On 5 September 2018 the Dusseldorf Higher Regional Court ruled on the insurance law aspects of a recourse claim against a subcarrier.
A shipper's cargo insurer sued the carrier for compensation for cargo damage that had occurred during international road transport. The carrier filed a third-party complaint against the subcarrier and, in separate proceedings, sued the subcarrier for compensation for damages.
In the first proceedings (shipper's cargo insurer versus carrier) the court granted the claim. The carrier's liability insurer paid the amount granted to the cargo insurer and the carrier continued the legal proceedings against the subcarrier, seeking compensation for damages paid by its liability insurer.
The Dusseldorf Higher Regional Court held that the carrier could claim against the subcarrier irrespective of the fact that the carrier's liability insurer had compensated the damage. Under German insurance law, this scenario led to a cession of rights by way of cessio legis (ie, legal session) of the insured's claim to the insurer. However, the insured carrier remained entitled to claim against the subcarrier. This is based on derivative rights of action, as the insurer had authorised the insured in a specific declaration to continue the proceedings. Further, the insurer ceded the claim back to the insured carrier.
This decision demonstrates that an insured's entitlement to claim compensation can be safeguarded if the insurer supplies a written declaration authorising the insured to continue the recourse proceedings, irrespective of whether the insurer has compensated the insured.
Such derivative rights of action ensure that recourse proceedings initiated by an insured carrier against a subcarrier still hamper the expiration of the time bar of the recourse claim. However, a sole cession of rights in which an insurer cedes the claim back to the insured cannot have this effect and could cause time bar issues.
Liability insurers and insured carriers should therefore conclude proper agreements about such authorisation and ensure that a motion for judgment is amended such that the defendant pays the insurer directly.
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