Encyclopedia of Private International Law
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Encyclopedia of Private International Law

Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio

The role and character of Private International Law has changed tremendously over the past decades. With the steady increase of global and regional inter-connectedness the practical significance of the discipline has grown. Equally, so has the number of legislative activities on the national, international and, most importantly, the European level. With a world-class editor team, 500 content items and authorship from almost 200 of the world’s foremost scholars, the Encyclopedia of Private International Law is the definitive reference work in the field. 57 different countries are represented by authors who shed light on the current state of Private International Law around the globe, providing unique insights into the discipline and how it is affected by globalization and increased regional integration. The Encyclopedia consists of three inter-linked pillars, enhanced by sophisticated search and cross-linking functionality. The first pillar consists of A-Z coverage of the scope and substance of Private International Law in the form of 247 entries. The second pillar comprises detailed overviews of the Private International Law regimes of 80 countries. The third pillar presents valuable, and often unique, English language translations of the national codifications and Private International Law provisions of those countries. This invaluable combination represents a powerful research tool and an indispensable reference resource.
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Chapter C.6: Cessio legis

Marta Requejo Isidro

I. Introduction

This entry is devoted to cessio legis (a third person paying a creditor acquires the rights of the latter against the debtor by operation of law) and legal subrogation (a third person paying a creditor acquires the right to enforce the rights of the latter against the debtor by operation of law). Neither recourse (Regress, Rückgriff) among joint debtors nor voluntary assignment or contractual subrogation will be addressed.

Private international law aspects of cessio legis and legal subrogation have seldom been addressed in case-law, and the scarce examples provide a mixed picture (see already TF Suisse, 22 September 1959, ATF 85.II.267, [1960] Rev.crit.DIP 345, reflecting the diversity among French, Dutch and German case-law). A specific treatment of the institutions is also rare in private international law statutes. However, some general as well as special provisions can be found: see art 146 Swiss Private International Law Act (Bundesgesetz über das Internationale Privatrecht of 18 December 1987, 1988 BBl I 5, p. 288as amended, henceforth Swiss PILA); art 107.1 Belgian Code of Private International Law (Code de Droit International Privé, Loi du 16 juillet 2004 portant le Code de droit international privé, MB 27 July 2004, 57344, as amended, henceforth Belgian PILA); art 33.3 Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche of 21 September 1994, BGBl. I 2494, as amended, henceforth EGBGB) prior to 2009, modelled on art 13 of the Rome Convention (Rome Convention on the law applicable to contractual obligations (consolidated version), [1998] OJ C 27/34), but with a broader scope that also covered legal subrogation of non-contractual obligations. Article 15 Rome I Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), [2008] OJ L 177/6; →Rome Convention and Rome I Regulation (contractual obligations)) reproduces with slight modifications the text of the Rome Convention. Article 19 →Rome II Regulation (Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II), [2007] OJ L 199/40) provides for a solution in the domain of non-contractual obligations. Both instruments refer to ‘a third person’ under a duty to satisfy the creditor, or who has in fact satisfied the creditor through discharge of that duty, their obligation being merely subsidiary. The Regulations also include a provision governing the multiple liability of debtors at the same level: see art 16 Rome I Regulation and art 20 Rome II Regulation – a similar rule is art 144 Swiss PILA. The provisions deal with the right of debtors that have already satisfied the creditor to demand compensation from the rest, whereby the way in which this right is acquired is irrelevant for the purposes of the rules. Legal subrogation could certainly be one way of acquisition, although for systematic reasons and in order to avoid overlapping with other entries, we refer the reader to the entry on ‘Joint Liability’ (→Joint Liability).

Besides the general provisions on legal subrogation/cessio legis, certain specific provisions are devoted to particular subject matters, such as maintenance: see arts 9 and 10.3 Hague Maintenance Applicable Law Convention 1973 (Hague Convention of 2 October 1973 on the law applicable to maintenance obligations, 1056 UNTS 204; reproduced in national private international law dispositions, such as former art 18(6) no 3 EGBGB). Corresponding provisions have been included in the Hague Maintenance Convention 2007 (Hague Convention of 23 November 2007 on the international recovery of child support and other forms of family maintenance, [2011] OJ L 192/51; art 36), and in the Hague Maintenance Protocol 2007 (Hague Protocol of 23 November 2007 on the law applicable to maintenance obligations, [2009] OJ L 331/19; arts 10 and 11) (→Maintenance obligations). There are also specific rules in the domains of social security and insurance: see art 85 Coordination of Social Security Systems Regulation (Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, [2004] OJ L 166/1) and Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability, [2009] OJ L 263/11.

