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On the establishment of the size of damage incurred due to the loss of the breadwinner at a traffic accident

Case No. 11/2013

 

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

IN THE NAME OF THE REPUBLIC OF LITHUANIA

 

RULING

ON THE COMPLIANCE OF THE PROVISIONS OF ITEMS 9 AND 11 OF THE RULES FOR THE DETERMINATION OF DAMAGE ARISING AS A RESULT OF A TRAFFIC ACCIDENT AND FOR THE PAYMENT OF INSURANCE PAYOUTS AS APPROVED BY THE 23 JUNE 2004 RESOLUTION (NO. 795) OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA (WORDING OF 13 FEBRUARY 2008) AND THE PROVISIONS OF ITEM 6.1 (WORDING OF 3 DECEMBER 2008) OF THE DESCRIPTION OF THE PROCEDURE FOR CALCULATING THE AVERAGE WORK REMUNERATION OF EMPLOYEES AND STATE SERVANTS AS APPROVED BY THE 27 MAY 2003 RESOLUTION (NO. 650) OF THE GOVERNMENT OF REPUBLIC OF LITHUANIA WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA’S LAW ON COMPULSORY INSURANCE AGAINST CIVIL LIABILITY OF HOLDERS OF VEHICLES, AND THE CIVIL CODE OF THE REPUBLIC OF LITHUANIA

 

16 April 2015, No. KT13-N7/2015

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Elvyra Baltutytė, Vytautas Greičius, Danutė Jočienė, Pranas Kuconis, Gediminas Mesonis, Vytas Milius, Egidijus Šileikis, Algirdas Taminskas, and Dainius Žalimas

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, pursuant to Articles 102 and 105 the Constitution of the Republic of Lithuania, and Articles 1 and 531 of the Law on the Constitutional Court of the Republic of Lithuania, in a Court hearing, on 8 April 2015, considered under written procedure constitutional justice case No. 11/2013 subsequent to the petition (No. 1B-17/2013) of the Vilnius City Local Court requesting an investigation into whether or not Items 8–11 of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts as approved by the Resolution of the Government of the Republic of Lithuania (No. 795) “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts” of 23 June 2004 (wording of 13 February 2008), as well as the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials as approved by the Resolution of the Government of the Republic of Lithuania (No. 650) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 27 May 2003, are in conflict with Paragraph 1 of Article 29, Paragraph 2 of Article 30, and Paragraph 1 of Article 48 of the Constitution of the Republic of Lithuania, Paragraph 22 of Article 2 of the Republic of Lithuania’s Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007) and Articles 6.249–6.251 of the Civil Code of the Republic of Lithuania.

The Constitutional Court

has established:

I

1. The Vilnius City Local Court was considering a civil case in which the said court had been requested to award one of the claimants, a minor, compensation for the pecuniary and non-pecuniary damage suffered as a result of the death of his father in a traffic accident.

It should be noted that, even though in the said civil case the Vilnius City Local Court adjudicates on the dispute regarding the compensation for both pecuniary and non-pecuniary damage, it is clear from the circumstances and arguments set forth in the ruling by which the said court has applied to the Constitutional Court that the petitioner’s doubts about the compliance of the impugned provisions of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts (hereinafter also referred to as the Rules) as approved by the Government Resolution (No. 795) “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts” of 23 June 2004 (wording of 13 February 2008) and the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials (hereinafter also referred to as the Description) as approved by the Government Resolution (No. 650) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 27 May 2003 with the Constitution and the laws are connected only with determining the size of pecuniary damage upon the loss of the breadwinner that is regulated by these provisions. It is also clear from the entirety of the circumstances and arguments set forth in the petition of the petitioner, as well as from the material of the civil case, that the income of the deceased person used to be obtained on the grounds of employment relations.

2. The petition of the petitioner is substantiated by the following arguments.

2.1. Under Paragraph 22 of Article 2 of the Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007) (hereinafter also referred to as the Law), the size of damage to persons may be assessed only in accordance with the procedure established by means of laws. This procedure is regulated in Articles 6.249–6.251 of the Civil Code (wording of 18 July 2000) (hereinafter also referred to as the CC). Having prescribed in Item 9 of the Rules that the non-received income is calculated on the average work remuneration that is calculated under procedure established by the Government, and having stipulated in Item 6.1 of the Description that the calculation of the average work remuneration of employees is made on the time period for calculation—three calendar months, the Government has taken over the competence of the legislature, i.e., it has regulated the legal relations that should have been regulated only by means of a law.

2.2. The said impugned legal regulation established by the Government has narrowed the possibilities of proving the size of damage, since the non-received income is linked only to the average work remuneration, whilst the calculation of such a size is allowed only on a certain period defined in the said substatutory legal act. A person who sustained damage, in this case—a minor child, cannot prove its size on the income of the person that used to support him which had been received during a longer period and that such income might have increased until his full legal age. A possibility of receiving full compensation for pecuniary damage has thus been limited and there is a violation of Paragraph 2 of Article 30 of the Constitution.

2.3. Under the impugned legal regulation established in Items 9 and 10 of the Rules, in the concrete situation of the case considered by the petitioner, the situation arose where, in the event of a difficult situation in the state, the income not received by a working person is calculated to be lesser in comparison with persons who did not work and whose income not received by them is calculated on the average work remuneration of employees of the respective profession and with the respective qualification, therefore, such legal regulation is discriminatory and is in conflict with Paragraph 1 of Article 29 of the Constitution.

2.4. The impugned legal regulation, whereby the income not received by a person is calculated only on the income from work activity received by the breadwinner during the last three months before his/her death, precludes the assessment of the fact that the breadwinner would have received bigger income from work or individual activity (would have had a possibility of increasing the income, finding another job, changing profession, or becoming engaged in individual activity) before the minor supported by him/her reached full legal age and would have given bigger support for the minor, is also in conflict with Paragraph 1 of Article 48 of the Constitution, which prescribes that each human being may freely choose a job or business.

II

1. In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were received from the representatives of the Government, the party concerned—Nerija Kukauskienė, Head of the Legislation Evaluation Division of the Law Department of the Ministry of Finance of the Republic of Lithuania, Agnė Grigaitė, chief specialist of the same division, and Jovita Burlėgienė, chief specialist of the Insurance Activities Division of the Financial Markets Policy Department of the same ministry, in which it is asserted that the impugned provisions of the Rules and the Description are not in conflict with the Constitution, the Law and, the CC. The position of the representatives of the party concerned is substantiated by the following arguments.

1.1. The purpose of compulsory insurance against civil liability of holders of vehicles is to protect the interests of both the persons who suffered damage in a traffic accident and those responsible for inflicting such damage, however, such insurance does not change the relations of civil liability. Paragraph 2 of Article 6.263 of the CC provides that damage must be fully compensated by the liable person. Paragraph 1 of Article 6.254 of the CC stipulates that, in the instances provided for by means of laws, civil liability may be covered by insurance by concluding an insurance contract covering civil liability. By such a contract, an insurer takes the obligation to pay an established insurance payout in case of an insured event. The obligation of an insurance company to pay an insurance payout in an event covered by compulsory insurance against civil liability of holders of vehicles compensating for damage inflicted in a traffic accident derives from the contract concluded on the grounds of the Law. The obligation taken by the insurer to compensate for damage inflicted by the insured person does not mean that the insurer takes the obligation to fully compensate inflicted damage, since the extent of such an obligation is defined by monetary amounts of insurance as consolidated in the Law. Where the insurance payout is not sufficient for full compensation for damage, the difference between the insurance payout and the actual size of damage shall be redressed by the insured persons themselves liable for the damage caused (Paragraph 2 of Article 6.254 of the CC).

