Global Vietnam Lawyers (GV Lawyers) respectfully introduces the article under the headline “Can I Claim Compensation After Receiving Insurance for a Vehicle Incident?” written by GV Lawyers’ team of lawyers, to analyze some practical legal aspects related to compensation liability in accident situations and insurance payments.
***
Such incidents as electrical short circuits, fire-explosion, sudden failed operation, unsafe states… can occur to vehicles due to many different reasons from driver mistakes to accident impacts, to poor vehicle maintenance, to possible defects arising from the manufacturing process. Upon occurrence of such a problem, many vehicle owners may believe that the vehicle is at fault and the vehicle manufacturer must be to blame for. In fact, in addition to the aforesaid case, there are many other cases where vehicle owners choose to sue the vehicle manufacturer to seek a compensation decided by competent authorities.
Is it possible for a lawsuit to be filed for compensation for damages to any insured property?
The current Law on Consumer Protection stipulates that consumers have the right to request business organizations and individuals to compensate for damages when products and goods are defective or unsafe (Article 4). The principle of civil law also gives people who suffer from any hurts to their health, honor, dignity, reputation, property or life, the right to claim compensation from the damage perpetrator (Articles 11, 13, 584 of the Civil Code and Articles 4, 185 of the Civil Procedure Code). Accordingly, if the vehicle owners believe that the incident is caused by the manufacturer’s fault, leaving them aggrieved by any damages, they, at their own discretion, then can take legal action against the vehicle company at the competent authority to protect their rights.
However, in many incidents, the vehicles, especially those with high value such as cars, large-displacement motorcycles, etc., might participate in voluntary insurance to prevent unexpected events. In that case, according to the insurance policy for each specific type of insurance, the vehicle owner can receive insurance benefits corresponding to the value of the vehicle before the incident. Given such scenario, the law on insurance business stipulates in Article 16 of the Law on Insurance Business 2022 as follows: “… the insured person is responsible for transferring to the insurance enterprise or branch of a foreign non-life insurance enterprise the right to request a third party who has caused damage to be held accountable for compensation within the scope of the insurance compensation amount. This principle does not apply to life insurance contracts and health insurance contracts;”
The aforesaid Article is understood that if the vehicle owner has received insurance compensation from the insurer within the scope of the right to claim compensation from the flawed party, the vehicle owner will not provide the basis for suing the vehicle company corresponding to the insured object. Instead, the insurer will receive the vehicle owner’s right to claim compensation and decide whether or not to claim compensation. Although the vehicle owner can still file a lawsuit and have it accepted by the competent authority, the likelihood of losing the lawsuit is very high if the vehicle company proves that the vehicle owner has received the insurance money and transferred the right to claim compensation by signing agreements and documents with the insurer. This is called the “subrogation principle” in concluding and implementing insurance contracts according to the law on insurance business.
Claiming compensation for other damages
Note that in addition to the scope of insured damages, the aforesaid law on insurance business will not cause the vehicle owner to lose the right to claim compensation if other damages or losses occur, such as a vehicle fire-explosion that spreads to surrounding vehicles, properties, houses, or causes human casualties. In these cases, it will be necessary to determine which damages are caused by the vehicle’s manufacturing defect and who suffers from the damages for the purposes of providing a basis for claiming compensation. Depending on the case, the vehicle owner also has the right to request the manufacturer to compensate for mental damage at the agreed compensation level or according to the law if no agreement can be reached.
However, the process of pursuing litigation to seek compensation is far from simple because the vehicle owner will have to prove “manufacturing defect” as a causal correlation triggering the above damages. The manufacturing defect is a purely technical issue and can only be determined by experts or authorities, while most vehicle owners – consumers often do not have enough expertise. Especially for the vehicles that have had incidents such as fire- explosion, serious deformation, and have been stored for a long time, determining whether the vehicle is truly defective from the manufacturing process and whether the defect leads to any incident becomes all the more difficult and may face objections from the manufacturer. After all, although the competent authority may still request a technical assessment, there is no guarantee that the assessment results will be favorable or helpful in clarifying the “manufacturing defect”.
Accidents or incidents occurring to a vehicle always make much emotional inflictions on the owner who has spent a lot of effort and money to create assets. At that time, the desire to pursue responsibility for the manufacturer’s fault is completely understandable. However, to prepare for a complicated lawsuit, the vehicle owner will need to pay attention to the aforesaid issues to avoid wasting time and money ineffectively, not to mention achieving no expected results.