What is the difference between recourse and subrogation under compulsory motor liability insurance?

Differences between recourse and subrogation

To understand what the difference is between subrogation and recourse, let's start with examples in the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation):
- recourse - the right of recourse of the person who compensated for the harm to its causer (for example, to an employee who caused harm in the performance of his labor function, clause 1 of article 1081 of the Civil Code of the Russian Federation);

— subrogation — transfer of the creditor’s rights under an obligation to another person, namely the transfer to the insurer of the creditor’s rights to the debtor, due to whose actions the insured event occurred (subclause 4, clause 1, article 387 of the Civil Code of the Russian Federation).

Both cases are aimed at implementing the principle of excluding unjust enrichment, that is, to prevent a situation where another person pays for the person who caused the harm, and he is unreasonably excluded from the number of obligated subjects.

At the same time, the difference between subrogation and recourse is that the right of recourse arises as such at the moment the creditor’s claims are satisfied by a person who is not the tortfeasor, and the rights of the person who satisfied the creditor’s demands, in the case of subrogation, are not new rights, but transferred to him rights of the creditor, in connection with which subrogation is an example of a change in persons in an obligation.

There is a point of view in the doctrine that the differences between recourse and subrogation are that:

• subrogation is a special case of recourse;
• subrogation is an innovation of the Civil Code of the Russian Federation, and the concept of recourse existed before.

Read about the nuances of recourse in bankruptcy cases in our article “When recourse against the insolvency administrator who caused the losses, the insurer must prove the intentional nature of the insolvency administrator’s actions.”

Subrogation. Help in case of an accident

What is the difference between a liftback and a hatchback What is the difference between them What is the difference between a liftback and a hatchback What is the difference between a liftback and a hatchback

Recourse requirements under a compulsory liability insurance contract, grounds for recovery of damages by way of recourse under compulsory motor liability insurance. By virtue of paragraph. Such a right is called the right of recourse. Thus, during recourse, the creditor is replaced by the obligation of the person who caused the damage. If initially the tortfeasor must pay money to the victim, then, as a result of the payment of compensation by a third party, it becomes possible for the new creditor to file a recourse claim against the debtor.

In addition, recourse arising from compulsory insurance relations allows insurers to compensate for their losses incurred as a result of paying insurance compensation if there are grounds for this provided by law. It is necessary to distinguish recourse in the field of compulsory civil liability insurance from subrogation due to the fact that these legal mechanisms have a similar operating principle. The right of recourse in the field of compulsory civil liability insurance arises from the insurer only in cases provided for in Art.

The insurer who paid the compensation transfers the right of the victim to claim compensation from the tortfeasor in the amount of the payment made, if:.

The statute of limitations is a period of time established by law for the protection of a violated right in court. In this case, the expiration of the period does not entail refusal to satisfy the plaintiff’s demands, unless the defendant informs the court about this. If the expiration of the limitation period was declared in court and this circumstance was confirmed, the expiration of the period is an independent basis for refusing to satisfy the claims.

At the same time, the running of the statute of limitations by virtue of clause Regression under the European Protocol is possible only if there are grounds established by Art. One of the grounds for the insurer to have the right to claim under a recourse obligation is the failure of the parties to the accident to send a notice to the insurer within 5 days from the date of the accident. In this case, the insurer transfers the right of claim of the victim against the harm-cauter to the insured.

If there are grounds for the emergence of a recourse obligation provided for in Art.

If the period has expired, it is necessary to draw the court’s attention to this fact, which will avoid possible collection. The most effective way to avoid payment is to exclude cases in which the insurer has a right of recourse

To do this you need:. Thus, the insurer has the right of recourse under compulsory insurance contracts only if there are grounds provided for by law.

In the absence of grounds, the insurer has no right to demand compensation for damage from the tortfeasor after payment of insurance compensation to the victim. Ask a lawyer: call 8 is free. Ask a lawyer: the call is free. Add to Favorites Add to Favorites. When exactly, you will find out from our article.

In it we will also tell you what the statute of limitations for recourse is when concluding a compulsory motor liability insurance agreement and how to avoid payment under recourse. The main differences are as follows: The right to recourse is received by the person who compensated for the harm, that is, the obligation arises in connection with the fact of causing harm. The right of subrogation arises from the insurance contract. The right of recourse appears only in certain cases provided for by law. The right of subrogation always exists when concluding a property insurance contract, and the inclusion in such contracts of conditions that exclude the possibility of the emergence of the right of subrogation is void.

