condition of individuals and the consequence of traffic accidents

Where a traffic accident occurs, generally the insurance company will first compensate the victim within the scope of the compulsory traffic accident liability insurance (hereinafter referred to as ¡°the Compulsory Liability Insurance¡±) purchased by the infringer and then compensate the victim within the scope of the commercial third party liability insurance (hereinafter referred to as ¡°the Commercial Third Party Liability Insurance¡±) in proportion to the liabilities. Where the victim who has suffered from diseases becomes disabled due to a car accident, could the liabilities for compensation of the insurance company and the infringer be mitigated?

Recently, Shanghai No.1 Intermediate People¡¯s Court (hereinafter referred to as ¡°Shanghai No.1 Intermediate Court¡±) concluded an appeal of dispute over liabilities arising from a motor vehicle traffic accident and determined that, the disease suffered by the victim and physical conditions of the victim have certain effects on the consequence of damage but have no legal causal relationship with the consequence of the accident, so the liabilities for compensation of the infringer and the insurance company shall not be mitigated.

[Case Review]

The elderly usually suffer from some health problems and Uncle Liu is not an exception. He has suffered from herniated disk and cervical spondylosis for years but his diseases are not too serious. Unfortunately, his physical condition gets worse due to a car accident.

About 2 p.m. on January 25, 2017, the non-motor vehicle driven by Uncle Liu collided with the motor vehicle driven by Ms. Li. As a result, Uncle Liu was injured. The traffic accident certificate issued by traffic police stated that, Ms. Li shall bear primary liabilities for the accident and Uncle Liu shall bear the secondary liabilities. Ms. Li purchased the Compulsory Liability Insurance and the Commercial Third Party Liability Insurance with the coverage of RMB1million with an insurance company for her motor vehicle.

After being injured, Uncle Liu was treated at a hospital and spent the medical fees of over RMB100,000. As identified by a judicial expertise center, Uncle Liu suffered from a fracture of both cervical vertebra and thoracic vertebrae which shall constitute a Class-9 disability, and also suffered from a fracture of left ankle which shall constitute a Class-10 disability. Generally, the insurance company shall compensate within the liability limit of the insurances. However, the parties did not reach an agreement over the liabilities for compensation and compensation amount. Therefore, Uncle Liu filed a lawsuit to the court, requesting the court to order the insurance company to compensate him over RMB300,000 for medical fee, disability indemnity, mental injury solatium, etc. within the scope of the Compulsory Liability Insurance and the Commercial Third Party Liability Insurance and order Ms. Li to pay the remaining part.

[Law Interpretation with Case]

The court of first instance, upon trial, confirmed that Uncle Liu suffered a loss of over RMB250,000 due to this accident. The court of first instance ruled that the insurance company shall compensate over RMB120,000 within the limit of the Compulsory Liability Insurance and over RMB130,000 within the limit of the Commercial Third Party Liability Insurance (at the rate of 80%) and that Ms. Li shall compensate RMB4,500, on the grounds that Uncle Liu¡¯s suffering from cervical spondylosis and herniated disk was only an objective factor that causes the consequence of the accident but had no legal causal relationship with the consequence of the accident. The insurance company refused to accept the judgment and appealed to Shanghai No. 1 Intermediate People¡¯s Court.

During the second trial, the insurance company held that, according to the medical records and conclusions of judicial assessment of Uncle Liu, the factures suffered by Uncle Liu were caused by the traffic accident but the cervical spondylosis and herniated disk were not caused by the traffic accident. The insurance company, on the ground of Uncle Liu¡¯s physical condition, applied for participation assessment on the injury and disability of Uncle Liu¡¯s neck and required the court to mitigate Ms. Li¡¯s liabilities for compensation according to the participation rate and thus mitigate the liabilities for compensation of the insurance company.

After trial, Shanghai No.1 Intermediate Court held that, the victim Uncle Liu¡¯s physical condition had certain effects on the consequence of damage but was not one of the faults specified by the Tort Law and had no legal causal relationship with the consequence of the traffic accident, so Uncle Liu shall not bear any liability merely for his physical condition had certain effects on the injury and disability caused by the traffic accident. With respect to the occurrence and expansion of the damage, Uncle Liu was not at fault, so the liabilities for compensation of the infringer shall not be mitigated or exempted in accordance with laws. Moreover, the judicial expertise center involved in this case had the appraisal qualification and the expert conclusion issued by it was based on the medical records and videos of Uncle Liu as well as the symptom and signs of Uncle Liu and therefore shall be admitted as evidence. The insurance company raised an objection to the disability class of Uncle Liu but failed to provide corresponding evidence, so the insurance company¡¯s application for reappraisal was rejected.

