Aggregation and Divisibility of Damage Tort and Insurance Law

W


Tort and Insurance Law
Vol. 26
Edited by the

European Centre of Tort
and Insurance Law
together with the

Institute for European Tort Law
of the Austrian Academy of Sciences


Ken Oliphant (ed.)
Aggregation and Divisibility of Damage
With Contributions by
Ewa Bagińska
Andreas Bloch Ehlers
Attila Fenyves
Suzanne Galand-Carval
Israel Gilead
Michael D. Green
Brooks M. Hanner
Ernst Karner
Christian Lahnstein
Richard Lewis

Attila Menyhárd

Alberto Monti
Ken Oliphant
Olaf Riss
Albert Ruda
Joseph Solé Feliu
Marlene Steininger
Thomas Thiede
Gerhard Wagner

SpringerWienNewYork


European Centre of Tort and Insurance Law
Reichsratsstraße 17/2
1010 Vienna, Austria
Tel.: +43 1 4277 29650
Fax: +43 1 4277 29670
E-Mail:

Austrian Academy of Sciences
Institute for European Tort Law
Reichsratsstraße 17/2
1010 Vienna, Austria
Tel.: +43 1 4277 29651
Fax: +43 1 4277 29670
E-Mail:
This work is published with the financial support of the
Austrian Ministry of Education, Science and Culture,
the European Commission and Munich Re.
The sole responsibility lies with the authors, the above-mentioned sponsors are not

responsible for any use that may be made of the information contained herein.
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ISBN 978-3-211-92208-8 SpringerWienNewYork


Preface
Whether the harm for which compensation is sought in an action in tort is
regarded as a single indivisible loss or a plurality of losses can have a number
of important ramifications. If there are several losses, it may be that more than
one of the claimant’s interests is affected and that only some of his losses are
considered to be recoverable damage. Whether or not consequential loss is
regarded as an independent harm, to be addressed separately, or as part of the
whole damage also bears upon this question of recoverability, as well as upon
the application of statutes of limitation of action. Where there exist liability

caps and minimum damage thresholds, the question may arise whether these
apply once only, to the whole of the claim, or to each of several different components of the overall claim. A plurality of losses may also be reflected in the
application of the laws of contributory negligence.
These problems relating to the divisibility of damage may be particularly
pressing in cases where there are multiple claimants or multiple defendants.
If two or more claimants have rights over the same damaged property (e.g. as
joint owners or as owner and licensee), whether they are regarded as having
suffered the same loss or independent losses may have implications for the
claims they can bring. Conversely, if two or more defendants concurrently injure a single claimant, how their individual liability is determined may turn (at
least in part) on whether the claimant’s injury is considered a single indivisible
harm or a plurality of losses. A number of more specific questions arise here in
respect of joint (or “solidary”) liability.
To deal with problems relating to the proof of causation in mass tort scenarios – where, for example, it is clear that several independent wrongdoers
have injured numerous different people, but it proves difficult or impossible
to establish a causal nexus between individual defendants and individual
claimants – some jurisdictions have developed exceptional rules which allow for the imposition of liability on the basis of the defendant’s creation
of a risk, whether or not it can be shown that the risk eventuated and caused
harm. In English law, the Fairchild decision (Fairchild v Glenhaven Funeral
Homes Ltd [2002] UKHL 22) provides an example, as does the theory of
“market share” liability developed in the United States. What is considered
the nature of the damage in such cases, and whether or not it is divisible, are
crucial questions.
Questions relating to the divisibility of damage also arise in relation to the
conflict of laws. If a single wrongful act or omission causes several losses in


VI

Preface

different jurisdictions, could this mean that a different tort law is applied to
each several loss? In what circumstances might effects experienced in different
jurisdictions be regarded as merely aspects of the same indivisible loss, and
what would be the implications in private international law?
Additionally, the divisibility of damage may have implications from the
point of view of civil procedure, for example, in determining which national
courts have jurisdiction, the appropriate forum within that jurisdiction, and
the recovery of costs. Another issue here is whether a final judgment in, or
settlement of, proceedings brought in respect of a given wrongful act or omission has the effect of barring subsequent claims in the event that the claimant
should suffer further harm. Modern procedural forms which allow class or
representative actions by or on behalf of multiple individuals may also require
the court to consider the divisibility of the damage suffered.
These issues arising in respect of substantive and procedural tort law are
mirrored by a set of issues relating to insurance law and practice, where the
question whether the damage consists in a single loss, or a set of distinct losses,
arises most clearly in the application of caps and deductibles. But even distinct
losses may be aggregated, and so subject to a single cap or deductible, by the
use of such devices as aggregate limits and claims series clauses.
The aggregation and divisibility of damage are therefore phenomena that
can be identified in both tort law and insurance, and study of the different approaches and techniques applied provides an opportunity to explore on multiple levels the complex interactions between the two domains.
This project deals with issues of aggregation and divisibility on a wideranging basis, covering tort law, procedural law and insurance. It takes a
comparative approach, with country reports from 11 national perspectives
structured around a common questionnaire. These are supplemented by three
special reports from the perspectives of the conflict of laws, the economic
analysis of law and insurance. There follow a comparative summary and a set
of concluding reflections. The twin aims of the study are to provide illumination about fundamental but somewhat overlooked issues relating to the basic
legal concept of damage – specifically, issues concerning the question: one
loss or several losses? – and to explore the interrelationship of tort law and
insurance in a wholly new context.
The project was initially suggested by our long-time friend and supporter, Christian Lahnstein of Munich Re, who also contributed a special

