|
By Adv. Sharon Shefer
During November 2007 a new judgement was handed down in the
District Court of Jerusalem which may
significantly influence the exposure of insurers and reinsurers under Third
Party / Public Liability policies.
According to the Israeli Law, when a claim is filed against
a tortfeasor (who is not the employer) by an employee who was injured while engaged at work in the tortfeasor's premises, the
tortfeasor will be required to pay for the damage sustained, less the payment
received by plaintiff from the National Insurance Institute (NII).
At a later stage the NII may file a subrogation claim
against the tortfeasor, demanding payment of the amounts which the NII paid to
the injured.
The NII is voided from filing a claim against the injured
employee in view of the fact the NII premium is paid by the employer.
In previous judgements the Court ruled that an employer will
only be considered as the party who actually paid the NII premium, even though
these employers were manpower companies which, in fact, received a refund of
these costs from the de facto employer.
In the above mentioned judgement C.A. 9589/06 Aryeh
Insurance Co. of Israel Ltd. vs. the NII the Court changed the above
mentioned, long-standing doctrine and precedent, and ruled that if the parties
can prove that the principal who had used the services of the manpower company
had, in fact, paid the NII premium through the manpower company, and if it can
be proved that the manpower company was only a "pipeline" for the
transfer of the payment to the NII, then the principal may be exempt from
liability towards the NII.
In other words, according to the said judgement, the NII will
not be able to file a subrogation claim against principals who used the
services of a manpower company for the employment of workers, if the above
mentioned elements can be proven.
In view of the fact that in Israel, in cases of severe
injuries, the majority of the compensation is paid by the NII, this ruling may
dramatically reduce the liability of the principal's third party insurers.
For the sake of good order, we would note that an appeal has
been filed on the said ruling, and we will now await the Supreme Court's
decision before we can advise further.
|
Home
