26 May 2017, Alberto Perez Cedillo

ROAD TRAFFIC ACCIDENTS IN SPAIN AND THE NEW “BAREMO”

For the calculation of damages suffered by the victims of traffic accidents, Spanish law has a scale system known as the “Baremo” (Law 35/2015 of 22 September) which regulates civil liability and insurance matters in road traffic accidents and applies to cases involving accidents on or after 1 January 2016. The Baremo is mandatory and binding on judges when assessing the damages in respect of injuries resulting from traffic road accidents.

Key changes

• The reform is substantial and covers fatal accidents claims as well as claims for personal injury, amending the approach to compensation for both past and future loss.
• In broad terms, it is expected to result in increased awards of compensation of around 50% for death, 35% for permanent injury, and 12.8% for temporary injury.
• Fatal accidents: those who have lived with the family for 5 years and were close by blood or personal closeness are now entitled to compensation.
• Personal injury claims:
  • (1) household work compensation is now recognised;
  • (2) loss of future earnings is now recoverable, with more generous tariffs for past and future loss of earnings;
  • (3) the possibility of receiving compensation by annuity has been introduced, at the discretion of the Judge;
  • (4) the amounts for the insurance company to reimburse to the Spanish National Health service are now contained in Tariffs; and
  • (5) it differentiates now patrimonial or material damages from non-patrimonial damages (personal injury), dividing the compensation in fatal injuries, permanent injuries and temporary injuries.
• Permanent injuries: they are divided in the following categories:
  • (1) basic personal damage, which includes physical, intellectual and sensorial disability, and aesthetic damage;
  • (2) specific non-patrimonial damage, which includes additional damages to those considered in the prior category, personal damages for the loss of quality of life of the victim and/or the family and loss of the foetus, and exceptional damages, with a possible uplift of up to 25%;
  • (3) material damage, which includes capped past losses and some recoverable future losses, such as expenses arising from the injuries and loss of future earnings.
• Temporary injuries: they are divided in the following categories:
  • (1) basic moral damage, with a fixed award of 30€ per day from the date of the accident until the date of stabilisation of the injuries;
  • (2) special moral damage, which includes loss of quality of life as well as impairment or limitation in the victim’s autonomy or personal development;
  • (3) material damage, which medical and sanitary expenses and equipment, mobility costs, family members’ expenses to assist the victim, and loss of earnings.

Additional key general principles under Spanish law

Tax: lump sums awards are quantified and paid net of tax.

Costs: legal costs are recoverable out of the claimant’s damages award.

Interest: usually, no interest is payable provided that the pre-litigation protocol is followed and the applicable tariff damages are paid when the prognosis becomes clear. Penalty interest is payable under Spanish law at the rate of the legal interest (fixed by the Bank of Spain, currently 3%) plus a further 1.5% up to two years after the accident; after that date, a statutory amount of 20% interest shall be applicable. There is an issue as to whether or not interests are a procedural question to be decided under the Law of the Forum in accordance with Section 1.3 of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the Law Applicable to non-contractual obligations (Rome II).

Forms of award: A lump sum, except when the Judge replaces it with a life annuity.

Recital 33: It remains to be seen how the Courts will approach the new Baremo in the context of Recital 33 of Rome II, to which the Baremo makes no reference whatsoever. On a general note, in the Spanish hierarchy of law the European Regulations are above national law and therefore there may be room for a challenge, even when the Baremo establishes that the tariffs are binding for judges in road traffic accidents claims.

Conclusion

The new Baremo is a small step forward for the personal injury regime in Spain. By recognising new heads of loss and by awarding more generous compensations, it gets slightly closer to the main goal for Claimants’ lawyers, which is achieving the restitutio in integrum principle, i.e. restoring the injured party to the situation he would have been in had the accident not happened at all. However, this aim will be out of reach as long as the scale system remains capped, a situation unlikely to change any time soon due to the insurers’ lobbying.