The owner of an insured car, who lawfully transferred control of it to another driver and was a passenger, may be a person who suffered damage to this car as a result of an accident - CivCC of SC

The person who caused the damage and whose liability is insured may be other than the owner (not the insured) of the vehicle, provided that such person legally owns the insured vehicle. A vehicle owner (insured) who has lawfully transferred possession of a secured vehicle and was a passenger in it may be a person who suffered damage to the secured vehicle.

This conclusion was made by the Supreme Court composed of the panel of judges of the Second Chamber of the Civil Cassation Court in a case brought by the wife of a road accident victim against an insurance company for compensation for damage caused by the victim's death.

The plaintiff's husband had transferred the technical control of his car to another person, under whose control the car got into an accident, and the passengers, including the owner of the vehicle, died. The defendant was insured for civil liability related to the operation of the car. The plaintiff asked the court to recover from the defendant insurance compensation for non-pecuniary damage caused by the victim's death and, in the interests of her daughter, insurance compensation for expenses in connection with the loss of the breadwinner.

The court of first instance, whose decision was upheld by the court of appeal, dismissed the claim. The courts noted that the plaintiff's husband was the owner of the insured vehicle and transferred it to another person for technical management without proper legal registration, which made the defendant's husband liable for the damage caused by the source of increased danger. The defendant's husband is the insured, the person whose civil liability is insured, and cannot be the victim, i.e. the person to whom such damage was caused.

The CivCC of the Supreme Court cancelled the previous court decisions and remanded the case to the court of first instance for a new trial, making the following legal conclusions.

Damage caused by a source of increased danger is indemnified by a person who, on the appropriate legal basis (ownership, other property right, contract, lease, etc.), owns a vehicle, mechanism, or other object, the use, storage, or maintenance of which creates increased danger (part 1 of Article 1187 of the Civil Code of Ukraine).

Article 1 of the Law of Ukraine ‘On Compulsory Insurance of Civil Liability of Owners of Motor Vehicles’ defines the term ‘persons whose liability is insured’ as the insured and other persons who legally own the secured vehicle. Possession of a secured vehicle is deemed to be lawful unless otherwise provided by law or a court decision.

The courts did not pay attention to the fact that the person who caused the damage and whose liability is insured may be other than the owner of the vehicle (not the insured, not the person who entered into the compulsory civil liability insurance contract with the insurer), provided that such person lawfully owns the secured vehicle. The owner of the vehicle who has lawfully transferred possession of the secured vehicle and was a passenger in it may be a person who suffered damage to the secured vehicle.

Since the courts did not establish that the driver of the car was in unlawful possession of the secured vehicle at the time of the accident, he is considered under the Law to be the person whose liability was insured, and the deceased car owner is the victim.

In such circumstances, the courts made a premature conclusion to dismiss the claims.

Resolution of the Supreme Court of 1 August 2024 in case No. 950/2479/22 (proceedings No. 61-11260св23) - https://reyestr.court.gov.ua/Review/120888787.

This and other legal opinions of the Supreme Court are available in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.