It is not the purpose of compulsory insurance against civil liability of holders of vehicles to shift the liability of the person responsible for damage inflicted in a traffic accident to the insurer. Rather, it is its purpose to create a system ensuring the most effective compensation for such damage. The established legal regulation does not deny the principle of full compensation for damage and, alongside, it enables an effective and proportionate (with respect to the interests of all participating subjects) system of compensation for damage inflicted in traffic accidents.

1.2. The legal relations of compensation for damage are regulated in the CC. The relations of compensation for damage sustained in a traffic accident are also regulated in the Law inasmuch as this is necessary for ensuring a proper functioning of the system of compulsory insurance against civil liability of holders of vehicles. Thus, issues of compensation for damage have been regulated comprehensively in laws.

Paragraph 16 of Article 19 of the Law consolidates a blanket norm on establishing damage and detailing the procedure for paying payments directing to the procedure established by the Government. The procedure according to which an insurance payout to be paid by the insurer to an injured third party is established in the Rules. The methods for calculating the size of damage which are specified in the Rules are designed for paying insurance payouts in events covered by insurance to persons who suffered damage in the most speedy and efficient manner and for making the mechanism for paying insurance payouts as simple and clear as possible. Such particularisation of the legal regulation is also necessary due to the fact that it is important to formulate clear and concrete rules obligating insurers to act in a certain way. In cases of voluntary insurance, the procedure for calculating insurance payouts is established in the insurance rules prepared by insurance companies, however, in cases of compulsory insurance, in order to protect the public interest (i.e., not only the interests of insurance payers, but also those of injured third parties), this procedure must be regulated by means of a legal act. Thus, the Rules are an instruction to insurance companies on how they must calculate insurance payouts due to damage inflicted in traffic accidents, however, such rules do not replace the principal provisions of damage compensation which are established in laws. Therefore, there are no grounds for stating that the impugned legal regulation is in conflict with Paragraph 2 of Article 30 of the Constitution.

1.3. The Rules consolidate the same principles for establishing damage with respect to persons of the same categories. In addition, in other legal acts particularising the principal provisions of the CC on damage compensation, the same principle of the average work remuneration is applied in order to calculate non-received income. Therefore, the impugned legal regulation does not violate the principle of the equality of persons consolidated in Paragraph 1 of Article 29 of the Constitution.

1.4. The impugned legal regulation does not impose any limitations on the possibilities of calculating both income received from employment relations and income received from individual activity in the course of the calculation of non-received income. This statement is supported by the provision of Item 11 of the Rules providing that the part of the income of the deceased person used to be received by the persons entitled to compensation for damage upon the loss of the breadwinner is calculated under procedure established in Items 8–10 of the Rules by taking into consideration the income received by the deceased person. This means that in case the person was engaged in individual activity and also worked under employment contract, in the course of the calculation the income not received by this person, the income received from both individual activity and employment relations must be assessed. In addition, Items 8–10 of the Rules should be applied in a systemic manner together with other provisions of the CC (Items 5–6 of the Rules), therefore, it is impossible to assert that the impugned legal regulation created preconditions for an insurer for abuse let alone limited the right of the injured person to fair compensation for damage. Thus, there are no grounds for stating that a limitation has been imposed with respect to injured persons on proving that the pecuniary damage (non-received income) sustained by them is actually bigger than the one calculated according to the impugned legal regulation.

1.5. Nor do the impugned provisions of the Rules contain any such legal regulation by which an injured person, in implementing the constitutional right to freely choose a job and business, would lose a possibility of implementing the constitutional right to fair compensation for damage, since the methods for calculating damage, established in Items 9–10 of the Rules, for which insurers are under an obligation to pay insurance payouts, may be applied in individual cases either jointly or severally.

1.6. Article 15 of the Law provides that the persons who are entitled to compensation for damage upon the loss of their breadwinner are compensated the part of a deceased person’s income which they either used to receive or were entitled to receive when the breadwinner was alive, and that the size of the damage subject to compensation is established by an insurer on the grounds of documents proving the circumstances, fact, and size of damage. Such legal regulation consolidates the principle of compensation for actual damage sustained by an injured person as proved by means of documents. The Supreme Court of Lithuania has held that non-received income may be compensated only after determining actual non-received income, i.e. such non-received income must be real, but not probable, and that the principle of full compensation for damage means that persons must be brought back to the situation regarding their property which had been prior to the infliction of damage on them. Therefore, there are no grounds for stating that the legal regulation established in the Rules diminishes persons’ possibility of proving the damage actually sustained by them.

2. In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were also received from Eglė Radišauskienė, Deputy Director of the Labour Department of the Ministry of Social Security and Labour of the Republic of Lithuania, and Laimutė Višinskienė, an advisor to the Labour Law Division of the same department, in which they assert that the impugned provisions of the Description are not in conflict with the Constitution, the Law, and the CC. The position of the representatives of the party concerned is substantiated by the following arguments.

The Government approved the Description by invoking the provisions of the Republic of Lithuania’s Labour Code, the Republic of Lithuania’s Law on the State Service, the Republic of Lithuania’s Law on Intelligence, according to which, the average work remuneration (average service remuneration) is calculated under procedure established by the Government.

The average work remuneration calculated according to the Description is guaranteed for the aforesaid persons in the cases established in laws and in either collective labour agreements or employment contracts, as well as in situations where they do not work, i.e., when employees are paid for annual leave, also, when they are paid when work is discontinued in cases established by means of laws, or when they are paid severance payments or other payments provided for in legal acts, therefore, the 3-month calculation period laid down in the impugned Item 6.1 of the Description is sufficient for establishing the size of the average work remuneration payable instead of the work remuneration.

Thus, the Description implements the provisions of the aforementioned laws, it does not regulate any relations categorised as not belonging to employment or service relations, however, it does not prohibit assessing, in cases established by means of laws, income received by persons on the grounds of civil contracts. Since the Description does not regulate the size of compensation for damage to persons, it is not in conflict with the Constitution, the Law, and the CC.

The Constitutional Court

holds that:

I

1. The Vilnius City Local Court, the petitioner, requests an investigation into the compliance of Items 8–11 of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts, as approved by the Government Resolution (No. 795) “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts” of 23 June 2004 (wording of 13 February 2008) and into the compliance of the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials, as approved by the Government Resolution (No. 650) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 27 May 2003, with Paragraph 1 of Article 29, Paragraph 2 of Article 30, and Paragraph 1 of Article 48 of the Constitution, Paragraph 22 of Article 2 of the Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007) and Articles 6.249–6.251 of the Civil Code (wording of 8 July 2000).

2. Even though the petitioner requests an investigation into the compliance of, inter alia, Item 8 of the Rules with Paragraph 1 of Article 29, Paragraph 2 of Article 30, Paragraph 1 of Article 48 of the Constitution, Paragraph 22 of Article 2 of the Law, and Articles 6.249–6.251 of the CC, it does not present any concrete legal arguments substantiating the non-compliance of the said item of the Rules with the aforementioned provisions of the Constitution, the Law, and the CC.

