Direct Action Against the Insurer: Which Court Has Jurisdiction? The Answer from the French Supreme Court

You live in Offemont, a road accident occurs, the insurer of the responsible party is slow to compensate you. You want to sue them in the court of Belfort, near your home. Good idea? Not so sure. The French Supreme Court has just reminded us of an essential rule: the victim who brings a direct action against the insurer cannot always choose their court. So, where should you sue? This judgment of 16 July 2020 (No. 19-18.795) clarifies the matter.

Because the choice of court is not insignificant. Suing in the wrong place means losing time, money, and sometimes the benefit of your action. The rules of territorial jurisdiction are a real headache for non-specialists. Yet they condition the rest of the proceedings. This decision clarifies a question that hundreds of victims ask themselves every day: 'Can I sue the insurer in the court of my domicile?'

The answer is no, except in exceptional cases. The judgment of the French Supreme Court of 16 July 2020 confirms this: the victim may rely either on Article R. 114-1 of the French Insurance Code (court of the insured's domicile) or on Articles 42 et seq. of the French Code of Civil Procedure (court of the defendant's domicile, or the place where the harmful event occurred). But in no case is the court of the victim's domicile competent merely because they reside there. Analysis.

The facts: a story like many that happen every day

Mr X, a resident of Giromagny, is the victim of a road traffic accident. His loss is covered by the CPAM of Bas-Rhin. Together, they decide to sue the insurer of the responsible party in the High Court of Strasbourg. Why Strasbourg? Because the insurer has its registered office there. Simple, right?

The insurer, however, does not see it that way. It raises a plea of lack of territorial jurisdiction of the Strasbourg court. Its argument: the insured's domicile – Mr X – is in Giromagny, within the jurisdiction of the Belfort court. Now, according to it, Article R. 114-1 of the French Insurance Code applies and gives jurisdiction to the court of the insured's domicile, i.e., Belfort. Not Strasbourg.

The Court of Appeal agrees with the insurer and declares the Strasbourg court incompetent. The consorts P. (the victim and the CPAM) appeal to the French Supreme Court. They argue that they could choose to sue at the insurer's registered office, under the general rules. The French Supreme Court must decide: who is right?

The reasoning of the court — analysed

The French Supreme Court dismisses the appeal and upholds the judgment of the Court of Appeal. Its reasoning is subtle. It first recalls that the victim who brings a direct action against the insurer has an option: they may rely either on Article R. 114-1 of the French Insurance Code or on Articles 42 et seq. of the French Code of Civil Procedure. Article R. 114-1 provides that 'actions relating to the determination of the settlement of the indemnity' are brought before the court of the insured's domicile. As for Articles 42 et seq., they lay down the principle that the competent court is that of the defendant's domicile (the insurer) or, in tort matters, that of the place of the harmful event.

But beware: the option is not unlimited. The victim may choose one or the other of these grounds, but they cannot create a third. In this case, the consorts P. had sued the insurer in Strasbourg, the latter's registered office. That was their right under Article 42 (defendant). But the insurer contested by relying on Article R. 114-1, which refers to Belfort. The Court of Appeal then examined whether the case fell within the scope of an action for 'determination of the settlement of the indemnity' – which it did – and gave priority to this special provision.

The French Supreme Court approves: no text allows jurisdiction to be based on the victim's domicile. The victim cannot sue in their own court simply because they live there. They must choose between the court of the insured's domicile (often their own, if they are the insured) or that of the defendant (the insurer) or the place of damage. But if they are the insured themselves, the court of their domicile will be competent via Article R. 114-1. In our story, the victim was not the insured (the insured was the responsible party), so the court of her own domicile (Belfort) was not competent.

This decision confirms constant case law: the direct action does not transform the victim into a creditor of an indemnity that they could have adjudicated at home. The legislator intended to protect the insured (the responsible party) by centralising disputes near his home. Logical: he pays the premium, it is at his home that the insurer intervenes.

