that the mentioned MTIBU insurer-member has not restituted the damage;
  3. the damage is caused by the foreign vehicle, which is registered in a foreign country and provided by the foreign insurance certificate "Green Card" that is valid on the day of the traffic accident which occurs within the territory of Ukraine. In this case the damage restitution shall be performed under the conditions and in the amount, which are established by the legislation on the insurance of civil liability and principles of mutual settlement of damages within the territory of the member states of the international automobile insurance system "Green Card".

 

What is going on in real life?!

In fact, an ordinary person does not even know about the existence of the MTIBU and when the vehicle is damaged by foreign vehicles, the person even does not know who shall be informed and does not call out the officer of the MTIBU.

Even when the person is well informed about the MTIBU, it is almost impossible to get the insurer on the phone in order to inform about the accident or to consult it. The lawyers of our firm have been trying to get the MTIBU on the phone every day for 2 years on the telephone numbers, which are specified on the official website of the MTIBU and in the insurance certificate "Green Card" of the individual, who caused damages (these phone numbers are: 044-239-20-31, 044-239-20-30 и 044-239-20-27). The purpose of these phone calls was to inform the MTIBU about the traffic accident. But all the calls remained unanswered.

Whereas, when you go to court the MTIBU refuses to pay the procedural payment and starts to manipulate with concepts and reasons for refusal.

In order to counteract this, we decided to consult you on such a complicated issue. Our consultation is based on successful judicial experience of our lawyers in cases against the MTIBU.

  1. The MTIBU tries to disturb the judge with the incorrect use of some concepts. Due to the abovementioned fact you should know the difference in meanings of the following concepts:
  • “a driver of the vehicle that is involved in the accident”,
  • “an owner of the vehicle that is involved in the accident”,
  • “an owner of the damaged property”,
  • “an individual, who is entitled to receive compensation for damage (sufferer)”.

Nota bene! In order to avoid the issues that may mislead the court, we want to highlight the fact that under the provisions of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners” and Road Traffic Rules, adopted by the Resolution of the Cabinet of Ministers of Ukraine dated October 10, 2001 No 1306, the forgoing concepts are not connected with the same individual. The mentioned regulatory legal acts differentiate the concepts and state that they shall be applied to different individuals.

Thus, under the provisions of the Articles 22-32 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners” the rights of the “owner of the damaged property” and “individual, who is entitled to receive compensation for damage (sufferer)” are determined separately from the others.

Whereas, under the provisions of the Items 33.3. and 33-1.1. of the mentioned law the “insurer”, “driver of the vehicle that is involved in the accident”, “individual, who is entitled to receive compensation for damage (sufferer)” are also defined as divers and independent individuals.

The Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners” does not determine the concept of “a driver of the vehicle”.

In turn, under the provisions of the Road Traffic Rules,

a driver is an individual, who operates a vehicle and possesses a driver's license (a license of a tractor driver, temporary permit for vehicle operation, interim driver license) of the corresponding category. The driving instructor is also considered to be a driver if he/she is in the vehicle while teaching”.

Consequently, the performance of operation of the vehicle and availability of the driver's license are the mandatory conditions in case of determining the individual as “a driver of the vehicle”.

Due to the mentioned fact the individual, who is in a vehicle but does not operate it (is sitting in the passenger seat, at the wheel of the vehicle, which does not move or is generally absent in the vehicle and other similar situations) may not be considered as “a driver of the vehicle”.

In this context, the harm-doer, who caused damages and drove the vehicle that is a subject to insurance certificate "Green Card" and was involved in a road traffic accident, shall be considered as “a driver of the vehicle that is involved in an accident”.

 

Another factor to consider is that in accordance with the provisions of the Item 1.5. of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”,

surface vehicles (hereinafter referred to as the vehicle) are devices, which are intended for transporting people and/or cargo as well аs the installed thereon special equipment or machinery, that are subject to state registration and record by the appropriate departments of the Ministry of Internal Affairs of Ukraine (hereinafter referred to as the relevant departments of the Ministry of Internal Affairs of Ukraine) and/or admitted to traffic, as well as registered in foreign countries, imported into the customs territory of Ukraine for temporary use”.

Under the provisions of the mentioned Item 1.5. of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”:

This Law does not consider as a vehicle the device, which meets characteristic  that are stated in this Item, but which does not have an adjusting factor, which depends on the type of the vehicle”.

