Abstract
In principle, every adult should be self-supporting, responsible for his own destiny and must live within his means. He may not without special circumstances, eg by meeting all the requirements for delictual liability by another as tortfeasor or by concluding a contract of private risk insurance, expect others to act as debtors liable for any setback that he may encounter as part of the risks of living – including an act of God. In accordance with this norm, in principle damage rests where it falls, and each bears his own harm – casum sentit dominus (res perit domino).
It is not unusual for a vehicle owner to lease his vehicle to a lessee subject to the requirement that the latter is responsible to take out comprehensive insurance cover for the vehicle for the duration of the lease agreement. Normally, however, an owner may be expected to limit his risks by taking out comprehensive insurance in respect of his own property. Since the same damage cannot be compensated twice, it is a waste to take out insurance against the same risk from two different insurers. In a particular matter it may be tax-prudent for the lessee to offset the premium expenses of comprehensive insurance of the lease object against his business’s profit. The lessee may therefore agree with the owner that not the owner but he as lessee will insure the vehicle comprehensively for the duration of the lease. It is advisable, however, that the lease agreement provides as a condition that the insurer will without delay be informed of the lease agreement and that the comprehensive insurance will be for the benefit of the owner although the lessee will be paying the premiums for the insurance cover. After all, any damage that results will materialise primarily in the estate of the owner as identified “third” party. At most the insurable interest of the lessee is to safeguard himself against any personal liability for loss resulting from damage to the leased vehicle whilst in his possession.
In a recent decision the court of appeal in Brussels held that, in the absence of such a clause for the benefit of the owner as third party, the owner had no claim against the insurer for indemnity after the lessee failed to disclose that the ownership of the insured vehicle rested not with him but with the undisclosed third party. The insurer was not obliged to indemnify the lessee in any sense because the latter as non-owner suffered no damage as a result of the total loss of the vehicle. As the insurance was for the damage to the vehicle allegedly as an asset of the lessee, it did not cover the lessee’s personal liability against the lessor as owner either.
Although in casu the owner in principle could still rely on his rei vindicatio to repossess the wreck of his vehicle after it was written off in an accident by the lessee, this claim was illusory because the wreck had been sold by the insurer after being fraudulently misled by the lessee regarding the ownership of the vehicle and the amount of the sale was paid to the lessee as presumed owner. The fraudster’s estate was subsequently liquidated and the owner could not successfully claim any damages for the breach of contract and the resulting loss from the fraudulent erstwhile lessee. Although the court held that the insurer in the circumstances acted negligently with regard to the transfer of the amount realised with the sale of the wreck, the court also frowned upon the laxness of the owner who, notwithstanding the express provision in the lease agreement, did nothing for a whole year to ensure that the contractual obligation by the lessee was met with regard to the comprehensive insurance and the additional clause for his benefit as the disclosed owner. This laxness of the owner to protect his own interests was termed a contributory cause for his eventual loss regarding the value of the leased vehicle.
In insurance law, the principle applies that the insured has an obligation to take all reasonable steps to keep the potential risk that any loss may materialise relating to the insured risk as small as possible. This applies to the prevention of the risk materialising at all as well as to the limitation of the resulting harm after the event. This implies a critical reconsideration of the automatic application of the fault principle defined as contributory negligence as the governing principle for the apportionment of damages in circumstances where the resulting damage to the claimant was caused partly as a result of his own “fault” as well as by the contributing cause of the defendant’s conduct. (For argument’s sake the inconvenient formulation of “own fault” with regard to the claimant’s conduct that can never be “tortious” to himself and should accordingly not be labelled “negligent” because only tortious conduct can be negligent, is retained as that is not the centre of this discourse.) Notwithstanding the fact that the conduct of the defendant fell short of what the reasonable person would have done to prevent the incurring of damage, the contributory conduct of the claimant causing the damage as it materialised should play a decisive role in shifting the burden of the harm.
If the relative weight of the “fault” of the parties involved is not used as the determinative criterion to find whether and to what extent the damage suffered by the claimant should be transferred onto the defendant, but rather the extent to which the relevant conduct of the involved parties was the leading cause of the eventual damage, it may indicate that the claimant’s laxness in the Brussels case should have limited or even excluded a successful claim for damages against the insurer as defendant. Had the owner of the vehicle in the Brussels case diligently ensured that the contractual obligation was met by the lessee with whom he freely entered into the lease agreement at his own risk, the owner would not have suffered any damage. A valid comprehensive insurance policy would have been in place to indemnify him as owner as was provided for in the agreement. In those circumstances there would not have been any negligence by the insurer, who was misled by the fraudulent act of the lessee to use falsified sales invoices pretending to be the registered owner of the vehicle to be insured to be indemnified. After the materialisation of the insured risk the owner’s damage would have been covered thanks to the clause for the benefit of it as third party. In the absence of reasonable diligent behaviour by the owner, the premise res perit domino may be decisive.