report for this volume. I would like to express my gratitude to Munich Re,
and also the Austrian Ministry of Education, Science and Culture and the
European Commission, for their support of this project. A first draft of the
Questionnaire was prepared by o. Univ.-Prof. i.R. Dr. Dr. h.c. Helmut Koziol,
whose contribution I gratefully acknowledge. It was he who persuaded me
to act as project leader in this difficult and challenging, but innovative and
ultimately rewarding investigation. The project could not have been completed without the considerable efforts of many members of ECTIL/ETL
staff, amongst whom I must particularly highlight Mag. Marlene Steininger,
who discharged her responsibilities as project assistant extremely effectively, and Donna Stockenhuber M.A., for her very thorough copy-editing. I


Preface

VII

would also like to thank Dr. Olaf Riss, Mag. Kathrin Strobach-Karner, Fiona Salter-Townsend LL.B., LL.M. and Stuart David Wallace LL.B., LL.M.
for their contributions.
Ken Oliphant
Vienna, September 2009


Table of Contents
Questionnaire ................................................................................................. 1
COUNTRY REPORTS.......................................................................................... 11
Aggregation and Divisibility of Damage in Austria: Tort Law
(Ernst Karner/Olaf Riss) ................................................................................ 13
I.
General ............................................................................................. 13
II. Liability for Damage........................................................................ 14
III. Procedural Aspects........................................................................... 36

Aggregation and Divisibility of Damage in Austria: Insurance
(Attila Fenyves) .............................................................................................. 51
IV. Insurance Aspects ............................................................................ 51
Aggregation and Divisibility of Damage in Denmark: Tort Law and
Insurance
(Andreas Bloch Ehlers) .................................................................................. 63
I.
General ............................................................................................. 63
II. Liability for Damage........................................................................ 63
III. Procedural Aspects........................................................................... 78
IV. Insurance Aspects ............................................................................ 87
Aggregation and Divisibility of Damage in England and Wales:
Tort Law
(Ken Oliphant) ............................................................................................... 95
I.
General ............................................................................................. 95
II. Liability for Damage........................................................................ 95
III. Procedural Aspects......................................................................... 116
Aggregation and Divisibility of Damage in England and Wales:
Insurance
(Richard Lewis) ............................................................................................ 125
I.
Introduction.................................................................................... 125
II. Specific Questions in Part IV of the Questionnaire ....................... 126
III. Conclusion ..................................................................................... 141


X

Table of Contents

Aggregation and Divisibility of Damage in France:
Tort Law and Insurance
(Suzanne Galand-Carval) ............................................................................ 143
I.
General ........................................................................................... 143
II. Liability for Damage...................................................................... 144
III. Procedural Aspects......................................................................... 158
IV. Insurance Aspects .......................................................................... 166
Aggregation and Divisibility of Damage in Germany:
Tort Law and Insurance
(Gerhard Wagner) ........................................................................................ 175
I.
General ........................................................................................... 175
II. Liability for Damage...................................................................... 178
III. Procedural Aspects......................................................................... 198
IV. Insurance Aspects .......................................................................... 210
Aggregation and Divisibility of Damage in Hungary:
Tort Law and Insurance
(Attila Menyhárd) ......................................................................................... 221
I.
General ........................................................................................... 221
II. Liability for Damage...................................................................... 227
III. Procedural Aspects......................................................................... 242
IV. Insurance Aspects .......................................................................... 249
Aggregation and Divisibility of Damage in Israel:
Tort Law
(Israel Gilead).............................................................................................. 255
I.
General ........................................................................................... 255

II. Liability for Damage...................................................................... 256
III. Procedural Aspects ........................................................................ 269
Aggregation and Divisibility of Damage in Italy:
Tort Law and Insurance
(Alberto Monti) ............................................................................................ 275
I.
General ........................................................................................... 275
II. Liability for Damage...................................................................... 276
III. Procedural Aspects......................................................................... 284
IV. Insurance Aspects .......................................................................... 289
Aggregation and Divisibility of Damage in Poland:
Tort Law and Insurance
(Ewa Bagińska) ............................................................................................ 295
I.
General ........................................................................................... 295
II. Liability for Damage...................................................................... 296
III. Procedural Aspects......................................................................... 316
IV. Insurance Aspects .......................................................................... 322


Table of Contents

XI

Aggregation and Divisibility of Damage in Spain:
Tort Law and Insurance
(Albert Ruda/Josep Solé Feliu) .................................................................... 331
I.
General ........................................................................................... 331
II. Liability for Damage...................................................................... 333