Recourse claims under a compulsory liability insurance contract, grounds for recovery of damages by way of recourse under compulsory motor liability insurance. The insurer has the right of recourse in the field of compulsory civil liability insurance only in the cases provided for in Art. Limitation period for recourse OSAGO The limitation period is a period of time established by law for the protection of a violated right in court.

Don't know your rights? Subscribe to the People's Adviser newsletter. Free, minute to read, once a week. I agree with the terms of personal data processing. Legal consultation.

Get a free consultation right now: 8 Ext. 389

(the call is free)

What is the difference between recourse and subrogation and assignment?

When resolving the question of how recourse differs from subrogation, the problem of distinguishing them from another related category - assignment - often arises. Under cession, according to Art. 388 of the Civil Code of the Russian Federation, refers to the assignment of the right of claim.

Cession and subrogation are united by the fact that both of these institutions are types of transfer of the rights of the creditor to another person. However, their difference lies in the fact that subrogation is one of the types of transfer of the creditor’s rights to a third party on the basis of law (Article 387 of the Civil Code of the Russian Federation), and assignment is an assignment of a claim, permitted if it does not conflict with the requirements legislation (clause 1 of article 388 of the Civil Code of the Russian Federation).

At the same time, according to paragraph 2 of Art. 387 of the Civil Code of the Russian Federation, relations regarding the replacement of a creditor by force of law can, as a general rule, be regulated by provisions on assignment. On the assignment of the right of claim

Difference between subrogation and subrogation in simple words

Based on the above, we note that the difference between subrogation and recourse can be expressed in simple words as follows. With subrogation, the creditor is replaced, and with recourse, a completely new right arises that did not exist before.

Often the distinction between the concepts under consideration is given in judicial practice. Thus, in the resolution of the 17th AAS dated July 26, 2017 No. 17AP-7590/2017-AK in case No. A60-6971/2017 the following differences are given:

• in case of recourse, a new obligation arises and there is no change of persons in obligations;
• recourse excludes the application of Ch. 24 of the Civil Code of the Russian Federation and Art. 965 Civil Code of the Russian Federation;
• recourse arises from tort (causing harm), and subrogation arises from contract (insurance relations);
• in case of recourse, in addition to the relationship between the debtor - the tortfeasor and the creditor - the victim, a relationship arises between the debtor - the person responsible for the losses, and the creditor - the person who compensated for the losses.

On our website you will also find explanations in simple words and other terms. In particular, in the articles:

• “Barter - what is it in simple words?”;
• “What is acceptance in simple words?”;
• “What is this - an offer - in simple words?”

Why is subrogation needed?

When an insured event occurs, subrogation becomes a kind of legal protection of insurance companies from various types of unforeseen circumstances, incl. and from fraud.

After all, often the policyholder (beneficiary), having received compensation, especially when the amount covers the losses incurred, loses all interest in the future. And the culprit of the insured event may go unpunished. Subrogation ensures recovery of damages from the perpetrator, thus easing the burden of liability of the insurer.

The concept of subrogation is quite new, not previously used in our legislation. Therefore, its use is associated with certain difficulties. However, the institution of subrogation protects the rights of both the insurer and the policyholder.

The latter receives the damages due to him when an insured event occurs under CASCO and is freed from all the hassle of settling relations with those responsible for the accident. The insurer, through subrogation, maintains its insurance reserves, which are used to pay policyholders.

Table of recourse and subrogation ratio

To summarize the various positions regarding the relationship between recourse and subrogation, we present a table of the differences between these concepts.

The distinction proposed in the table is not unconditional and is debatable (for example, paragraph 6). The list is not exhaustive; doctrine and practice may provide other grounds for comparison.

Insurance subrogation

Translated from Latin, this term means replacement. The principle of subrogation in insurance means the transfer of the right of claim and applies only to property insurance. Simply put, the rights of the policyholder are transferred to the insurer, which is essentially equivalent to replacing the creditor.

If the insurance company compensates for damage in connection with the occurrence of an insured event, it has the right to make similar demands against the guilty party. This transfer of the right to compensation for damage is enshrined in Article 965 of the Civil Code of the Russian Federation. Due to the fact that such a replacement is possible only within the framework of compensation for property damage, insurance subrogation does not apply to personal life and health insurance of citizens.