3. The petitioner’s doubts about the compliance of Items 9 and 10 of the Rules and the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description with Paragraph 1 of Article 29 and Paragraph 1 of Article 48 of the Constitution are substantiated, inter alia, by the fact that, under the legal regulation established in the said items and paragraphs, in the concrete situation of the case considered by the petitioner, the situation arose where, in the event of a difficult situation in the state, the income not received by a working person is calculated to be lesser in comparison with persons who did not work and whose income not received by them is calculated on the average work remuneration of employees of the respective profession and with the respective qualification, therefore, such legal regulation is discriminatory and is in conflict with Paragraph 1 of Article 29 of the Constitution; the legal regulation, whereby the income not received by a person is calculated only on the income from work activity received by the breadwinner during the last three months before his/her death, precludes the assessment of the fact that the breadwinner would have received bigger income from work or individual activity (would have had a possibility of increasing the income, finding another job, changing profession, or becoming engaged in individual activity) before the minor supported by him/her reached full legal age and would have given bigger support for the minor, is also in conflict with Paragraph 1 of Article 48 of the Constitution, which prescribes that each human being may freely choose a job or business. These statements and assumptions of a general character, which, among other things, are connected with the application of the impugned provisions, do not substantiate the petitioner’s doubts about the compliance of the impugned provisions with Paragraph 1 of Article 29 and Paragraph 1 Article 48 of the Constitution.

Thus, the petitioner has not provided any concrete arguments on the non-compliance of Items 9 and 10 of the Rules and Item 6.1 (wording of 3 December 2008) of the Description with Paragraph 1 of Article 29 and Paragraph 1 Article 48 of the Constitution.

4. Consequently, the petition of the petitioner should be treated as a petition requesting an investigation into the compliance of Items 9 and 10 of the Rules and the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description with Paragraph 2 of Article 30 of the Constitution, as well as with the provisions of the Law and the CC.

4.1. It should be noted that, as mentioned before, the circumstances and arguments set forth in the court ruling by which the petitioner has applied to the Constitutional Court make it clear that the doubts of the petitioner about the non-compliance of the impugned provisions of the Rules and the Description with the Constitution and the laws are related only with establishing pecuniary damage upon the loss of the breadwinner as regulated by these provisions; it is also clear from the entirety of the circumstances and arguments set forth in the petition of the petitioner, as well as from the material of the civil case, that the income of the deceased person used to be obtained on the grounds of employment relations.

4.2. Although the petitioner doubts whether or not Item 9 of the Rules is in conflict with Paragraph 2 of Article 30 of the Constitution, as well as with certain provisions of the Law and the CC, the arguments of the petition make it clear that it requests an investigation into whether Items 9 and 11 of the Rules, insofar as they prescribe that the part of the income of a deceased person that used to be received by persons entitled to compensation for damage upon the loss of their breadwinner is calculated under procedure for calculating non-received income according to the average work remuneration, are in conflict with Paragraph 2 of Article 30 of the Constitution, as well as with certain provisions of the Law and the CC.

4.3. Although the petitioner doubts about the compliance of, inter alia, the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description with Paragraph 2 of Article 30 of the Constitution, as well as with certain provisions of the Law and the CC, it is clear from the petition that it requests an investigation into the compliance of the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description with Paragraph 2 of Article 30 of the Constitution, as well as with certain provisions of the Law and the CC insofar as the average work remuneration of a person who died as a result of a traffic accident is calculated on the basis of a three-month calculation period.

4.4. It should be noted that, on 27 May 2003, the Government adopted the Resolution (No. 650) “On the Approval of the Procedure for the Calculation of the Average Work Remuneration of Employees State Servants” by which it approved the Procedure for the Calculation of the Average Work Remuneration of Employees and State Servants. This government resolution and the procedure (inter alia, their titles) approved by the said resolution has later been amended on more than one occasion: as from the entry into force, on 1 October 2006, of the Government Resolution (No. 959) “On Amending the Resolution of the Government of the Republic of Lithuania (No. 650) ‘On the Approval of the Procedure for the Calculation of the Average Work Remuneration of Employees State Servants’ 27 May 2003” of 27 September 2006, this resolution was titled as the Government Resolution “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees State Servants”, whilst the description approved by it was titled as the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees State Servants; as from the entry into force, on 1 January 2013, of the Government Resolution (No. 1561) “On Amending the Resolution of the Government of the Republic of Lithuania (No. 650) ‘On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees State Servants’ of 27 May 2003” of 19 December 2012, this resolution has been titled as the Government Resolution “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials”, whilst the description approved by it has been titled as the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees State Servants.

Thus, the petitioner requests an investigation into the compliance of the first and third paragraphs (to the specified extent) of Item 6.1 (wording of 3 December 2008) of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials as approved by the Government Resolution (No. 650) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 27 May 2003 with Paragraph 2 of Article 30 of the Constitution, as well as with certain provisions of the Law and the CC.

4.5. It should also be noted that, by the Government Resolution (No. 1288) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 19 November 2014, government resolution No. 650 of 27 May 2003 and the Description approved by it were amended and set forth in their new wording.

Thus, the petition of the petitioner should be regarded as a petition requesting an investigation into whether or not the first and third paragraphs (to the specified extent) of Item 6.1 (wording of 3 December 2008) of the Description were in conflict with Paragraph 2 of Article 30 of the Constitution, and with certain provisions of the Law and the CC.

4.6. Even though the petitioner requests an investigation into the compliance of the impugned Items 9 and 11 of the Rules and the first and third paragraphs (to the specified extent) of Item 6.1 (wording of 3 December 2008) of the Description with, inter alia, Articles 6.249–6.251 of the CC, it is clear from the arguments of the petition that it doubts about the compliance of these provisions with Paragraph 1 of Article 6.251 of the CC (“The damages inflicted must be compensated in full, except in cases when limited liability is established by means of laws or a contract”).

5. Thus, in the constitutional justice case at issue, taking account of the arguments of the petitioner, the Constitutional Court will investigate whether or not the following listed below is (was) in conflict with Paragraph 2 of Article 30 of the Constitution, Paragraph 22 of Article 2 of the Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007), and Paragraph 1 of Article 6.251 of the Civil Code (wording of 18 July 2000):

Items 9 and 11 of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts as approved by the Government Resolution (No. 795) “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts” of 23 June 2004 (wording of 13 February 2008), insofar as they prescribe that the part of the income of a deceased person that used to be received by persons entitled to compensation for damage upon the loss of their breadwinner is calculated under procedure for calculating non-received income according to the average work remuneration;

the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials as approved by the Government Resolution (No. 650) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 27 May 2003 insofar as the average work remuneration of a person who died as a result of a traffic accident is calculated on the basis of a three-month calculation period.

II

On the compliance of Items 9 and 11 of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts as approved by government resolution No. 795 of 23 June 2004 (wording of 13 February 2008), and the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials, as approved by government resolution No. 650 of 27 May 2003 with Paragraph 2 of Article 30 of the Constitution, Paragraph 22 of Article 2 of the Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007), and Paragraph 1 of Article 6.251 of the Civil Code (wording of 18 July 2000)

1. On 23 June 2004, the Government adopted the Resolution (No. 795) “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Payments” by which it approved the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Payments. After this resolution had been amended and set forth in its new wording by the Government Resolution (No. 122) “On Amending the Resolution of the Government of the Republic of Lithuania (No. 795) ‘On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Payments’ of 23 June 2004” of 13 February 2008, it was titled as the Government Resolution “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts”, whilst the rules approved by it were titled as the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts.

1.1. The preamble to the Government Resolution (No. 795) “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts” of 23 June 2004 (wording of 13 February 2008) specifies that the Government approved the Rules by invoking Paragraph 16 of Article 19 of the Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007) (“The procedure for assessing damages and paying compensation shall be set forth by the Government”).