III. Procedural Aspects......................................................................... 352
IV. Insurance Aspects .......................................................................... 370
Aggregation and Divisibility of Damage in the United States:
Tort Law and Insurance
(Michael D. Green/Brooks M. Hanner) ....................................................... 379
I.
General ........................................................................................... 379
II. Liability for Damage...................................................................... 380
III. Procedural Aspects......................................................................... 397
IV. Insurance Aspects .......................................................................... 413
THEMATIC REPORT ........................................................................................ 425
Aggregation and Divisibility of Damage From the
European Conflict of Laws Perspective
(Thomas Thiede) .......................................................................................... 427
I.
Preliminary Remarks ..................................................................... 427
II. International Jurisdiction ............................................................... 430
III. Applicable Law .............................................................................. 436
IV. Conclusion ..................................................................................... 447
Introduction to Economic Analysis of Loss Division
(Israel Gilead).............................................................................................. 449
I.
The Question: When is Loss Division Efficient? .......................... 449
II. Division of Loss and Efficient Deterrence .................................... 449
III. Division of Loss and Efficient Loss-Spreading ............................. 461
IV. Division of Loss and Reduction of the Administrative
Costs of Litigation ......................................................................... 463
V. On the Interrelations between the Three Aspects
of Loss Division ............................................................................. 464
VI. Conclusion ..................................................................................... 464

Aggregation and Divisibility of Damage: Insurance Aspects
(Christian Lahnstein) ................................................................................... 465
I.
Aggregation of Damage ................................................................ 465
II. Divisibility of Damage .................................................................. 468
COMPARATIVE ANALYSIS ................................................................................ 471
Aggregation and Divisibility of Damage in Tort Law and Insurance:
Comparative Summary
(Ken Oliphant/Marlene Steininger) ............................................................. 473
I.
General ........................................................................................... 473
II. Liability for Damage...................................................................... 474


Table of Contents

XII

III.
IV.

Procedural Aspects......................................................................... 495
Insurance Aspects .......................................................................... 509

Concluding Reflections on the Aggregation and Divisibility of Damage in
Tort Law and Insurance
(Ken Oliphant) ............................................................................................. 519
I.
Introduction.................................................................................... 519
II. Aggregation and Divisibility in Insurance ..................................... 522

III. Aggregation and Divisibility in Tort .............................................. 528
IV. Conclusions.................................................................................... 543
Contributors ............................................................................................... 547
Index ............................................................................................................ 557
Publications ................................................................................................ 563


Questionnaire
I.

General

1. Does your legal system have general rules, whether statutory or case-law,
which regulate the categorisation of harm as a single indivisible loss or a
plurality of losses? Have such rules been proposed in the secondary legal literature? Does the distinction have any significance in practice?
II. Liability for Damage
A. Recoverability of Divisible and Indivisible Losses
2. In your national tort law, is liability for damage addressed separately for
different parts of the overall loss where different protected interests are affected (e.g. interference with the person or interference with property; pecuniary damage or non-pecuniary damage) even if the harm resulted from the
same tortious conduct by the same tortfeasor? If the requirements for liability
have to be addressed separately for each kind of loss, how might this affect the
tortfeasor’s liability?
3. CASE STUDY (different kinds of loss; contributory negligence) P is injured,
and his glasses are broken, in a traffic accident negligently caused by D. P
claims compensation for a) pain and suffering b) medical expenses and c)
his broken glasses. Is P’s harm regarded as a single indivisible loss or as a
plurality of independent losses? Assuming P had not fastened his seat belt,
how is his contributory negligence taken into account with regard to each of
the three categories of his damage?If there are differences in the effect of the
contributory negligence depending on the kind of loss suffered, how are these

justified?
4. In your national tort law, are there cases other than in respect of personal
injury where the requirements for liability have to be addressed separately for
each different kind of loss even though the harm resulted from a single tortious
act or omission?


2

Questionnaire

B. Recoverability of Consequential Loss
5. Please state how consequential loss is defined in your national tort law. Is
consequential loss regarded as an independent harm that has to be addressed
separately or as part of the overall damage, meaning that there is no need
to re-consider the requirements for liability found to have been satisfied in
respect of the “primary loss”? Where is the line drawn between several independent losses and a consequential loss?
6. CASE STUDY (consequential loss; contributory negligence) P’s right hand is
injured in a traffic accident negligently caused by D. Consequently, P is unable to pursue his career as a piano teacher for six weeks. P thus sustains loss
of earnings. Assuming that P himself acted negligently and that his negligence
contributed to his pain and suffering, but it did not have any effect on his ability to work and therefore on his loss of earnings, to what extent is D liable
for a) P’s pain and suffering and b) his loss of earnings? In the instant case,
is loss of earnings regarded as an independent loss that has to be addressed
separately?
7. CASE STUDY (consequential loss; statute of limitation) In January 2000 D
breaks into the production hall of P Company, which manufactures computer
equipment. He damages some high-tech components which have been prepared for delivery to other manufacturers. Since the break-in and the damage
caused by D are not noticed immediately by P Company staff, some of the
damaged computer equipment is sent to different manufacturers (A, B, and
C) without having been repaired adequately prior to dispatch. Consequently,

