Abstract
A castastrophe is defined as an event, sudden and unexpected, that causes devastating harm to a large number of victims, triggering the need for significant and coordinated public response. In many cases, a political decision qualifies the event as catastrophic. From an insurance standpoint, a catastrophe is considered a cumulative risk with low frequency and high intensity, making these risks very costly to insure. Insurance companies may insure against such harms by requiring payment of supplemental premiums. Some risks are excluded from coverage. These include natural disasters, like earthquakes and floods, and man-made ones, like terrorism and nuclear accidents. The legal systems covered by this report handle insurance coverage of catastrophes in three different ways: private contract, default rule excluding catastrophic risk from private contract unless otherwise agreed, or imposition of a legal obligation on insurers to cover certain risks, particularly those that are historically recurrent. National compensation funds for victims also play a role in redressing catastrophic damage. Finally, the law of torts, although better equipped to address cases of individual injury, nonetheless has a role to play under principles of negligence or intentional torts, as well as strict liability for abnormally dangerous activities.
II.A.1, Les dommages catastrophiques – responsabilité civile et assurances.
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Notes
- 1.
Moréteau, United States Report. From the Latin catastropha, can be understood as well “as a coup de théâtre, something of an unforeseen happy or unhappy event that turns the situation around at the end of a play, be it a comedy or a tragedy”.
- 2.
In most national reports the word disaster is used as a synonym of catastrophe (Bernauw/Dubuisson, Belgian Report; Chang, Taiwanese Report; Majda, Polish Report; Mendelson, Australian Report; Moréteau, United States Report; Sladič, Slovenian Report; Yonemura, Japanese Report). Others are “public calamity”, “major accident” or “mass loss” (Bernauw/Dubuisson, Belgian Report); “collective emergencies” or “national emergency” (Arbour, Canadian Report); “major risk” (Wagner, German Report), “emergency” (Mendelson, Australian Report; Novotná, Slovakian Report; Xuefeng, Chinese Report); “urgent event” (Mendelson, Australian Report), “extraordinary harms” (Kerschner, Austrian Report); “extraordinary event” (Novotná, Slovakian Report); and “serious accident” (Sinde/Veloso, P ortuguese Report). The following adjectives have been also used to qualify the term “catastrophe” or “catastrophic harm”: “major” (Bernauw/Dubuisson, Belgian Report; Moréteau, United States Report); “unexpected” (Xuefeng, Chinese Report); “huge”, “sudden”, “unexpected”, “very terrible”, “extraordinary”, “irresistible”, “unavoidable” and “tremendous” (last eight adjectives are mentioned in Majda, Polish Report; Novotná, Slovakian Report; Chang, Taiwanese Report; Xuefeng, Chinese Report).
- 3.
Lov nr. 72/1996 om petroleumsvirksomhet § 7–3.
- 4.
See also Xuefeng, Chinese Report.
- 5.
See also Yavuz, Turkish Report, according to which catastrophes are “[n]atural, technological and mankind sourced supernatural events that affect the communities by stopping and interrupting the normal life and the activities of the people which create physical, economical and social damages”.
- 6.
It is the wording of the definition of “emergency” within the Victorian Emergencies Act of 2004. See Mendelson, A ustralian Report.
- 7.
The United Nations Department of Humanitarian Affairs also defines a national disaster as an “event for which the capacity to respond is beyond the ability of the national or regional authorities alone” http://www.un.org/ha/moreha.htm (last visited June 25, 2010).
- 8.
AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 20.
- 9.
http://www.preventionweb.net/english/professional/terminology/v.php?id=475, quoted by Bernauw/Dubuisson, Belgian Report.
- 10.
Røsæg, Norwegian Report.
- 11.
Majda, Polish Report.
- 12.
Xuefeng, Chinese Report.
- 13.
Yonemura, Japanese Report .
- 14.
Sladič, Slovenian report.
- 15.
See also Section 13 (1) of the Queensland Disaster Management Act of 2003 (Australia), which defines disaster as “a serious disruption in a community, caused by the impact of an event that requires a significant coordinated response by the State and other entities to help the community recover from the disruption”. According to Section 13(2) of the same Act “serious disruption means:
-
(a)
loss of human life, or illness or injury to humans; or
-
(b)
widespread or severe property loss or damage; or
-
(c)
widespread or severe damage to the environment.”
