Determining the appropriate defendant when providing a vehicle for short-term rental (carsharing)

Sh.E. appealed to the court with a claim for recovery of material damage and moral damage in solidarity with the defendants LLP "D", V.N., G.M. The claim is motivated by the fact that V.N., driving a Volkswagen Polo car in a state of drug intoxication, without the right to drive vehicles, collided with a Toyota Camry car belonging to the plaintiff moving in the opposite direction.

The Volkswagen Polo car is owned by "D" LLP. V.N. leased the vehicle online on behalf of his friend, defendant G.M.

The claim was partially satisfied by the decision of the Bostandyk District Court of Almaty dated May 18, 2022. 1,884,419 tenge was recovered from V.N. and G.M. in solidarity in favor of Sh.E. in compensation for material damage.

By the decision of the appeals board dated August 11, 2022, the decision of the court of first instance was changed, the damage caused was recovered in solidarity with V.N., G.M. and D LLP.

The Court of Appeal justified its conclusions by the fact that LLP "D", carrying out business activities to provide a vehicle for rent, did not make sure that the vehicle was provided to the person with whom the lease agreement was concluded, as a result, the car was in the possession of VN, who did not have the right to drive a vehicle and was located under the influence of drugs.

According to Article 10 of the Civil Code, entrepreneurial activity is carried out on behalf of, at risk and under the property responsibility of the entrepreneur, therefore, LLP "D" is jointly and severally liable for damage caused by IPO, as the owner who unlawfully transferred the right to drive a car to VN.

The Court of Appeal found it justified to hold G.M. jointly and severally liable, along with the harm-doer V.N.

It is also stated that LLP "D", in case of compensation for damage to Sh.E., has the right to reverse the claim (recourse) to V.N. and G.M. in accordance with the procedure provided for in Article 933 of the Civil Code.

Along with this, the court of Appeal concluded that, by virtue of paragraph 2 of Article 951 of the Civil Code, moral damage is compensated by the causer if he is guilty, therefore compensation for moral damage is subject to V.N., who is the culprit of the accident, that is, the causer of harm.

In another case, according to the claim of M.M. and M.Z., it was established that due to the fault of N.G., who was driving a Toyota Camry car in a state of alcoholic intoxication, an accident occurred, as a result of which M.Z. suffered serious harm to his health, disability group 3 was established. M.M., the owner of the damaged vehicle, suffered material damage. damage.

By the decision of the district court no.2 of the Medeu district of Almaty on December 10, 2020, the criminal case against NG was terminated due to the death of the perpetrator.

The owner of the vehicle driven by NG is M.S.

Under the agreement dated January 5, 2018, M.S. transferred the Toyota Camry car to the ownership of IP Abbasov, represented by A.R. A.R. in turn, under the vehicle rental agreement dated October 15, 2019, transferred the car to the temporary possession of N.G.

Earlier, by the decision of the Medeu District Court of Almaty dated June 24, 2021, the claim of M.M. and M.Z. was partially satisfied, compensation for moral damage in the amount of 300,000 tenge was collected from M.CH. in favor of M.Z., the cost of restoration repairs 2,836,948 tenge was collected in favor of M.M.

By the decision of the Judicial Board for Civil Cases of the Almaty City Court dated November 23, 2021, the said decision was overturned, with a new one rejecting the claim. The reason for the refusal was that the claim was filed against an improper defendant, since at the time of the accident, the defendant M.S. did not own a Toyota Camry car, since under the contract dated January 5, 2018, the car was transferred to the possession of IP "A". It is indicated that the contract of compulsory insurance of GPO owners of vehicles in respect of this car was concluded between JSC "A" and IP "A". The insurance company has made an insurance payment in the amount of 1,750,200 tenge. The Judicial Board clarified that the plaintiffs are not deprived of the right to file a claim against the IPO owner.

After that, the plaintiffs M.M., M.M. filed a claim for damages to IP "A". The claim was dismissed by the decision of the Alatau District Court of Almaty dated April 8, 2022.

By the decision of the Judicial Board for Civil Cases dated July 18, 2023, the decision of the court of first instance remained unchanged.