1.2. In the context of the constitutional justice case at issue, first of all, the following provisions of the Rules important for this case should be mentioned:

– “The size of insurance payout depends on the size of the damage inflicted on an injured third party <…> in a traffic accident” (Item 5);

– “The size of the damage inflicted in a traffic accident and the size of an insurance payout payable to an injured third party are established by invoking the Republic of Lithuania’s Civil Code, the Law, and provisions of other legal acts, as well as by taking into consideration the degree of guilt of the participants of a traffic accident that lead to the occurrence of such a traffic accident, the reports or conclusions of the persons (appointed experts) authorised by the insurance companies that insured the civil liability of the person responsible for the inflicted damage (hereinafter—the responsible insurer), or the Motor Insurer’s Bureau of the Republic of Lithuania (hereinafter—the Bureau) regarding the damage, the documents submitted by an injured third party and the insured regarding the damage, circumstances of a traffic accident and liability of the participants of a traffic accident, and the documents submitted by other persons specified in these Rules enabling the establishment of the circumstances of a traffic accident and the size of inflicted damage. Where a decision on compensation for damage is adopted by a court, or if it approves a settlement in a case subsequent to a claim by an injured third party for compensation for damage, the size of damage is established by taking account of an effective court judgment or a court-approved settlement on compensation for damage. By invoking these Rules, the Bureau is in charge of administration of damage, establishes the size of damage inflicted in a traffic accident, calculates insurance payouts and pays them to injured third parties in cases provided for in Article 17 of the Law” (Item 6);

– “The size of the damage arising due to fatal injury of an injured third party is established either by the responsible insurer or the Bureau. <...> The part of the income of the deceased person that used to be received by the persons entitled to compensation for damage upon the loss of the breadwinner is calculated under procedure established in Items 8–10 of the Rules by taking into consideration the income received by the deceased person, the number of dependants and social insurance payouts received by the dependants related to the loss of the breadwinner, or other payments paid under legal acts due to the loss of a breadwinner” (Item 11).

To sum up the quoted provisions of the Rules, in the context of the constitutional justice case at issue, it should be noted that, as mentioned before:

the size of the payout of compulsory insurance against civil liability of holders of vehicles payable to an injured third party by the insurer (in cases established in the Law—by the Motor Insurer’s Bureau of the Republic of Lithuania) depends on the size of damage inflicted on such a person in a traffic accident;

in establishing the size of such damage, inter alia, the size of damage upon the loss of their breadwinner, and, respectively, the size of an insurance payout, the insurer (in cases established in the Law—the Motor Insurer’s Bureau of the Republic of Lithuania) must invoke, inter alia, the CC and the Law;

the size of damage, inter alia, the size of damage upon the loss of a breadwinner may also be established by an effective court decision or a court-approved settlement;

the persons entitled to compensation for damage upon the loss of their breadwinner are compensated the part of the income of the deceased person which they used to receive; this part is calculated by taking account of the income received by the deceased person, the number of dependants, social insurance payouts, and other payments related to the loss of the breadwinner.

1.3. It should be noted that the impugned Item 11 of the Rules, in which the procedure for calculating the part of a deceased person’s income that used to be received by persons entitled to compensation for damage upon the loss of their breadwinner, contains a provision referring, inter alia, to Items 9 and 10 of the Rules according to which the income used to be received by a deceased person should be calculated.

1.4. Item 9 of the Rules, whose compliance with the Constitution and the laws is investigated in the constitutional justice case at issue, prescribes: “With respect to persons who worked under an employment contract, state servants, state politicians, judges and state officials, their non-received income is calculated on the average work remuneration that is calculated under procedure laid down by the Government of the Republic of Lithuania.”

Thus, under the impugned legal regulation established in Item 9 of the Rules construed in conjunction with Item 11 of the Rules, the income received by a deceased person who used to work under an employment contract or who used to hold the specified position, and, correspondingly, the part of such income that used to be received by the persons entitled to compensation for damage upon the loss of their breadwinner are calculated on the average work remuneration calculated under procedure established by the Government.

1.5. It also needs to be mentioned that Item 10 of the Rules prescribes: “With respect to persons who were engaged in individual activity, their non-received income is calculated on the average taxed income received during the last 12 months prior to discontinuing individual activity due to harmed health or, if it is impossible to establish such income precisely, the non-received income is calculated on the income declared for the previous tax period prior to the occurrence of harm to one’s health (i.e., on the income received from individual activity as specified in annual income declarations filed with the State Tax Inspectorate). This income, upon the deduction of the paid or payable income tax of residents and the expenses incurred by an injured third party, in the course of individual activity, is deducted from the number of days of the last 12 months or from the number of days of the previous tax period and is multiplied by the number of calendar days during which the person was unable to work due to health’s injury. If a person has been engaged in individual activity for less than 12 months, the size of damage is calculated under the same procedure as for the entire period of individual activity.”

Thus, Item 10 of the Rules, if construed in conjunction with Item 11 of the Rules, establishes a procedure for calculating, inter alia, the income received by a deceased person who used to be engaged in individual activity, and, respectively, for calculating the part of such income received by the persons entitled to compensation for damage upon the loss of their breadwinner.

It also needs to be mentioned that, under the legal regulation established in this item of the Rules, the average-taxable-income calculation period is either 12 months or the tax period (with certain exceptions).

2. As mentioned before, under the impugned Item 9 of the Rules, the average work remuneration is calculated under procedure established by the Government.

It should be noted that the calculation of the average work remuneration of employees and state servants (as from 1 January 2013—also that of intelligence officials with certain exceptions), when they are paid for annual leave, also, when they are paid when work is discontinued in cases established by means of laws, or when they are paid severance payments or other payments provided for in legal acts, was regulated by the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees and State Servants (as from 1 January 2013, it is titled as the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials) as approved by the Government Resolution (No. 650) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees and State Servants” of 27 May 2003 (as from 1 January 2013, it is titled as the Government Resolution “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials”) (Item 1 (with subsequent amendments and supplements) of the Description).

2.1. The first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description, whose compliance with the Constitution and the laws is also investigated in the constitutional justice case at issue, prescribed:

6. In the course of calculating the average work remuneration, the following provisions are followed:

6.1. The calculation period is three calendar months preceding the month (or part thereof) for which the average work remuneration is paid. The average work remuneration of employees is calculated on the remuneration determined during the calculated period, where such remuneration is calculated for the work done or the time worked (if legal acts do not provide otherwise), including all types of work pay specified in Items 3.1–3.4 of the Description, as well as month bonuses. <...>

In order to calculate the average work remuneration in the absence of the data about the employee’s work remuneration preceding the month from which the average work remuneration is calculated, three calendar months preceding the said month are taken for the purpose of calculating the work remuneration (save the cases provided for by means of laws and legal acts where employees must be fully remunerated). Collective agreements (in the absence of such—local normative legal acts of enterprises) must specify professions or work allowing the provision of such a period on which the said calculation is based. <...>”

Thus, according to the impugned government-established legal regulation laid down in the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description, inter alia, the time period for calculating the average work remuneration of persons working under employment contracts is three specified calendar months.

2.2. It should be noted that, even though government resolution No. 650 of 27 May 2003 and the Description approved by it were amended and set forth in their new wording by the Government Resolution (No. 1288) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 19 November 2014, the legal regulation, insofar as the time period for calculating the average work remuneration is three calendar months, has virtually remained intact.

3. To sum up, it should be noted that, under the impugned legal regulation established in Items 9 and 11 of the Rules and the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description, if such legal regulation is construed in the context of the related legal regulation established in the Rules, the insurer (in cases established in the Law—the Motor Insurer’s Bureau of the Republic of Lithuania) calculates the size of damage, i.e. the part of the income of a deceased person that used to be received by persons entitled to compensation for damage, and, respectively, the size of the payout of compulsory insurance against civil liability of holders of vehicles, inter alia, on the average work remuneration received by a deceased person whose time period for calculation is three specified calendar months, inter alia, in cases where a person who died as a result of a traffic accident used to work under employment contract.