And see Section Two of the Japanese Act on Special Financial Support to Deal with the Designated Disaster of Extreme Severity (1962), which defines “disaster of extreme severity”:
“When a disaster exerts overwhelming influence on the national economy and leaves individual victims and local governments in need of specific financial support, the disaster is designated a disaster of extreme severity by a cabinet order.”
-
(a)
- 16.
Sladič, S lovenian Report. See also Section 2 of the Turkish Code, No. 5902, regulating the Structural Formation and the Administration of Catastrophe and the Emergency Situations, which defines catastrophes as:
“[I]ncidents which stop or suspend the regular life and activities of the whole society or certain sections or require urgent response.”
And Section 3 of the Slovakian Act No. 42/1994 Coll. on civil protection of population, which defines catastrophe as:
“An extraordinary event, which leads to an augmentation of destructive factors and their subsequent accumulation caused by natural disaster or technological disaster.”
And, finally, Section 3 (1&2) of the Portuguese Law No. 27/2006, of July 3, regarding the Framework Law for Civil Defence, defines catastrophe as a:
“[S]erious accident or series of serious accidents capable of causing levels of material damage and, possibly, victims, which greatly affect living conditions and socio-economic conditions in areas of or throughout national territory.”
- 17.
See also Section 3 of the Polish Act on Natural Disasters (2002), which defines “natural disaster” as:
“[A] natural catastrophe … which causes a threat for the life or health of a great number of people, for property … or for [the] environment. In this case aid or protection may be undertaken only by introducing extraordinary means in co-operation of many authorities and specialized services.”
- 18.
See also Section 3 of the Emergency Response Act of the People’s Republic of China (August 30, 2007), which defines an “emergency event” as:
“[A] natural disaster, accidental disaster, public health event or social safety event, which takes place by accident, has caused or might cause serious social damage and needs the adoption of emergency response measures. According to such factors as degree of social damage and extent of effects, the natural disasters, accidental disasters and public health events shall be divided into four levels: especially serious, serious, large and ordinary, except as otherwise provided for by law or administrative regulation or the State Council.”
And Section 3 of the South Australia Emergency Management Act 2004, which defines emergency as “a disruption to essential services or to services usually enjoyed by the community”.
- 19.
In case of a catastrophe or calamity and a permanent support service.
- 20.
See also Section 2§1, 1° of the Belgian Act of July 12, 1976 on the compensation of certain damages caused to private property by natural catastrophes, which defines catastrophes as:
“Natural events with extraordinary force or unforeseeable violence or that have caused important losses, in particular earthquakes or landslides, tidal waves or other floods of a calamitous nature, hurricanes or other storm winds.”
And Section 6§2 of the Belgian Royal Decree of February 16, 2006 on emergency and intervention plans, which defines an emergency situation as:
“[E]very event that causes detrimental effects for social life such as serious disturbance of public safety, serious threat of human life or health or material interests, where coordination of disciplines is required to remove the threat and to limit the damaging consequences.”
- 21.
Article 1105 of the Colombian Commercial Code contains, by way of example, a list of catastrophic events that are considered catastrophic, such as civil or international war, riots, strikes, and subversive movements and volcanic eruptions, earthquakes and other convulsions of nature (Tamayo, Colombian Report).
- 22.
See Section 4.4.4. of this general report.
- 23.
- 24.
AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid, Consorcio de Compensación de Seguros, 2008), 20.
- 25.
Bernauw/Dubuisson, Belgian Report.
- 26.
Xuefeng, Chinese Report.
- 27.
Mendelson, Australian Report.
- 28.
Please note, however, that some legal systems, such as the Spanish one, might belong to more than one group.
- 29.
Tamayo, Colombian Report.
- 30.
Act n. 50 of October 8, 1980, regarding the Insurance Contract, modified by Act n. 21 of December 19, 1990 and Act n. 30 of November 8, 1995.
- 31.
Fernando Sánchez Calero, “Comentario al art. 44” in Fernando Sánchez Calero (Dir.), Ley de Contrato de Seguro. Comentarios a la Ley 50/1980, de 8 de octubre, y a sus modificaciones, 3rd ed. (Cizur Menor (Navarra): Thomson Aranzadi, 2005), 790, 788–805.
- 32.
Fernando Sánchez Calero, “Comentario al art. 44”, op. cit., 791.
- 33.
Bernauw/Dubuisson, Belgian Report.
- 34.
Dacoronia, G reek Report.
- 35.
