APPLICATION OF SPANISH LAW TO PRODUCT-LIABILITY CLAIMS AGAINST CROSS-BORDER INSURERS

In its judgment n. 771/2026, dated on 21 mayo 2026, the Spanish Supreme Court confirms that a clause in a manufacturer’s insurance contract subjecting the policy to foreign law cannot limit the right of direct action of an injured party residing in Spain.

The case concerns a patient operated on in Spain for retinal detachment using a medical device manufactured by a German company, which proved defective and caused total loss of vision in her eye. She brought proceedings in Spain against both the German manufacturer and its German insurer.

1.- First, regarding the law applicable to the direct action against the insurer, the Court reasons that art. 5.1.a) of the Rome II Regulation provides that the law applicable to liability for defective products is that of the country of habitual residence of the injured party, provided the product was marketed in that country. Art. 18 of the same Regulation allows the injured party to bring a direct action against the insurer if so provided by the law applicable to the non-contractual obligation or the law applicable to the insurance contract.

Since Spanish law applies (the patient resides in Spain and the product was marketed in Spain) art. 76 of the Insurance Contract Act supports the direct action without any precondition. The clause submitting the contract to German law only produces effects between the insurer and the insured, and cannot limit the rights of the injured third party. This was also declared by the CJEU in its judgment of 9 September 2015 (case C-240/14).

2.- Second, regarding the limitation period, the insurer argued that the applicable period was one year under art. 1968.2 of the Spanish Civil Code (non contractual action). The Court reiterates its precedents: the limitation period for the direct action against the insurer is the same as for the civil liability action against the insured, namely three years under art. 143.1 of the Spanish Law for the Defence of Consumers and Users, running from the date the injured party became aware of the damage and the person responsible.

Since the toxicity of the product was not known with certainty until January 2016, the period had not expired when the claim was filed in December 2018.