P has to pay damages to his customer A. After successfully claiming recourse
from D in January 2002, P is sued for damages by his customer B and in January 2003 by C. Are the payments to B and C regarded as consequential losses
that are part of the overall damage caused by D, or as independent losses that
have to be addressed separately? What are the commencement dates for the
limitation periods applying to P’s recourse actions in respect of his payments
to A, B, and C?
8. In your national tort law, are there any other cases not previously mentioned
where it may be decisive whether a harm is regarded as a consequential loss,
and therefore only part of the “primary loss”, or as an independent harm
caused by the same tortious act or omission?
C. Liability Caps and Minimum Thresholds
9. Please state when, if at all, liability for damage is capped in your national
tort law. In such cases, are there statutory provisions or case-law principles
which deal with the issue of whether the consequent damage is a single indivisible loss – in which case the tortfeasor’s overall liability is capped by the
maximum amount – or a plurality of several independent losses, for each of
which the tortfeasor is liable up to the maximum amount?


Questionnaire

3

10. Please state when, if at all, the victim has to bear a minimum threshold of
loss himself in your national tort law. In such cases, are there statutory provisions or case-law principles which deal with the issue whether the damage is a
single indivisible loss – so that the victim has to bear the below-the-threshold
loss only once – or a plurality of several independent losses, with the threshold
therefore applied several times over?
11. CASE STUDY (minimum threshold in product liability) A short circuit in the
electric system causes a fire in P’s parked car which completely burns out. The
fire also destroys P’s golfing equipment that was stored in the car boot, and

his car telephone system. P claims compensation from the manufacturer on the
basis of the latter’s liability for defective products. Is the whole damage – to
the vehicle’s telephone system, the vehicle itself and the golfing equipment – to
be treated as a single indivisible loss or as a plurality of independent losses?
The EC Product Liability Directive prescribes a minimum threshold in respect
of claims for property damage. Would separate thresholds apply to each loss
– i.e. P’s car, the car telephone system, and the golfing equipment – or would
a single threshold apply to the whole amount? Could one even argue that the
damage to the golf bag and the damage to the golf clubs are to be regarded as
independent losses?
12. Which criteria are decisive in establishing liability caps and minimum
thresholds in your national tort law? Consider, in particular, the following: the
kind of loss (e.g. personal injury or damage to property); the form of liability
(e.g. fault-based liability or strict); the personal attributes of the victim or the
tortfeasor (e.g. employee, minor, professional); other criteria (e.g. compensation by annuities or by lump-sum). If the law recognises such distinctions,
could one argue that the loss sustained by the victim in consequence of a single
tortious act or omission has to be regarded as a plurality of separate losses,
some of them subject to liability caps or minimum thresholds, and some of
them not?
D. Plurality of Losses
13. When property jointly owned by two or more parties is damaged, is the
harm resulting from such damage considered to be a plurality of several independent losses sustained by each person whose rights have been infringed?
14. CASE STUDY (joint ownership) P1 and P2 are joint owners of a building that
has been destroyed by a malicious arson attack by D. Is the harm sustained by
P1 and P2 regarded as a single indivisible loss or as two losses sustained by
P1 and P2 independently, and what are the consequences of the chosen classification?
15. CASE STUDY (ownership and right of use) P1 owns wooded land over which
P2 has acquired the prescriptive right to collect timber. D negligently causes
a fire which destroys the wood. Is the harm suffered by P1 and P2 regarded as

Questionnaire

4

a single indivisible loss or as two independent losses, and what are the consequences of the chosen classification?
E. Plurality of Losses and Multiple Tortfeasors
16. Under what conditions is it assumed that multiple tortfeasors have jointly
caused a single harm to the victim? Under what conditions is it assumed that
multiple tortfeasors have caused independent losses to a single claimant that
have to be addressed separately? What are the prerequisites of joint liability
for harm caused by multiple tortfeasors? Could one argue that there are several independent losses caused by different tortfeasors, but that the tortfeasors
are jointly and severally liable for the entire loss at the same time?
17. CASE STUDY (joint and concurrent liability) D1, D2, and D3 plan to rob a
couple, E and F. D1 will wait in the car and is responsible for their getaway.
D2 will use his gun to keep the couple under control and take the money from
E, while D3 will take the jewellery which F is wearing. D1, D2 and D3 agree to
use force if it appears necessary. As a result of E defending himself against D2,
the latter fires his gun, injuring E who subsequently claims compensation for
medical expenses and pain and suffering. F claims restitution of her jewellery
and, as it was damaged in the fracas, the cost of repairs. In the instant case,
is there considered to be one overall loss which is attributable to each of the
tortfeasors to the same extent or are there several independent losses, each attributable to a different tortfeasor? To what extent are D1, D2 and D3 liable?
18. CASE STUDY (personal injury was explicitly excluded) Assuming the same
facts as above, is the case treated differently if D1, D2 and D3 initially agreed
not to use force, but D2 nevertheless fired his gun when E failed to comply with
his orders? In this case, does D2 bear exclusive responsibility for E’s injury, or
can D1 and D3 also be held liable for it on the basis that there is one overall
loss that is attributable to each of the tortfeasors to the same extent?
F.