Arbour, Canadian Report.
- 36.
Chang, Taiwanese Report.
- 37.
Moréteau, United States Report.
- 38.
Yavuz, Turkish Report.
- 39.
Since 2001, according to Section 138 of the Taiwanese Insurance Law Act all dwelling fire insurance policies must cover earthquake risk. Chang, Taiwanese Report and AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid, Consorcio de Compensación de Seguros, 2008), 155.
- 40.
Sections 102 and 103 (a) (3) Terrorism Risk Insurance Act of 2002. 15 U.S.C. § 6701 (2006). Moréteau, United States Report.
- 41.
In response to the reluctance of Australian insurance companies to insure businesses for loss or damage caused by terrorism, the Australian Terrorism Insurance Act 2003 imposed insurance coverage for damages caused to commercial property and business activities by acts of terrorism (Section 8). Mendelson, Australian Report.
- 42.
In France, terrorism risk is mandatorily included in the coverage of property and casualty polices. Section 9 of the French Act against terrorism (1986).
- 43.
Røsæg, Norwegia Report. See also AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 122–123.
- 44.
Regulation n. 300 of February 20, 2004 develops Act 7/2004.
- 45.
According to Section 6.3 of the Act 7/2004 and Section 6 of the Regulation 300/2004, damages will not be compensated by the Consortium when arising from the following events:
-
(a)
Defective condition of the insured product itself or the lack of its maintenance.
-
(b)
War and armed conflicts.
-
(c)
Events declared as a catastrophe or a national calamity by the Government because of its intensity and severity.
-
(d)
Nuclear catastrophes.
-
(a)
- 46.
The Belgian Act of April 1, 2007 introduced the compulsory coverage of terrorism risk.
- 47.
Bernauw/Dubuisson, Belgian Report.
- 48.
Yonemura, Japanese Report. See also AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 90–92.
- 49.
Section 23 Spanish Act 7/2004. See Enrique Barrero Rodríguez, El Consorcio de Compensación de Seguros, Tirant lo Blanch-Cuatrecasas, Valencia, 2000), 158–257.
- 50.
Section 8.1 of the Spanish Act 7/2004 and Section 4 Regulation 300/2004.
- 51.
AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 192–198.
- 52.
Yavuz, Turkish Report.
- 53.
AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 66–68.
- 54.
Japanese Earthquake Insurance Act of May 18, 1966. Yonemura, Japanease Report.
- 55.
Chang, Taiwanese Report. See also AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 155–156.
- 56.
Røsæg, Norwegian Report, pp. 2–3. AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 122.
- 57.
Moréteau, United States Report. AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 198–199.
- 58.
Røsæg, Norwegian Report. AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 125.
- 59.
Kerschner, Austrian Report. AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 31.
- 60.
Bernauw/Dubuisson, Belgian Report. AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 35.
- 61.
The minimum requirements for such a declaration are:
-
(a)
The exceptional nature of the natural event.
-
(b)
Minimum damage of €1,250,000 to private property in the area affected by the natural catastrophe.
-
(c)
Minimum average damage of €5,000 per individual claim.
See AA.VV, Natural Catastrophes Insurance Cover. A Diversity of Systems (Madrid: Consorcio de Compensación de Seguros, 2008), 35.
-
(a)
- 62.
Dacoronia, G reek Report.
- 63.
Chang, Taiwanese Report.
- 64.
Gesetz über die Errichtung der Stiftung “Hilfswerk für das behinderte Kind”, of 17.12.1971, BGBl. I, p. 2018. Wagner, German Report.
- 65.
Gesetz über die humanitäre Hilfe für durch Blutprodukte HIV-infizierte Personen of 24.07.1995, BGBl I, p. 972; Bekanntmachung der Satzung der Stiftung “Humanitäre Hilfe für durch Blutprodukte HIV-infizierte Personen” of 02.08.1995, Banz Nr. 157 of 22.08.1995. Wagner, German Report.
- 66.
Yonemura, Japanese Report.
- 67.
Bernauw/Dubuisson, Belgian Report.
- 68.
On the uneven performance of tort law and insurance when dealing with mass torts, see Albert Azagra Malo, Daños del amianto: litigación, aseguramiento y fondos de compensación, Fundación Mapfie, Madrid, 2011. Asbestos litigation and asbestos injuries compensation funds are the manuscript’s main case studies.
- 69.