II. General regime

1. The third party payer

No specific conditions as to the identity of the third party payer are required, either in the above-mentioned statutory provisions regarding cessio legis/legal subrogation or in the Rome I and Rome II Regulations. The third party payer could thus be an individual, but also a social insurance carrier, or the state as employer. This last situation is not unusual, whereby the development of provident social schemes taken in charge by public or semi-public bodies explains the legislature’s concern to provide them with the possibility of subrogating in the rights of the compensated individual against the responsible person (see Cour de Cassation (France), 17 March 1970, no de pourvoi: 68-13577 (source: Legifrance); Cour de Cassation (Belgique), 23 October 1969, Pas. 1970, I, 28).

The duty of the third party has to be ancillary to that of the debtor. Cessio legis or subrogation in art 146 Swiss PILA; art 107.1 Belgian PILA, as well as in art 15 Rome I Regulation and art 19 Rome II Regulation operate in favour of a third party whose duty comes to the forefront secondarily in respect to that of the principal debtor. In other words, the payer and the debtor’s obligation do not stand on an equal footing, whereby guarantor and insurer are the typical cases. The idea p. 289of subsidiarity is reflected in the wording of the legal texts mentioned by their reference to the payer as ‘third party’ – even if actually both the guarantor and the insurer are usually themselves debtors of the creditor. A systematic interpretation of the provisions (art 146 Swiss PILA together with art 144 Swiss PILA; art 107.1 Belgian PILA and art 107.2; art 15 Rome I Regulation and art 19 Rome II Regulation in relation to art 16 Rome I and art 20 Rome II, respectively) reinforces the requirement. Various solutions have been recommended regarding how the ranking is to be determined, either (i) to apply the law of the principal claim, or (ii) the lex fori, or (iii) (the most popular solution), the legal system governing the third party’s duty (Bettina Brückner, Unterhaltsregress im internationalen Privat- und Verfahrensrecht (Mohr Siebeck 1993) 32–33). For the EU Regulations, an autonomous interpretation may also be an alternative, which should above all take into account the systematic relationship between art 16 Rome I Regulation and art 20 Rome II Regulation.

According to both art 15 Rome I Regulation and art 19 Rome II Regulation, the third person must be under a duty to satisfy the creditor. It is disputable whether the provisions are also applicable where the third person compensates the victim voluntarily or by mistake. The predominant opinion favours the negative answer (Reiner Hausmann, ‘Art 15 Rom I-VO’ in Christian Armbrüster and others (eds), J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen, Art 11–29 Rom I-VO, Internationales Vertragsrecht 2 (Sellier-de Gruyter 2011) para 19; Andrew Dickinson, The Rome II Regulation: The Law Applicable to Non-contractual Obligations (OUP 2008, reprinted 2013) para 14.113), although some voices support the opposite view (in favour of application by analogy: Report on the Convention on the law applicable to contractual obligations by Mario Giuliano, Professor, University of Milan, and Paul Lagarde, Professor, University of Paris I, [1980] OJ C 282/1, 35). Under art 146 IPRG, it is expressly stated that in the case of an absence of any relationship among the creditor and the payer, the law of the right under which subrogation occurs is applicable.

Within the framework of the EU Regulations, doubts have arisen regarding the duty of the third party and the identity of the person to whom he owes the performance. According to art 146.1 Swiss PILA, the transfer of claim by operation of law is subject to the law governing the underlying legal relationship between the former and the new creditor, while the same idea seems to underlie art 15 Rome I Regulation and art 19 Rome II Regulation under the German version of the texts, which refers to ‘die Verpflichtung des Dritten gegenüber dem Gläubiger’. Although some scholars consider this is simply a bad translation (U Magnus, ‘Die Rom-I Verordnung’ [2010] IPRax 27, 42), the understanding is shared by other authors that ‘art 19.1 only applies to situations in which the position as between the third party and the person liable is not regulated by contract’ (Andrew Dickinson, The Rome II Regulation: The Law Applicable to Non-contractual Obligations (OUP 2008, reprinted 2013) para 14.114). Other versions, such as the Spanish (‘la ley aplicable a esta obligación del tercero’), allow for a different interpretation, ie accepting that the third party may also have a duty binding him to the principal debtor. It should nevertheless be pointed out that in this situation there is usually no right to recourse, and that even if it exists, its source is seldom a cessio legis.