4. As mentioned before, in the constitutional justice case at issue, the Constitutional Court investigates the compliance of government-established legal regulation with, inter alia, Paragraph 1 of Article 6.251 of the CC.

4.1. Paragraph 1 of Article 6.251 of the CC provides that the damages inflicted must be compensated in full, except in cases when limited liability is established by means of laws or a contract.

This provision of the CC should be construed in the context of other relevant provisions of the CC regulating the legal relations of civil liability and those of insurance against it:

– “Damage shall include the amount of the loss or damage of property sustained by a person and the expenses incurred (direct damages) as well as the income of which they have been deprived, i.e. the income they would have received if unlawful actions had not been committed. Damage expressed in monetary terms shall constitute damages. <...>” (Paragraph 1 of Article 6.249);

– “Any damage to persons or property <...> must be fully compensated by the liable person” (Paragraph 2 of Article 6.263);

– “1. In the instances provided for by means of laws or a contract, civil liability may be covered by insurance by concluding an insurance contract covering civil liability. Relations connected with the insurance of civil liability are regulated by this Code and other laws.

2. Where the insurance payout is not sufficient for full compensation for damage, the difference between the insurance payout and the actual size of damage shall be redressed by the insured persons themselves liable for the damage inflicted” (Article 6.254);

– “By an insurance contract one party (an insurer) undertakes to pay, subject to the insurance contribution (premium) established in the contract, to the other party (an insurance payer) or the third person for whose benefit the agreement has been made, the insurance payout established in the insurance contract to be calculated in the procedure prescribed in the insurance contract if an insured event set forth in the law or the insurance contract occurs” (Article 6.987).

Thus, under Paragraph 1 of Article 6.251 of the CC, if it is construed in conjunction with the other quoted provisions of the CC, the person liable for inflicting damage must fully (save the cases of limited civil liability provided for by means of laws or a contract) compensate for inflicted damage (damages), inter alia, for income not received by persons; the size of an insurance payout (indemnity) calculated under procedure established by means of a law or a contract payable by an insurer does not impose any limitation on the civil liability of a person liable for inflicting damage, i.e., where the insurance payout (indemnity) calculated under the said procedure is not sufficient for full compensation for damage, the duty to compensate the remaining part of the damage falls on the person who inflicted such damage.

4.2. In the context of the constitutional justice case at issue, Article 6.284 of the CC, regulating the legal relations of civil liability for damage caused by fatal injury, is also important. The said article, inter alia, prescribes:

1. In the event of the death of a natural person, the right to compensation for damage caused by the latter’s death shall be acquired by the persons who were under his/her support or at the time of his/her death were entitled to be supported by him/her (minor children, spouses, parents incapable of work, or other factual dependants incapable of work), likewise the children of the deceased born after his/her death. These persons shall also have the right to compensation for non-pecuniary damage.

2. The persons who are entitled to compensation for damage upon the loss of their breadwinner shall be compensated the part of the income of the deceased person that they used to receive when the breadwinner was alive. <...>”

Thus, under the legal regulation established in Paragraphs 1 and 2 of Article 6.284 of the CC, the damage to be compensated upon the loss of a breadwinner is deemed to be the part of the income of a deceased person which the persons, entitled to compensation for such damage, used to receive or were entitled to receive.

5. In this context, a mention should also be made of certain provisions of the Republic of Lithuania’s Law on Insurance (wording of 18 September 2003 with subsequent amendments and supplements):

– “‘Insurance against civil liability’ means the insurance of property interests of a person arising from possible civil liability for the damage caused to the injured third party and/or their property where the size of the insurance payout paid by the insurer depends on the size of the damages which the insured person must pay to the injured third party for the damage which, however, does not exceed the sum insured if it specified in the insurance contract” (Paragraph 4 of Article 2 (wording of 15 November 2007);

– “Contracts of insurance against damages shall be property, civil liability and health insurance contracts under which the insurer commits to pay, upon the occurrence of an insured event, a payout equal to the amount of the loss incurred” (Paragraph 4 (wording of 15 November 2007) of Article 76).

Thus, according to the legal regulation established in the quoted provisions of the Law on Insurance (wording of 18 September 2003 with subsequent amendments and supplements), contracts of insurance against civil liability insure against the risk of negative consequences for one’s property which could arise due to civil liability for inflicted damage; under such a contract, the size of the insurance payout paid by an insurer depends on the size of damages inflicted on an injured third party with the exception of the cases where they exceed the insured monetary amount.

It should be noted that even though the Law on Insurance (wording of 18 September 2003 with subsequent amendments and supplements) was amended and set forth in its new wording by the Republic of Lithuania’s Law Amending the Law on Insurance adopted by the Seimas on 17 November 2011, the discussed aspects of the legal regulation did not change.

6. As mentioned before, in the constitutional justice case at issue, the Constitutional Court investigates the compliance of the government-established legal regulation with, inter alia, Paragraph 22 of Article 2 of the Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007).

6.1. On 14 June 2001, the Seimas adopted the Republic of Lithuania’s Law on Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles. The aforementioned law was later amended on more than one occasion, inter alia, by the Republic of Lithuania’s Law Amending the Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles adopted by the Seimas on 17 May 2007, by which the said law was set forth in its new wording.

It is clear from the travaux préparatoires of this law that one of the purposes of the adoption of this law was to grant injured parties more guarantees so that the damage sustained by them might be compensated as soon as possible and that they could receive actual compensation for damage, inter alia, in cases where the person who inflicted damage (holder of vehicle) does not possess required funds for compensating for it.

6.2. In this context, one should note the provisions of the Law regulating the amount of the obligations of an insurer and a person responsible for the infliction of damage:

– “‘Insurance payout’ <…> means an amount of money or any other agreed form of payout payable by the insurer or the Bureau of Insurers of Motor vehicles of the Republic of Lithuania <…> to an injured third party, where such a payout is meant to compensate for damage to persons and property and/or non-pecuniary damage” (Paragraph 2 of Article 2);

– “The size of the payout payable by the responsible insurer or the Bureau by way of compensation to a third party injured in a traffic accident shall not be higher than sufficient to cover the damage which was caused in the traffic accident and which is supported by evidence and shall not exceed the insured sums as specified in Article 11 of this Law <…>” (Paragraph 6 of Article 19);

– “The sum insured under compulsory insurance against civil liability of holders of vehicles in a single traffic accident in the Republic of Lithuania, whatever the number of injured third parties shall be:

1) until 10 December 2009—500,000 euros for damage to a person (including 1,000 euros for non-pecuniary damage) <...>;

2) from 11 December 2009 until 10 June 2012—2,500,000 euros for damage to a person (including 2,500 euros for non-pecuniary damage) <...>;

3) as from 11 June 2012—5,000,000 euros for damage to a person (including 5,000 euros for non-pecuniary damage) <...>” (Paragraph 1 of Article 11);

– “Where the compensation paid by the responsible insurer or the Bureau is not sufficient to cover the damage sustained by an injured third party because the damage exceeds the sum insured, the injured third party shall be entitled to claim the remainder from the responsible person” (Paragraph 2 of Article 13).

To sum up the quoted provisions of Articles 2, 11, and 13 of the Law, it should be noted that, according to a contract of insurance against civil liability of holders of vehicles, the size of the insurance payout paid by the insurer depends on the size of damages incurred by an injured third party with the exception of the cases where the damages exceed the insured sums specified in the Law. However, even though the size of an insurance payout meant, inter alia, for compensation for damage to a person is limited by the insured sums specified in the Law, the provisions of the Law do not impose any limitation on the civil liability of a person liable for inflicting damage, i.e., where the insurance payout is not sufficient for full compensation for damage, the duty to compensate the remaining part of damage falls on the person who inflicted such damage.

