Polish Supreme Court to Settle Decades-Old Dispute on Car Accident Compensation

A significant legal dispute concerning the calculation of damages for car accidents under Poland's mandatory third-party liability insurance (OC) is poised for resolution. The Civil Chamber of the Supreme Court (SN) is set to address a complex question: should compensation be based on hypothetical repair costs, or should it reflect the actual financial loss experienced by the vehicle owner, especially when the car has already been repaired or sold?

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The question is whether it is permissible to determine compensation from OC insurance as the equivalent of hypothetical repair costs when the injured party has already repaired the vehicle or sold the damaged car.

This issue has led to conflicting rulings in Polish courts. Some judgments have adopted a "dynamic" view of damages, considering the loss at the time of the court's ruling. Under this approach, if a car is repaired, the damage is equated to the cost of repairs plus any potential decrease in market value post-repair. If the car is sold, the damage is the difference between its sale price and what it would have fetched if undamaged.

Conversely, other judicial decisions adhere to a more static principle, asserting that the obligation to compensate arises at the moment the damage occurs (Article 363, Paragraph 1 of the Civil Code). This perspective suggests that the amount of compensation should cover the necessary repair costs, irrespective of whether the owner has actually undertaken the repairs or sold the vehicle. The core of the debate lies in whether the insurer should cover the cost of repairs that were never performed or if the compensation should strictly align with the owner's demonstrable financial detriment.

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There are discrepancies in the case law of the Supreme Court and common courts when dealing with car damage cases.

The President of the Civil Chamber, Prof. Joanna Misztal-Konecka, has submitted a request to the full chamber for a definitive ruling, aiming to bring clarity and consistency to this area of law. The outcome of this decision will have substantial implications for insurance companies, accident victims, and the legal profession in Poland, potentially settling years of legal uncertainty and ensuring fairer compensation practices.

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The obligation to repair the damage by restoring the vehicle to its previous state or by paying a sum to compensate for this damage arises at the moment the damage is caused.