2. The applicable law

a) Connecting points

In the past, several answers have been given to the question of which law applies to the subrogation of the payer in the rights of the original creditor. Scholars of different countries have proposed both the application of the law that governs the duty of the payer, and of the legal system of the relationship between the original creditor and the debtor. A cumulative application, total or partial, of both systems has also been defended. The first solution has been endorsed by art 107.1 Belgian PILA: ‘La subrogation légale dans les droits du créancier au profit d’un tiers qui l’a désintéressé est régie par le droit applicable à l’obligation du tiers de désintéresser ce créancier.’ The rule already existed before the codification and had been confirmed by case-law (Cour de Cassation (Belgique), 23 October 1969, Pas. 1970, I, 28). The Rome I and Rome II Regulations have preferred the cumulative formula, as has the Swiss PILA in the situation where a duty exists between the creditor and the third party payer (otherwise the law of the claim applies (see above)). Thus, the regulation of the p. 290cessio legis and of the legal subrogation as a rule requires the interplay of two connecting points:

Where a person (the creditor) has a contractual claim against another (the debtor) and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person’s duty to satisfy the creditor shall determine whether and to what extent the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship.

Once the two legal systems at stake have been determined (see (1) below), their coexistence begs the question of their respective material scopes of application (see (2) and (3) below).

(1) Connecting factors 

Under both art 15 Rome I Regulation and art 19 Rome II Regulation, the law which governs the third person’s duty to satisfy the creditor (the so-called Zessionsgrundstatut) determines whether and to what extent the third person is entitled to exercise against the debtor the rights that the creditor had against the debtor under the law governing their relationship. As no information is provided as to which those laws are, both have to be identified following the usual applicable rules. For instance, the Rome I Regulation will apply to an insurance contract as well as to a guarantor’s contract, as they both fall within its scope of application (Report on the Convention on the law applicable to contractual obligations by Mario Giuliano, Professor, University of Milan, and Paul Lagarde, Professor, University of Paris I, [1980] OJ C 282/1, 35, for the Rome Convention). Parties should thus be allowed to choose the applicable law according to the Regulation choice-of-law rules, provided this does not negatively affect the debtor’s position. The caveat is clear in art 146.2 Swiss PILA but less so in the EU Regulations. In the absence of choice, the default rule will enter into play.

(2) Delimitation: ascertaining the rationale of the rule 

The delimitation of the scope of the legal systems concurring to govern cessio legis and legal subrogation requires clarification of the underlying rationale, as well as a correct assessment of the interests at stake. In this regard it has been argued that, similarly to voluntary assignment, in the case of cessio legis the modification of the creditor cannot result in a worsening of the debtor’s position, especially in light of the fact that he has no influence over the choice of the applicable law (Zessionsgrundstatut: the law which governs the third person’s duty to satisfy the creditor). The interests at stake in the framework of cessio legis/legal subrogation are therefore not essentially diverse from those involved in a voluntary assignment or a contractual subrogation, and a different solution for this point would not be justified (Reiner Hausmann, ‘Art 15 Rom I-VO’ in Christian Armbrüster and others (eds), J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen, Art 11–29 Rom I-VO, Internationales Vertragsrecht 2 (Sellier-de Gruyter 2011) para 12). The overarching idea that the debtor cannot be negatively affected by any transaction of the creditor also applies to this domain, whereby contracts at the expense of third parties are not allowed. Actually, this was the solution endorsed by art 17.2 of the Draft of the Rome Convention, of 1972, according to which the law of the original claim determined its transmissibility as well as the rights and obligations of the debtor. A similar provision is to be found in art 146.2 Swiss PILA: in order to assure protection of the debtor’s position, provisions of the law governing the claim which protect the debtor remain reserved. However, art 17 of the Draft was not incorporated to the final text; nor does any reference to the protection of the debtor appear in art 15 Rome I Regulation, although suggestions in this regard were explicitly made by scholars (Max Planck Institute for Comparative and International Private Law, ‘Comments on the European Commission’s Proposal for a Regulation of the European Parliament and the Council on the law applicable to contractual obligations (Rome I)’ (2007) 71 RabelsZ 225, 326–327). Article 19 Rome II Regulation also makes no mention of protection of the debtor. Nonetheless, such absence should probably not be read as implying a will to neglect the debtor, and actually the text ‘the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship’ is usually interpreted as providing for the debtor’s protection.

