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HomeGorrissen Federspiel wins landmark case on double compensation

Gorrissen Federspiel wins landmark case on double compensation

On 27 April 2022, the Supreme Court ruled in favour of the insurance companies The Danish Shipowners’ Accident Insurance Association (UFDS) and the P&I insurer SKULD (SKULD), in a case concerning the calculation of compensation for a foreign seafarer’s personal injuries sustained while working on a Danish-flagged vessel. The case concerned a Philippine seafarer who had sustained personal injury on a tanker vessel owned by the shipping company TORM. The seafarer received compensation for the injury, first under the Philippine rules (POEA rules) and later under the Danish Act on Workers’ Compensation.

The crux of the case was whether UFDS should be entitled to deduct the compensation already made to the seafarer under the Philippine Rules when paying the compensation under the Danish rules. If this were to be permitted, SKULD should be reimbursed the already paid compensation and the injured party would only receive one compensation amount.

The key legal issue concerned whether section 29(2) of the Danish Act on Workers’ Compensation applied in relation to determining whether the compensation under the POEA rules should be considered as being of the “same nature” as compensation under the Danish Act on Workers’ Compensation. The Supreme Court ruled that the compensations were of the same nature, which meant that SKULD could be reimbursed the already paid compensation. Therefore, there should be no double compensation for the injured seafarer.

The ruling clarifies the following three fundamental issues regarding section 29(2) of the Danish Act on Workers’ Compensation:

  1. The provision will, as mentioned, only apply if the two compensations are of the “same nature”. In regard to the specific compensations, the Supreme Court found that this was the case and noted that the objective of the provision was “to avoid double compensation” and that the wording of the provision was “broad”.
  2. The provision implies that there is a “liable tortfeasor”. The Supreme Court ruled that this was satisfied in the case at hand where the shipping company’s liability for the industrial injury rested on strict contractual liability.
  3. Finally, the Supreme Court ruled that SKULD was a “liability insurance company” in relation to the provision.

The case is of great importance for all the cases where international seafarers are injured while working on Danish flagged vessels. In the case, the trade organisation Danish Shipping intervened in support of the insurance companies and the Danish Metalworkers’ Union intervened in support of the Social Appeals Board.

The case was conducted before the Supreme Court on behalf of the insurance companies by Peter Appel, Partner, Gorrissen Federspiel, with support from Line Gritt Boel Jensen, attorney, and Madina Yaqin, assistant attorney. Danish Shipping, which appeared in support of the two insurance companies, was represented by Jacob Skude Rasmussen, Partner, Gorrissen Federspiel. The counterparty, the Social Appeals Board, was represented by the Legal Adviser to the Danish Government and was during the case supported by the intervener the Danish Metalworkers’ Union.

Gorrissen Federspiel is very satisfied with the decision, which was handed down after seven years of proceedings before the administrative authorities and the courts of law.

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