In turn, in accordance with the provisions of the Articles 6, 7 and 8 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”, the application of the adjusting factor is provided only for the ensured vehicle of the insurant, for whom the civil liability may occur as a result of the insured event.

In other words, in the legal sense, the ensured vehicle of the individual, who committed the traffic accident and is a subject to civil liability, shall be considered as “a vehicle” under the provisions of the forgoing Law. All other vehicles that are involved in the accident are not considered to be "vehicles" under the conditions of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”.

Under the provisions of the Article 6 of the mentioned Law, all damaged property of the sufferer (including the vehicle, garage, TV and so on) is considered under this Law as the “property” without defining its characteristics.

Herewith, in the mentioned Article the concept of “vehicle” is used only in relation with the vehicle of the individual, who is a subject to civil liability, which occurs as a result of the insured event (which is to say the harm-doer).

Taking into account the fact that the sufferer is not an insurant in relation with the MTIBU and does not bear civil liability in the mentioned traffic accident (especially when the sufferer’s vehicle was not involved in the incident) then in this case the adjusting factor is not applied to the vehicle of the sufferer and that is why the sufferer’s vehicle is not considered as the “vehicle” under the provisions of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”. Instead of it such a vehicle is considered as the damaged property.

Vice Versa, the harm-doer`s vehicle under the provisions of the abovementioned Law shall be considered as the “vehicle”.

 

As for the “owner of the vehicle”, this concept is established by the Item 1.6 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners” in the following way:

owners of the vehicles are the legal entities and individuals, who are the owners and legal possessors (users) of the surface vehicles under the Ukrainian legislation. Such a legal status is based on the property rights, right of economic jurisdiction, operative management, car rental agreement and other lawful grounds”.

Due to the fact that under the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”, the sufferer’s vehicle is not considered as a “vehicle”, subsequently the sufferer is not considered as the “owner of the vehicle”.

For the present purpose, as the “owner of the vehicle” under the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners” is considerate to be the harm-doer, who is the owner of the vehicle by means of which the accident was committed.

Taking into consideration the above mentioned, we may summarize that the traffic accident results in the damage of the sufferer’s property. The sufferer is not the “driver of the vehicle that is involved in an accident” and the “owner of the vehicle”. The sufferer is the “owner of the damaged property” and “individual, who is entitled to receive compensation for damage (sufferer)”. That is because in accordance with the provisions of the Item 1.3 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”,

sufferers are the legal entities and individuals, whose life, health and/or property were damaged as a result of a traffic accident using vehicle”.

  1. The MTIBU often indicates as the reason for the refusal to pay the procedural payment the sufferer`s non-fulfillment of the requirements, which are established by the Item 33.1.4. of the Article 33 of the Law of Ukraine “On Mandatory Civil and Legal liability Insurance for Motor Vehicles Owners”. In accordance with the mentioned provisions of the Law the “driver of the vehicle that is involved in an accident” shall:

33.1.4. notify in writing the insurer, with whom a contract of mandatory insurance of civil liability was concluded (under the provisions of the Article 41 of the mentioned Law such an insurer is MTIBU), about the traffic accident. Such a notification shall be perform in a form established by the MTIBU. In this case the information about the locality of the vehicle and damaged property, contact phone number and address shall be also provided. The notification shall be provided without undue delay, but not later than within three working days after the traffic accident occurrence. If the driver of the vehicle was unable to fulfill this obligation for valid reasons, he/she shall provide documentary evidence of the mentioned situation”.

In accordance with the abovementioned provision of the Law, only the «driver of the vehicle that is involved in the accident » is obligated to notify the MTIBU about the traffic accident.

In turn, as it has been already noticed, the foregoing provisions of the Item 33.1.4 of the Article 33 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners” may not be applied to the sufferer due to the fact that the sufferer is not the “driver of the vehicle that is involved in an accident”. The sufferer is the “owner of the damaged property” and “individual, who is entitled to receive compensation for damage (sufferer)”.

Therefore, the sufferer is not obligated to notify the MTIBU about the traffic accident and thereof the sufferer is not liable for non-notification and any other legal consequences, which are associated with the non-fulfillment of the obligations of the «driver of the vehicle that is involved in an accident» (fulfillment or non-fulfillment of certain actions within a certain term from the moment of notification of the MTIBU). The fulfillment or non-fulfillment of the mentioned obligation does not depend on the sufferer’s will.

