Road-accident compensation: the scope of the Constitutional Court and Council of State judgments

The principles used to calculate road-accident compensation have changed materially following Constitutional Court judgments and Council of State decisions on the General Conditions. Each judgment, however, operates only on the provisions and annexes identified in its operative part. Statements that all General Conditions became invalid or that one calculation method became mandatory go beyond the judgments.

What did the Council of State decide?

The Eighth Chamber of the Council of State judgment E.2022/772, K.2025/4513 of 14 May 2025 annulled references to Annexes 1, 2 and 3 in the amendments of 4 December 2021 and the annexes themselves. The judgment also cites the same Chamber’s judgment E.2020/772, K.2024/7229 of 19 December 2024, which annulled specified wording concerning care costs, other treatment-related expenses and loss of working capacity.

The text of the 14 May 2025 judgment states that an appeal to the Council of State’s Board of Administrative Litigation Chambers was available within thirty days of service. Its effect therefore requires consideration of the operative order, appeal status, event date and applicable version of the General Conditions.

The role of the Constitutional Court judgments

Two Constitutional Court judgments on the constitutional limits of the delegation in Article 90 of the Road Traffic Act form part of the legal background:

The Constitutional Court judgment E.2019/40, K.2020/40 of 17 July 2020 annulled particular references to the “general conditions” in Article 90. Its reasoning and operative order should not be read as indiscriminately eliminating all insurance rules or every calculation input.

The Constitutional Court judgment E.2021/82, K.2022/167 of 29 December 2022 annulled the rules added to Article 90 by Law No. 7327 on calculating loss of support and permanent disability, together with the related delegation. It highlighted the significance of the reference to the Code of Obligations for matters not regulated in the Road Traffic Act.

The judgments require careful comparison of insurance cover and the vehicle keeper’s civil liability. The two relationships are not necessarily identical for every loss: policy scope, statutory exclusions and liability conditions remain relevant.

The principle of actual loss

Past loss should be established from actual data where possible. Future loss necessarily involves projections, so the basis for earnings, lifespan, working period, support shares, impairment and discounting should be explained. The principle of actual loss does not prohibit all assumptions about the future.

Calculation methods

The judgments have made the legal and technical basis of calculation reports more important and visible. They do not, however, make one method automatically binding for every type of loss and event date.

Life tables: PMF-1931 and TRH-2010 represent different data sets and periods. The chosen table requires justification; statistical life expectancy is not a prediction of an individual lifespan.

Technical interest: the legal basis for a particular rate may have been annulled, but that does not mean no discounting approach can ever be used or that compensation rises by a fixed percentage. The rate and method must be assessed under the law applicable on the relevant date.

Approaches encountered in practice

Progressive annuity: some calculations increase and discount the last known earnings for future years. Although ten per cent growth and ten per cent discounting appear in judicial practice, those rates are not immutable statutory rules for every case.

A technical-interest or fixed-term annuity approach seeks the present value of a future stream of loss. Annulment of particular General Conditions provisions does not, by itself, make the method irrelevant in every context and legal relationship.

Average-earnings and fixed-annuity methods may be relevant to understanding earlier practice. Their use in a current assessment requires separate justification by date, type of loss and legal basis.

Active and later-life periods: occupational earnings, actual work and economic contribution after retirement may require separate treatment. The minimum wage is not automatically used for every person in a later-life period; the loss and actual contribution must be identified.

Actual earnings: payroll and tax records are a starting point. If said not to reflect reality, they may be tested against bank records, occupational information and comparable earnings. Official records should not be disregarded without reasons.

Deductions: Article 55 of the Code of Obligations provides that non-recourse social-security payments and payments not intended as performance are not deducted. Inheritance, private insurance and social-security benefits are not automatically treated alike; each payment’s legal character and whether it compensates the same loss must be examined.

Whether child-rearing costs should be deducted after a child’s death depends on the legal character of the claim and the evidence. A general study cannot justify an automatic deduction, or an automatic ban on deduction, in every case; any contribution to the family economy must also be evidenced.

Practical issues

A reliable calculation depends on asking the correct legal question and disclosing the data used. The following practical issues remain important after the judgments.

Consistency: different outcomes are not always evidence of unfairness; SGK, an insurer and a court may answer different legal questions. Reports addressing the same question should, however, use comparable data, methods and stated assumptions.

The expert’s role: a technical expert explains the data and calculations; applying the law and deciding the dispute are for the court. There is no general rule that the expert must be a lawyer or that an actuary is inherently insufficient. Expertise is selected for the task.

Non-pecuniary damages: Article 56 requires attention to the event and its personal impact. They are not an extension of an actuarial earnings calculation. Greater predictability comes from clear, case-specific reasons rather than an automatic, non-statutory tariff.

Possible reform: new rules may follow annulment judgments, but views on what would be desirable or fair must be distinguished from current law. Courts decide existing disputes by the binding rules in force.

A fund or periodic-payment scheme is a policy proposal. It does not mean that every claimant can currently demand monthly payments, or that an insurer can choose them unilaterally. Any such model would need rules on security, administration and inflation risk.

Limitation: the period depends on the claim and its legal basis. For pecuniary road-accident claims, Article 109 generally provides two years from knowledge and ten years from the accident, with a possible longer criminal limitation period. Accrual, interruption, parties and procedural prerequisites require case-specific analysis.

Access to procedure: where the amount cannot initially be determined, the appropriate form of claim, competent court and prerequisites such as an insurance application depend on the facts. It cannot be assumed in advance that an unquantified-claim procedure is always available or never available.

Assessment

The Constitutional Court and Council of State judgments have reinforced the connection between statutory authority and actual loss. Annulment operates only on the provisions identified in the operative order. It does not establish that all General Conditions disappeared, that the Code of Obligations invariably overrides every rule, or that one formula became mandatory.

A sound assessment identifies the applicable text and authority, documents earnings and medical evidence, explains assumptions and avoids duplicate recovery. In a current case, the appeal status of the 14 May 2025 judgment and any later legislation should be checked separately.