A claim regarding stolen cigarettes was not time-barred
When a carrier causing damage went bankrupt, the cargo owner claimed directly against the carrier’s liability insurance company. The insurance company alleged that the claim was time-barred. The Maritime and Commercial High Court and the High Court both agreed. However, the Supreme Court found that the statute of limitations had been suspended.
In a case concerning compensation for theft of cigarettes during transport, a question of limitation came before the Supreme Court. The Maritime and Commercial High Court and the High Court of Appeal had both found that the claim was time-barred.
The carrier had reported the damage to their insurance company, but afterwards went bankrupt. The cargo owner then made a direct claim for compensation against the carrier’s insurance company.
The insurance company alleged that the cargo owner’s claim was time-barred as the cargo owner had filed the lawsuit more than three years after the theft occurred. The cargo owner disagreed and alleged that the limitation period was suspended when the carrier reported the theft to insurance company. When the carrier went bankrupt, the cargo owner acquired the same rights against the insurance company. Therefore, the limitation period was also suspended concerning the cargo owner.
The cargo owner referred to section 95(2) of the Danish Insurance Contracts Act. According to this section, an injured party acquires the insured’s rights of cover against the bankrupt insured’s liability insurers. The cargo owner alleged that this provision would mean that the cargo owner could also rely on the time bar for the claim being suspended against the insurers once the carrier had reported the claim. Since the insurer had never rejected the claim, the suspension would still be effective.
The insurance company alleged that the wording of section 95(2) of the Danish Insurance Contracts Act allowed the cargo owner to also rely on the bankrupt carrier’s notice of the damage to the insurance company. Both the Maritime and Commercial High Court and the High Court of Appeal agreed with the insurance company’s claim that the carrier’s notice to the insurance company had no impact on the cargo owner’s claim.
The limitation period was suspended
The Supreme Court found that the carrier had reported the damage to the insurance company and had then interrupted the limitation period of that claim. After the carrier’s bankruptcy, the cargo owner had stepped into the claim under section 95(2) of the Danish Insurance Contracts Act. The cargo owner could then also rely on the effect of the notification. Therefore, the claim was not time-barred, and the Supreme Court overturned the decisions of the two previous instances of court.
IUNO’s opinion
The case finally decides a question that has been disputed, not least in this case, about how far an injured party steps into a tortfeasor’s claim against the liability insurance. After the judgment in two instances, there was probably a presumption that the injured party could not rely on issues of limitation between the tortfeasor and the liability insurance. The judgment means that claimants may have cases that have not been followed up because they have been considered time-barred and that liability insurers may have closed cases that can be reopened because they have never rejected the claim. IUNO recommends reviewing the “drawers” to see if it might be the case.
[The Supreme Court’s ruling of 24 February 2022 in case BS-28670/2021-HJR of 24 February 2022]
In a case concerning compensation for theft of cigarettes during transport, a question of limitation came before the Supreme Court. The Maritime and Commercial High Court and the High Court of Appeal had both found that the claim was time-barred.
The carrier had reported the damage to their insurance company, but afterwards went bankrupt. The cargo owner then made a direct claim for compensation against the carrier’s insurance company.
The insurance company alleged that the cargo owner’s claim was time-barred as the cargo owner had filed the lawsuit more than three years after the theft occurred. The cargo owner disagreed and alleged that the limitation period was suspended when the carrier reported the theft to insurance company. When the carrier went bankrupt, the cargo owner acquired the same rights against the insurance company. Therefore, the limitation period was also suspended concerning the cargo owner.
The cargo owner referred to section 95(2) of the Danish Insurance Contracts Act. According to this section, an injured party acquires the insured’s rights of cover against the bankrupt insured’s liability insurers. The cargo owner alleged that this provision would mean that the cargo owner could also rely on the time bar for the claim being suspended against the insurers once the carrier had reported the claim. Since the insurer had never rejected the claim, the suspension would still be effective.
The insurance company alleged that the wording of section 95(2) of the Danish Insurance Contracts Act allowed the cargo owner to also rely on the bankrupt carrier’s notice of the damage to the insurance company. Both the Maritime and Commercial High Court and the High Court of Appeal agreed with the insurance company’s claim that the carrier’s notice to the insurance company had no impact on the cargo owner’s claim.
The limitation period was suspended
The Supreme Court found that the carrier had reported the damage to the insurance company and had then interrupted the limitation period of that claim. After the carrier’s bankruptcy, the cargo owner had stepped into the claim under section 95(2) of the Danish Insurance Contracts Act. The cargo owner could then also rely on the effect of the notification. Therefore, the claim was not time-barred, and the Supreme Court overturned the decisions of the two previous instances of court.
IUNO’s opinion
The case finally decides a question that has been disputed, not least in this case, about how far an injured party steps into a tortfeasor’s claim against the liability insurance. After the judgment in two instances, there was probably a presumption that the injured party could not rely on issues of limitation between the tortfeasor and the liability insurance. The judgment means that claimants may have cases that have not been followed up because they have been considered time-barred and that liability insurers may have closed cases that can be reopened because they have never rejected the claim. IUNO recommends reviewing the “drawers” to see if it might be the case.
[The Supreme Court’s ruling of 24 February 2022 in case BS-28670/2021-HJR of 24 February 2022]