6.3. In the context of the constitutional justice case at issue, the provisions of the Law consolidating the procedure for establishing the size of damage as a result of fatal injury are also important.

Item 22 of Article 2 of the Law provides that the size of damage to an injured third party, inter alia, damage incurred by loss of life, shall be determined under procedure established by means of laws.

Article 15 “Assessment of Damage” of the Law, inter alia, provides:

5. The damage incurred by loss of life shall include funeral expenses and other related expenses as well as expenses related to compensation for damage due to the loss of a breadwinner. The persons who are entitled to compensation for damage upon the loss of their breadwinner shall be compensated the part of the income of the deceased person that they used to receive when the breadwinner was alive. The right to compensation for damage shall be acquired by the persons who were under support of the deceased person or at the time of his/her death were entitled to be supported by him/her (minor children, spouses, parents incapable of work, or other factual dependants incapable of work), likewise the children of the deceased person born after his/her death.

6. Damage to a person shall be assessed by the responsible insurer or, in the cases referred to in Article 17 of this Law, by the Bureau on the basis of documents and information which prove the circumstances, fact and size of the damage as well as on the basis of medical examination reports. <...>”

Thus, the Law, inter alia, Article 15 thereof, establishes the procedure for determining the size of damage incurred by loss of life, according to which, the damage subject to compensation upon the loss of a breadwinner is deemed the part of a deceased person’s income which the persons entitled to compensation for such damage either used to receive or were entitled to receive. It should be noted that this legal regulation is analogous to that established in Paragraph 2 of Article 6.284 of the CC.

6.4. In the context of the case at issue, it should also be noted that Paragraph 16 of Article 19 of the Law prescribes that the procedure for determining damage and paying the respective payouts is established by the Government.

7. To sum up the legal regulation set forth in the CC, the Law on Insurance (wording of 18 September 2003 with subsequent amendments and supplements), and the Law, it should be noted in the context of the constitutional justice case at issue that, according to the overall legal regulation consolidated in these laws, in the course of determining the extent of the obligation of the insurer, derived from the insurance contract, to pay an insurance payout, one must determine the extent of the obligation of the person civilly liable to compensate for damage, meanwhile, the size of the insurance payout paid by the insurer on the grounds of this contract must be adequate to the size of the losses (damage) incurred by an injured third party excepting the limitations (inter alia, insured sums) established in laws or in an insurance contract in question.

It should also be noted that laws, specifically—Paragraph 2 of Article 6.284 of the CC and Paragraph 5 of Article 15 of the Law, establish the criteria for determining the size of damage upon the loss of a breadwinner, where the income received by a deceased person is one of such criteria.

8. In the constitutional justice case at issue, the Constitutional Court investigates the compliance of the government-established legal regulation governing the procedure for determining damage inflicted in a traffic accident and paying a payout of compulsory insurance against civil liability of holders of vehicles with, inter alia, Paragraph 2 of Article 30 of the Constitution.

8.1. The Constitutional Court has held that the necessity to compensate for material and moral damage inflicted upon a person is a constitutional principle stemming from the Constitution, inter alia, Paragraph 2 of Article 30 thereof, which provides that compensation for material and moral damage inflicted upon a person shall be established by means of a law (inter alia, the Constitutional Court’s rulings of 27 March 2009 and 6 December 2013). This provision of the Constitution consolidates a duty of the legislature to pass a law or laws providing for compensation for damage for a person who suffered material and moral damage (inter alia, the Constitutional Court’s rulings of 3 February 2010 and 18 April 2012).

8.2. The Constitutional Court has also held that compensation for damage inflicted upon a person must be real and fair. The Constitution imperatively requires that a legal regulation be established by means of a law to the effect that a person, who was inflicted damage by unlawful actions, would be able in all cases to claim for just compensation for that damage and to receive that compensation (inter alia, the Constitutional Court’s rulings of 3 February 2010 and 6 December 2013). While compensating for material damage, in all cases it is possible to follow the principle of full (adequate) compensation for damage (restitutio in integrum), when the amount of the inflicted damage may be expressed in a monetary equivalent and the damage may be compensated with money (also, it does not deny the possibility of compensating for material damage by means of other property or otherwise); thus, material losses are compensated with material assets (the Constitutional Court’s rulings of 19 August 2006 and 3 February 2010).

8.3. The provisions of Article 30 of the Constitution must be construed inseparably from other provisions of the Constitution, inter alia, Paragraph 1 of Article 109 thereof, in which it is established that, in the Republic of Lithuania, justice shall be administered only by courts (the Constitutional Court’s ruling of 6 December 2013). The Constitution does not tolerate any such legal regulation where a court which, under the Constitution (inter alia, Article 109 thereof), must administer justice, cannot, while taking account of all the significant circumstances of the case, establish the amount of the material and/or moral damage inflicted upon a person, and, by following law, inter alia, by not violating the imperatives of justice, reasonableness and proportionality, cannot award fair compensation for the material and/or moral damage sustained by the person (the Constitutional Court’s rulings of 19 August 2006, 27 March 2009, 6 January 2011, and 6 December 2013).

It was held in the Constitutional Court’s ruling of 19 August 2006, which has formulated the provisions of the official constitutional doctrine on compensation for damage inflicted by unlawful actions of state institutions or officials, that no prohibition arises from the Constitution for the legislature to establish by means of a law, while heeding the norms and principles of the Constitution and while regulating the relations linked to the compensation of damage inflicted by unlawful actions of state institutions and officials, certain reasonable and grounded criteria under which it would be possible to establish (assess) the size of the damage that should be compensated; such criteria may be very different, they may be differentiated according to the nature, peculiarities and other circumstances of inflicted damage. On the other hand, it was emphasised in the same ruling of the Constitutional Court that no criteria, expressis verbis specified in the laws, referring to which it would be possible to establish (assess) the size of the damage which needs to be compensated, should impede the court to administer justice—by taking account of all the significant circumstances of the case, to establish the size of the material and/or moral damage inflicted upon the person by unlawful actions of state institutions and officials, and, by following the law, inter alia, without trespassing the imperatives of justice, reasonableness and proportionality, to award just compensation for that material and/or moral damage sustained by the person.

These provisions of the official constitutional doctrine are also applicable mutatis mutandis to the legal regulation governing compensation for damage of a different kind inflicted upon persons.

8.4. In the context of the constitutional justice case at issue, it should be noted that the Constitution, inter alia, Paragraphs 1 and 2 of Article 30 and Paragraph 1 of Article 109 thereof, gives rise to a guarantee of the judicial protection of the right of persons who sustained damage as a result of unlawful actions to receive real and fair compensation for the damage. Such a guarantee is implemented by proving, inter alia, the size of damage inflicted upon a person and by claiming compensation for such damage in court.

8.5. The Constitutional Court has also noted that, when performing the duty to adopt a law or laws that establish the compensation for damage inflicted upon a person, the legislature, by using its discretion, may choose and consolidate in a law or laws various forms of compensation for inflicted damage (the Constitutional Court’s rulings of 3 February 2010 and 6 December 2013).

As the Constitutional Court held in its ruling of 3 February 2010, the legislature, having taken into account, inter alia, the fact that the risk of causing damage (origination of damage) is higher in certain spheres of activity, and while striving to ensure that the damage caused to persons is compensated efficiently and timely, may also establish such legal regulation where, on the basis of a contract, the obligation to recover damage caused to other persons is undertaken by a person other than the one who has inflicted damage, or the one who is liable for the actions of the latter, i.e. to establish a so-called insured method of compensation for damage; in setting forth such a method of compensation for damage caused to a person, the legislature must consolidate the grounds for the insured compensation for damage; the legislature, having taken into account the fact that the use of certain objects involves a bigger risk to the rights and legitimate interests of other persons, as well as having taken into account the particularities of certain vocational or economic activity of other persons, may establish such legal regulation, according to which the persons who use certain objects or who are engaged in certain vocational or economic activity, must insure their civil liability against causing damage; in setting the grounds and conditions for compulsory insurance, the legislature may set, inter alia, the maximum sums of insurance.