Divisibility of Damage and Causal Indeterminacy

19. To deal with problems relating to the proof of causation – especially in
mass tort scenarios – some jurisdictions have developed exceptional rules
which allow for the imposition of liability on the basis of the defendant’s creation of a risk, whether or not it can be shown that the defendant’s conduct was
a “but for” cause (sine qua non) of the victim’s injury. Does your national tort
law recognise such rules? If so, what exactly is considered to be the loss the
victim has sustained?
20. CASE STUDY (exposure to risk from multiple sources) V has worked in successive periods of employment with D1, D2 and D3. In each of these periods
of employment, he was exposed to asbestos through his employer’s negligence.
He has recently been diagnosed as suffering from mesothelioma, severely reducing his life expectancy, as a consequence of his employment-related as-


Questionnaire

5

bestos exposure. Mesothelioma is not a disease of degree (unlike asbestosis)
and the additional exposure does not contribute to its severity. The scientific
evidence does not show whether the mesothelioma resulted from asbestos exposure in any single period of employment, or cumulatively from exposure in
different periods of employment. Can D1, D2 and D3 be held liable in your
national tort law? If so, is V considered to have sustained a single indivisible
loss or a plurality of different losses?
21. In the so-called DES cases, some American courts held several defendants
liable even though their causal responsibility for the claimant’s injury was not
established in the way that would ordinarily be required. These cases dealt
with a plurality of both tortfeasors and victims. While it was not possible to
prove which tortfeasor had harmed which victim, liability was imposed upon
each defendant for a percentage represented by that defendant’s share of the

DES market (market share liability). Under your national tort law, would such
a liability model be suitable? If so, please address on the basis of the following
case what exactly is regarded as the loss sustained.
22. CASE STUDY (market share liability) D1, D2, and D3 are pharmaceutical
manufacturers producing drugs which are based on the same chemical agent
and distributed in state A. Years after bringing the drug onto the market it
turns out that the agent used in the drugs causes cancer. P is one of thousands
of victims who, like all the others, is unable to show which manufacturer’s
product (D1, D2, or D3) he has been ingesting. According to the market share
theory, however, P can claim compensation from each of them (D1, D2, and
D3) though limited by the market share of the specific manufacturer in state A.
If this market share model is applicable under the tort law provisions of your
country, what is regarded as the loss for which each manufacturer is liable?
Is this loss scenario regarded as a single indivisible loss or as a plurality of
independent losses?
III. Procedural Aspects
A. Jurisdiction
23. Under the procedural laws of your country, can the place of the harmful
conduct or the place where the harm occurred be decisive for the question of
which courts have jurisdiction? How are cases addressed when harmful conduct causes different losses in different places? Could compensation for all the
losses be claimed before one court even though the harm occurred in different
jurisdictional areas? If so, would the entire harm be regarded as a single indivisible loss or as a plurality of independent losses?
24. CASE STUDY (national jurisdiction; place where the loss occurred) In the
jurisdictional area of court W, D poisons P’s food. This food is fed to P’s dog
in the jurisdictional area of court X. Consequently, the dog starts to vomit
while in the jurisdictional area of court Y and makes a mess of P’s car. In the


6

Questionnaire

jurisdictional area of court Z, P himself consumes the poisoned food and consequently suffers stomach cramps and nausea. Before which court can P sue
for compensation in respect of his losses (messed-up car, pain and suffering,
loss of earnings)? Can all the claims be filed before the same court?
B. Value of the Claim
25. Is the value of the claim at all decisive in respect of procedural aspects of
the claim (e.g. with regard to attorney fees, court fees, admissibility of legal
remedies, or court jurisdiction, or for any other reason)? If so, could there be
different results when claims arising out of a single tortious act or omission
are split up and filed separately? What difference (if any) does it make whether
the harm sustained is regarded as a single indivisible loss or a plurality of
losses?
C. Legal Effect of Prior Court Decisions and Settlements
26. Where a claim has been litigated and a final court judgment has been
handed down, to what extent is the claimant barred from suing in respect of
further harm arising from the same tortious act or omission? Is it decisive
whether the loss that is the object of the later claim is regarded as part of the
loss already addressed by the court or as an independent loss?
27. CASE STUDY (prior decision) P’s car is damaged in a traffic accident negligently caused by D. P successfully sues D for the cost of a respray. After judgment, it turns out that it was not only the car’s paintwork that was damaged in
the accident, but also the engine. Is P barred from bringing a second claim for
compensation in respect of the damage to the engine? Is the damaged engine
regarded as part of the loss already addressed by the court or as an independent harm?
28. CASE STUDY (prior decision and contributory negligence) On the same facts
as above, whilst addressing P’s compensation claim for the cost of the respray,
the court holds that P was contributorily negligent and reduces the damages
by half. Would the court hearing the subsequent claim for the damage to the
engine be bound by the earlier court’s finding of contributory negligence? Is
the damaged engine regarded as an independent loss that has not yet been
addressed by the court, with the consequence that the earlier decision is not

