The Subtle Role of the Insurer In Expert Proceedings in France
The issues of liability and coverage are generally dealt with at the same time and in the same forum in France. As French law, like other civil law jurisdictions, does not provide for proceedings for discovery/disclosure of documents, or ex parte expert or witness reports, expert proceedings are used in order to gather elements of fact and to provide the Court with an independent authorised technical opinion. Such proceedings are frequent in France and almost systematic in cases of malpractice, product liability, property damage, catastrophic claims, for instance. Because of the specificity of such proceedings, its key features will be presented hereafter.
Often, these proceedings are preceded by amicable insurance expert proceedings. Insurers play a key role during both stages, as independent experts in insurance expert proceedings and as parties with technical knowledge and their own position to defend in Court-ordered expert proceedings. This duality, if not managed properly, can go directly against the insurers’ interests as explained further below.
COURT-ORDERED EXPERT PROCEEDINGS IN FRANCE IN A NUTSHELL
Usually in France, when the solution of a dispute depends on a technical issue, the claimant will ask for the appointment of an expert in summary proceedings or emergency summary proceedings before he/she launches any proceedings on the merits. This is permitted by Article 145 of the French Code of Civil Procedure.
A hearing for the appointment of an expert tends to be quite short since, generally, only the definition of the expert’s assignment is debated. It is often very difficult to challenge a request for the appointment of an expert. In fact, in 99 per cent of cases, the Court grants the claimant’s request and appoints an expert. An appeal may be lodged before the relevant Court of Appeal but the grounds of success are very limited as it must be proven that the appointment of an expert is not necessary at all.
The individuals generally appointed as experts by the Courts are independent specialists, listed by the French Courts of Appeal according to their areas of expertise (accounting, medical practice, aviation, etc).
Once appointed, the expert convenes a first expert meeting, where the order is formally read to the attendees. During this first meeting, the parties’ lawyers make a brief presentation of the issues at stake and the operations to be carried out are defined and scheduled. Normally, at this stage, the expert also checks that all the relevant persons, including insurers if need be, have been made parties to the expert proceedings.
Several expert meetings are generally convened by the expert. During these meetings, the expert questions the attendees on the matters at stake and requests the production of documents necessary to his/her investigations, such as sketches, diagrams or charts. Third parties can also be heard by the expert if so required. The legal merits of the case are not discussed in the course of such operations; indeed, the expert may only address technical issues (Article 238 of the French Code of Civil Procedure).
The parties’ positions and analyses are developed in statements filed by the lawyers with the expert. In addition, the latter may request the parties to file statements providing explanations on specific points and the parties’ lawyers can further request in their statements that specific investigations be carried out by the expert or documents produced by the other parties.
The expert may decide that tests need to be carried out on the sites under investigation and may appoint an independent laboratory for such purpose, should he/she not be able to carry them out personally for technical reasons.
The expert proceedings end when the expert files his/her final report with the Clerk of the Court, a copy of which is sent to the parties’ lawyers. Frequently, a preliminary report is submitted by the expert to the parties in order for the latter to make comments to influence the final opinion of the expert.
Furthermore, where the expert report contains information, which public disclosure would be detrimental to one of the parties’ legitimate interests, it cannot be used in a context other than that of the proceedings at stake, unless the Court or the party concerned authorises such use of the report (Article 247 of the French Code of Civil Procedure).
Should the expert’s conclusions support his/her claim, the claimant will then initiate proceedings on the merits requesting the Court with jurisdiction to rule that the claim is well-founded against the party or parties which are deemed liable; to order compensation of the loss sustained; and to rule that the defendants are to bear the expert’s costs as well as part of the legal fees incurred.
The expert’s report is not binding on the Court (Article 246 of the French Code of Civil Procedure). In law, the said report is merely an opinion given to the Court. However, in reality, the Court tends to adopt the expert’s conclusions as far as technical points are concerned.
If the parties are not satisfied with the conclusions of the expert report, they may ask for the appointment of one or several new experts, with the same assignment or an amended assignment. Courts are usually rather reluctant to grant such requests which need to be based on serious grounds, such as obvious mistakes in the first expert report.
INSURANCE EXPERT PROCEEDINGS V COURT-ORDERED EXPERT PROCEEDINGS
There are key differences in the role of the insurer in insurance expert proceedings as opposed to its role in Court-ordered expert proceedings. In the first type of proceedings, the insurer is supposed, with independence and neutrality, to assess coverage and, the case arising, quantum while in the second type, the insurer has to defend its insured’s interests.
It is very common for insurers to have to play both roles, often one after the other. It is accordingly very easy to understand the tricky situation the insurance company is then facing.
Indeed, before Court-ordered expert proceedings are launched, the insurers are generally involved by all the relevant parties at stake. The insurer of the injured party is usually the first one informed and the first who comes on site to determine whether or not the insurance policy covers the damage in question and what is the root cause of such damage. When doing so, the expert acting for the insurance company is supposed to follow the rules that all experts must comply with, ie, neutrality, conscience and impartiality. This means that if the damage is due, whether wholly or partly, to the insured, the insurance company’s expert is supposed to disclose it in his/her report. While these reports were at first considered as internal documents to the insurance company and were not disclosed to the other parties, most Court-appointed experts now request to be communicated a copy of each insurer’s expert’s report. The refusal of a party to file such a copy is often seen as a sign that the insurer’s expert found that the root cause was due to this insurer’s insured.
The insurance company may, therefore, be inclined to ask their experts to draft reports that do not state that the damage is due to the insured as such findings would then be used against it. However, the latter cannot state something that goes against what he/she thinks in his/her report just in case Court-ordered expert proceedings follow. Indeed, French Courts consider that the insurer’s expert and the insurer have a contractual relationship and that if the insurer’s expert’s findings are wrong and cause a further damage to the insured, he/she will be liable and have to bear the consequences of his/her breach. French Courts have also condemned insurance experts in tort when their findings created damages to third parties (French Supreme Court, 3rd Civil Chamber, 28 January 1998; French Supreme Court, 3rd Civil Chamber, 10 July 2002). The only way this expert can, in these circumstances, defend him/herself is by showing that he/she acted with neutrality, conscience and impartiality. Furthermore, since the French Supreme Court held that experts usually acting for insurance companies can also be Court-appointed experts (French Supreme Court, 2nd Civil Chamber, 22 May 2008), many have been doing both. As such, these experts cannot take the risk of stating something of which they are not convinced in insurance expert proceedings, as it may well be used against them in other Court-ordered expert proceedings involving similar technical issues.
What is, therefore, advised is for the insurance company’s expert to draft a report which is as broad as possible with warnings as to the extent of knowledge he/she has on the facts if he/she is convinced that the damage is due to the insured. In other words, the insurance company’s expert must warn the reader that his/her conclusions are made in light of the facts and damage he/she is aware of and that his/her conclusions should be completed with further tests and discussions. This will help the insurance company in Court-ordered expert proceedings to then argue that its expert’s report is not as relevant/definitive as it seems.
Insurers have a key role in Court-ordered expert proceedings and greatly influence the Court-appointed expert as they involve their own experts who speak the same technical language. They are now almost systematically involved as parties when they were before only observers. They, therefore, need to adjust their strategy and be aware that their internal investigations on the issue will likely be disclosed and may be used against them and their insured.