8.6. The Constitutional Court has also held in its acts on more than one occasion that laws establish rules of a general character, whilst substatutory legal acts may particularise them and regulate the procedure for their implementation (the Constitutional Court’s rulings of 26 October 1995, 5 March 2004, 9 May 2014, and 9 October 2014).

9. As mentioned before, the doubts of the petitioner about the compliance of the provisions of Items 9 and 11 of the Rules and Item 6.1 of the Description with the Constitution and the laws are substantiated by the fact that, having established the impugned legal regulation, the Government has taken over the competence of the legislature, since it is allowed to establish the size of damage for persons only under procedure established by means of laws; in addition, according to the petitioner, the impugned legal regulation has narrowed the possibilities of proving the size of damage, since the non-received income is linked only to the average work remuneration, whilst the calculation of such a size is allowed only on a certain period defined in the said substatutory legal act; thus, a possibility of receiving full compensation for pecuniary damage was limited and there was a violation of Paragraph 2 of Article 30 of the Constitution.

10. While deciding whether or not Items 9 and 11 of the Rules, insofar as they prescribe that the part of the income of a deceased person that used to be received by persons entitled to compensation for damage upon the loss of their breadwinner is calculated under procedure for calculating non-received income according to the average work remuneration, the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description, insofar as the average work remuneration of a person who died as a result of a traffic accident is calculated on the basis of a three-month calculation period, are (were) in conflict with Paragraph 2 of Article 30 of the Constitution, Paragraph 22 of Article 2 of the Law, and Paragraph 1 of Article 6.251 of the CC, it should be noted that, under the Constitution, as mentioned before:

compensation for damage inflicted upon a person must be real and fair;

the Constitution, inter alia, Paragraphs 1 and 2 of Article 30 and Paragraph 1 of Article 109 thereof, gives rise to a guarantee of the judicial protection of the right of persons, upon whom damage was inflicted by unlawful actions, to receive real and fair compensation for the damage, where such a right is implemented by proving, inter alia, the size of damage inflicted upon a person and by claiming compensation for such damage in court;

the legislature, having taken into account, inter alia, the fact that the risk of causing damage (origination of damage) is higher in certain spheres of activity, and while striving to ensure that damage caused to persons would be compensated efficiently and timely, may also establish such legal regulation where, on the basis of a contract, the obligation to recover damage caused to other persons is undertaken by a person other than the one who has inflicted damage, or the one who is liable for the actions of the latter, i.e. to establish a so-called insured method of compensation for damage; in setting forth an insured method of compensation for damage caused to a person, the legislature must consolidate the grounds for the insured compensation for damage;

laws establish rules of general nature, while substatutory legal acts may particularise them and regulate the procedure for their implementation.

In the context of the constitutional justice case at issue, it should be noted that the fact that, under the Constitution, the grounds for insured compensation for damage must be established by means of a law means that the Government is allowed to regulate the relations within its competence by means of legal acts that are based on the law and do not compete with it. While regulating these relations, the Government is also bound by the constitutional imperatives of a real and fair compensation for damage.

10.1. It should be noted that, having established, by means of the impugned legal regulation, the procedure for calculating the size of damage subject to compensation upon the loss of a breadwinner and, respectively, for calculating the size of a payout of compulsory insurance against civil liability of holders of vehicles, inter alia, in cases where a person who died as a result of a traffic accident had worked under an employment contract, the Government implemented the powers conferred on it under Paragraph 16 (“The procedure for assessing damages and paying compensation shall be set forth by the Government”) of Article 19 of the Law.

10.2. As mentioned before, under the overall legal regulation set forth in the CC, the Law on Insurance (wording of 18 September 2003 with subsequent amendments and supplements), and the Law, in the course of determining the extent of the obligation of the insurer, derived from the insurance contract, to pay an insurance payout, one must determine the extent of the obligation of the person civilly liable to compensate for damage, whilst the size of the insurance payout paid by the insurer on the grounds of this contract must be adequate to the size of the losses (damage) incurred by an injured third party excepting the limitations (inter alia, insured sums) established in laws or in an insurance contract in question. It should be noted that, otherwise, one would negate the purpose of insurance against civil liability to shift to the insurer the risk of negative property consequences due to possible civil liability, and, in the case of compulsory insurance against civil liability of holders of vehicles, and one would negate the purpose of this insurance to ensure, under conditions established by means of a law or a contract, compensation for damage sustained by a person as a result of a traffic accident. In establishing the procedure for implementing the provisions of the laws regulating compulsory insurance against civil liability of holders of vehicles, the Government must heed such requirements arising from the laws.

It has also been mentioned that, even though the size of an insurance payout meant, inter alia, for compensation for damage to a person is limited by the insured sums specified in the Law, the provisions of the Law do not impose any limitation on the civil liability of a person liable for inflicting damage, i.e., where the insurance payout is not sufficient for full compensation for damage, the duty to compensate the remaining part of damage falls on the person who inflicted such damage.

10.3. It has been mentioned that Item 22 (the legal regulation established by the Government is also impugned regarding the compliance thereof with this item) of Article 2 of the Law provides that the size of damage to an injured third party, inter alia, damage incurred by loss of life, shall be determined under procedure established by means of laws.

It has also been mentioned that laws, specifically—Paragraph 2 of Article 6.284 of the CC and Paragraph 5 of Article 15 of the Law, establish the criteria for determining the size of damage upon the loss of a breadwinner, where the income received by a deceased person is one of such criteria. It should be noted that these provisions of laws also imply the fact that, in the course of deciding on the size of such damage, all income received by a deceased person, a part whereof was lost by a person that used to be supported by the deceased, should be assessed. Alongside, it needs to be emphasised that, due to the variety and specify of sources of income, it is possible to deem a certain part of income of a deceased person to be income not received by persons supported by the deceased only upon assessing the entirety of the circumstances important for each concrete situation. Therefore, it is not allowed to negate a possibility of establishing general (universal) methods for the calculation of the damage subject to compensation upon the loss of a breadwinner on the grounds of only some sources of the income of the deceased person.

10.4. In assessing whether the first and third paragraphs of Items 9 and 11 of the Rules and Item 6.1 (wording of 3 December 2008) of the Description have reasonably established such a method for calculating the income of a person who used to work, inter alia, under employment contract, and respectively calculating the part of such income that used to be received by the persons entitled to compensation for damage upon the loss of a breadwinner, where such income is related to the average work remuneration whose calculation period is based on three specified calendar months, it should be noted that there are no grounds for stating that the size of income used to be received by such a person is not reflected and that, after the Government has opted for a different calculation method, in all cases (in most cases) preconditions would be created for establishing the size of this income and, respectively, the size of inflicted damage.

It has also been mentioned that Item 10 of the Rules, if construed in conjunction with Item 11 of the Rules, establishes a procedure for calculating, inter alia, the income received by a deceased person who used to be engaged in individual activity, and, respectively, for calculating the part of such income received by the persons entitled to compensation for damage upon the loss of their breadwinner.