That being as it may, it cannot be overlooked that in the case of cessio legis/legal subrogation the third party payer plays an essential part, and that at any rate a balance of interests (those of the debtor and those of the third party) p. 291is needed. This is one of the most important divergences between cessio legis/legal subrogation and voluntary assignment or contractual subrogation: whilst the latter normally have nothing to do with the balancing of interests of co-debtors (or consecutive debtors), the raison d’être of a cessio legis is precisely that. Subrogation is an outcome resulting from a rule of objective law that works for the payer. Therefore, in terms of conflict of laws, the interests of the debtor weigh as heavily as the interests of the payer – or less. The third party fulfils his/her duty by anticipating the payment, but as the debtor is still bound to settle the debt, he/she (the payer) bears the risk of the debtor becoming bankrupt. That is why in the cessio legis the figure of the debtor fades: what really matters is not whether he is discharged of his obligation, but to preserve the rights accorded to the payer by the legal system that applies to his duty once he has paid (Christian von Bar, ‘Abtretung und Legalzession im neuen deutschen Internationalen Privatrecht’ (1989) 53 RabelsZ 462, 476–479; TF Suisse, 22 September 1959, ATF 85.II.267, [1960] Rev.crit.DIP 345).

Within the specific framework of the Rome II Regulation, ie the law applicable to non-contractual obligations, another reason has been advanced in order to justify a different solution for cessio legis/legal subrogation compared to voluntary assignment. In the field of non-contractual obligations, the debtor does not choose his counterpart (the creditor), as he does when he accepts a contractual obligation. Therefore, it has been submitted that a priori he is not entitled to claim legitimate expectations in that the tort victim remains as his creditor. This point of view may nevertheless be disputed: once the tort has occurred, the tortfeasor is in a ‘regular’ debtor’s position, meaning that circumstances concerning the victim may affect enforcement of the tort claim (for instance, the victim’s conduct). To this extent the debtor’s position deserves protection against the change of the creditor; the law applicable to the claim must also be applied – or at least taken into account – besides the legal system governing the third party’s duty.

(3) Material scope 

The foregoing paragraphs show a lack of consensus that – not surprisingly – results in the lack of unanimity as to the material scope of each of the legal systems involved in a cessio legis/legal subrogation setting. Following the wording of art 15 Rome I Regulation and of art 19 Rome II Regulation, the law applicable to the right of the payer will determine whether and to what extent the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship. However, the term ‘whether’ is already open to two interpretations. First, the use of the word ‘whether’ can be seen as answering the question whether the third person acquires the creditor’s claim against the debtor, or the power to enforce it at all. A second understanding interprets ‘whether’ as pointing to the requirements under which, and the time at which, the creditor’s claim against the debtor is transferred to the third person by operation of the law. In this regard, ‘whether’ means the conditions for the subrogation effectively taking place: for instance, if the debtor’s knowledge of the fact of the payment is a requirement for the creditor to be bound to subrogate the third party to his rights (see art 1159 Spanish Civil Code (Código Civil of 24 July 1889, Gaceta de Madrid No 206, 25 July 1889)), and also the conditions under which subrogation can be presumed, and those in which it has to be ‘clearly’ established for its effect to take place (see art 1209 Spanish Civil Code). For some scholars these issues are linked to the protection of the debtor’s position, so that the applicable law can only be the law of the claim (Reiner Hausmann, ‘Art 15 Rom I-VO’ in Christian Armbrüster and others (eds), J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen, Art 11–29 Rom I-VO, Internationales Vertragsrecht 2 (Sellier-de Gruyter 2011) para 13).

