On 17 May 2023, the CJEU delivered its judgment in Fonds de Garantie des Victimes des Actes de Terrorisme et d’Autres Infractions (FGTI) v. Victoria Seguros SA (Case C‑264/22).
This is a case on the delineation of the respective scopes of the law governing torts and the law governing subrogation. The answer given by the Court seems obvious, and one wonders why the question was asked in the first place, at least in such terms.
One interesting issue (possibly the only one) is whether the existence of a French judgment could have changed the answer of the Court, but the question was not asked.
On 4 August 2010, while swimming and snorkelling in the sea off the beach at Alvor (Portugal), a person of French nationality was struck by the propeller of a boat registered in Portugal and suffered serious physical injuries.
The victim brought a claim for compensation in France against Fonds de garantie des victimes des actes de terrorisme et d’autres infractions (FGTI), a public fund which can compensate victims of certain torts. After compensating victims, FGTI is subrogated in their rights that it can exercise against tortfeasors.
FGTI settled in 2014. The settlement was approved by a French court, and FGTI paid the victim in April 2014, which triggered the subrogation.
At the end of November 2016, FGTI brought proceedings against Victoria Seguros, the insurance company of the alleged tortfeasor, in Portuguese courts.
Victoria Seguros argued that the claim brought by FGTI was governed by Portuguese law and thus time-barred. FGTI replied that French law applied and that the claim was not time-barred.
Lex loci delicti or lex subrogationis?
The issue before the court was whether the time limit was governed by the law of the tort or the law governing the subrogation.
Victoria Seguros argued that the law of the tort applied. As the damage was suffered in Portugal, it was thus Portuguese law (Rome II Regulation, Article 4), and the starting point of the limitation period was the day of the accident, i.e. 10 August 2010. Under Portuguese law, the applicable time limit was 3 years.
FGTI argued that the law of the subrogation applied (Rome II Regulation, art. 19). As the duty of the Fund arose under French law, this was French law, which provides for a 10 year limitation period starting in 2014.
Article 19 of the Rome II Regulation reads:
Where a person (the creditor) has a non-contractual claim upon another (the debtor), and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person’s duty to satisfy the creditor shall determine whether, and the extent to which, the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship.
This provision establishes in complex terms a pretty simple distinction. The law governing the obligation of a person (here, the Fund) to compensate a victim determines whether this person is subrogated in the rights of this victim, and to which extent (for instance, only to the extent of the actual payment made to that victim). But the result of the subrogation is clearly to transfer to the Fund the rights of the victims. Subrogation does not establish new rights. It merely transfers existing rights from one person (the victim) to another (here the Fund).
Thus, the answer to the question referred to the CJEU seemed pretty obvious, and one can understand that no opinion of an Advocate General was requested. FGTI was exercising the victim’s rights against the (alleged) tortfeasor. These rights were governed by the lex loci delicti, and as clarified by Article 15, this included the limitation period for exercising those rights.
This is what the CJEU rules:
Article 4(1), Article 15(h) and Article 19 of Regulation No 864/2007 must be interpreted as meaning that the law which governs the action of a third party subrogated to the rights of an injured party against the person who caused the damage and which determines, in particular, the rules on limitation in respect of that action is, in principle, that of the country in which that damage occurs.
The Court offers quite an impressive number of reasons to justify such an obvious solution.
The French Judgment
In Portuguese courts, FGTI argued that French law provides “for a limitation period of 10 years from the date of the judicial decision at issue, which, in the present case, was made in March 2014“.
It is difficult to assess this argument without any further information.
There is no doubt that there is no special time limit for subrogation under French law. The French supreme court rules regularly that subrogation does not trigger any new time limit, and that it is always the time limit applicable to the right of the victim which applies, which is of 10 years for personal injury cases, starting on the date of the damage. Maybe this is the rule FGTI relied upon (though the starting point should not have been the 2014 judgment then).
There is, however, a special time limit of 10 years applicable to the enforcement of judgments. In this case, FGTI referred to a time limit starting on the day of the French judgment approving the settlement, i.e. March 2014.
From a PIL perspective, this raises the issue of whether this judgment could have been the basis for an action in Portugal. Clearly, the insurer of the alleged tortfeasor was not a party to the French proceedings, and the French judgment had not ruled on whether the alleged tortfeasor was liable. But maybe an argument could have been made that the judgment could be recognised in Portugal to the extent that it might have declared that FGTI was subrogated (I do not know that it did). From the perspective of Portugal, it could then have raised the issue of whether a new right was created by the judgment (novatio), or whether Portugal would still have recognised the pre-existing right of the victim.