binding on the later court?
29. CASE STUDY (legal effect of settlement) Again assuming the same facts, except that P’s initial claim is settled out of court rather than being resolved
judicially, is P barred from pursuing the second claim by the fact of the earlier
settlement? If not, is an agreed reduction in the compensation for reasons of
contributory negligence binding in the second claim? Is it significant whether
the harm sustained is regarded as a single indivisible loss or a plurality of
losses?


Questionnaire

7

D. Class and Representative Actions, Test Cases, Mass Torts
30. In your national legal system, what kinds of procedural mechanisms allow
compensation claims by several different claimants to be combined before a
single court? If different claims are combined, are they considered to relate to
a single indivisible loss or to a plurality of losses?
31. What are the prerequisites of a class action (or its nearest equivalent) in
your national legal system? Please give examples of the use of class actions
in tort cases in your country. What are the differences between claiming compensation by means of a class action and compensation claims filed by each
victim separately? If a victim is not satisfied by the judgment delivered by the
court in a class action, can he bring an independent action on his own if a) he
had previously been party to the class action, and b) he had never been party
to the class action? What is the legal effect of a judgment in a class action? If
a group of claimants sues for compensation by class action, does it lead to the
aggregation of each claimant’s injuries so that they are regarded as a single
indivisible loss?
32. Under what conditions may an action (“a representative action”) be
brought by a consumer protection association on behalf of a group of persons

affected by the same tortious conduct? Please give examples of the use of representative actions in tort cases in your country. What are the legal effects of
a judgment delivered in such proceedings on compensation claims brought by
each victim independently? If an individual victim is not satisfied by the court’s
decision in the consumer action, can he pursue his own claim independently?
Is the harm sustained by each victim regarded as an independent loss though
it has been addressed by the court within the framework of the representative
action?
33. Do the procedural laws of your country provide any other mechanisms (e.g.
test cases) for combining a number of different compensation claims before the
same court? What preconditions must be met? In particular, is a specific link
(legal connection) required between each of the losses alleged? What legal
consequences flow from the combination of different compensation claims by
such mechanisms?
34. CASE STUDY (railway accident) A train operated by D Company derails on
a high speed line, injuring 100 of those on board. The victims have different
legal relationships to D Company. Some were paying passengers, some were
travelling gratuitously, and others had no permission to be on board. Is it
possible to combine the compensation claims of the victims through a) a class
action, b) a representative action, or c) any other procedural mechanism? If
several claims are combined and addressed in the same proceedings, is the
harm sustained by each victim regarded as part of a single indivisible loss or
as an independent loss amongst a plurality of losses?


Questionnaire

8

IV. Insurance Aspects
A. Caps and Deductibles

35. In your national legal system, are there statutory principles or have the
courts developed general principles that address the issue of whether a damage event is considered to be a single incident, in which case it is the insurer’s
overall liability that is limited by any applicable cap, or a plurality of several
independent losses, in which case the cap applies to each, leaving the insurer
to pay up to the specified sum for each one? Alternatively, is this issue addressed by standard clauses used in contracts of insurance?
36. CASE STUDY (building insurance and insurance cap) P is the owner of factory
premises consisting of several buildings which he has insured against harm
resulting from severe weather conditions. The insurer’s liability is capped at
€ 500, 000 per damage event. During a thunderstorm that lasts several hours,
two of the buildings are struck by lightning and both are completely burnt
down. Each of the buildings was worth € 300,000. What is the insurer’s obligation to pay for the damage under the policy?
37. In your national legal system, have the courts developed general principles
that address the issue of whether a damage event is considered to be a single
incident, in which case the insured has to bear any stipulated deductible only
once, or a plurality of several independent losses, in which case the deductible
applies to each, leaving the insured to bear the amount several times? Alternatively, is this issue addressed by standard clauses used in contracts of insurance? If third-party insurance is required by law, would this have any effect on
the legality of a deductible?
38. CASE STUDY (auditors’ liability) P, an independent auditor engaged by X Ltd
to certify its accounts, is asked by X Ltd to meet with two potential investors in
the company, A and B. At the meeting, P vouches for the company’s financial
well-being. In consequence, A and B make large purchases of shares in X Ltd.
It transpires that P negligently misrepresented the value of the company to
the investors. A and B consequently suffer economic losses which they seek
to recover as damages from P. In principle, their losses are covered by P’s
professional indemnity insurance, but according to the terms of the policy the
insured has to bear a deductible of € 5,000 per damage event. In the instant
case, does P have to bear the deductible amount only once or with regards to
both claims?
B. Other Limits on the Amount of Cover
1.

