Case C-442/12, Sneller – the Reaal deal on the freedom of the insured person to choose his lawyer [judgment 2013, ECLI:EU:C:2013:717]

Where a consumer buys an insurance policy to cover his legal expenses, does the EU’s legal expenses insurance Directive 87/344 justify his insurer not only curtailing the freedom of the insured person to choose his lawyer but also generally deciding that one of insurer’s employees will provide the legal assistance even though that employee need not be a registered lawyer?

Facts
Mr Sneller believed his employer had incorrectly terminated his contract of employment. He therefore sought to bring a damages claim for unfair dismissal. Fortunately for Mr Sneller he had already purchased an insurance policy, and he thought the policy would not only cover his legal expenses but also give him the right to choose his lawyer.

His Dutch insurer, Reaal, disagreed. It pointed out that the standard terms and conditions in the insurance contract entrusted the performance of the contract to a totally different insurance company, the Dutch branch of legal insurer ‘DAS’ [DAS Nederlandse Rechtsbijstand Verzekeringsmaatschappij NV].

The Dutch branch of DAS agreed that the insurance policy entitled Mr Sneller to legal assistance to bring a claim against his employer. However, it interpreted the wording of the insurance contract to mean that it was not Mr Sneller who had the right to choose his lawyer – it was the Dutch DAS which would decide whether the costs of an external lawyer would be covered and, as a general rule, legal assistance would be provided by one of its own employees, who was not a registered Dutch lawyer.

Mr Sneller took his insurers to court and the case eventually ended up at the Dutch Supreme Court. The Supreme Court noted a couple of facts. The first was that if a person wished to bring a claim against their employer, there was no legal obligation in Dutch procedural law for that person to be legally assisted.

Second, and this was the point which gave rise to the reference, a legal assistance insurance contract falls within the scope of a specific piece of Dutch public law, which is known in its abbreviated form as the ‘Wft’. Article 4:67 of the Wft is based on Council Directive 87/344/EEC of 22 June 1987 on the coordination of laws, regulations and administrative provisions relating to legal expenses insurance.

Article 4 of the Directive was therefore relevant to Mr Sneller’s case. The wording of Article 4 reads:

1. Any contract of legal expenses insurance shall expressly recognize that:
(a) where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve the interests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such lawyer or other person;
(b) the insured person shall be free to choose a lawyer or, if he so prefers and to the extent that national law so permits, any other appropriately qualified person, to serve his interests whenever a conflict of interests arises.
2. Lawyer means any person entitled to pursue his professional activities under one of the denominations laid down in Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services.

However, the meaning of the wording to Article 4 was unclear to the Dutch Supreme Court. On the one hand, the DAS interpreted the Dutch version of the Directive to mean that it was the DAS who was free to choose whether or not to let a case be handled by one of its employees. On the other, the Dutch Supreme Court remarked that the various language versions of Article 4 did not seem to correspond equally with the Dutch version of the Directive.

Furthermore, the meaning of two judgments emanating from the CJEU was also unclear to the Supreme Court: Case C-199/08, Dr. Erhard Eschig; and, more recently, Case C-293/10, Gebhard Stark v DAS Österreichische Allgemeine Rechtsschutzversicherung AG.

As a result, the Dutch Supreme Court wondered if the right of an insured person to choose his lawyer could be limited by whether or not national legal procedure just happened to make the assistance of a lawyer a mandatory requirement for bringing a claim before a particular judicial or administrative tribunal.

Equally, the Dutch Supreme Court questioned whether the right of an insured person to choose his lawyer could be made conditional upon the insurance company’s decision of whether a case was to be handled by an external lawyer or, more likely, just by one of its own employees?

Questions Referred
According to the Curia website, the Dutch Supreme Court has asked:

1. Does Article 4(1) of Directive 87/344/EEC allow a legal expenses insurer which stipulates in its policies that legal assistance in inquiries or proceedings will in principle be provided by employees of the insurer also to stipulate that the costs of legal assistance provided by a lawyer or legal representative chosen freely by the insured person will be covered only if the insurer takes the view that the handling of the case must be subcontracted to an external legal representative?

2. Will the answer to Question 1 differ depending on whether or not legal assistance is compulsory in the inquiry or proceedings concerned?