OPINION OF MR ADVOCATE-GENERAL TRABUCCHI

DELIVERED ON 5 FEBRUARY 1976 (*1)

Mr President,

Members of the Court,

1. This action, brought by a former official against the Council, arises from the compensation for partial permanent invalidity paid by the defendant institution in accordance with the decision of an arbitration tribunal specially appointed to determine the rate to be applied. His invalidity was the result of a motor-car accident in July 1968 in which the applicant, at that time employed by the Council, was involved whilst not on duty. The contingency was covered by the ‘individual — group’ insurance which at that time applied to officials of the Council under an insurance policy concluded by the Secretariat-General so as to lay down for the time being the conditions on which the benefits provided for under Article 73 of the Staff Regulations of Officials could be granted.

After expressly accepting 20 %, fixed by the arbitration tribunal, as the degree of invalidity, the applicant asked the Council to grant him 30 % on the ground that this was the rate accepted by the appointing authority before he had expressly agreed to the less favourable award of the arbitration tribunal. By drawing a distinction between his relationship with the institution and that between the institution and the insurance organization, the applicant is endeavouring to ensure that his acceptance of the 20 % as the degree of invalidity is effective only as between the insurance organization and the institution, without, according to him, affecting, as between him and the institution, the higher degree of invalidity fixed and previously accepted by the officers of the Council. He claims that the consequence of this is that the institution must make up the difference between the figure agreed with the insurance organization and the figure which the institution had earlier declared itself willing to accept in respect of the applicant as a third party benefiting from the abovementioned individual — group insurance.

The applicant bases his contention on the fact that the statement of the doctor who had treated him and who had assessed his patient's degree of invalidity at 30 %, was based on an opinion to the same effect from a specialist, Dr. Olmechette, whom he had consulted. The Council had also accepted the applicant's suggestion that this specialist should be appointed as his own representative on the arbitration tribunal appointed to settle the question of the degree of invalidity.

This does not, however, in any way justify the conclusion that the competent authorities of the institution to which the applicant belonged had adopted the previous unilaterally determined figure which was more favourable to the official and which the insurance organization immediately challenged.

Apart from its dependence on a presumption, which is not confirmed by the facts, of the Council's acceptance, the applicant's legal case, which is based on a separation of relationships and of procedures for fixing the degree of invalidity, does not appear to correspond to the position in law. The insurance which the defendant institution had concluded in favour of its officials against the risks provided for under Article 73 of the Staff Regulations and the concomitant obligations assumed must clearly have been sufficient to cover the responsibilities' involved in applying the provision contained in the Staff Regulations. As was made clear by the judgment in Case 18/70 Duraffour v Council ([1971] ECR 523), an obligation assumed by the insurer does not replace an obligation imposed directly on an institution in favour of an official; nevertheless, in a case in which an official has been involved in an accident which is one of the risks that the institution has the duty to cover pursuant to Article 73 and has had his degree of invalidity fixed in due manner, the institution certainly cannot legally recognize a higher degree of invalidity, a fortiori if its rate has been determined with the direct participation and agreement of its representative and the person concerned has freely accepted it.

Bearing in mind that the insurance scheme in force at the material time was a provisional one and that it might not provide cover for all the obligations placed upon the institution by Article 73 of the Staff Regulations, the most that the institution could, in theory, be imagined as doing would be to intervene on behalf of the official if the amount of benefit determined in accordance with the insurance policy was, in its view, inadequate in the light, for example, of depreciation of the currency or other developments of an economic character. But an institution cannot legally intervene in order to recognize a degree of invalidity higher than that duly fixed in accordance with the machinery provided therefor and then unilaterally assume responsibility for payment of that part of the award which was not covered by the insurance company. The degree of invalidity is determined on the basis of inherently technical considerations and not on the basis of expediency or equity and may not therefore be unilaterally changed by an administrative body responsible for handling public money in accordance with objective rules.

The fact that, for the purposes of the arbitration proceedings, the defendant institution consented to the applicant's suggested appointment of the doctor who, when consulted privately by the applicant, had previously stated that he agreed with the assessment of the degree of invalidity at 30 %, does not mean that the institution itself had adopted this assessment as correct but was merely evidence of the length to which the institution had gone to ensure that everything possible was done to safeguard the interests of one of its officials. The fact that, subsequently, the applicant's own medical adviser found it possible to accept a lower degree of invalidity than the one which he had previously favoured certainly does nothing to strengthen the official's case.

The latter would be entitled to receive supplementary benefit from his institution only if it were shown that the benefit granted to him by the insurers as third-party beneficiary was less than what the institution must provide in accordance with the conditions laid down by Article 73 of the Staff Regulations. In the present case, however, the applicant is not complaining about the inadequacy of the obligation assumed by the insurance organization, compared with the risk which the institution was required to cover, but the fact that the organization's assessment of the injury actually sustained was unrealistic. But, on this point, his express acceptance, at a time when there was no question of his ability to understand and take decisions, of an assessment at 20 % of the degree of invalidity cuts the ground from beneath his feet.

