The Construction Of Subrogation System In Insurance Law

Subrogation system in insurance law aims to carry out the principle of indemnity, according to which, the insured shall be fully indemnified, but shall never be more than fully indemnified. This objective means that the regulation mechanism of subrogation system in insurance law is essentially a remedy system that centers around the prevention of the insured's unjust enrichment. On the basis of this unified purport, however, there are two different kinds of arrangement in continental law system and common law system, namely legal assignment of rights of claim and legal subrogation of rights of claim. Due to the arrangement of legal assignment of rights of claim in China, it is necessary to fully understand the arrangement of legal subrogation of rights of claim and make a comprehensive comparison between these two systems from theories to rules, which can help find a relatively desirable regulation system as the foundation of the construction of subrogation system in insurance law to realize its core value of preventing the insured from unjust enrichment.Except for the introduction, this dissertation consists of five chapters.The first chapter discusses the difference of system definition of subrogation system in insurance law. In continental law system, subrogation system in insurance law is defined as legal assignment of rights of claim,whereas in common law system, it is defined as legal subrogation of rights of claim.Because of this difference, the rules of subrogation system in insurance law are quite different in these two systems. The arrangement of legal assignment of rights of claim possesses four characteristics:first, if the insurer performs the obligation of payment of insurance claims toward the insured, the rights of claim of the insured will be transferred to the insurer; second, there are two possible results, one of which is integral transfer of the insured's rights of claim if the insurer's payment of insurance claims can fully indemnify the insured's actual loss caused by the insurance accident, and if per contra, the other of which is partial transfer; third, due to the transfer of rights of claim, the insurer is able to make claims towards the third party independent of the insured; fourth, before the insured is actually more than fully indemnified, the possibility of the insured's doubly making claims is denied. The arrangement of legal subrogation of rights of claim also have four features:first, the insurer's performance of payment of insurance claims toward the insured does not cause the rights of claim to be transferred from the insured to the insurer, and on the contrary, it only make the insurer to stand in the shoes of the insured to make claims towards the third party; second, the two possible results, namely integral and partial transfer of the rights of claim that are caused by legal assignment of rights of claim do not occur; third, the insurer is not able to make claims towards the third party independent of the insured; fourth, the possibility of the insured's doubly making claims is permitted, and the result of unjust enrichment is finally denied until the insured is actually more than fully indemnified.Chapter two makes a comparison between the arrangements of legal assignment of rights of claim and that of legal subrogation of rights of claim from the perspective of theory. Both of these two arrangements of subrogation system in insurance law have a core remedy value, that is prevention of the insured's unjust enrichment. However, the arrangement of legal assignment of rights of claim cannot effectively achieve this value in the aspect of theory. The first theory of the arrangement of legal assignment of rights of claim, that is the theory of unreal joint and several liabilities has deviated from the core value of prevention of the insured's unjust enrichment because it is devoted to the prevention of the third party's unjustly being exempt from liabilities, and then will lose the explanation strength when the presumption that the third party shall take the ultimate responsibility for the insured loss does not exist. Meanwhile, the theory of unreal joint and several liabilities has encountered the limit that is resulted from the requirement of object consistency. The second theory of the arrangement of legal assignment of rights of claim, that is the theory of liquidation subrogation under the surety arrangement, has also departed from the remedy value of prevention of the insured's unjust enrichment because it has placed the realization of the insurer's rights as the dominant aim of subrogation system in insurance law. By contrast, the theory of legal subrogation of rights of claim is helpful to overcome the above difficulties. The theory of the principle of contribution can bring the right of subrogation in insurance law back to the nature and application of contribution, which puts subrogation system in insurance law into practice when the third party does not take the ultimate responsibility for the insured loss. The theory of constructive trust can smooth away the difficulty that is resulted from the requirement of object consistency.In addition, since the above two theories regard subrogation in insurance law as a subsidiary right for the realization of remedy, they can overcome the trouble of ignoring the remedy nature of subrogation system in insurance law faced with the theory of liquidation subrogation under the surety arrangement.Chapter three compares the arrangement of legal assignment of rights of claim with that of legal subrogation of rights of claim from the angle of rules.The arrangement of legal assignment of rights of claim leads subrogation system in insurance law to be confronted with two predicaments.First, the object of subrogation in insurance law is too narrow, namely the object is generally limited within the kind of the rights of claim that is directly caused by the damage or loss of the subject-matter insured. Second, there is the tangle between the two legal relationships, which means that in the trial of subrogation in insurance law, the court intends to review not only the legal