The Latvian branch of Gjensidige ADB secures the dismissal of a claim for damages totalling nearly EUR 261,000

The claimant, Compensa Vienna Insurance Group ADB (“Compensa”), brought legal proceedings against COBALT’s client, Gjensidige ADB’s Latvian branch (“Gjensidige”), seeking to recover damages for lost profits amounting to nearly EUR 261,000. This sum represents an insurance claim paid by Compensa to a retail company. The claim arose following a road traffic accident attributable to the negligence of the vehicle’s driver, which resulted in damage to the company’s property. Consequently, the building was deemed unsafe for use until such time as the necessary repairs had been completed.

Gjensidige provided compensation for the damage to the building and goods under the terms of the compulsory motor vehicle owner’s third-party liability insurance policy (the “Motor Third Party Liability Insurance Policy”). Compensa, through its voluntary insurance cover, compensated the company for the loss of profits estimated for the duration in which the company was unable to utilise the damaged property for its commercial operations. Since Gjensidige issued the Motor Third Party Liability Insurance Policy, Compensa sought compensation from Gjensidige for the loss of profits.

Despite the Compulsory Civil Liability Insurance of Owners of Motor Vehicles Law (the “MTPL Law”) explicitly stating that loss of profit resulting from a road traffic accident is not eligible for compensation, Compensa considered that this provision to be in conflict with the provisions set out in Directive 2009/103/EC of the European Parliament and of the Council (the “Motor Insurance Directive”).

COBALT, having analysed the applicable law and the case law of the Court of Justice of the European Union, argued that the MTPL Law could not be found to be incompatible with the Motor Insurance Directive and that the Motor Insurance Directive could not be the basis for a claim for damages against Gjensidige. During the proceedings, the Court of Justice of the European Union came to a similar conclusion in Case C-28/21, holding that the Polish legislation implementing the Motor Insurance Directive was compatible with the Motor Insurance Directive, even though it did not provide for damages for loss of profit. Consequently, the claimant agreed with COBALT’s arguments and withdrew its claim against Gjensidige. On this basis, the Riga City Court decided to terminate the proceedings against Gjensidige at the end of 2023.

Representation of the client was ensured by COBALT Partner Sandija Novicka and Senior Associate Sabīne Zaula.