10.5. It has also been mentioned that, under Item 6 of the Rules, in establishing, inter alia, the size of damage upon the loss of their breadwinner, and, respectively, the size of a payout of compulsory insurance against civil liability of holders of vehicles, the insurer (in cases established in the Law—the Motor Insurer’s Bureau of the Republic of Lithuania) must invoke, inter alia, the CC and the Law; the size of such damage may also be established by an effective court decision or a court-approved settlement.

Thus, according to the impugned legal regulation laid down in the first and third paragraphs of Items 9 and 11 of the Rules and Item 6.1 (wording of 3 December 2008) of the Description, as well as that established in Item 10 of the Rules, if such legal regulation is construed in a systemic manner in conjunction with Item 6 of the Rules, it should be held that, in calculating the size of a payout of compulsory insurance against civil liability of holders of vehicles, an insurer (in cases established in the Law—by the Motor Insurer’s Bureau of the Republic of Lithuania), or, in case a dispute arises—a court, is bound by the requirements derived from the said laws that, in the course of deciding on the size of such damage, all income lawfully received by a deceased person should be assessed, a part of which was lost by the person used to be supported by the deceased, and that the size of an insurance payout paid by an insurer on the grounds of an insurance contract against civil liability must be adequate to the size of damages (damage) sustained by a third party, save the limitations (inter alia, insured sums) established in laws or the insurance contract.

Consequently, the impugned legal regulation laid down in the first and third paragraphs of Items 9 and 11 of the Rules and Item 6.1 (wording of 3 December 2008) of the Description, as well as the related legal regulation established in the Rules according to which the income of a deceased person is calculated in cases where s/he worked under employment contract, held a certain position, or was engaged in individual activity, does not mean that, inter alia, a court, by establishing the size of damage to be compensated upon the loss of a breadwinner and, respectively, the size of a payout of compulsory insurance against civil liability of holders of vehicles, must confine itself to such cases and must not assess evidence substantiating the size of actually inflicted damage.

10.6. Alongside, it needs to be emphasised that the criteria for establishing the size of damage to be compensated for a person as laid down by the legislator in the course of regulating the grounds and conditions of compulsory insurance, not to mention the government-established methods for determining the size of damage in order to calculate an insurance payout established in the course of particularising the legal regulation laid down in laws, may not be treated as precluding the implementation of the guarantee (arising from the Constitution, inter alia, from Paragraphs 1 and 2 of Article 30 and Paragraph 1 of Article 109 thereof) of the judicial protection of the right of persons who sustained damage as a result of unlawful actions to receive real and fair compensation for damage if they prove, inter alia, the size of inflicted damage and claim compensation for such damage in court. Thus, the impugned legal regulation established in Items 9 and 11 of the Rules and the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description, where such legal regulation particularises, subsequent to the criterion—income of a deceased person—of determining the size of damage to be compensated upon the loss of a breadwinner, the procedure for calculating such income in a concrete possible situation, i.e., when a deceased person used to work under employment contract, means that, in establishing the size of such damage in order to calculate, inter alia, an insurance payout, a court is allowed to invoke criteria that are not necessarily consolidated expressis verbis in laws in situations where, by taking account of all the circumstances significant for a case, this is necessary in order to ensure fair and real compensation for damage.

11. It should be held that the impugned legal regulation, established by the Government (in the course of implementing the powers conferred on it) in Items 9 and 11 of the Rules and the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description, consolidating the method for calculating the size of damage to be compensated upon the loss of a breadwinner, and, respectively, for calculating the size of a payout of compulsory insurance against civil liability of holders of vehicles in cases where a person who died as a result of a traffic accident used to work, inter alia, under employment contract, has not negated the criteria which are specified in laws and which enable the determination of the size of aforesaid damage. Therefore, this legal regulation did not violate Item 22 of Article 2 of the Law prescribing that the size of damage to an injured third party, inter alia, damage incurred by loss of life, shall be determined under procedure established by means of laws.

It should also be held that, in itself, the impugned legal regulation established in Items 9 and 11 of the Rules and the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description does not impose any limitations on the opportunities of the persons entitled to compensation for such damage to receive full compensation for such damage, inter alia, on the grounds of an insurance contact. Therefore, there are no grounds for stating that this legal regulation established by the Government is (was) in conflict with Paragraph 1 of Article 6.251 of the CC.

12. Having held that, it should also be held that the impugned legal regulation established in Items 9 and 11 of the Rules as well as in the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description did not violate the requirement derived from Paragraph 2 of Article 30 of the Constitution to establish, by means of a law, compensation for damage, inter alia, material damage, inflicted upon a person. In addition, the same impugned legal regulation did not violate the constitutional imperatives of real and fair compensation for damage, either.

13. In the light of the foregoing arguments, the conclusion should be drawn that the following listed below is (was) not in conflict with Paragraph 2 of Article 30 of the Constitution, Paragraph 22 of Article 2 of the Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007), and Paragraph 1 of Article 6.251 of the Civil Code (wording of 18 July 2000):

Items 9 and 11 of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts as approved by the Government Resolution (No. 795) “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts” of 23 June 2004 (wording of 13 February 2008), insofar as they prescribe that the part of the income of a deceased person that used to be received by persons entitled to compensation for damage upon the loss of their breadwinner is calculated under procedure for calculating non-received income according to the average work remuneration;

the first and third paragraphs of Item 6.1 (wording of 3 December 2008) of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials as approved by the Government Resolution (No. 650) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 27 May 2003 insofar as the average work remuneration of a person who died as a result of a traffic accident is calculated on the basis of a three-month calculation period.

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1, 53, 531, 54, 55, and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

1. To recognise that Items 9 and 11 of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts as approved by the Resolution of the Government of the Republic of Lithuania (No. 795) “On the Approval of the Rules for the Determination of Damage Arising as a Result of a Traffic Accident and for the Payment of Insurance Payouts” of 23 June 2004 (wording of 13 February 2008; Official Gazette Valstybės žinios, 2008, No. 22-808), insofar as they prescribe that the part of the income of a deceased person that used to be received by persons entitled to compensation for damage upon the loss of their breadwinner is calculated under procedure for calculating non-received income according to the average work remuneration, is not in conflict with the Constitution of the Republic of Lithuania, Paragraph 22 of Article 2 of the Republic of Lithuania’s Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007; Valstybės žinios, 2007, 61-2340), and Paragraph 1 of Article 6.251 of the Civil Code of the Republic of Lithuania (wording of 18 July 2000, Valstybės žinios, 2000, 74-2262).

2. To recognise that the first and third paragraphs of Item 6.1 (wording of 3 December 2008; Valstybės žinios, 2008, 142-5627) of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials as approved by the Resolution of the Government of the Republic of Lithuania (No. 650) “On the Approval of the Description of the Procedure for the Calculation of the Average Work Remuneration of Employees, State Servants, and Intelligence Officials” of 27 May 2003 insofar as the average work remuneration of a person who died as a result of a traffic accident is calculated on the basis of a three-month calculation period, were not in conflict with the Constitution of the Republic of Lithuania, Paragraph 22 of Article 2 of the Republic of Lithuania’s Law on Compulsory Insurance Against Civil Liability of Holders of Vehicles (wording of 17 May 2007; Valstybės žinios, 2007, 61-2340), and Paragraph 1 of Article 6.251 of the Civil Code of the Republic of Lithuania (wording of 18 July 2000; Valstybės žinios, 2000, 74-2262).

This ruling of the Constitutional Court is final and not subject to appeal.

Justices of the Constitutional Court:                       Elvyra Baltutytė

                                                                         Vytautas Greičius

                                                                         Danutė Jočienė

                                                                         Pranas Kuconis

                                                                         Gediminas Mesonis

                                                                         Vytas Milius

                                                                         Egidijus Šileikis

                                                                         Algirdas Taminskas

                                                                         Dainius Žalimas