A ruling by the Court of Cassation upholds Studio Zunarelli’s argument on insurance recourse or subrogation; senior partner Andrea Giardini defended a French haulier whose cargo was stolen.
In the case that gave rise to the trial, which ended a few weeks ago before the Court of Cassation (Italian Supreme Court) with judgment no. 32918 of 2022, the issue was whether the company that insured the transported goods could exercise the action of insurance recourse or subrogation against the transporter.
The case that gave rise to the insurance recourse or subrogation action
The theft of a cargo of stylish clothes occurred during transportation by road from Italy to France.
The insurance company of the Italian fashion house that sold the goods compensated its client and exercised its insurance subrogation action against the carrier.
It did so, however, without noticing that two different freight forwarders were involved, one ‘internal’ to the company that sold and shipped the goods and one to whom the latter had in turn commissioned the transport.
Only the former, however, had assigned his contractual rights to the company.
In the transport of the goods were involved
- the seller (an Italian fashion firm)
- a first forwarding agent
- a second forwarding agent
- the carrier defended by Studio Zunarelli
The Geneva Convention on the International Carriage of Goods by Road
The contract of carriage with the French carrier was subjected by the parties to the Convention on the Contract for the International Carriage of Goods by Road signed in Geneva on 19 May 1956, which is commonly known as the CMR Convention.
On the CMR consignment note there appeared as consignor a forwarding agent who had made no assignment of rights in favour of the seller.
The same findings of the case confirmed that the goods had been handled by more than one forwarding agent.
Studio Zunarelli’s defence argument focused on the fact that the insurance company was not entitled to act.
The company, in fact, had subrogated itself to the rights of a party that had no claim against the carrier.
The objection was incredibly rejected at both first and second instance. The firm appealed to the Court of Cassation and the Supreme Court upheld its argument in full.
The Supreme Court’s decision on insurance recourse or subrogation
The Supreme Court of Cassation recalled the wording of the Civil Code, which in Article 1916 very clearly states that “The subrogation of the insurer to the rights of the insured party against the liable party entails the derivative acquisition of such rights […] since the insurer takes over the identical substantive and procedural position of the injured party against the third party author of the harmful event”.
It was decisive for the judgment whether the company had paid the indemnity in favour of the person who was actually entitled to it.
In fact, an important step in the assignment of rights was missing from the record. These steps had to be verified, requested and obtained by the insurance company in order to claim compensation from the carrier.
As the Supreme Court correctly pointed out, the only contract of carriage in force in the case, documented by the only CMR consignment note filed with the Court’s records, bore as shipper a forwarding agent from whom the insurance company had not obtained any assignment of rights for subrogation.
The judgement highlights a fundamental aspect for insurance company recourse actions.
The chain of parties that handled the carriage must be carefully verified in order to follow the ownership of the rights and obtain the necessary assignments that allow one to act in subrogation against the carrier once the indemnity has been paid.
Avv. Andrea Giardini, senior partner Zunarelli Studio Legale