The right to subrogation arises only after the insurer has paid compensation to the injured party. Then claims for compensation for the damage incurred are redirected to the perpetrator on the basis that the right to claim from the beneficiary (the policyholder) is transferred to the insurer.

We invite you to read: The right to impose disciplinary sanctions

For example, a person entered into an apartment insurance contract, including against flooding. When an insured event occurs, the insurer pays the amount of compensation to the injured person under the contract, after which it makes similar demands on the neighbors or the management company (depending on who is the cause of the flooding of the insured person’s apartment).

By the way, you can read more about insuring an apartment against flooding here https://tvoipolis.online/5772-strahovka-ot-zatopleniya-kvartiry-sosedyami

A similar scheme is used to resolve situations in the field of car insurance. The insurer pays the amount of damage to the client injured in the accident, after which it receives the right to demand compensation for the damage incurred from the person responsible for the accident instead of the insured. Therefore, in the event of an insured event, the beneficiary (policyholder) is obliged to provide the insurer with all the necessary documents, expert opinions and other evidence confirming the right to compensation for the damage incurred.

In turn, the insurer, after fulfilling its obligations to the injured party, transfers the claim for compensation for the damage incurred to the guilty party solely within the amount of the payment made.

Important! If the insured has waived his own right of claim against the perpetrator, or due to the fault of the insured it is impossible to exercise such a right, the insurer has the right not to pay compensation for damage in full (or in the relevant part), or to return the amounts already paid.

If harm is intentionally caused in order to receive an insurance payment, the culprit will bear responsibility, since in such a case the exclusion of the right to transfer claims to the insurer is unacceptable on the basis of clause 1, art. 965 of the Civil Code of the Russian Federation.

Assignment, subrogation and recourse in the resolution of the Plenum of the Armed Forces of the Russian Federation dated December 26, 2017 No. 58

As we noted earlier, Resolution No. 58 contains a block of clarifications of judicial practice that combines assignment, subrogation and recourse. The clarifications relate in particular to the following:

• An agreement on the assignment of the right of claim in relation to insurance payment is concluded if it is possible to accurately determine in relation to which right the assignment was made. Moreover, if the exact amount of the assigned right is not determined in the agreement, it can still be considered concluded (clause 69).
• Transfer of the rights of the victim is possible only after the occurrence of an insured event (clause 70).
• If the insurer has paid an amount under a voluntary insurance agreement that exceeds the amount of payment under a compulsory insurance agreement, then by subrogation it may recover both the amount payable under the MTPL legislation from the insurance company obligated to make this payment, and the difference between these amounts from the tortfeasor (paragraph 74).

Would you like to study Decree No. 58 in more detail? Get free access to ConsultantPlus..

What is regression

Recourse is also the right of the insurance company to demand compensation for losses incurred as a result of the occurrence of an insured event by the guilty party. Before this, the company must pay off the obligations of the person responsible for the accident to the injured person/group of persons. In other words, the insurer of the guilty party, after making payments to the injured parties, has the right to make claims against its client.

Regression is most often applied to drivers in the following situations:

• Drunk;
• intentional harm to another vehicle or person;
• lack of license to drive a car;
• fleeing the scene of an accident.

Some nuances of practice regarding recourse and subrogation

Also in judicial practice, the following nuances regarding recourse, subrogation and their relationship are noted:

• if there is a private transfer of debt, that is, the original debtor completely leaves the relationship, and the new debtor, having fulfilled his obligations, covers his own debt to the creditor, this does not give the new debtor the right to recourse or subrogation claims against the original debtor (clause 19 of the Review of Judicial Practice RF Armed Forces No. 1 (2018), approved by the Presidium of the RF Armed Forces on March 28, 2018);
• due to the fact that during recourse, material succession does not occur, but a new obligation appears, the pledge provided as security for the original obligation does not secure the new obligation (resolution of the 8th AAS dated September 26, 2017 No. 08AP-10703/2017 in the case No. A75-12404/2016).

***

So, this article outlined the difference between recourse and subrogation, including both the position in the doctrine on this issue and the conclusions of judicial practice.
In general, most sources agree that with subrogation, a change occurs on the creditor’s side with the preservation of obligations, and with recourse, a new obligation arises that did not exist before the satisfaction of the creditor’s claims. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.