relationship between the insured and the third party, but also the one between the insured and the insurer, which has increased great cost and obstacle for the exercise of subrogation in insurance law. On the contrary, the arrangement of legal subrogation of rights of claim can help to resolve the above problems. First, since this arrangement includes all the rights of claim and interests that are helpful for the prevention of the insured's unjust enrichment into the range of the object of the right of subrogation, it can conquer the difficulty that the object is too narrow. Second, because this arrangement maintains mutual independence between the legal relationship of the insured and the insurer and that of the insured and the third party, it can effectively avoid the the tangle between the two legal relationships.Chapter four analyzes the construction of subrogation system in insurance law by the arrangement of legal subrogation of rights of claim.The comparison made above proves that a relatively ideal choice of subrogation system in insurance law is the arrangement of legal subrogation of rights of claim, so the present task is to study how to establish the subrogation system in insurance law under this arrangement. First, in the aspect of the preconditions of subrogation system in insurance law, the following terms should be satisfied:(1)the insurance contract is a contract of indemnity; (2) the insured loss is fully indemnified; (3)the insured enjoys the rights or interests in diminution of the insured loss which are helpful for the prevention of the insured's unjust enrichment. Second, the insured shall be ensured to enjoy two kinds of rights:one is to be placed in the position of the insured to make claims towards the third party; the other is to claim indemnification from what the insured has been more than fully indemnified, by which the insurer is entitled to make a deduction at the moment of payment and to claim indemnification after the payment of insurance claims. Third, the insured shall undertake two kinds of obligations:one is ensure the insurer to be placed in his or her position to make claims towards the third party; the other is to indemnify the insurer with what he or she has been more than fully indemnified. Fourth, the third party should have the right of defense from the substantive arid the procedural aspects. The defenses from the substantive aspect contains benefit of insurance clauses,settlements and releases,factual defenses,the defenses of common debtor-creditor relationship and etc. The defenses from the procedural aspect include judgments and stays, delay, arbitration clauses and etc. Last, the conventional subrogation system in insurance law should be developed around two sides:one is the extension of the right of subrogation in insurance law, which includes changing the made whole doctrine, endowing the insurer the right of control of the process of exercise of subrogation and so on; the other is strengthening the insured's obligations, which includes the reasonable dispatch clause, express stipulation about the insured's existing obligations for the purpose of clear understanding, etc.Chapter five elucidates the cruxes and countermeasures encountered in the construction of subrogation system in insurance law under the arrangement of legal subrogation of rights of claim.On the background of present situation, the cruxes mainly exist in the theoretical and institutional aspects. The major crux in the theoretical aspect is that the two main theories of the arrangement of legal subrogation of rights of claim, namely the principle of contribution and constructive trust theory have not been established in the present theoretical framework. The primary cruxes in the aspect of institution are as follows:first, the core yardstick of the contract of indemnity and non-indemnity has not been established; second, the limits of subrogation in insurance law is incomplete; third, the effective arbitration mechanism of subrogation in insurance law does not exist; fourth, the system of conventional subrogation in insurance law has not been set up. Therefore, the foremost task is to establish the principle of contribution and constructive trust theory as the main theoretical frame of subrogation system in insurance law. Furthermore, it is necessary to take some measures to build up the initial conditions for the arrangement of legal subrogation of rights of claim, which chiefly include the establishment of the classification of contract of indemnity and non-indemnity as the yardstick of judging whether to apply subrogation system in insurance law, the refinement of the limitation of subrogation in insurance law, the construction of arbitration mechanism of subrogation in insurance law and building up the system of conventional subrogation in insurance law from the perspectives of extending the insurer's subrogation rights and strengthening the insured's obligations.On the basis of the above, the contribution of this dissertation lies in the following points:first, since it promotes the comparison between the arrangement of legal subrogation of rights of claim and that of legal subrogation of rights of claim to the level of prevention of the insured's unjust enrichment, it helps to overcome the essential defect of too scattering and lacking of guidance of a unified value; second, because it makes this comparison from theories to rules, and thus comes to the primary conclusion that the arrangement of legal subrogation of rights of claim should be chosen to construct subrogation system in insurance law, it is able to solve the problem that the choice of legal subrogation of rights of claim is difficult to sufficiently proved due to the fact that the previous comparison has mainly stayed on the superficial level; third, since it studies the arrangement of legal subrogation of rights of claim from theory to institution, depicts the panorama of this arrangement, and finds out the cruxes and countermeasures encountered in the construction of this arrangement, it can provide reference for the implementation of legal subrogation of rights of claim into the present institutional system of China.