Perhaps three outstanding examples are:
-
The Civil Protection Act of Quebec (February 2001) protects “(…) persons and property against disasters, through mitigation measures, emergency response planning, response operations in actual or imminent disaster situations and recovery operations”.
-
The Mexican Civil Protection Act (May 12 2000) regulates the national system of civil protection. According to Section 10 of the Act “[t]he aim of the National System is to protect the individual and the society in the event of a disaster caused by natural or human agency, through actions that might reduce or eliminate the loss of lives … the destruction of property, environmental damage and the disruption of the main functions of society, as well as to pursue the recovery of the population and its environment to the conditions of life they had before the disaster”.
-
The Japanese Act on Special Financial Support to Deal with the Designated Disaster of Extreme Severity (1962) provides for governmental relief in case of a “disaster of extreme severity”.
-
- 70.
Steven Shavell, Foundations of Economic Analysis of Law, (Cambridge, MA: Belknap Press of Harvard University Press, 2004), 281–282.
- 71.
Section 45 of the Spanish Insurance Contract Act n. 50/1980, October 8.
- 72.
Sections 7-6, 7-7 and 7-8 of the Norwegian Insurance Act n. 69/1989.
- 73.
Section 65 of the Insurance Act of People’s Republic of China (2009).
- 74.
Section 115 (1) (No. 1) of the German Insurance Contract Act (2008).
- 75.
Section 16 of the Japanese Automobile Liability Security Act (1955).
- 76.
Poddighe, Italian Report.
- 77.
- 78.
Christian Lahnstein, “Catastrophes, Liability and Insurance,” Connecticut Insurance Law Journal 9 (2002–2003):443–445.
- 79.
Novotná, Slovakian Report.
- 80.
Sinde/Veloso, P ortuguese Report.
- 81.
Mendelson, Australian Report.
- 82.
Dan B. Dobbs, The Law of Torts (St. Paul, MN: West Group, 2000), 1058.
- 83.
Yonemura, Japanese Report.
- 84.
Moréteau, United States Report.
- 85.
Wagner, German Report.
- 86.
John G. Fleming, “Mass Torts”, The American Journal of Comparative Law 42 (1994): 507–508.
- 87.
Gesetz über die Errichtung der Stiftung “Hilfswerk für das behinderte Kind”, of 17.12.1971, BGBl. I, p. 2018. Wagner, German Report.
- 88.
Pablo Salvador Coderch and Antoni Rubí Puig, “Causas de exoneración de la responsabilidad: excepción por riesgos de desarrollo”, in Pablo Salvador Coderch and Fernando Gómez Pomar (editors) Tratado de responsabilidad civil del fabricante, Civitas, Madrid, 2008, pages 585–593.
- 89.
The Judgement of Niigata District Court on September 29, 1971 and the Judgement of Kumamoto District Court on March 20th, 1973. Yonemura, Japanese Report.
- 90.
The Act on Compensation of Pollution-Related Health Damage, 1973; The Act on Punishment of Crime to Cause Pollution Harmful for Human Health, 1970; The Air Pollution Control Act, 1968; The Water Pollution Control Act, 1979; The Basic Act for Environmental Pollution Control, 1970. Yonemura, Japanese Report.
- 91.
See Nicholson, W. J., G. Perkel, and I. J. Selikoff, “Occupational Exposure to Asbestos: Population at Risk and Projected Mortality 1980–2030,” American Journal of Industrial Medicine 3 (1982): 259–311.
- 92.
Joan C. Seuba Torreblanca, Sangre contaminada, responsabilidad civil y ayudas públicas (Madrid: Civitas, 2002), 74.
- 93.
Editorial, “Has the World Forgotten Bhopal?,” Lancet 356 (2000): 1863.
- 94.
Moréteau, United States Report.
- 95.
Mendelson, A ustralian Report.
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Appendix
Appendix
4.1.1 Questionnaire on Catastrophic Harms
-
I.
Harms and catastrophes: defining “catastrophic harms”
-
1.
May we ask you, please, to provide us with a generic definition of “catastrophic harms” well suited to your own legal culture?
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1.
-
II.
Catastrophic harms and statutory law
-
2.
Please specify the main legal requirements present in your own legal systems to construct the concept of legally relevant catastrophic harms.
-
2.
-
III.
Insurance System
-
3.
Is an event of catastrophic harm, which may severely affect the company or eliminate it, contemplated somehow by insurance policies, or even by statutory law?