Shanghai No.1 Intermediate People¡¯s Court then rejected the appeal and affirmed the original judgment.

The judges warn that, the injury participation may determine the effects of physical condition or diseases of individuals on the consequence of damage, but such effects shall not constitute the faults specified in laws such as the Tort Law. In dispute over tort liabilities arising from traffic accidents, to determine whether the infringer¡¯s liabilities for compensation shall be mitigated based on the injury participation, it is necessary to consider the nature of determination of tort liabilities arising from traffic accidents, namely to consider whether the requirements for tort are met, especially whether the infringer is at fault and whether there is any legal causal relationship. Also the accountable causes, the conditional relations and correspondence, the grounds for elimination of liabilities, etc. shall be considered. Where the requirements for tort are not impaired, the injury participation is not a legal factor that may mitigate the liabilities for compensation of the infringers.

[Relevant Laws]

Tort Law of the People¡¯s Republic of China

Article 16  Where a tort caused any personal injury to another person, the tort-feasor shall compensate the victim for the reasonable costs and expenses for treatment and rehabilitation, such as treatment expenses, nursing fees and travel expenses, as well as the lost wages. If the victim suffers any disability, the tort-feasor shall also pay the costs of disability assistance equipment for the living of the victim and the disability indemnity. If it causes the death of the victim, the tort-feasor shall also pay the funeral service fees and the death compensation.

Article 26  Where the victim of a tort is also at fault as to the occurrence of harm, the liability of the tort-feasor may be mitigated.

Article 48  Where a motor vehicle traffic accident causes any harm, the compensatory liability shall be assumed according to the relevant provisions of the Road Traffic Safety Law.

Law of the People's Republic of China on Road Traffic Safety

Article 76  Where a motor vehicle meets with a traffic accident and causes personal injury or death or any property loss, the insurance company shall pay indemnity within the scope of limit of the compulsory third party liability insurance liability for the motor vehicle. The part in excess of the liability limit shall be indemnified in either of the following ways:

¡¡¡¡(I) Where a traffic accident occurs between motor vehicles, the faulty party shall bear the liability; if both parties are at fault, they shall each bear their proper share of the liabilities.

¡¡¡¡Where a traffic accident occurs between a motor vehicle and a non-motor vehicle driver or a pedestrian and the non-motor vehicle driver or the pedestrian is not at fault, the motor vehicle shall bear the liabilities; however, if there is any evidence to prove that the non-motor vehicle driver or the pedestrian is at fault, the motor vehicle¡¯s liabilities for compensation may be mitigated according to the faults; if the motor vehicle is not at fault, the motor vehicle shall bear up to 10% of the liabilities for compensation.

¡¡¡¡Where the losses of the traffic accident are intentionally caused by the non-motor vehicle driver or the pedestrian, the motor vehicle shall bear no liabilities.

Interpretation of the Supreme People¡¯s Court on Several Issues Concerning the Application of Laws in the Trial of Cases of Compensation for Damages Arising from Road Traffic Accidents

Article 16  Where any damage is caused by a motor vehicle covered by both the compulsory third party liability insurance for motor vehicles (hereinafter referred to as ¡°the Compulsory Liability Insurance¡±) and the commercial third party liability insurance (hereinafter referred to as ¡°the Commercial Third Party Liability Insurance¡±)in a traffic accident and the party concerned files a lawsuit against both the infringer and the insurance company, the people¡¯s court shall determine the liabilities for compensation in accordance with the following rules:

(I) the insurance company underwriting the Compulsory Liability Insurance provides compensation within the scope of limited liability;

(II) if the above compensation is not sufficient, the balance shall be compensated by the insurance company underwriting the Commercial Third Party Liability Insurance pursuant to the insurance contract;

(III) if the above compensation is still not sufficient, the balance shall be compensated by the infringer pursuant to relevant provisions of the Road Traffic Safety Law and the Tort Law.

Where the infringed or any of its relatives requests the insurance company underwriting the Compulsory Liability Insurance to compensate for mental damage first, the people¡¯s court shall support such request.