In substantiation of the refusal, the courts pointed out that at the time of the accident, the defendant IP "A" did not own a vehicle, respectively, he is not responsible for the damage caused as a result of the accident NG.

It is stated that at the time of the accident, NG owned a vehicle on the basis of a vehicle rental agreement dated October 15, 2019, there is no fault of the defendant IP "A" for the damage caused by NG.

Clause 4.2.9. of the vehicle rental agreement dated October 15, 2019 provides for NG's financial liability to third parties.

The above-mentioned agreement has not been terminated by the parties, and it has not been declared invalid in accordance with the procedure established by law.

The courts also found the plaintiff's reference to the contract of compulsory insurance of civil liability of vehicle owners concluded between JSC "A" and IP "A" to be unjustified.

In these cases, the courts, when determining the owner of the IPO at the time of the accident, took into account the availability of a vehicle rental agreement and a waybill for the driver who committed the accident, and therefore refused to satisfy the claim against the person who provided the rental vehicle.

In accordance with Article 3 of the Law "On Compulsory Insurance of Civil Liability of Vehicle Owners", the object of compulsory insurance of civil liability of vehicle owners is the property interest of the insured person related to his obligation, established by the civil legislation of the Republic of Kazakhstan, to compensate for damage caused to life, health and (or) property of third parties in as a result of the operation of the vehicle as a source of increased danger.

Article 7 of the said law indicates the inadmissibility of operating a vehicle without concluding a compulsory liability insurance contract for vehicle owners. In accordance with Article 10 of the Civil Code, entrepreneurial activity is carried out on behalf of, at risk and under the property responsibility of the entrepreneur.

By virtue of these regulations, the person providing carsharing services is not entitled to put the vehicle into operation without compulsory GPO insurance. However, in the case of carsharing, a compulsory insurance contract is not concluded with the person to whom the vehicle is leased for a short time.

The insured is the GPO of the carsharing organization itself. Accordingly, the person obligated to compensate for damage caused to the life, health and (or) property of third parties as a result of operating a vehicle under short-term rental (carsharing) agreements is the person providing such services as an entrepreneurial activity (carsharing organization).

In the case of M.'s claim, IPO owner is IP "A". This circumstance is also confirmed by the fact that for an accident committed by NG, JSC "A", in which GPO IP "A" was insured, an insurance payment in the amount of 1,750,200 tenge was made.

In the case of the claim of Sh.E., damage was reasonably recovered from LLP "D", however, the conclusion that joint recovery was also necessary from V.N. and G.M. and the instruction to recover moral damage from the causer are incorrect.

Jurisdiction of cases

The jurisdiction of cases is determined in accordance with the general rules established by Article 29 of the CPC, that is, at the place of residence of the defendant of an individual or at the location of the defendant of a legal entity.    

Along with this, claims for compensation for damage caused by injury or other damage to health, as well as caused by the death of the breadwinner, may be filed by the plaintiff at his place of residence or at the place of injury (part 5 of Article 30 of the CPC).

State duty

According to paragraph 1 of Article 610 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (Tax Code), a state fee is charged in the following amounts from claims for material damage filed in court: for individuals - 1 percent of the amount of the claim, but not more than 10,000 MCI, for legal entities - 3 a percentage of the claim amount, but not more than 20,000 MCI, from non-property claims - 0.5 MCI.

Plaintiffs in claims for compensation for damage caused by injury or other damage to health, as well as the death of the breadwinner, are exempt from paying state duty on the basis of subparagraph 5) of Article 616 of the Tax Code.

The legislation does not provide for pre-trial settlement

Courts should keep in mind that the legislation does not provide for the plaintiff's compliance with the procedure for pre-trial settlement of disputes on compensation for damage caused by a source of increased danger (hereinafter referred to as IPO).

Example: By the ruling of the Alatau District Court of Almaty dated April 5, 2023, the claim of N.D. to K.K. and Zh.E. for recovery of material damage caused by IPO in connection with non-compliance with the procedure for pre-trial settlement of the dispute was dismissed.

In accordance with subparagraph 1) of Article 279 of the CPC RK, the court leaves the claim without consideration if the plaintiff has not complied with the procedure established by law for this category of cases or the procedure provided for in the contract for pre-trial dispute settlement and the possibility of applying this procedure has not been lost.

