Liability for missing documentation, even in case of correct advice: Part 1

A recent ruling of the Higher Regional Court of Cologne of 26.02.2016 (Case No. 20 U 102/15) underlines the “obligation of the broker to inform the policyholder that the intended change to private health insurance (PKV) may affect the insurance cover of his or her spouse and the financial burdens associated with it”. The spouse is often involved when changing from statutory health insurance (GKV) to private health insurance through the legal institution of the (broker) contract with protective effect in favour of third parties.


For married persons, it is regularly apparent to the insurance broker that the change from statutory to private health insurance also affects the spouse, which means that the spouse is also owed protection and care.

“When advising on a change of insurance, the broker must inform the policyholder of all possible consequences of the change”;

naturally also with regard to third parties or spouses affected by the protective effect.


Possible financial disadvantages of switching to private health insurance for spouses as well

For example, the option of non-contributory family insurance can be waived for a spouse and (also future) children.

For the (self-employed) spouse, the SHI contribution can increase if the income of both spouses is taken as the basis for the contribution in accordance with § 240 IV SGB V – the private health insurance that initially appears to be cheaper for one spouse then leads to an additional contribution for the person still insured with SHI. However, this will also cause damage to the future private health insurance policyholder himself,

in that he would owe his spouse, who continues to be insured under the statutory health insurance scheme, an increased (health care) maintenance (§ 1578 II of the German Civil Code – BGB) Depending on the tariff, sooner or later the private health insurance policyholder will have to bear additional burdens in comparison to the compulsory health insurance: Pensioners often pay more than 1,000 euros monthly premium in private health insurance, regardless of their income, while those compulsorily insured in the health insurance for pensioners (KVdR) only have to pay about half of the contribution rate on the pension itself, as well as the full contributions from company pensions.


Duty of the broker to clarify the facts and provide advice?

The Higher Regional Court of Cologne has the following to say about the brokerage obligations:

“Before changing from statutory to private health insurance, he must also point out the advantages and disadvantages resulting from such a change of systems.


“the extent of the obligation to provide information and advice shall depend on the specific circumstances of the individual case, in particular on the broker’s knowledge of the existing insurance relationships of his contractual partner and of the third parties indirectly affected by a bill of exchange.”.

According to the OLG Cologne, the broker owes

“but not, of itself, an explanation of the system of statutory health insurance and the calculation of the contributions to be paid there.”

The Federal Court of Justice, however, has already stipulated in its judgement on trustees (BGH, judgement of 22.05.1985, ref. IV a ZR 190/83) that the broker is obliged to carry out a risk assessment and to examine the property. A broker who is not capable of risk analysis because of the difficulties and complexity of the matter may not accept a brokerage contract.


Burden of proof on the victim of wrong advice

In principle, third parties, as victims of false advice, also bear the burden of proof for false, incomplete or incorrect advice. The Cologne Higher Regional Court states:

“The legal documentation obligation is limited to advising the policyholder on his insurance relationship and does not extend to safeguarding the interests of third parties.

The third party or spouse can therefore not hope to obtain relief from the burden of proof if he or she had not received documentation of the advice in accordance with § 61 of the Insurance Contract Act (VVG). Perhaps it would have been better for the UN to sue as a broker instead of the wife as the third party, since he may owe his wife the higher health care maintenance later on?

Therefore (future) private health insurance policyholders should make sure that they have complete documentation for consultation before signing the application for private health insurance, § 62 VVG. This is because the Federal Court of Justice (BGH, ruling of 13.11.2014, Ref. III ZR 544/13) has already ruled that inadequate documentation required by law leads to a reversal of the burden of proof.


Duty to document the consultation – even without subsequent mediation

However, the Higher Regional Court probably violated the law of reasoning, because in the present case, the wife (who was self-employed) who was insured with the statutory health insurance scheme had also asked for a private health insurance scheme herself, which did not materialise, so that she remained in the statutory health insurance scheme. At the latest, this meant that there was a direct duty to advise the wife, including a duty of documentation – even without the conclusion of an insurance contract in the private health insurance.

Advising against a private health insurance and advising to remain in the GKV is also advice for which the broker is liable. Without documentation as to why a contract did not come about, it is assumed, for the sake of evidence, that this is a mistake on the part of the broker, and so the broker may provide the (additional) services – for the completely missing contract. In the present case, the applicant’s lawyer may have failed to do so,

“to present the factual and legal points of view in favour of his party as comprehensively as possible”,

and would now have to be liable as the party liable to recourse (BGH, ruling of 10.12.2015, file no. IX ZR 272/14).


Waiver of consulting without documentation – also at the expense of third parties?

The study “Evaluation of the documentation of advice in the investment and insurance sector” of 18 February 2014 commissioned by the Federal Minister of Justice already showed that in insurance brokerage, around 85 per cent of the advice given is not documented – contrary to the legal obligation which has existed since 22 May 2007. If (possibly further) consultation were to be waived in individual cases, this would also have to be documented with the reasons for this.

If one nevertheless follows the OLG Cologne, then a broker without documentation would be better protected against the third party than one with documentation, because the latter could not prove any errors with the help of the (omitted) documentation, and would not have any evidence facilitation. The Federal Court of Justice (BGH) and the European Court of Justice (ECJ) could well take a different view if there is a contract with a protective effect in favour of third parties.


Contract with protective effect in favour of third parties

It is worth considering that the (possibly future) policyholder (UN) himself can waive the consultation without asking the third party. The third party can nevertheless remain included in the scope of protection of an obligation to provide advice to a broker if the broker recognises or must recognise that the (future) UN has its own personal care or duty of care towards the third party (Federal Court of Justice, ruling of 17.09.2002, ref. X ZR 237/01), § 311 BGB. The broker often has no idea that he is literally caught between two stools when the interests of the future UN are contrary to those of the third party or spouse.


Broker liability towards third parties

A waiver of advice or even a waiver of documentation is usually worthless if a third party is included in the scope of protection. The third party can then sue the broker himself, arguing that the documentation is a legal obligation. If it had been done, then one could have read it again in peace and quiet, and then either noticed the problem, or would have come across the gap in the consultation, whereby one’s own wrong decision would not have been made.

It does not even have to be claimed that the advice given was wrong, but possibly correct – rather that the duty of documentation was violated so that the advice missed its purpose. After all, the documentation does not (only) serve the purpose of later having evidence of what was said, but also to recapitulate the reasons for the decision in peace and quiet and to revise them if necessary. She is definitely a duty. Therefore, this breach of duty may also in itself give rise to liability for damage.


by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm


by courtesy of (published on 12.08.2016)



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Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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