{"id":4094,"date":"2023-09-29T14:16:25","date_gmt":"2023-09-29T12:16:25","guid":{"rendered":"https:\/\/www.cvs-avocats.com\/cancellation-public-procurement-insurance\/"},"modified":"2023-09-29T14:16:25","modified_gmt":"2023-09-29T12:16:25","slug":"cancellation-public-procurement-insurance","status":"publish","type":"post","link":"https:\/\/www.cvs-avocats.com\/en\/cancellation-public-procurement-insurance\/","title":{"rendered":"Public insurance contracts: the public authority may impose the continuation of the contract for the period required to award a new contract"},"content":{"rendered":"<div class=\"section__body\">\n<div class=\"block-strong-text\">\n<p><p><strong>For practitioners of public procurement, public insurance contracts may come as a surprise. Situated at the intersection of insurance law and public procurement law, they have to reconcile two sometimes contradictory regimes.<\/strong><\/p>\n<\/p><\/div>\n<article class=\"article-normal\">\n<div class=\"article__entry\">\n<p>Moreover, the inclusion of insurance contracts in the field of procurement is relatively recent, the Conseil d&#039;Etat having initially considered that the specific nature of the insurance contract regime excluded them de facto[1], before finally considering that the two legal regimes were not incompatible[2].<\/p>\n<p>While the issue is no longer in doubt, the relationship between these two regimes is far from natural.<\/p>\n<p>One of the &quot;most delicate points of friction&quot;[3] is undoubtedly the unilateral termination of the public insurance contract.<\/p>\n<p>In total contradiction with the general principles of administrative contracts, which in principle reserve this option for public bodies[4], the Insurance Code allows insurers to terminate their insurance contracts unilaterally.<\/p>\n<p>In addition to the possibility of a change in the insured risk (art. L.113-4 of the French Insurance Code), or non-payment of premiums (art. L.113-3 of the French Insurance Code), it is above all the insurer&#039;s right to terminate the contract at his own discretion and without any justification at its annual expiry date (art. L.113-2 of the French Insurance Code).<\/p>\n<p>This option poses obvious practical difficulties, accentuated by the extremely short notice period (2 months). Under these conditions, it is difficult to organize a competitive bidding procedure to appoint the successor to the outgoing insurer, especially in a &quot;shortage of supply&quot; of insurance for public bodies[5].<\/p>\n<p>While there are contractual tools available to limit this possibility, in particular by contractually organizing these termination procedures, the risk of public bodies finding themselves in a situation of lack of coverage is very real.<\/p>\n<p>The Conseil d&#039;Etat ruled on this point in its decision of July 12, 2023 (CE, July 12, 2023, no. 469319), proposing a link between these two legal regimes.<\/p>\n<p>In this case, the Grand Port de Marseille had received two letters from its property damage insurer, dated March 30 and July 19, 2022, informing it of the termination of its public insurance contract with effect from January 1, 2023. He formally objected by letters dated May 16 and September 29, 2022, giving him formal notice to continue performing the contract.&nbsp;<\/p>\n<p>In the absence of a response, it brought the matter before the Juge des r&eacute;f&eacute;r&eacute;s on the basis of article L.521-3 of the Code de justice administrative, known as the &quot;r&eacute;f&eacute;r&eacute; mesures utiles&quot;, with a view to having its insurer ordered to continue performance of the contract. The Marseille Administrative Court rejected the claim, and the Grand Port Maritime de Marseille appealed to the Conseil d&#039;Etat.<\/p>\n<p>&nbsp;<\/p>\n<p>First of all, the Conseil d&#039;Etat clearly confirms, even if there was little doubt about the issue, that the insurer&#039;s right to terminate the contract at the end of the year applies to public-sector insurance contracts.<\/p>\n<p>Secondly, and this is the contribution of the ruling, it sets out the system for linking this option to the general interest imperatives of public bodies, and to the general principles applicable to administrative contracts.<\/p>\n<p>Taking up the solution set out in its landmark Grenke ruling[6] , it extends the right of public bodies to oppose the unilateral termination of their contracts by their co-contractors for reasons of general interest, where this is provided for contractually, to cases where it is provided for by law.<\/p>\n<p>This means that public bodies can impose the continuation of contractual relations with the insurer at the origin of the termination, but only for as long as is &quot;strictly necessary, in the light of the applicable legislative and regulatory provisions, for the conduct of the procedure for awarding a new public insurance contract&quot;, and for a maximum period of 12 months.<\/p>\n<p>However, it will be up to them to justify a reason of general interest, which may be based on, but not limited to, the requirements of the public service for which they are responsible.<\/p>\n<p>The Conseil d&#039;Etat ruled that this was the case here, and that the proper performance of the Grand Port Maritime de Marseille&#039;s missions required that its assets be covered by an insurance policy.<\/p>\n<p>In reality, in view of the risk that a public entity would take on and impose on the service, the citizens or the agents in the event of a lack of insurance of any kind, it is difficult to see situations in which the general interest would not be retained.<\/p>\n<p>[1] CE October 12 1984, no. 34671<\/p>\n<p>[2] CE April 28, 2003, no. 233343<\/p>\n<p>[3] Expression used by the Public Reporter, Mr. Labrune, in his conclusions to the judgment under review.<\/p>\n<p>[4] In addition to the highly restricted hypothesis recognized by the CE of termination at the initiative of the co-contractor: CE 8 octobre 2014, n&deg; 370644<\/p>\n<p>[5] F. Allaire, JurisClasseur Contrats et March&eacute;s Publics, &quot;Fasc. 644: march&eacute;s publics d&#039;assurance&quot;, no. 99 to 102.<\/p>\n<p>[6] Conseil d&#039;&Eacute;tat, October 8, 2014, no. 370644: &quot;that it is, however, open to the parties to provide in a contract which does not have as its object the actual performance of the public service, the conditions under which the co-contractor of the public person may terminate the contract in the event of breach by the latter of its contractual obligations; that, however, the co-contractor may not proceed to termination without first having put the public person in a position to oppose the termination of the contractual relations on grounds of general interest, based in particular on the requirements of the public service&quot;.<\/p>\n<\/p><\/div>\n<\/article><\/div>\n","protected":false},"excerpt":{"rendered":"<p>For practitioners of public procurement, public insurance contracts may come as a surprise. Situated at the intersection of insurance law and public procurement law, they have to reconcile two sometimes contradictory regimes. Moreover, the inclusion of insurance contracts in the field of procurement is relatively recent, the Conseil d&#039;Etat having initially considered that the specific [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":4095,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"wds_primary_category":0,"footnotes":""},"categories":[19],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/posts\/4094"}],"collection":[{"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/comments?post=4094"}],"version-history":[{"count":0,"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/posts\/4094\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/media\/4095"}],"wp:attachment":[{"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/media?parent=4094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/categories?post=4094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cvs-avocats.com\/en\/wp-json\/wp\/v2\/tags?post=4094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}