The action for annulment brought by the applicant against the defendant's decision rejecting his request is, therefore, unfounded. The concomitant application for compensation is, for the same reasons, also without foundation.

2. I am also in favour of dismissing the application for damages for the loss which the applicant claims to have sustained as a result of the defendant's failure to adopt the implementing measures prescribed in the second subparagraph of Article 73 (2), where provision is made for an annuity to be substituted for payment of the lump sum grant in the event of invalidity. In fact, once the applicant unreservedly accepted the award of a lump sum grant without even asking for an annuity instead, he cannot thereafter be heard to object to the fact that, at the material time, the defendant had not yet taken steps to adopt the necessary implementing measures to arrange in practice for an annuity to be substituted for the capital sum.

Again, it is difficult to imagine what constitutes the loss which the applicant attributes to the advent of currency depreciation. Apart from the opportunities open to him to take precautions against such an event, which must have been easily foreseen, by investing the capital sum received in settlement, any compensation for loss as a result of devaluation is usually only allowed if there is some illegality involved.

3. Nor is there any substance in the argument with regard to the alleged abnormal delay in calculating and paying the benefit due to him. The length of time which elapsed between the accident and the payment of compensation appears to have been due entirely to the need to wait until his invalidity had consolidated before taking a definite decision on its degree. Moreover, during the time which elapsed between the date of the accident and the date at which it was possible to determine the degree of invalidity, the applicant does not appear to have ever requested any payment on account.

4. The applicant further claims to have suffered undue loss because of the way in which the administration of the Council acted in transferring to Germany and converting into marks the capital sum awarded him as compensation for the permanent invalidity. The sum awarded to him in Belgian francs and, in accordance with his request, paid to an account in Germany, was changed into German currency at the normal rate on the free market currently adopted for banking transactions. The applicant maintains that the exchange operation should instead have been conducted at the more favourable rate of the official parity, in accordance with provisions of Article 63 of the Staff Regulations, which lays down that remuneration paid in a currency other than Belgian francs shall be calculated on the basis of the par values accepted by the International Monetary Fund which were in force on 1 January 1965.

The payment of pensions is subject to the same rule (second subparagraph of Article 82 (1)). There is no express provision in the Staff Regulations for payment of benefits of the type with which we are concerned in the present case.

The practice followed by the institutions, in accordance with the resolution adopted by the heads of the Community administration branches at their meeting on 4 May 1970, tended to exclude from the operation of Article 63 of the Staff Regulations a large number of benefits payable to officials under the Staff Regulations but which are not considered to be a component part of remuneration within the meaning of that article. Included among them are, for example, mission expenses, service allowances, temporary daily subsistence allowances, fixed allowances for travel and removal expenses, birth or education grants and so on.

The benefit at issue here does not appear in this list. Moreover, the aforesaid resolution could not in any case be relied upon as a legal basis on which to settle this issue, which can be settled only by interpretation of the Staff Regulations of Officials.

Since there is no express provision in the Staff Regulations, it would be helpful to consider whether application of the exchange rule in Article 63 is consistent with the nature of the protection involved in this case.

What is involved is a payment made not as remuneration but as compensation for injury suffered by an official. This purpose requires that the amount which he is entitled, expressed in this case in the currency of the country in which he had served as an official of the Council, should correspond to the amount paid to him, in accordance with his request, in the currency of the country of his new residence.

In contrast to the position with regard to remuneration which includes elements designed to adjust its level in accordance with variations in local conditions, in the case of benefits of the type in question here, the abovementioned equivalent can be provided only on the basis of the actual value of the sum originally awarded to the person concerned. This value is expressed by the exchange rate on the free market, which is precisely what was used in the present case; on the other hand, use of the exchange rate as required by Article 63 would not produce any real equivalent but might in some cases produce unwarranted advantages, and, in others, undue loss. That exchange rate is not therefore appropriate for the type of payment with which we are concerned.

This means that this claim by the applicant is also unfounded.

5. On the other hand, this is a benefit which, whilst underwritten by an insurance organization in respect of an occurrence in the applicant's private life, is due to him from his institution because of the right conferred upon him under a provision of the Staff Regulations; I am therefore of the opinion that, in accordance with the practice usually observed by institutions when paying, even in a foreign country, sums due under the Staff Regulations of Officials, the payment ought not to have involved the recipient in any bank charges.

6. I therefore recommend that the application be upheld only in respect of the claim for repayment of bank charges debited to the applicant for the transfer, in Deutschmarks, to his account in Germany, of the sum which he was awarded in Belgium in connexion with his invalidity. The remainder of his application should be dismissed as unfounded. On the question of costs I recommend that the defendant should bear a quarter of the costs incurred by the applicant.

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(*1) Translated from the Italian.