Aggregate limit clauses

39. In your country, do standard-term insurance policies use aggregate limit
clauses whereby the liability of the insurer is capped by a maximum amount


Questionnaire

9

per specified period? If so, please give examples of how these clauses are
worded and how they are interpreted, paying particular regard to the issue of
whether a damage event is considered to be a single indivisible loss (therefore
falling into only one period) or a plurality of losses (potentially falling into
several different periods).
2.

Claims series clauses

40. In your country, do standard-term insurance policies use claims series
clauses whereby several independent damage events are treated as a single
damage event (a single series) which is subject to a single liability cap? If
so, please give examples of how these clauses are worded and how they are
interpreted. Please state in particular what criteria are used for distinguishing
between several independent damage events and a single damage series.
3.

Long tail damage

41. In your country, do standard-term insurance policies use clauses whereby
the liability of a former insurer is limited to a specified period of time after the
end of the insurance contract? If so, please give examples of how these clauses
are worded and how they are interpreted. What is considered to be the starting
point for the relevant limitation period (e.g. the date on which the insurance
contract ended, the date of the insured’s negligence or the date on which the
damage was sustained)? In this context, where is the line drawn between several independent damage events and a single damage event?
42. CASE STUDY (long tail damage) P Company develops, manufactures and distributes motor equipment, including fuel pumps. As the result of a design fault
in the pumps, the fuel supply of motor vehicles in which they are incorporated
is often interrupted without warning. Assume that this leads to numerous accidents for which P Company is liable under your laws on product liability.
Until a) the pump’s development, b) its manufacture, c) its distribution, and
d) the consequent accidents, P Company’s product liability was insured by I.
After the termination of the insurance contract with I, P Company takes out insurance with J. Which insurer, I or J, has to cover P Company’s liability for its
faulty fuel pumps in each of scenarios a)-d)? Assume that the standard terms of
both insurers’ contracts contain clauses on liability for long tail damage that
are most common in your country.
4.

Liability limits in compulsory third-party insurance

43. Would the fact that, in certain fields, third-party insurance is required by
law have any effect on the extent to which liability limits in terms of aggregate
series clauses, claims series clauses and long tail damage clauses are legally
allowed?


Country Reports


AGGREGATION AND DIVISIBILITY OF DAMAGE IN AUSTRIA:

TORT LAW
Ernst Karner/Olaf Riss
I.

General

1. Does your legal system have general rules, whether statutory or case-law,
which regulate the categorisation of harm as a single indivisible loss or a
plurality of losses? Have such rules been proposed in the secondary legal literature? Does the distinction have any significance in practice?
Austrian tort law is based on a very broad definition of damage.1 § 1293 of the
Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB) defines
damage namely as “every wrong that has been inflicted on someone, be it to
his property, or his rights, or his person” (Schade heißt jeder Nachteil, welcher
jemandem an Vermögen, Rechten oder seiner Person zugefügt worden ist).

1

However, no rules exist, either statutory or in case law or in doctrine, expressly
categorising harm as either a single indivisible loss or a plurality of losses. Of
course, different categories of harm are recognised under Austrian tort law,
but these are not directly aimed at “dividing” or “aggregating” harm: There is
a basic distinction – made by the ABGB itself – between pecuniary loss (Vermögensschaden) and non-pecuniary loss (ideeller Schaden).2 Austrian tort law
also distinguishes between loss of earnings (entgangener Gewinn) and the harm
actually sustained (positiver Schaden). In this context, it must be observed that,
according to § 1323, 1324 ABGB, loss of earnings is only compensable in the
case of gross fault (gross negligence, intention). With this “structured concept
of damage” (gegliederter Schadensbegriff), which is peculiar to the Austrian
legal system, the law takes into account the gravity of the grounds for imputation when determining the scope of the compensation – albeit cursorily.3 When
it comes to dealings between enterprises on the other hand, § 349 of the Busi-

2

1

2

3

Cf. on this H. Koziol, Generalnorm und Einzeltatbestände als Systeme der Verschuldenshaftung,
Zeitschrift für europäisches Privatrecht (ZEuP) 1995, 395 ff.
Among many others, H. Koziol, Österreichisches Haftpflichtrecht I (3rd ed. 1997) no. 2/3, 2/102;
R. Strasser, Der immaterielle Schaden im österreichischen Recht (1964) 44 ff.
See W. Wilburg, Die Elemente des Schadensrechts (1941) 249 f.; Koziol (fn. 2) no. 1/16.