Article 15 Rome I Regulation and art 19 Rome II Regulation refer to the extent in which the third person is entitled to exercise against the debtor the rights that the creditor had against the debtor under the law governing their relationship. Doubts have arisen in regard to this part of the provisions, concerning the amount in which the third payer is subrogated, and to the law that governs this issue. It has been argued that the legal system of his own duty rules on this point, although within the limits set by the law of the original relationship – ie the upper limit of the recoverable amount is decided by the latter system in order to secure the debtor’s position.

The scope of the law applicable between the creditor and the debtor is less contentious. p. 292There is agreement regarding its applicability to the contents of the obligation, the defences available to the debtor (such as time limits), whether →set-off is possible, and the conditions under which the debtor’s obligations are discharged. More disputed is whether the transferability of the claim remains within the scope of the same law (expressly in favour of art 17.2 Draft of the Rome Convention 1972, which did not find its way into the final text, see above).

b) Assessment of the solution

The Rome I and Rome II Regulations have been subject to criticism regarding the cessio legis/legal subrogation rule. Lack of clarity and the need to improve the formulation of the rule is one of the usual claims. In this regard it has been regretted that the coordination between the two laws has not been expressly addressed in the text itself, thus perpetuating a long-lasting situation of uncertainty all around Europe (see for instance OLG Athens 4834/81 [1983] IPRax 312, with critical comments by Athanassios Pouliadis). In the same vein, scholars would have preferred to retain the expression ‘in full or only to a limited extent’, used in art 13 of the Rome Convention, instead of the new one ‘to what extent the third person is entitled to exercise against the debtor’ (Eva-Maria Kieninger and Harry C Sigman, ‘Abtretung und Legalzession’ in Franco Ferrari and Stephan Leible (eds), Ein neues Internationales Vertragsrecht für Europa – Der Vorschlag für eine Rom I-Verordnung (JWV 2007) 179, 197–198).

The relative merits of the solutions have been also contested. The applicability of the law which governs the third person’s duty to the possibility of subrogation (‘whether the third person is entitled . . .’: on what ‘whether’ means, see above) has raised criticism from a perspective that combines both the need to protect the victim and the need to preserve and to enhance the functions of civil liability in the domain of non-contractual obligations (Luigi Mari, ‘La subrogación en el Reglamento (CE) nº 864/2007: aspectos problemáticos’ [2007] AEDIPr 267–276). According to this view, the solution finally retained presents the shortcoming of according the same treatment to all cases of legal subrogation, building upon the guarantor model. However, the rationales underlying such a model and other institutions (such as insurance) do not necessarily coincide. Accordingly, applicability of just one legal system – that of the law governing the third party’s duty – to the admissibility of the subrogation, thereby excluding the cumulative solution – the law of the original claim plus the law that governs the third party’s duty – may be particularly unfortunate: this would be the case if it leads to an unfavourable outcome for the original creditor. For instance, legal systems such as that of →Italy do not allow for the subrogation of the insurer in the rights of the victim related to compensation of physical harm. Therefore, the victim may accumulate the compensation by the insurer to the compensation of such harm, even when the amount satisfied by the insurer already covers the pecuniary equivalent of the physical harm. The case where the victim has contributed to causation of the damage provides another example, as in that constellation the methods to determine the limits within which subrogation operates vary from one legal system to another. Thus, the victim’s claim may be (negatively) affected by the law that applies to the subrogation, in a situation where the exclusion of the law of the original relationship (the relationship between the victim and the debtor) would not be justified on the usual grounds, ie that the protection of the debtor’s position is not an issue.

This criticism rests on the conviction that the rules governing legal subrogation mirror principles pertaining to other legal institutions, particularly to civil liability. The policy underlying compensation for civil liability aims to prevent it from becoming a source of financial gain for the victim; each national lawmaker decides on the contours, limits and exceptions to this aim in view of the general system of civil liability in force nationally. The rights of the victim, derived from the obligations of the tortfeasor, are defined by the law applicable to their relationship. The exceptions this law may foresee to the right to obtain compensation, and especially the above-mentioned exceptions to the policy, should be respected in order to ensure that the ultimate objectives of the institution of civil liability are achieved. This is why both the law of the subrogation and the law governing the non-contractual relationship between the original parties should apply to the admissibility of the subrogation.

