Does a fraudulent victim have a right to compensation under the Motor Vehicle Liability Insurance Act (WAM)? (2)

That was the question answered by the Supreme Court on July 4, 2025 (ECLI:NL:HR:2025:1082). The injured party in question was seriously injured as a passenger in a single-vehicle traffic accident. Although the car was registered in the name of a friend, the injured party turned out to be the actual owner and usual driver. After rejection of her own insurance application, she had the car registered in the name of a friend and took out insurance in that person's name. In doing so, she completed the questionnaire incorrectly, including questions about a previous rejection, the usual driver, and whether or not she had a driver's license. The insurer refused to pay (further) compensation for the damage because of the injured party's actions when taking out the insurance.

The discussion in the courts focused mainly on whether the injured party qualified as a “known third party” within the meaning of Section 7:928(2) of the Dutch Civil Code, so that she also had a duty to disclose and, by failing to do so, could be denied coverage under Section 7:930(5) of the Dutch Civil Code. This would have thwarted the injured party's own right under Section 6 of the WAM. The question also arose as to whether the insurer could invoke the limiting effect of reasonableness and fairness. You can read the exact considerations of the court and the court of appeal in our previous Legal Update, in which we discussed the conclusion of Advocate General Hartlief.

Judgment of the Supreme Court

With reference to various rulings of the Court of Justice of the European Union (CJEU), the Supreme Court emphasizes the objective of victim protection under the WAM Directive. Similar to the Matmut judgment of the CJEU (in which the policyholder himself was the injured passenger), the Supreme Court concludes that, regardless of whether a passenger can be regarded as ‘a known third party’ within the meaning of Article 7:928(2) of the Dutch Civil Code, he must be regarded as an injured party within the meaning of Article 1 of the WAM and therefore has an independent right to compensation from the insurer. In the relationship between the injured party and a WAM insurer, there is no room for (by analogy) general extra-legal rules whereby intentional deception or breach of the pre-contractual duty of disclosure by an injured party leads to forfeiture of rights.

Nor does fairness and equity offer any relief to the insurer in this situation. Payment can only be refused if there is abuse of EU law, which is the case when the objective of the European rules is not achieved and when there was a subjective intention to obtain an advantage granted by EU law. The Supreme Court ruled that this was not the case: the injured party is a victim who is seeking compensation, thereby achieving the objective of the WAM Directive (protection of victims). Furthermore, there is no evidence that the injured party deliberately attempted to abuse European rules; she only wanted to take out insurance. The Supreme Court overturned the judgment of the Court of Appeal and referred the case back for further consideration, as a decision still had to be made on the insurer's claim for contributory negligence.

Conclusion 

This ruling by the Supreme Court means that a traffic accident victim, even if they deliberately committed fraud when taking out the insurance, is in principle still entitled to compensation, because the protection of traffic accident victims is paramount in the European Motor Insurance Directive. Only in exceptional cases of abuse of EU law could compensation be refused.

Nevertheless, the fraudulent conduct may not be entirely without consequences. After all, the insurance was taken out in the name of and for the account of the friend. She is therefore the policyholder, and the deception and incorrect answers to the questions could therefore also be attributed to her. This could give the insurer the possibility of recourse against the girlfriend on the basis of Article 15 of the WAM.

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