If the law establishes or the contract provides for a pre-trial dispute settlement procedure for a certain category of cases, an appeal to the court may be after observing this procedure (part 6 of Article 8 of the CPC RK).

Taking into account these norms, by the ruling of the judicial board for Civil Cases of the Almaty City Court dated May 18, 2023, the ruling of the court of first instance was canceled, with the transfer of the case to the court of first instance for consideration on the merits.

The plaintiffs are citizens and legal entities.

In accordance with Part 1 of Article 47 of the CPC RK, plaintiffs are citizens and legal entities who have filed a claim in defense of their violated or disputed rights and freedoms, legitimate interests, or in whose defense a claim has been filed by other persons in accordance with the procedure provided for by this Code.

Determination of the defendant in a claim for damages

When determining the defendant in a claim for damages, it is necessary to check the legal grounds for the defendant's ownership of IPO property.

M.E. filed a lawsuit against B.E., K. for recovery of material damage and monetary compensation for moral damage caused as a result of the accident.

By the decision of the Borodulikhinsky district Court of the Abai region dated January 12, 2023, the claim was partially satisfied, material damage in the amount of 852,459 tenge was recovered from B.E. in favor of M.E., monetary compensation for moral damage in the amount of 1,200,000 tenge.

The court found that the Lada 21713 car belongs to the defendant K.A., the defendant B.E. drove the vehicle on the basis of an insurance policy.

By the verdict of the court No. 2 of the city of Semey, East Kazakhstan region, dated December 21, 2021, B.E. was found guilty of committing a criminal offense under part 2 of Article 345 of the Criminal Code of the Republic of Kazakhstan, which established that B.E., driving a Lada 21713 motor vehicle, made a head-on collision with a Toyota Avensis motor vehicle.

As a result of the accident, M.E. suffered serious harm to her health.

Based on paragraph 1 of Article 931 of the Civil Code of the Republic of Kazakhstan, B.E., who was legally driving the vehicle, was reasonably recognized as the owner of the Lada 21713 vehicle at the time of the accident.

The presence of an insurance policy indicates the insurance of the defendant's GPO as the owner of the vehicle.

Regulatory framework

The normative legal acts regulating these legal relations and subject to application in the consideration of cases of the analyzed category are:

- The Constitution of the Republic of Kazakhstan;

- The Civil Code of the Republic of Kazakhstan (hereinafter referred to as the Civil Code);

- The Civil Procedure Code of the Republic of Kazakhstan (hereinafter - CPC);

- The Code of the Republic of Kazakhstan "On Administrative Offenses" (hereinafter referred to as the Administrative Code);

- The Labor Code of the Republic of Kazakhstan (hereinafter referred to as the Labor Code),

- The Law of the Republic of Kazakhstan "On compulsory insurance of civil liability of vehicle owners";

- The Law of the Republic of Kazakhstan "On compulsory insurance of civil liability of the carrier to passengers";

- The Law of the Republic of Kazakhstan "On Road Traffic" dated April 17, 2014;

- Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated October 6, 2017 No. 8 "On Judicial practice in disputes arising from insurance contracts";

- Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated November 27, 2015 No. 7 "On the application by courts of legislation on compensation for moral damage";

- Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated July 9, 1999 No. 9 "On certain issues of application by courts of the Republic of legislation on compensation for damage caused to health";

- Rules for determining the amount of damage caused to a vehicle, approved by Resolution No. 14 of the Board of the National Bank of the Republic of Kazakhstan dated January 28, 2016;

- Order of the Minister of Internal Affairs of the Republic of Kazakhstan dated June 30, 2023 No. 534 "On approval of the Rules of the Road, the Basic provisions for the admission of vehicles to operation, the list of operational and special services, the transport of which is subject to equipment with special light and sound signals and coloring according to special color schemes";

- Standard Rules for keeping and walking pets, approved by Order No. 168 of the Minister of Ecology, Geology and Natural Resources of the Republic of Kazakhstan dated May 20, 2022; - Standard Rules for grazing farm Animals, approved by Order No. 145 of the Minister of Agriculture of the Republic of Kazakhstan dated April 29, 2020.

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