Introduction

A recent magistrate court decision in Muhamad Abu Dachal v Menora Insurance Co Ltd (CC 3737-04-14) rejected a claim filed after the limitation period prescribed by the Insurance Contract Law 1981. The plaintiff's appeal was rejected by the district court and his motion to file an appeal to the Supreme Court was denied on January 24 2016 for procedural reasons.

In Muhamad, the plaintiff raised an important issue relating to the liability of insurers to pay insurance to an insured after the limitation period had expired, since he argued that the grounds for filing the claim were not based solely on the Insurance Contract Law, but also on breach of the Tort Law, unjust enrichment and contractual grounds, which are not subject to the three-year limitation period under the Insurance Contract Law.

Facts

On April 2 2014 the plaintiff filed a claim at the Beer-Sheva Magistrate Court against Menora Insurance Co Ltd for insurance benefits. The plaintiff alleged that his vehicle was stolen on April 19 2007 and he should be compensated accordingly.

The insurers submitted a motion for declination of the claim, arguing that the period for filing the claim had elapsed, as under Section 31 of the Insurance Contract Law the period for filing an insurance claim is three years from the date of the incident.

The plaintiff did not dispute the fact that the limitation period stipulated by the Insurance Contract Law is three years and that his claim was time barred. However, he argued that his claim was based on additional causes of actions including contractual grounds, violation of the Tort Law and unjustified enrichment. The plaintiff claimed that the grounds were not subject to the limitation period prescribed by the Insurance Contract Law and therefore the motion filed by the insurers should be denied.

Decision

The court reviewed the above arguments and determined that the plaintiff's attempt to distinguish between the grounds based on the Insurance Contract Law and grounds based on other laws was unfounded and should be denied. The court determined that even if one party to the contract had breached its duty to act in good faith (as stipulated in Section 39 to the Contract Law 1973), this cause of action cannot exclude the provisions of the Insurance Contract Law in the above case.

In its decision, the court referred to Kobovski v Shirbit Insurance Co Ltd (CC 1988-06-10), which stated that where the main characteristics of a claim are based on insurance policy and its interpretation, the claim will be subject to the Insurance Contract Law, even in cases in which ancillary causes of action can be added based on the Contract Law, the Tort Law and unjustified enrichment.

The court also stated that examining a claim for insurance benefits under the Contract Law will eliminate the special arrangement stipulated in Section 31 of the Insurance Contract Law, as the basic argument in every insurance claim is that the insurer breached its contractual duty according to the policy.

In light of the above, the court determined that the plaintiff should have submitted his claim within the limitation period stipulated by the Insurance Contract Law.

The plaintiff submitted an appeal to the district court which was denied, since he had exceeded the timeframe for serving appeals stipulated in the civil procedure regulations. His motion to submit an appeal to the Supreme Court was denied for procedural reasons.

This article was first published by the International Law Office, April 2016.

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