The Constitutional Court of the Republic of Belarus comprising the Presiding Officer - Chairman of the Constitutional Court of the Republic of Belarus P.P.M iklashevich, Deputy Chairman A.V. Maryskin, judges T.S. Boiko, T.V. Voronovich, S.Y. Danilyuk, V.P. Isotko, V.V. Podgrusha, L.M. Ryabtsev, O.G. Sergeeva, A.G. Tikovenko, S.P. Chigrinov,

according to the eighth part of Article 22 of the Code of the Republic of Belarus on Judicial System and Status of Judges in the exercise of the right to forward proposals to the President of the Republic of Belarus, the chambers of the National Assembly of the Republic of Belarus, the Council of Ministers of the Republic of Belarus, other state bodies within their competence on the need to make alterations and (or) addenda to the acts of legislation, to adopt new normative legal acts as well as other proposals within the competence of the Constitutional Court, considered in court session a petition of an organisation concerning the inconsistent practice of general and economic courts when applying the norms of the Rules for insurance activities in the Republic of Belarus approved by Edict of the President of August 25, 2006 No. 530 «On Insurance Activities» (hereinafter – The Rules).

In the petition to the Constitutional Court it was pointed at the lack of uniform recovery practice of general and economic courts in the case of the insurer who provides compulsory insurance of the civil liability of vehicles owners with regards to the difference in insurance amounts defined through the calculation method and the actual expenses of the victim on vehicle repair as well as with regard to allowances reimbursed to the victim by the insurer carrying compulsory insurance against accidents at work and occupational diseases.

Having analysed the norms of the Constitution of the Republic of Belarus, of the Civil Code of the Republic of Belarus, of Decree of the President of the Republic of Belarus of August 25, 2006 No. 530 “On Insurance Activities”, other normative legal acts and relevant materials the Constitutional Court found the following.

1. According to article 21 of the Constitution the rights and liberties of the citizens of the Republic of Belarus shall be the supreme goal of the State. The State shall guarantee the rights and liberties of the citizens of Belarus that are enshrined in the Constitution and the laws, and specified in the state's international obligations.

The State shall take all measures at its disposal to create the domestic and international order necessary for the exercise in full of the rights and liberties of the citizens of the Republic of Belarus that are specified in the Constitution. State bodies, officials and other persons who have been entrusted to exercise state functions shall take necessary measures to implement and safeguard the rights and liberties of the individual. These bodies and persons shall be held responsible for actions violating the rights and liberties of an individual (article 59 of the Constitution).

Everyone shall be guaranteed protection of one's rights and liberties by a competent, independent and impartial court of law within time periods specified in law. (part one of article 60 of the Constitution). All shall be equal before the law and entitled without discrimination to equal protection of their rights and legitimate interests (article 22 of the Constitution). Pointed constitutional guarantees also act with respect to legal persons, organisations that are not legal persons, and individual business owners (hereinafter - legal persons).

According to part one of article 112 of the Constitution the courts administer justice on the basis of the Constitution and other normative acts adopted in accordance therewith.

The principle of legal certainty contextual to the basic constitutional principle of supremacy of law (part 1 of Article 7 of the Constitution) implies either a logical coherence of legal norms, accuracy, consistency and clearness of their statement or unambiguous interpretation and practical application of them. The lack of uniform interpretation generally provokes inconsistent application of normative legal acts.

Thereby while administering justice the courts being bound by constitutional requirements should guarantee the observance of principles of legal certainty, justice, equal protection of rights and legal interests of the citizens and legal persons. The pointed requirements involve the need to come to both uniform interpretation and practical application of normative legal acts.

2. The legal basis for regulating insurance relations includes the Civil Code of the Republic of Belarus, Edict of the President of the Republic of Belarus August 25, 2006 № 530 “On Insurance Activities” (hereinafter – Edict №530) by which the Rules are approved and other acts of legislation, inclusive of ones pursuing to Edict №530.

2.1. According to subpoint 4.1 of point 4 of the Rules compulsory insurance of the civil liability of vehicle owners is one of the types of compulsory insurance in the Republic of Belarus.

According to point 126 of the Rules the insurer shall compensate per occurrence for damages, caused by a road traffic accident to life, health and (or) property of the victim within the limits of liability established by the President of the Republic of Belarus.