It is submitted here that a less radical solution may also be envisaged. Instead of being accorded full application, the law of the claim could be taken into account for the sole purpose of ensuring that the objectives linked to civil liability are not lost. The proposal is borrowed p. 293from the framework of contribution and indemnification among joint tortfeasors in multistate conflict cases, where the delimitation between the law applicable to the first paying tortfeasor, and the law applicable to the non-paying tortfeasor, has to be done in a way that guarantees that contribution does not forestall the victim’s redress (Tim Dornis, ‘Contribution and Indemnification among Joint Tortfeasors in Multi-state Conflict Cases: A Study of Doctrine and the Current Law in the US and under the Rome II Regulation’ (2008) 4 J Priv Int L 237, 256–259).

III. Special rules

1. Maintenance obligations

Cessio legis and legal subrogation are addressed by specific provisions in two Hague Conventions, the Hague Maintenance Applicable Law Convention 1973 and later the Hague Maintenance Convention 2007, and the Hague Maintenance Protocol 2007. However, none of them provide for a complete regulation of the cessio legis. Besides, the claim for reimbursement to which the instruments refer may derive from the original claim and be transmitted via cessio legis, but it could also be an original and independent claim (selbständige Erstattungsansprüche). Albeit with some hesitation, it is generally accepted that the latter also falls within the scope of application of the above-mentioned instruments (Bettina Brückner, Unterhaltsregress im internationalen Privat- und Verfahrensrecht (Mohr Siebeck 1993) 108). On the other hand, benefits not related to maintenance, such as public allowances that derive from political decisions in family matters and giving no right of reimbursement, are not covered by the Conventions.

According to art 9 Hague Maintenance Applicable Law Convention 1973, ‘[t]‌he right of a public body to obtain reimbursement of benefits provided for the maintenance creditor shall be governed by the law to which the body is subject’. Article 10.3 explains and complements the provision, in that the extent of the obligation of the maintenance debtor against whom a public body claims reimbursement is determined by the law applicable to the maintenance obligation. The provisions only apply to public bodies, ie private individuals are excluded. The proposal made in this regard in the 1972 Draft was not endorsed in the final text. An application based on analogy has also been excluded, the solution for the case of public bodies being seemingly not convenient. On the other hand, a broad understanding of what ‘public body’ means has prevailed. According to Michael Verwilghen, Explanatory Report on the 1973 Hague Maintenance Conventions (Hague Conference on Private International Law 1975) para 90, no specific definition has been retained, and a specific technical notion has intentionally been avoided with a view to allowing for a wide understanding of the term. Therefore, a public welfare office or a youth authority is meant, but so too is ‘any body or individual which has power in this type of cases to carry out acts which are clothed with public authority’, ie even a private association which is recognized as serving a public function.

The applicable law will be determined in view of the intervening authority, so that for a public authority belonging to an administrative structure, the applicable law will be that of the state of the authority’s →nationality. For private institutions exercising a public function, the Proposal of 1972 pointed to the law of the seat in the case of a legal entity and to the law of the habitual residence for individuals.

The aggregate reading of art 9 and art 10.3 Hague Maintenance Applicable Law Convention 1973 may lead to an unsatisfactory outcome. Difficulties as regards characterization and delimitation of scope may arise from the fact that two legal systems must be combined, and also due to the need to adapt the solutions provided for in each legal system every time that the laws respectively applicable to the maintenance obligation and to the reimbursement of the public body do not coincide. Indeed, sometimes the connecting points will lead to the same, single legal system. For example, this would be the case if the maintenance obligation is governed by the law of the creditor’s habitual residence, since the public body providing benefits to the creditor usually operates in the latter’s state of residence and follows local law. However, a split of the two laws is likely to occur when the maintenance obligation is subject to a law other than the law of the state of the creditor’s habitual residence by virtue of arts 5, 6, 7 or 8.

The right to reimbursement, or the absence of it, and whether the payment is final or just an advanced payment are issues that fall within the scope of the law of the public entity. Conversely, the existence of the maintenance obligation as well as its amount fall within the scope of the law governing the maintenance p. 294obligation. Characterization (and therefore the applicable law) of other issues has proven more complex, such as provisions that preclude waiving the right to alimony. Other controversial aspects are whether the role of the law governing the maintenance obligation is restricted to topping up the amount that the public body may recover, or whether, on the contrary, such amount always has to be decided upon application of this law. There is no agreement either as to what of the systems at hand governs the issue of the time limit of the right to reimbursement.

