Claims handling can be subject to very different legal principles from a jurisdiction to another. In a recent meeting with our Paris Claims team, Pierre-Olivier Leblanc, partner at Taylor Wessing and Cedric Wells, Head of Claims at Swiss Re Corporate Solutions for France and Iberia, discussed the intricacies of some of the differences of the French insurance and civil procedural laws.
Here are a few examples.
Subrogation
Legal subrogation is automatic. It will benefit P&C insurers that can demonstrate, (1) that they have paid an indemnity and, (2) that they were bound to make such payment under the terms and conditions of a given insurance policy. Insurers may be compelled to produce a copy of the insurance wording in order to prove their subrogation rights.
Contractual subrogation can help avoid discussions around the validity of legal subrogation however it is not automatic. In order to be valid, contractual subrogation must: (1) be explicit and in writing, and (2) be granted at the exact moment of payment or at the latest immediately before payment, unless the willingness of the insured was expressed in writing before.
Before making any payment, insurers must verify that they are paying the correct entity and that they are properly subrogated in such entity's rights. Upon payment, they will effectively be standing in the shoes of the payee and proceedings will be issued in the insurers' name as subrogees of the insured
Evidence
Discovery and disclosure do not exist in France. This means that, claimants must prove their case before a Court thus requiring that they serve on other parties the documents on which their submissions rely. This also means that parties have no duty to disclose evidence which may be detrimental to their own case. Courts may grant the production of documents at a party's request but this is no way comparable to the broad Anglo-Saxon discovery process. Parties to a certain extent need to 'guess' what their opponents have on file.
Litigation is predominantly conducted in written form. Oral pleadings and discussions are limited and witnesses are not cross-examined. Trials per se typically last several hours rather weeks.
Court survey
Any party to an insurance contract in France may request that a Court appoints an expert to review technical matters, in addition or in lieu of its own appointed expert. This does not mean litigation will follow on the merits. Whilst a Court surveyor’s role is intended to be strictly technical, experts have been seen to go beyond their assigned scope of work. Parties should be cautious about this, particularly before commercial courts judges who are non-professionals and rely on experts' views.
Time bar is a highly complex matter as there are many different rules in the French Insurance and Civil Codes that apply to a variety of situations.
Direct action
As per the Insurance Code, a third party - or its insurer once subrogated in it is rights - may bring a direct action against the liability insurer of the liable party. As a result, in practice, third party insurers might end up challenging the first party insurers' decision to cover their insureds' claims, in addition to challenging their own insureds' liability.
Professional secrecy
In-house counsels do not enjoy legal privilege and cannot therefore protect work product from disclosure. Parties may only withhold documents that are covered by outside counsel professional secrecy.
Costs
Costs are usually awarded in favour of the prevailing party but Courts have discretion to decide otherwise. Amounts will not necessarily match legal expenses incurred. They are entirely discretionary so that they may in fact be symbolic compared to costs incurred for large and complex claims. There is no automatic costs recovery, and no equivalent of a Part 36 Offer.