The procedure of determining the damage to the vehicle caused by a road traffic accident for the purposes of insured compulsory civil liability of vehicle owners shall be approved by the Belarusian Transport Insurance Bureau, in concern with the Ministry of Transport and Communications of Belarus (part two of point 162 of the Rules).

According to the sixth part of point 158 of the Rules the insurance amount is paid upon the costing of the vehicle repair with its equipment deducted excluding value added tax (VAT) and other taxes (dues). If the victim presents documents confirming that the vehicle has been repaired by a licensed organization or entrepreneur, the insurer shall make additional payment equal to actual VAT actually paid and other taxes (dues) included in rendered service cost for removing damages relating to the case, within the fixed limit of liability.

Subpoint 1.2 of point 1 of Decree of the President of the Republic of Belarus of August 25, 2006 No. 531 "On Fixing Insurance Tariff Rates, Insurance Dues, Liability limits for Certain Types of Compulsory Insurance" the limits of liability in compulsory insurance of the civil liability of vehicle owners for the damage caused by a road traffic accident, is fixed at the rate of: for the life or health of the victim - 10 000 euro; for the property of the victims - 10 000 euro.

In the case of the excessed insurance amount of the fixed limits of liability the victim may bring a claim to the doer for damages recovery to the amount exceeding the specified limits (the first part of point 127 of the Rules).

In accordance with point 4 of Article 823 of the Civil Code in the case where liability for causing damage is insured pursuant to its compulsory nature as well as in other cases stipulated by law or liability insurance contracts the person, to the benefit of whom an insurance contract is concluded, may bring a claim for damage recovery up to the insured amount (within the liability).

Points 1 and 2 of Article 855 of the Civil Code establish that if a property insurance contract and a liability insurance contract do not provide otherwise, the insurer who has paid insurance compensation, gets the right of a claim, up to the paid amount, which the insured (or beneficiary) has against the person responsible for the damage recovered by insurance (subrogation). The insurer exercises the right of a claim in compliance with the rules on relations between the insured (or beneficiary) and the person responsible for damage.

According to Article 941 of the Civil Code the legal person or citisen who has insured his liability in the way of voluntary or compulsory insurance to the benefit of the victim (Article 823, point 1 of Article 825 of the Code), in the case where insurance amount does not compensate the total value of the damage, shall reimburse the difference in insurance amounts and the actual expenses of the victim.

On the basis of the pointed norms of the Civil Code and the Rules the insurer who has paid insurance compensation under a voluntary insurance contract of land based vehicles, makes claims in court to recover that amount from the insurer who has insured the liability of the doer that caused damages.

2.2. According to subpoint 4.1 of point 4 of the Rules one of the types of compulsory insurance in the Republic of Belarus is also compulsory insurance against accidents at work and occupational diseases.

Article 855 and 941 CC regulate this type of insurance relations.

In addition, point 2991 of the Rules provides that an insurer under a contract of compulsory insurance against accidents at work and the diseases is entitled to exercise, up to the paid insurance amounts, the right to a claim, that passed to him in subrogation, which the insured has against the person responsible for damages reimbursed by insurance. This point identifies the cases in which the insurer may realise this right.

According to the mentioned rules the insurance organisation that provides for compulsory insurance against industrial accidents at work and occupational diseases, which has paid the insurance amount of the victim after his life or health has been harmed, appeals to the court with a writ to recover that insurance amount from the insurer that carries compulsory insurance of the civil liability of the vehicle owner who is responsible for the road traffic accident.

3. The petition of the organisation and the available data show that the court recovery practice in the case of insurance compensation under the contract of compulsory insurance of the civil liability of vehicle owners is incontroversial.

3.1. In the opinion of the Supreme Court of the Republic of Belarus, a claim of the insurer that paid the insurance compensation under a contract of voluntary insurance of land based vehicles may be realised even exceeding the amount of insurance compensation that has been defined through the calculation method, but within the limits of liability established by the President of the Republic of Belarus. Therefore, general courts within the specified limits of liability answer to claims to the insurance companies that carry compulsory insurance of civil liability of vehicle owners who caused the damage, on compensation of the difference in the actual cost of repair and the insurance amount, calculated by the insurer.

As follows from the petition, general courts, basing on the norms of articles 855, 941 of the Civil Code, point 2991 of the Rules also decide to answer claims of insurers that carry compulsory insurance against industrial accidents at work and occupational diseases and who have paid victims’ insurance compensation to the loss of their health and work capacity or accidental death at work against the insurer who carries compulsory insurance of vehicle owners, on the paid amount recovery.