The Hague Maintenance Convention 2007 follows the Hague Maintenance Applicable Law Convention 1973 when stating in its art 36.2 that ‘[t]‌he right of a public body . . . to seek reimbursement of benefits provided to the creditor in place of maintenance shall be governed by the law to which the body is subject’. The Explanatory Report (Alegría Borrás and others, Explanatory Report on the Convention on the International Recovery of Child Support and Other Forms of Family Maintenance (Hague Conference on Private International Law 2013) para 592), explains that ‘[a]ccording to this paragraph, the law to which the body is subject will govern the right of the public body to act in place of an individual to whom maintenance is owed or to seek reimbursement of benefits paid to an individual in place of maintenance’. It adds that ‘it has to be clear that the law applicable to the maintenance obligations will also apply to the existence of the obligation of maintenance and the extent of this obligation’.

The Hague Maintenance Protocol 2007 provides for a provision parallel to art 9 Hague Maintenance Applicable Law Convention 1973 in its art 10. Article 11.3 rules on the scope of the applicable law along the same lines of art 10.3 of the 1973 Convention: therefore, the law applicable to the maintenance obligation determines among others the extent of the obligation of a maintenance debtor, where a public body seeks reimbursement of benefits provided for a creditor in place of maintenance. The Explanatory Report (Andrea Bonomi, Explanatory Report on the Hague Protocol of 23 November 2007 on the Law Applicable to Maintenance Obligations (Hague Conference on Private International Law 2013) para 162) stresses the non-innovative character of the rule, explaining that only few drafting modifications have been made. It also recalls that the connection to the law of the public body applies only to the public body’s right to seek reimbursement, whereas the existence and extent of the maintenance claim are governed by the law applicable to that obligation. It also highlights that obtaining the reimbursement does not depend on the law of the public body, but rather on the law applicable to the maintenance obligation.

2. Social security within the EU

Certain special rules regarding cessio legis/legal subrogation have been enacted by the Community lawmaker, for example the OJ L 166/1. According to art 23 Rome I Regulation and art 23 Rome II Regulation, such rules may not prejudice the application of provisions of Community law which, in relation to particular matters, lay down choice-of-law rules relating to contractual or non-contractual obligations.

Article 85 Coordination of Social Security Systems Regulation replaces art 93 of Council Regulation (EC) No 1408/71 of 14 June 1971 on the application of a social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (consolidated version), [1997] OJ L 28/1, as regards subrogation in relation to benefits accorded by the Social Security institutions. The point of departure of the rule is the case of a recipient of benefits from a social security institution of a Member State for →damages that occurred in another Member State. If the institution responsible for providing benefits is, under the legislation it applies, subrogated to the rights which the beneficiary has against the third party, then such subrogation must be recognized by each Member State. The issue of the law competent to determine the requirements and effects of the cessio legis, when the legal system that applies to right to compensation and the one that applies to the cessio legis differ, is resolved in favour of the latter. Thus, scholars talk of a parallelism between art 85 Coordination of Social Security Systems Regulation and art 15 Rome II Regulation when it refers to ‘the law which governs the third person’s duty’ (Reiner Hausmann, ‘Art 15 Rom I-VO’ in Christian Armbrüster and others (eds), J. von Staudingers Kommentar zum Bürgerlichen Gesetzbuch mit Einführungsgesetz und Nebengesetzen, Art 11–29 Rom I-VO, Internationales Vertragsrecht 2 (Sellier-de Gruyter 2011) para 21).

3. p. 295Insurance against civil liability (use of motor vehicles)

Directive 2009/103/EC of 16 September 2009, relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability has foreseen a case of legal subrogation in its art 24.2. The provision’s starting point is negligence on the part of the insurer – either they have not named a representative in the state of the injured party’s residence or have not responded to the complaint within three months. Further requirements are that the compensation body of the Member State of residence compensates the injured party, and claims reimbursement of the sum paid from the compensation body in the Member State of establishment of the insurance undertaking which issued the policy. The latter body will be subrogated to the injured party in his rights against the person who caused the accident or his insurance undertaking, to the extent that the compensation body in the Member State of the injured party’s residence provided compensation for the loss or injury suffered.

Literature

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