Biennial prescription of insurance law: the Constitutional Council to the aid of insurers!

Marked by the Court of Cassation's salvos against the provisions of the insurance code which it considered not severe enough for insurers, the year 2022 ended with the unexpected support of the Constitutional Council.

Seized by a judgment of 7 October 2021 of the 2nd Civil Chamber of the Court of Cassation of the question of the constitutionality of the two-year limitation period established by Article L.114-1 of the Insurance Code , with regard to the principle of equality before the law, the Constitutional Council was asked to say whether the fact of enacting a limitation period of two years constituted a breach of equality before the law given that this limitation period is five years in other contracts and that the two-year period applies indistinctly to the insurer and the insured, while the latter is in a position of weakness compared to the former.

The stakes were high for insurers, many of whose processes are based on the assumption that they can in principle "archive" their files once two years have passed since a claim or the expiry of the contract.

Economically, the application of the two-year statute of limitations represents a considerable burden, judging in particular by the volume of cases that end up in court after the insurer has invoked the two-year period against its insured.

Relying on the principle that different situations warrant different treatments, the Constitutional Council considered that the originality of the insurance contract compared to contracts subject to the Consumer Code sufficiently justified applying a different prescription regime to it.

In relations between insurer and insured, the Constitutional Council considered that equal treatment was perfectly respectful of this principle of equality.

As we can see, this way of applying the principle of equality could just as easily have led to the opposite solution, particularly with regard to the relationship between insurer and insured, whose situations can hardly be considered as not being different.

Beyond the legal motivation, the decision of the wise men of rue de Montpensier certainly sounds like a rescue of the insurers!

Jefferson Larue