In the Resolution of the Plenum of the Supreme Court of the Republic of Belarus of June 24, 2004 No 9, “On judicial practice in cases of recovery of damages caused by vehicles” and of December 22, 2005 No 12 “On some issues of judicial application of law on compulsory insurance against accidents at work and occupational diseases” in the procedure of judicial interpretation general courts are provided with clarifications on the respective compensation of damages caused by vehicles, and application of laws on compulsory insurance against accidents at work and occupational diseases.

However, these resolutions contain recommendations for general courts to consider mentioned categories of cases with reference to the norms of the Civil Code and the Rules, concerning the issues of the present decision and those recommendations have been poorly specified and clarified.

3.2. The materials of the petition make understand that adjudicating civil liability insurance of vehicle owners the economic courts follow the approach, according to which the amount of the recoverable damages from the insurer providing for compulsory insurance of the civil liability of vehicle owners, shall not exceed the insurance compensation, defined by a calculation method. Thus, a claim filed in subrogation by the insurer who has paid insurance compensation under the contract of voluntary insurance of land based vehicles, is not recoverable.

Reimbursement of the expenses incurred by the claimant owing to insurance compensation in compulsory insurance against accidents at work and occupational diseases is not recognised by the economic courts as the insurance case under the contract of civil liability insurance of vehicle owners. Decisions of the economic courts are motivated by subpoint 3.2 of point 3 of Decree No. 530, under which insurance compensations for damages to life and health of the victim, shall be fully paid by both an insurer contracting compulsory civil liability insurance of vehicle owners and an insurer contracting compulsory insurance against accidents at work and occupational diseases.

4. According to the Constitutional Court the general and economic courts understand in different ways the same rules of the Civil Code of the Republic of Belarus, Edict of the President of the Republic of Belarus August 25, 2006 No 530 “On Insurance Activities”, including the Rules on insurance activities in the Republic of Belarus, approved by Edict. Despite the same approaches that the Civil Code of the Republic of Belarus and Edict of the President of the Republic of Belarus August 25, 2006 No 530 take to legal regulation of insurance relations, not providing for distinction in adjudication depending on their jurisdiction the general and economic courts, considering the same subjects of dispute, rule in contradiction. Such approaches to adjudicate in a state of law, what is proclaimed to be the Republic of Belarus (the first part of Article 1 of the Constitution), are not admissible and they question the guarantees for full protection of the rights and freedoms of citisens of the Republic of Belarus, the rights and legitimate interests of legal persons in court. The guarantees for equal protection matter only when the court is actually able to interpret truly a norm, apply it and as a result make a legitimate and valid court ruling and thereby restore the violated right.

The Constitutional Court considers that according to the Constitutional guarantees of the rights and freedoms of citisens of the Republic of Belarus, the need to respect the rights and legitimate interests of legal persons, the ensuring of the adequate legal protection of citisens and legal persons, the Supreme and Economic Courts should provide for a consistent judicial interpretation of legal norms in insurance industry to be applied by general and economic courts in cases relating to the compulsory insurance of civil liability of vehicle owners, thus ensuring the uniform application of law in court practice.

In view of the foregoing and guided by part eighth of Article 22, parts two and fourteen of Article 24, Articles 82 and 83 of the Code of the Republic of Belarus on Judicial System and Status of Judges, the Constitutional Court of the Republic of Belarus

Ruled:

1. With a view to ensure adequate protection of the rights and freedoms of citisens of the Republic of Belarus, as well as the rights and legitimate interests of legal persons, the principle of legal certainty to recognise the need to give in a joint meeting of Plenums of the Supreme Court and the Supreme Economic Court of the Republic of Belarus a judicial interpretation to courts to clarify issues stated in this decision on application of insurance legislation.

2. To propose to the Supreme Court of the Republic of Belarus and the Supreme Economic Court of the Republic of Belarus to take a joint decision of the Plenums of the Supreme Court of the Republic of Belarus and the Supreme Economic Court of the Republic of Belarus on the issues specified in the established order.

3. The present decision shall come into legal force from the date of its adoption.

4. To publish the decision in accordance with the effective legislation.

Presiding –

Chairman of the Constitutional Court

Republic of Belarus P.P. Miklashevich