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An extraordinary appeal of the Financial Ombudsman in a dispute over car repair costs

8 April 2021

The Financial Ombudsman brought another extraordinary appeal to the Supreme Court. This time he is fighting for the right to reconsider the dispute between the injured party and the insurer for over 11,000 PLN. The dispute concerns the payment of compensation equal to the cost of repairing the car, calculated by experts. The Financial Ombudsman informs that the aggrieved party has the right to do so even if the damaged car has not been repaired and sold.

– I decided to file an extraordinary appeal, because in this case we are dealing with an incorrect, and grossly, incorrect interpretation of the law. By adopting the approach presented by the District Court, the second instance court would also violate the constitutional principle of equality before the law. Therefore, the revocation of the judgment under appeal is necessary to ensure compliance with the principle of a democratic state ruled by law implementing the principles of social justice. The violations in the complaint are so serious that they order the Supreme Court to interfere with the res judicata by upholding the complaint, setting aside the judgment under appeal and referring the case for reconsideration – says Dr. Mariusz Jerzy Golecki, professor at the University of Łódź, Financial Ombudsman.

The dispute between the injured party and the insurer, in which the Financial Ombudsman filed an extraordinary appeal, concerns the effects of a car collision in April 2013. The insurer of the perpetrator decided that the repair of the victim’s car was not worth it. This means that its costs would exceed the value of the vehicle on the day of the damage, estimated at 20,800 PLN. Therefore, the insurer declared the so-called total loss, estimated the wrecked vehicle at 13,400 PLN and paid out 7,400 PLN in compensation.

The court of first instance agrees with the injured party

The injured party did not agree with this position. He hired an expert, whose calculations confirmed that the repair costs were lower than the value of the car before the accident. The injured party asked for additional compensation covering the calculated repair costs. However, the insurer did not change his mind. The dispute continued and the injured party, unable to wait for the payment of compensation allowing for the repair, sold the damaged car. However, he retained the right to compensation equal to the cost of repairing the car, calculated by an expert. Therefore, he brought the case to court. The expert appointed by the first instance court confirmed that the insurer incorrectly assessed both the repair costs and the value of the vehicle on the date of the damage. According to these calculations, there was therefore no basis for considering the damage to be total. As a result, in March 2018, the court of first instance found that the insurer is obliged to pay an additional amount of almost 9,000 PLN for the cost of repairing the vehicle and the return of 450 PLN paid by the customer for the services of an expert. He also added default interest, so in total over 11,000 PLN were to be transferred to the customer’s account.

– The court of first instance, referring to the well-established line of jurisprudence of the Supreme Court and common courts, rightly pointed out that the compensation owed by the insurer under the compulsory third-party liability insurance of motor vehicle owners in the event of partial damage covers deliberate and economically justified repair costs. The obligation to repair the damage does not depend on the fact of repairing the damaged car, and even less on other subsequent events in the form of its sale. In the case of partial damage to the vehicle, the insurer’s indemnity is reduced to the payment of the amount necessary to restore the vehicle to its previous condition in all material respects – explains Andrzej Kiciński, Deputy Financial Ombudsman.

The second instance court is on the side of the insurer

The insurer fought on, raising the argument that after selling the damaged vehicle, the injured party cannot claim compensation for repair costs. It turned out that he found the understanding of the court of second instance, which in January 2019 changed the judgment and dismissed the injured party’s claim for payment of repair costs. The District Court took the interpretative position that in the case of selling a damaged vehicle, even if the repair costs are not excessive, the obligation to repair the damage is limited to the difference between the market value of the vehicle in an undamaged condition and the value of the accident remnants.

– The analysis of the justification of the judgment shows that the interpretation of the provisions of law made by the court of second instance with regard to the notion of damage and the amount of due compensation is unequivocally assessed in the jurisprudence of the Supreme Court as erroneous, and grossly at that. In our opinion, this justifies the submission of an extraordinary appeal by the Financial Ombudsman – says Andrzej Kiciński.