Due to the mentioned fact, the MTIBU’s denial to perform a procedural payment is unjustified and unsound whereas all the arguments of the denial are based on the fact of the notification of the MTIBU by the “driver of the vehicle that is involved in an accident” about the accident and on a determination of the date of filing the mentioned notification.

Moreover, nowadays the notification form remains unestablished. The establishment of such a form is a duty of the MTIBU and does not depend on the sufferer’s will.

Thus, in accordance with the provisions of the Item 4 of the “Concluding Provisions” of the Law of Ukraine “On Amendments to the Certain Legislative Acts of Ukraine on Road Traffic Accidents and Insurance Reimbursement” dated February 17, 2011 No 3045-VI, the MTIBU is obligated to fulfill the following:

“4. The Motor (Transport) Insurance Bureau of Ukraine in coordination with the State Automobile Inspectorate of the Ministry of Internal Affairs of Ukraine shall establish a form of notification about a traffic accident within 6 months as from the day of promulgation of this Law. The mentioned bodies shall also develop and approve instructions on filling in such notifications about traffic accidents. The forgiven instruction shall include typical schemes of the traffic accidents”.

In addition, under the provisions of the Article 57 of the Constitution of Ukraine the MTIBU shall release to public such form, as far as:

Everyone is guaranteed the right to know the rights and duties.

The laws and other regulatory legal acts that determine the rights and duties of citizens shall be released to public in accordance with the law.

The laws and other regulatory legal acts that determine the rights and duties of citizens are invalid if these acts are not released to public under the procedure that is prescribed by law”.

The provisions of the Article 12 of the Law of Ukraine “On the Principles of Regulatory Policy in Economic Activity” dated September 11, 2003 No 1160-IV outline that the mentioned pattern of notification is a subject to state registration and shall be promulgated in the printed publicity materials “Ofitsiynyy visnyk Ukrayiny” and “Uryadovyy kuryer”. The form of notification comes into force after the official promulgation (see the article The Order of Entry into Force of Legal Acts that Determine Rights and Duties of Citizens).

Consequently, the notification about the traffic accident, which shall be performed in accordance with the form that is established by the MTIBU, is a duty of the “driver of the vehicle that is involved in the accident”. The mentioned duty comes into force after the state registration and official promulgation of the regulatory legal act, which establishes such a form.

As for today the corresponding regulatory legal act has not been registered and promulgated, thereof the form remains unestablished.

Taking into account the mentioned facts, the MTIBU’s references to such grounds for the refusal to perform a procedural payment are unreasonable and illegal as they are related to the fact of filling an appropriate notification of the “driver of the vehicle that is involved in the accident” (not of the sufferer) to the MTIBU, while the appropriate form has not been established.

Consequently, the sufferer shall not be liable for a failing of a harm-doer to notify the MTIBU about the accident in form that has not be established. Altogether, such actions are outside the scope of civil legal capacity of the sufferer.

 

  1. The MTIBU also states as the ground for the refusal to perform the procedural payment its unproven opinion that the sufferer violates the provisions of the Item 33.3. of the Article 33 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners” and has not maintained the damaged property for ten working days since the receipt of the notification about the traffic accident by the MTIBU.

However, as it has been already noticed, the MTSBU’s references to such grounds for the refusal are unreasonable and illegal as they are related to the fact and date of filling an appropriate notification of the «driver of the car that is involved in the accident» (the action of whom does not depend on the intention of the sufferer) to the MTSBU, while the appropriate form has not been established.

Moreover the second Paragraph of the Item 33.3. of the Article 33 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners” includes the following statement:

“The individuals, who are specified in this Item, are released from the obligation to maintain the damaged property (vehicles) in the condition in which it was after the road accident, if through no fault of the mentioned individuals, within ten working days after receiving the notification about road traffic accident, the authorized representative of the insurer (in cases that are foresighted by the Article 41 of this Law, - the representative of the MTIBU) does not arrive to the location of the damaged property.”

