A summary of changes to road traffic accident compensation in Spain
Many a cross-border legal practitioner will be familiar with the Baremo; a tabulated system in place in Spain which determines the way in which compensation for road traffic accidents is calculated. The Baremo is annexed to Royal Legislative Decree 08/04 of 29 October, and was amended by Act 35/2015 of 22 September 2015.
The most recent amendments to the Baremo only came into force on 1 January 2016, but even in the short space of time that has passed since then, the Baremo (often referred to as the ‘new Baremo’) has already become obsolete.
Under ‘Additional Provision One’ of the new Baremo a ‘Reasoned Report’ was recommended to examine the implementation, legal and financial repercussions of the Act, and to make suggestions to improve the system, if necessary. As a result, a Monitoring Committee was created, and it, in collaboration with victims’ associations, academics, lawyers and Spanish insurers, produced a Reasoned Report, which was recently published.
The Monitoring Committee has long accepted that the Baremo, even in its current form, is far from perfect and that it does not achieve its intended aim of restitutio in integrum. Rather, the new Baremo was simply the best result that could be achieved following many years of negotiations between Spanish stakeholders.
The Monitoring Committee notes that one of the many shortcomings of the new Baremo is the fact that it will never place foreign victims of Spanish road traffic accidents in the same position that they would have been in but for the accident. Just two reasons for this include the fact that the tables for both loss of earnings and third-party assistance assume that the injured person will receive Spanish welfare benefits, and indeed, those Spanish benefit amounts are built into the Baremo’s tariffs.
Further, the Baremo tables only allow for a standard Spanish pension payable on retirement; they utilise a discount rate which reflects anticipated inflation in Spain, as well as Spanish life expectancy; and the heads of loss within the new Baremo assume access to healthcare and professional support available in Spain.
But the Monitoring Committee has now gone one step further: it has concluded that the new Baremo has also become obsolete for most, if not all, Spaniards. It notes, for example, that Spanish rates of inflation have changed since the new Baremo was first published in the Official State Gazette (Boletín Oficial del Estado) in Spain on 23 September 2015. Further, it comments on how the Baremo’s tariffs for the value of third party assistance are based on the interprofessional minimum wage and are limited to set hours, both of which are out of touch with reality. There is also reference to the cap on future technical aids of €158,000, which the Committee says will never adequately compensate the most severely injured Spanish victims, some of whom may be reliant on technical aids for life following their accident.
Indeed, the Baremo Monitoring Committee has identified some fifty changes which will be included in its proposal to reform the current regulations. The Committee hopes that with further amendments, which it says are necessary and urgent, not only will victims have improved rights, but there will be more consensus on the value of claims at the outset for insurers and victims alike.
The next step is for the Monitoring Committee’s proposed amendments to be submitted to the Spanish Insurance Advisory Board, which is part of the General Directorate of Insurance. However, the proposal’s final approval will depend on the Ministry of Economy, and a ministerial order of those compensation tables would be required before the ‘new new Baremo’ can come into force.
Prof. Dr. Miquel Martín-Casas, Professor of Civil Law at the University of Girona and President of the Ex-Post Legal and Evaluation working groups of the Baremo Monitoring Committee, says of the Committee’s proposal: “There are some proposals that affect the entire system globally. But they are complex. One example is to eradicate the part of the scales in relation to damages claimed in the notional role of ‘housewife’ or ‘house-husband’, since this scale is subject to unacceptable limitations”.
He adds about the proposal: “this has been a pioneering effort by the Committee where an important consensus has been reached”.
Until such time as the proposal is approved and comes into force, Prof. Dr. Martín-Casas strongly encourages practitioners to review the ‘Good Practices Guide’ on the Baremo, a document that the Committee considers to be invaluable when considering the correct application of the new Baremo.
The deadline for the Monitoring Committee’s proposal to be completed is 30 September 2021, which it will then present to Congress. If the proposal is approved by the Spanish government, the ‘new new Baremo’ could be in force as early as 1 January 2022.