-
4.
Does your national legal system distinguish between damages covered by insurance policies and those that are legally excluded?
-
5.
Even if some catastrophic damages may be legally covered by insurance policies, which are the events more commonly excluded by standard forms of insurance policies in your own jurisdiction?
-
6.
Does your country have any legally established fund covering, among others, extraordinary risks? If so, or if there is more than one, please list the most relevant three, adding short comments about contributors, amount of contribution, management and coverage.
-
7.
How do the levels of risk concentration and risk magnitude translate into insurance policies and rates? When answering, please consider which levels make reinsurance or coinsurance a good practice, and the existence of compulsory reinsurance or coinsurance or similar meaningful features you think may be of interest.
-
8.
How does your system distinguish between sudden accidents and long term risks? If so, please, provide us with a very short list of statutory or case law defining latency and distinguishing between sudden accidents and long term risks.
-
9.
Please describe new statutes, if any, in your legal systems triggered by global catastrophes, as the above-mentioned ones, and any new statutes driven by national or local events?
-
10.
Was legal change triggered by case law itself? If so, please cite the leading cases?
-
3.
-
IV.
The Law of Torts
-
11.
Do “catastrophic harms” generate criminal, administrative, civil or labor liability? If so, what are the main legal sources or the leading case law?
-
12.
Do administrative fines or criminal punishment preempt civil claims?
-
13.
Which standard of liability governs catastrophic harm claims?
-
14.
Are co-injurers jointly, severally or joint and severally liable? If there is a joint and several liability standard, is there a right to contribution and, if so, how is it regulated?
-
15.
Are class actions regulated in your procedural system? If so, please provide brief details of their main features?
-
16.
May the victims or their estates sue the insurance company directly (direct action)? If so, please cite the relevant statute.
-
17.
According to the Collateral Source Rule and if the law does not provide otherwise, any amount of compensation paid to the victim or their estates is not to be taken into account to decrease the liability of the injurer. How is this rule applied in your legal system?
-
18.
Is the State of the Art Defense (Risk of Development) regulated by your own jurisdiction? Is it generally accepted as a defense? Is it excluded for some economic activities or public sectors?
-
11.
-
V.
Regulatory Agencies and Liability
-
19.
If victims have a tort claim, must they wait until a regulatory agency decision is taken or reviewed, or can victims merge their tort claims with general administrative proceedings? If so, please provide a short list of relevant legal sources and case law.
-
20.
Is there a general preemption clause in your own legal system? Are there specific preemption clauses?
-
19.
4.1.2 List of National Reporters
Country | National reporter |
|---|---|
Australia | Danuta Mendelson, Deakin University |
Austria | Ferdinand Kerschner, Universität Wien |
Belgium | Bernard Dubuisson, Université Catholique de Louvain |
Kristiaan Bernauw, University of Gent | |
Canada | Marie-Ève Arbour, Université Laval (Quebec) and Università del Salento (Italy) |
Colombia | Javier Tamayo Jaramillo, Javier Tamayo Jaramillo & Asociados |
China | Zhou Xuefeng, China-EU School of Law, Beihang University School of Law |
Germany | Gerhard Wagner, Universität Bonn |
Greece | Eugenia Dacoronia, National and Kapodistrian University of Athens |
Italy | Elena Poddighe, Università degli Studi di Sassari |
Japan | Shigeto Yonemura, Tohoku University |
Mexico | Fernando Hegewisch Díaz Infante; Hegewisch Abogados, S.C. |
Norway | Erik Rosaeg, Scandinavian Institute of Maritime Law |
Poland | Rafal Majda, Université de Lódź |
Portugal | Jorge Sinde Monteiro and Maria Manuel Veloso Gomes, University of Coimbra |
Slovakia | Marianna Novotná, University of Trnava |
Slovenia | Jorg Sladič, Law Firm Sladič – Zemljak |
Taiwan | Kuan-Chun Chang National Chengchi University |
Turkey | Cevdet Yavuz, Marmara Universitesi |
United Sates | Olivier Moréteau, Louisiana State University |
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Coderch, P.S., González, S.R., Rafel, R.M. (2012). Catastrophic Damages: Liability and Insurance. In: Brown, K., Snyder, D. (eds) General Reports of the XVIIIth Congress of the International Academy of Comparative Law/Rapports Généraux du XVIIIème Congrès de l’Académie Internationale de Droit Comparé. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2354-2_4
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