auto mechanic uses a multimeter voltmeter to check the voltage level in a car

The European Parliament admits the complaint filed by vehicle repair shops against insurers

The European Parliament (EP) has officially communicated to the Navas & Cusí law firm, specialized in community law, that its petition for “Breach of European Union regulations in the car repair workshop sector” has been admitted, which was presented on behalf of employers of the sector “due to the bad practices and abuses committed by insurance companies in Spain, which cause serious economic damage to car repair shops, and which the Spanish State consents to by failing to comply with four community directives and several articles of the Operating Treaty of the EU”.

According to the managing partner Juan Ignacio Navas “a solution is sought from Europe that, based on respect for the community legal framework, ends the current unbalanced relationship between garages and insurers, giving rise to a more equitable framework”

The lawsuit is filed on behalf of CETRAA (Spanish Confederation of Automobile and Related Repair Workshops, which represents 25,000 companies in the sector), CONEPA (Spanish professional automotive businessmen, with 18 workshop associations throughout Spain), FAGENAUTO (agents automotive officials, 1,684 SMEs and 16,936 direct jobs and more than 3,000 freelancers) and GANVAM (seller of motor vehicles, repair and spare parts, which represents 350,000 jobs and a turnover of almost 100,000 million euros).

The bad practices carried out by insurance companies consist of setting prices without respecting that established by the workshop and the amount to be paid for the claim, without recognizing the hours of work used by the workshop to repair the damage; the experts of the insurance companies value the time and the cost of the materials of the repairs in detriment of the workshop; they agree to unilaterally impose prices on the workshops (tacit collusion), which is expressly prohibited by law.

In addition, the economic dependence of the experts on the insurers does not guarantee that they act with strict objectivity when assessing the damage and setting the price/hour of the repair. They follow the mandate and act in the best interest of the insurer. This practice violates article 17.3 of Directive 2016/97, on insurance distribution.

Some insurers impose on the workshops the suppliers of spare parts or the type of spare part to be installed, which violates Directive 2006/123/EC. There are companies that market policies that prevent customers from freely choosing the workshop to repair their vehicle, restricting free competition and the consumer’s freedom of choice. This practice violates Directive 93/13/CEE on abusive clauses in contracts concluded with consumers, being especially abusive in the case of accidents attributable to third parties.

Likewise, the abusive nature extends to the clause restricting free choice, which is not highlighted in the text of the insurance contract nor is it signed separately. Some entities pressure the customer to take his vehicle to certain selected workshops, distorting the market by limiting and restricting the consumer’s free choice of workshop. This practice violates Directive 2005/29.