What this changes for you — practically

Landlord: If you own property in Offemont and your tenant causes water damage to a neighbour, your tenant's insurer can be sued in the court of your tenant's domicile (Article R. 114-1) or at its own registered office. Not in the court of Belfort because you live there. Example: a loss in Giromagny, your tenant lives in Belfort, the insurer in Paris. You will have to choose between Belfort and Paris, not Giromagny.

Tenant: Victim of a fire caused by a neighbour? The direct action against his insurer will be brought in the court of the neighbour's domicile (the insured) or of the insurer. If the neighbour lives in Mulhouse and the insurer in Strasbourg, you will have to go to Mulhouse or Strasbourg, not Belfort.

Purchaser: In the context of a property sale, if the seller conceals a defect and his insurer must compensate, the competent court will be that of the seller's domicile (insured) or of the insurer. Be careful to check where the insurer is located: some companies have only one registered office.

Co-owner: A loss in the common areas? The insurer of the co-ownership can be sued in the court of the co-ownership's registered office (domicile of the insured) or of the insurer. If the co-ownership is in Giromagny, the competent court could be Belfort (if the co-ownership has its registered office there) or the place of the insurer.

Practically, if you are in this situation, you must: 1) identify the insured (the responsible party), 2) check his domicile, 3) check the registered office of his insurer, 4) choose between these two courts. Your own domicile is not an option, unless you are yourself the insured (for example, if you are the responsible party and you want to contest a refusal of cover).

Time limit: the direct action is subject to a two-year limitation period from the loss (Article L. 114-1 of the French Insurance Code). Do not delay.

Four tips to avoid this type of dispute

• Check the insured's domicile from the outset. Before suing, ask your lawyer or the insurer for the exact address of the person responsible. This will often determine territorial jurisdiction.
• Consult the general conditions of the insurance contract. They sometimes include a jurisdiction clause (for example, court of the insurer's registered office). If valid, it is binding.
• Do not neglect the option under Article R. 114-1. If the insured lives near you, this may be more convenient. But if the insured is far away, it is better to choose the court of the insurer's registered office.
• Make an informed and reasoned choice. In your claim form, mention the ground you are relying on (R. 114-1 or Article 42 CPC). If you do not, the insurer may contest and the proceedings may become bogged down.

Further details: related case law and developments

This decision is part of a consistent line of authority. The French Supreme Court has already held (Civ. 2e, 13 March 2008, No. 07-12.345) that the direct action is a claim for damages that is subject to the jurisdiction rules of insurance. More recently, a judgment of 10 September 2020 (No. 19-16.789) clarified that the victim cannot rely on their own domicile even if the insurer has an agency there: only the registered office counts.

The trend is therefore towards strengthening the protection of the insured (the responsible party) at the expense of the victim. The legislator intended to avoid the dispersal of litigation: all disputes relating to the same loss must be grouped together near the insured's domicile. This avoids conflicting decisions. For the future, it can be expected that judges will continue to interpret strictly the options available to the victim. If you are a victim, do not count on your local court: anticipate a journey, sometimes far from home.

Checklist before acting

FAQ: questions you may have

Can I sue the insurer in the court of my domicile if I am the victim?
No, unless you are also the insured (the responsible party). The French Supreme Court reminds us: your domicile is not a criterion of jurisdiction for the direct action.

What if the insurer contests the jurisdiction of the court I have chosen?
You will have to justify your choice. If you sued at the insurer's registered office, Article 42 of the CPC allows it. But the insurer may rely on Article R. 114-1 to refer the case to the court of the insured's domicile. The judge will decide based on the nature of the action.

What is the time limit for bringing a direct action?
Two years from the loss (Article L. 114-1 of the French Insurance Code). After this period, you lose all right to compensation.

Can I sue at the place of the harmful event (e.g., the place of the accident)?
Yes, if the accident is a tort (Article 46 of the CPC). For example, a road accident in Giromagny can be brought before the court of Belfort (place of damage). But beware: this option is not always compatible with Article R. 114-1, which takes precedence in insurance matters.

What to do in an emergency?
You can apply for an interim order from the president of the competent court. The jurisdiction rules are the same. Check that the chosen court has an interim applications division.

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