It is estimated that the number of Italian vehicles with Polish liability insurance policies has already exceeded 30,000, and cases of “Polish” vehicles have also been noticed in other countries. Although the justice system is fighting this practice (I recently heard about the confiscation of a shipment with Polish license plates), the problem is growing. From a legal point of view, such activity should be classified as fraud (under Article 286 of the Penal Code) – individuals who engage in this practice lead insurers to dispose of property in an unfavorable manner by misleading them in order to gain financial benefits. At best, the insurer will receive a much lower premium than it would normally charge in such a location (if it could conduct insurance activities there), and at worst, it may not receive any premium at all. Clearly, this constitutes fraud.
Validity of the Agreement
Is an insurance contract entered into for the purpose of committing a crime valid? Article 58, paragraph 1 of the Civil Code states that legal actions that are contrary to the law or aimed at circumventing the law are invalid. Furthermore, paragraph 2 of this provision states that even a contradiction with the principles of social coexistence renders the legal act invalid.
A contradiction with the law specifically refers to an action committed with the aim of committing a crime. As stated in the reasoning of the judgment of the Court of Appeal in Lublin dated November 15, 2022 (I ACa 338/18): “A legal act undertaken for criminal purposes is invalid (Article 58 § 1 of the Civil Code)” and in the reasoning of the judgment of the Court of Appeal in Poznań dated October 17, 2019 (I ACa 1182/18): “A legal act undertaken for criminal purposes is invalid. It is an act contrary to the law, i.e., the Penal Code.”
Therefore, it should be concluded that the insurance contract attempted by the perpetrator is invalid.
What are the Rights of the Victims in Such a Situation?
The validity of the victims’ claims
The situation seems simple – since the insurance contract is invalid, the victim has no legal basis for a claim against the insurance company. Since there is no contract, there is no way to file a claim based on the contract.
However, the Court of Justice of the European Union (CJEU) issued a ruling that could prompt further reflection on this issue. I am referring to the judgment in Case C-287/16, in which the CJEU stated:
“Article 3(1) of Council Directive 72/166/EEC […] and Article 2(1) of the second Council Directive 84/5/EEC […] must be interpreted as meaning that they oppose national provisions that allow, in circumstances such as those in the main proceedings, for the invalidity of the civil liability insurance contract for damage caused in connection with the movement of vehicles to be invoked due to false initial declarations by the insured concerning the identity of the owner or user of a given vehicle, or because the person on whose behalf the insurance contract was concluded had no economic interest in entering into that contract.”
However, two issues should be noted:
- In the factual situation underlying the question, no crime occurred – as I understand it, the policy was issued with the data of an entity that had no insurance interest, but it actually existed, and the purpose of this action was not to deceive the insurer.
- The CJEU ruled that national law is incompatible with the directive – and because directives are not directly applicable in national law, this means that the member state should amend its regulations. However, in disputes between civil law entities, national law still applies, not the directive.
The Latest CJEU Ruling
The aforementioned CJEU judgment, however, lost its relevance as on September 19, 2024, the CJEU issued a ruling in Case C-236/23, in which it stated that, as a rule, the invalidity of a contract cannot be invoked, but the invalidity of a contract can be invoked if fraud or abuse is involved:
“In this regard, it must first be noted that Directive 2009/103 does not contain provisions regulating potential abuse of rights by the policyholder.
Nevertheless, according to settled case law, Union law contains a general principle under which legal entities may not invoke Union law in a manner that involves fraud or abuse (Judgment of December 21, 2023, BMW Bank and others, C-38/21, C-47/21, and C-232/21, EU:C:2023:1014, paragraph 281 and the case law cited therein).
Legal entities are obliged to respect this general principle of law. The application of Union law cannot be extended to actions undertaken for the purpose of benefiting from the rights provided by Union law in a manner that involves fraud or abuse (Judgment of December 21, 2023, BMW Bank and others, C-38/21, C-47/21, and C-232/21, EU:C:2023:1014, paragraph 282 and the case law cited therein).”
EU law does not yet cover criminal law, so it does not contain definitions of fraud or abuse, so these terms are somewhat vague. In English, they sound a little different: “EU law cannot be relied on for abusive or fraudulent ends.”
However, it seems that in the case of Italian policies purchased in Poland, we are dealing with just such fraud or abuse of the law – fraudsters should not be allowed to benefit from the protection provided by such insurance policies.
And once again, I will remind you: the fact that a national legal provision is potentially incompatible with a directive does not render it invalid. Even if such incompatibility is confirmed by the CJEU. Disputes between the insurer and the victim must be resolved according to national regulations until they are potentially amended.
Although the pro-EU interpretation of the law has been present in Polish legal thought for years, it cannot lead to interpretations contra legem! Since Article 58 of the Civil Code states that a legal act contrary to the law is invalid, it is not possible, within the pro-EU interpretation, to add an exception for vehicle insurance contracts. Clara non sunt interpretanda.
Conclusion
In the case of the invalidity of the insurance contract, the victim cannot make claims based on this invalid insurance contract. There are also no other grounds for making such a claim – neither tort by the insurer nor unjust enrichment seem to apply here.