It is also reminiscent of Supreme Court judgments of 8 March 2018, II CNP 32/17; of April 12, 2018, II CNP 41/17, and of April 12, 2018, II CNP 43/17 (available at the website of the Supreme Court). In cases where, after causing partial damage, the damaged vehicle was sold and where the common courts limited the concept of damage to the difference between the market value of the vehicle in the state before the damage and the price obtained from the sale of the damaged vehicle, the Supreme Court clearly qualified this type of interpretation of the law as gross violation of substantive law (mainly Art. 363 of the Civil Code, Art. 361 of the Civil Code and Art. 822 of the Civil Code) and then found that the judgment was unlawful.

It is also impossible to ignore that in 2018 the Supreme Court refused several district courts to answer legal questions regarding the rules for determining compensation in the event of a partial repair of a damaged car or the sale of accident remnants. The Supreme Court in the justification of the decisions refusing to adopt a resolution consistently indicated that the jurisprudence of the Supreme Court is well-established and there are no grounds for making the amount of compensation dependent on the fact of repairing or limiting liability to the difference between the market value of the damaged vehicle and the value of the remnants in the event of the sale of the damaged car. In the case of partial damage to the vehicle, and in the event of the sale of an unrepaired car, the injured party may still claim compensation corresponding to the repair costs, and limiting liability to the difference between the market value of the undamaged vehicle and the wreckage is unjustified.

– This and other cases show that the dispute with the insurer can last for many years. It is difficult to expect victims to refrain from making decisions about the car until the case is settled by the court. If the insurer has not paid enough compensation to repair the vehicle, selling the remnants is often the only option. In this situation, it is difficult to accept the deprivation of the injured party’s right to demand an additional payment covering the full cost of repairing the damage – says Andrzej Kiciński.

He adds that such an approach would also violate Art. 32 of the Polish Constitution, the principle of equality before the law. Those who did not sell the wrecked vehicle would be treated better than those who did, although there is no legal basis for such a gradation of their legal situation.

Possible consequences of an extraordinary appeal

The setting aside of the judgment under appeal and the referral of the case for reconsideration will give the injured party the chance to obtain due compensation. It will also be a clear indication for those who find themselves in a similar situation that they may still pursue their rights, e.g. by submitting a request to the Financial Ombudsman for an extraordinary appeal.

Persons whose dispute on a similar background is currently pending in court have the option of submitting to the Financial Ombudsman a request to present a relevant court for the case.

Those who in the past have refused to pay for repair costs and have not decided to go to court can still pursue their claims against the insurer if they are not time-barred. In most traffic accidents, it will be three years from the receipt of the last decision in a given case from the insurance company. But in cases where the damage was a crime, it could be as long as 20 years. If such a complaint is rejected, the Financial Ombudsman can be asked to intervene.

Remember! The right to demand coverage of the costs of the appraiser service

In this case, there is also a dispute over the return of 450 PLN – the remuneration of the expert hired by the customer. The consequence of an incorrect interpretation in the dispute concerning the surcharge was the rejection of this claim by the court of second instance. In the opinion of the Financial Ombudsman, customers have the right to use professional support in a dispute regarding the extent of the damage or repair costs.

It is worth remembering that the Supreme Court, in a resolution adopted at the request of the Financial Ombudsman, confirmed the right of injured parties and assignees to demand that the costs of the expert’s opinion be covered from the motor third party liability insurance. He also made a reservation that they must be proved necessary for the effective claiming of damages. In practice, this means applying the simple principle “who is wrong, pays”. It follows from the justification that if the expert’s opinion shows that the insurer has underestimated the compensation, the customer should have no problems obtaining a refund of costs. (more in the link below) Therefore, if in the past the injured person hired an appraiser to determine the cost of the repair, he or she can additionally submit a request for coverage of the costs of such a service by the insurer.


The Financial Ombudsman’s website in Ukrainian
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