Motor liability insurance is legally defined as being part of general liability insurance coverages in Norway. In order to have a valid claim in Norway under the rules of general liability, three cumulative conditions must be fulfilled: a basis of liability must be established, the claimant must prove an economic loss, and such economic loss must be caused by the act that is the basis of liability. The following is a discussion about how motor liability is regulated in Norway.
Key Issues Related to Motor Liability
All motor vehicles in Norway must have liability insurance to cover damages caused to persons and third party property. If a vehicle is not insured, or if the vehicle causing damages cannot be identified, all insurers underwriting motor liability in Norway are jointly and severally liable for the damages.
In a departure from the rules regarding general liability, motor liability is a strict liability as opposed to liability in negligence. This means that all damages caused by the relevant vehicle shall be covered regardless of whether the driver was negligent or not.
Another significant difference from general liability rules is that the claimant files a direct action with the insurance company that covers the vehicle causing damage. A claimant can also choose to file against the party causing the damage, but such a claim must be based upon general liability rules. Since general liability is not a strict liability as described above, this alternative is very seldom used.
Motor Liability Act
Motor liability is regulated by the act of February 3, 1961, known as the Motor Liability Act (MLA), including its later amendments. MLA applies to “compensation for and insurance against injury which motor vehicles cause to person or property.”(1)
Definition of Motor Vehicle
Article 3 MLA defines motor vehicle as the following: “any vehicle with power machine as means of propulsion is designed to be driven on the ground without rails, including also trolley buses.” A trailer or other attachment to a motor vehicle is deemed part of the vehicle. Excluded from the definition of motor vehicle are all aircraft and vehicles that do not reach speeds of more than 10 kilometers per hour, unless the vehicle can be easily set up to go faster.
Strict Liability and Direct Action Toward the Insurer
The strict liability and the insurance company’s direct liability are noted in Article 4 MLA: “When a motor vehicle caused injury, the injured party may claim compensation from the insurance company with which the vehicle, pursuant to chapter IV, is insured, even if no one is to blame for the injury.”
Excluded From MLA’s Cover
Excluded from the MLA’s coverage are damages caused by the vehicle if it is used for purposes other than as a vehicle; while the vehicle is standing or safely parked outside any street, road or other place open to public traffic; or while the vehicle is participating in a racing contest held on dedicated grounds by special permission of police authorities.
Furthermore, some damages are not included in the mandatory insurance obligation regarding motor liability, including damages to the vehicle itself (unless additional insurance coverage has been purchased by the owner/user) and damages to goods/equipment of the vehicle’s owner/user (unless additional insurance coverage has been purchased by the owner/user).
Total Liability Cap
For damages to a person, there is no total liability cap provided in the MLA. With regard to property damages, the MLA specifies a total liability cap in the amount of NOK10 million. Additional claims for damages must be based upon the rules regarding general liability in Norway.
MLA has a specific provision regarding collision in Article 8. The main rule is that both parties shall claim compensation from the insurance company covering the vehicle causing the damage. According to the MLA, this may change in some cases. Specifically, the act states:
Damage caused by a motor vehicle to another motor vehicle, or to person or property in another vehicle, shall be covered by the insurance company of the first mentioned vehicle only if the injury is due to:
The fact that the owner, user or driver of this vehicle, or some person who accompanied the vehicle, did not act with due care,
Some defects or shortcoming of the vehicle itself or
That the vehicle otherwise was not driven, parked or treated in a way that conflicts with prevailing traffic regulations.
Insurers also use this provision as a basis of liability for recourse action towards the insurer covering the vehicle that caused the damages, if such insurer has paid damages to its own customer.
Recourse Action and Reduction of Claims
The MLA’s provisions regarding recourse action and reduction of claims are mostly in accordance with provisions regarding general liability. However, some claims set forth on behalf of passengers have proved to be of interest for insurers. These cases have focused on whether passengers will receive no compensation or a reduction in compensation if they were passengers while the driver was under the influence of alcohol or if they did not use a safety belt. Since there is no general rule, each individual case must be tried based on its individual facts.
Since the MLA was enacted in 1961, only minor changes have been made to the act, and many cases related to damages caused by vehicles are still being tried. The legal issues mostly deal with the extent of damages and whether or not the vehicle caused injuries.
The most interesting case in recent years was a ruling by the Supreme Court on December 16, 2010 (Rt 2010/1547), that referred to medical research as a basis for stating that damages to a person were not caused by a car accident. The finding suggests that claimants may now face a more challenging line of arguments.
1 Article 1 MLA