Besides that, in accordance with the Item 34.3 of the Article 34 of the Law of Ukraine “On Mandatory Civil and Legal Liability Insurance for Motor Vehicles Owners”

“The sufferer may choose the average commissioner or expert for damage assessment, if the authorized representative (in cases that are foresighted by the Article 41 of this Law, - the representative of the MTIBU) does not arrive to the location of the damaged property within the time limit that is specified above. Therefore, the insurer (in cases that are foresighted by the Article 41 of this Law, - the MTIBU) shall reimburse the sufferer’s adjustment expenses”.

In view of the above said and in accordance with the Article 27 of the Civil Code of Ukraine and the Articles 19, 21 and 22 of the Constitution of Ukraine, the sufferer’s rights, obligations and responsibility may not be watered down due to the fulfillment or non-fulfillment of the another individual’s obligations. The mentioned issue also includes the obligation of the “driver of the vehicle that is involved in the accident” to notify the MTIBU about the traffic accident (the foregoing does not depend on the sufferer’s intention) as well as the obligation of the MTIBU to establish the form of the notification.

Thus, the MTIBU and driver’s fulfillment or non-fulfillment of obligations may not restrict or effect the sufferer`s right to receive the insurance compensation (procedural payment). As a result, the sufferer is not obligated to maintain the damaged property in the condition in which it was after the traffic accident, owning to fact that the MTIBU and the “driver of the vehicle that is involved in the accident” fail to comply with their obligations and because of the fact that the fulfillment of such obligations does not depend on the sufferer’s intention and opportunities.

Whereas, the only one who shall maintain the damaged property in the condition in which it was after the traffic accident, wait for the authorized representative and provide the relevant notification is the “driver of the vehicle that is involved in the accident”.

Nevertheless, we recommend you to take the following steps in order to insure a time-saving process. First of all you should maintain the damaged property and notify the MTIBU in a written form. In any case, you should also perform an independent expert examination. The mentioned measure is crucial, because it may help you to estimate the damage and procedural payment amount.

Furthermore, the last paragraph of the Item 23 of the Resolution of the Plenum of the Superior Specialized Civil and Criminal Court of Ukraine “On Certain Questions of Application of the Legislation by Courts in Case of the Dispute Resolution on Indemnification Caused by a Source of Increased Danger” dated March 1, 2013 No 4 includes the following statement:

“The terms that are established by the provision of the Article 33 of the Law N1961-IV for the notification of the insurer (under the provisions of the Article 41 of this Law, - for the notification of the MTIBU) about the road traffic accident are not the terms for the performing of the sufferer’s right for an insurance compensation. Thus, the sufferer may take a legal action before court if the insurer denies accepting the documents for insurance compensation with the reference to the omission of the mentioned term.”

Moreover, the Item 19 of the forgiven Resolution of the Plenum of the Superior Specialized Civil and Criminal Court of Ukraine includes the following statement:

“In accordance with the Article 979 of the Civil Code of Ukraine and the Article 16 of the Law of Ukraine “On insurance” the insurer shall pay the insurance compensation in case of the insured event occurrence. Other contractual clauses are the reasons for refusal in payment if such a violation of the contract prevented the insurer from proving the relevant event as an insured event. In view of this, such contract clauses shall be reviewed at court for each case. For example, the insurant’s untimely without a clear reason notification of the insurer about the occurrence of the insured event (the Item 5 of the Part one of the Article 989 of the Civil Code of Ukraine, the Item 5 of the Part one of the Article 991 of the Civil Code of Ukraine), may be a reason for the refusal to pay the insurance compensation, if in this case the insurer has no possibility to assure that this event is an insured event.

The courts shall also take into account that the insuarant`s violation of the contractual terms for the submission of documents concerning the insured event may not be recognized as the violation of the contractual terms for the notification about the insured event occurrence”.

To summarize the above mentioned interpretation of the Plenum and the Ukrainian legislation, the failure to carry out the insurance contract clauses or violation of its terms by any individual, may not be the reason to refuse to pay the insurance compensation payment, except for the extent when there is no chance to assure that this event is the insured event.

Consequently, there is no reason for the refusal in the procedural payment, if the individual has proved in court the fact that the traffic accident, which happened to the sufferer, is the insured event, that is usually confirmed by the traffic police references, the “Green card” of the harm-doer and is not disclaimed by the MTIBU as well as by the independent expert examination of damages (which allows to establish the amount of payment).

 

Managing Partner of the Law Firm "FOX" Vladimir Marinich