14

Ernst Karner/Olaf Riss

ness Enterprise Code (Unternehmensgesetzbuch, hereinafter UGB) follows
the “all-or-nothing principle” as is also anchored in German law (§ 252 Civil
Code, hereinafter BGB); this is why loss of earnings is compensable even in
the case of slight negligence. Further, it is common to distinguish between the
infringement of a legally protected interest and damage sustained as a consequence of the injury (consequential damage; Folgeschaden).4

3

The issue on which this Questionnaire is based has only arisen in practice
once – as far as can be told – namely in insurance law.5 Apart from this, the
distinction between a single loss and a plurality of losses has not been explicitly addressed either in academic writing or in case law. As will be seen in the

following, such a differentiation nevertheless appears to be immanent in parts
of Austrian liability law.
II. Liability for Damage
A. Recoverability of Divisible and Indivisible Losses
2. In your national tort law, is liability for damage addressed separately for
different parts of the overall loss where different protected interests are affected (e.g. interference with the person or interference with property; pecuniary damage or non-pecuniary damage) even if the harm resulted from the
same tortious conduct by the same tortfeasor? If the requirements for liability
have to be addressed separately for each kind of loss, how might this affect the
tortfeasor’s liability?

4

The Austrian legal system does not know a categorisation of harm as a single
indivisible loss or as a plurality of losses. Therefore, no general rule exists for
aggregating or dividing the harm incurred. But, it does seem this question is
usually asked implicitly and solved unconsciously when other tort law requirements, such as causation or prescription, or procedural tools like presumptions, are addressed. Where different protected interests are affected, liability for damage has to be addressed separately. Each different type of damage
suffered by the claimant must be examined separately in order to establish
whether all requirements for tortious liability have been met. This is true as
well when the various injuries suffered by the victim were caused by the same
tortious conduct by the same tortfeasor. It is necessary to examine recoverability separately because the prerequisites for recoverability may differ according
to the type of damage. Whether there is a difference in the prerequisites for the
claim may, on the one hand, depend on which legal interest (Rechtsgut) was infringed (property, bodily integrity, personality rights, pure pecuniary interest),
but on the other hand, also on what type of loss the infringement of the legal
interest brought about (pecuniary and non-pecuniary damage). It has already
4
5

See infra no. 17 f.
A. Fenyves, Aggregation and Divisibility of Damage in Austria: Insurance (contained in this
volume) no. 2 f.

Austria: Tort Law

15

been mentioned that under § 1323, 1324 ABGB loss of earnings is only recoverable in the case of gross fault (see supra no. 2).
Under Austrian tort law, not all legal interests are protected to the same extent.
Thus, pure pecuniary interests are only protected against infringements to a
limited extent.6 But even within the context of absolutely protected interests,
the ranking of the legal interest may mean that there are differences when it
comes to establishing unlawfulness and hence in examining recoverability of
the loss. Thus, it is recognised, for example, that, in the context of establishing unlawfulness, the interests involved must be comprehensively weighed up,
whereby the rank of the interest infringed has particular significance.7 Actions
which may not appear unlawful in the context of infringing pure pecuniary
interests may, however, very well be frowned upon and thus constitute conduct
relevant under tort law when bodily integrity is infringed.

5

Differentiation may also be necessary on the basis of the kind of loss which
has been incurred. The infringement of one and the same legal interest may
bring about both pecuniary damage and non-pecuniary damage. This is typical in the case of bodily injury, which can cause pecuniary damage (costs of
treatment and loss of earnings) as well as non-pecuniary damage (claims for
pain and suffering). Equally, losses in both categories of damage are thinkable
in the case of damage to property, e.g. if the damage reduces the market value
of the thing and the owner also suffers a non-pecuniary injury due to a particular relationship of closeness to said thing. The distinction between pecuniary
and non-pecuniary injuries has considerable significance since Austrian law is
much more restrictive when it comes to awarding damages for non-pecuniary
damage than pecuniary damage. Insofar as the law does not provide otherwise,

monetary compensation for non-pecuniary damage is awarded according to
the general rule under § 1323, 1324 ABGB only in the case of gross fault.8 The
case law which limits compensation basically to the cases explicitly provided
for by statute is even more restrictive.9 Because of special statutory provisions,
non-pecuniary damage is recoverable in cases of personal injury even where
negligence is slight (§ 1325 ABGB)10 and in cases where there is strict liability
(e.g. § 13 line 4 Traffic Liability Act, EKHG), in the case of infringement of
property rights at least when the non-pecuniary damage (sentimental interest) is brought about due to wilfulness or malice on the part of the tortfeasor
(§ 1331 ABGB).

6

6

7
8

9

10

Cf. on this H. Koziol, Schadenersatz für reine Vermögensschäden, Juristische Blätter (JBl)
2004, 273.
Koziol (fn. 2) no. 4/29.
F. Bydlinski, Der Ersatz ideellen Schadens als sachliches und methodisches Problem, JBl 1965,
247; E. Karner/H. Koziol, Der Ersatz ideellen Schadens im österreichischen Recht und seine
Reform, Gutachten für den 15. Österreichischen Juristentag II/1 (2003) 17 ff.
Consistent case law since the OGH in Glaser/Unger – Neue Folge (GlUNF) 4185; in agreement
with this, for example, R. Welser, Bürgerliches Recht II (13th ed. 2007) 325. Cf., however, also
OGH in Zeitschrift für Verkehrsrecht (ZVR) 2001/73 noted by E. Karner (compensation for

emotional distress caused by mourning).
See on this E. Karner, Der Ersatz ideeller Schäden bei Körperverletzung (1999).