Hague Convention

At the core of the Convention is the principle according to which the substantive law of the country in which the accident occurred (lex loci) is applicable. If, however, only one vehicle is involved in an accident and this vehicle is not registered in the country in which the accident occurred, the liability of the driver, keeper, owner, and all beneficial owners of the vehicle is assessed in accordance with the law of the country in which the vehicle is registered (lex stabuli or law of registration).

This applies to any injured passengers whose customary place of residence is not situated in the country in which the accident occurred. On the other hand, if their customary place of residence is situated in the country in which the accident occurred, the law of this country applies. Finally the liability with regard to injured parties located outside of the vehicle is also assessed in accordance with the law of the country of registration of the vehicle causing the accident, insofar as the injured party has his or her customary place of residence there.

In cases involving more than one injured party, the applicable law is determined for each party separately. The lex stabuli already referred to is also applicable when more than one vehicle registered outside of the accident country is involved in the accident, providing the vehicles are all registered in the same country. If this is not the case, and the vehicles involved are registered in different countries, lex loci applies.

For those individuals located outside of the vehicle who are involved in an accident, lex stabuli only applies if all these individuals along with the involved vehicles had their customary place of residence or location (vehicle registration) in the same country of registration.

The question remains which law applies to liability with regard to property damage. As concerns transported items belonging to the passenger, the law applicable to the passenger himself or herself is to be applied. As to other items transported in the vehicle, the applicable liability law is the law applicable to the vehicle owner. As a general rule, the law of the accident site is applicable to items located outside of the vehicle(s), unless the items in question are the personal property of an injured party to whom lex stabuli applies.

The concept of involvement in the accident needs to be considered, and this is a concept subject to interpretation. As concerns vehicles, any participation in the accident constitutes involvement. By contrast, a more narrowly defined concept applies to individuals located outside of the vehicle, on the presupposition that an individual can be considered to be a party incurring liability on account of the accident. Irrespective of the applicable law, liability is determined by reference to the traffic and safety regulations in effect at the site and time of the accident.

Injured parties possess a direct right of action against the insurer of the liable party insofar as they are entitled to exercise this right according to applicable law. If the applicable law of lex stabuli, as described above, does not provide for a direct right of action it can nevertheless be exercised if the law in effect at the site of the accident provides for this. If neither the lex loci nor lex stabuli provides for a direct right of action it can nevertheless be exercised if this is permissible according to the law applicable to the insurance contract.