Supreme Court (Court of Cassation) judgment re. statute of limitations for liability claim against insurer

Supreme Court case law often provides crucial guidance on the interpretation, scope and application of particular legal provisions. One such example is the Cassation ruling of 4 November 2022 relating to Article 88, § 2 of the Insurance Act (Case No. C.22.0133.N).

On 20 May 2003, in Belgium, an individual fell victim to a traffic accident caused by a German driver, whose liability was undisputed. When the attorney originally tasked with seeking compensation for the damages suffered tarried and failed to take action, the victim sought out another lawyer to bring a claim against the accident insurer before the Hasselt Police Court in 2013. However, on 19 May 2016, the Court dismissed this claim due to the limitation period being exceeded: whereas the original attorney had always maintained that any limitation period would only start to run once the accident insurer had notified its position directly to the victim, this turned out to be an erroneous assumption. As the victim’s appeal was dismissed as unfounded on 27 November 2017, he then initiated proceedings against the professional liability insurer of his former attorney on 28 May 2019, seeking compensation for the latter’s (alleged) professional misconduct, i.e. the failure to sue the accident insurer in due time. After being ordered to pay compensation by the Antwerp Court of appeal on 2 November 2021, the liability insurer lodged an appeal in cassation.

The Supreme Court notes that the main applicable provision is Article 88, § 2 of the Insurance Act of 4 April 2014 (former Article 34, § 2 of the 1992 law on terrestrial insurance contracts), which states that the action resulting from the personal right that the injured person has against the insurer lapses five years after the event that gave rise to the damage. However, if the victim demonstrates that (s)he only became aware of his/her right against the insurer at a later date, the 5-year limitation period begins to run at that time, while remaining limited to a maximum of 10 years from the time the damage occurred. In the event of professional misconduct by an attorney resulting in damage to a client, i.e. not filing a claim within the required limitation period, the damage occurred when the limitation period expired, on 20 May 2008 (5 years on from the accident). The appellate judge nevertheless ruled that the 5-year limitation period for the liability claim had not been exceeded, as it only started to apply once the client was made aware of his attorney’s negligence (by the judgment of the Police Court of 19 May 2016). However, the event that gave rise to the damage remains the expiry of the limitation period on 20 May 2008, and the absolute limitation period of 10 years still applies. Hence, the writ of summons served on 28 May 2019 was not issued within this time limit. The appeal judgment is thus found contrary to the applicable provisions of the Insurance Act and is set aside, the case being referred to another appellate court.

For the full text of the judgment, see https://juportal.be/content/ECLI:BE:CASS:2022:ARR.20221104.1N.5.

If you have any questions regarding this subject, feel free to reach out to our Insurance expert, Sandra Lodewijckx (sandra.lodewijckx@lydian.be). For additional details about our Insurance practice, please visit our Insurance page: https://www.lydian.be/en/areas-expertise/insurance-and-reinsurance.