Excess (Law) – Term, definition, and legal significance
Term and definition of Excess
The term Excess originates from English and literally means “surplus,” “excess,” or “overstepping.” In a legal context, it encompasses actions that go beyond the permitted or lawful limit. “Excess” is applied as a technical term in numerous legal systems and disciplines, especially in criminal law, civil law, and insurance law. The term is often closely associated with topics such as exceeding authorities, excessive use, or abuse of legal powers.
Excess in criminal law
Exceeding self-defense (§ 33 StGB)
A particularly significant area for the application of the term “excess” is found in the context of self-defense and necessity. German criminal law recognizes the so-called “excess in self-defense” in § 33 of the Criminal Code (StGB). This refers to the exceeding of the required defensive action in a self-defense situation:
- Intensive excess: The defensive act exceeds what is necessary for defense. Example: An attacker is seriously injured, although a lesser intervention would have sufficed.
- Extensive excess: The act of self-defense is performed at a time when the self-defense situation no longer exists, for example, after the actual threat has ended.
An excess in self-defense may under certain conditions be excused, for example if the transgression is due to confusion, fear, or panic (§ 33 StGB). Similar regulations exist in connection with justifiable necessity (§ 34 StGB).
Excess in official and organizational acts
Excess also refers to exceeding official powers, such as by public officials, particularly when the legal limits of official conduct are breached. Such actions may have disciplinary or criminal consequences.
Excess in civil law
Exceeding authority of representation
In civil law, “excess” often refers to exceeding a legal authority, such as a power of attorney. If a representative enters into a legal transaction on behalf of the principal that is not covered by the power of attorney, this is called “abuse or excess of authority of representation.”
According to § 179 BGB, the acting person is personally liable if they have exceeded their authority of representation and the principal does not approve the transaction. The distinction between clearly exceeded authority and “self-dealing” is detailed in case law.
Excess in agreements and contracts
Another area of application is the agreement or use of excess clauses, in particular with respect to liability limitations, deductibles, or damage compensation limits. In this context, “excess” describes the portion that a party must bear itself before (further) performance obligations arise.
Excess in insurance law
Excess clauses and their function
In insurance law, “excess” typically refers to the deductible, i.e., the amount that the policyholder must bear themselves in the event of a claim before the insurer provides payment. This is known as excess insurance or “excedent insurance,” where coverage only applies after a certain threshold of loss has been exceeded.
Legal consequences and structuring
The specific structuring of excess clauses significantly affects the allocation of liability in the event of loss. A clear contractual agreement is required for such conditions to be valid. Disputes often arise regarding the interpretation of the terms “deductible” and “excess cover.” Strict standards apply regarding the transparency and clarity of the insurance terms.
Excess in international law and common law
Excess of Powers
In international procedural law and especially insolvency and corporate law of common law jurisdictions, “excess of powers” denotes an overstepping of authority by bodies, such as exceeding the company’s purpose or statutory powers. This can result in the invalidity of legal acts and lead to liability consequences.
Legal consequences of excess
- Ineffectiveness or contestability of legal acts
- Liability consequences for the acting party (e.g. § 179 BGB)
- Possible excusing or aggravating effect in criminal law
- Disciplinary sanctions for public officials
- Deviations or loss of insurance coverage in case of violation of excess clauses
Literature, sources, and further references
- Palandt, Civil Code (BGB), Commentary on §§ 164-181 BGB
- Fischer, Criminal Code, § 33 StGB
- BGH, Judgments on excess in self-defense and exceeding authority of representation
- Insurance Contract Act – VVG
Summary
The term “excess” has numerous relevant aspects in German and international law. Its meaning varies depending on the context, but typically covers the exceeding of statutory, constitutional, or contractual limits. The consequences of excess range from the ineffectiveness of legal acts, liability rules, excusing and defending aspects in criminal law, to liability limitation in insurance law. The precise legal assessment of a given excess always depends on the individual circumstances and the applicable legal system.
Frequently asked questions
What legal requirements must be observed when calculating excess in insurance contracts?
The calculation of an excess (deductible) in Germany is subject to several legal frameworks, in particular the Insurance Contract Act (VVG) as well as relevant EU directives. The insurance contract must clearly and transparently specify which forms of excess apply—such as per loss event, per insurance period, or as combined models. Insurers are legally obliged to inform the policyholder of all excess conditions, including any upper and lower limits, before the contract is concluded. Furthermore, excessive regulations must not violate consumer protection law; unlawful disadvantages or ambiguous clauses may be declared null and void by the courts. In some lines of insurance, such as motor vehicle insurance, special legal requirements (e.g., Compulsory Insurance Act) apply, for example concerning minimum thresholds or the inadmissibility of variable excess clauses.
What duty to inform do insurers have in connection with excess?
According to § 7 VVG and the Insurance Information Regulation (VVG-InfoV), insurers are required to provide comprehensive and understandable information about the existence, specific structure, and impacts of the excess. This includes explaining to the policyholder the function of the excess, its amount, any adjustment mechanisms, and the exact burden in the event of a claim. The duty to inform also extends to possible consequences for premium calculation or termination rights if the excess changes during the contract period. If the insurer fails to meet these obligations, it may lead to claims for damages by the policyholder or to the invalidity of certain contract clauses.
What legal disputes may arise regarding the application of excess?
Typical legal disputes concerning excess arise especially from unclear or ambiguously worded contractual clauses. Courts have repeatedly emphasized that lack of transparency or ambiguities must be interpreted against the insurer (so-called ambiguity rule under § 305c para. 2 BGB). Repayment claims by insurers—such as when a policyholder’s participation in a claim is subsequently deemed too low—also frequently lead to legal disputes. Another key issue is the link with gross negligence and violations of obligations, with frequent disputes about the extent to which the excess is reduced or eliminated.
To what extent can the excess be changed unilaterally by the insurer?
A unilateral change of the excess by the insurer is legally highly restricted. In principle, a change to the excess during the term of an insurance contract is only possible with the explicit consent of the policyholder, unless the contract expressly provides for a dynamic adjustment (e.g., to an index or the development of claims ratios). Even in such cases, a valid and transparent agreement is required. Changes detrimental to the policyholder without a corresponding contractual basis are invalid and may, depending on the circumstances, entitle the policyholder to extraordinary termination.
What role does excess play in the settlement of partial losses or multiple loss events?
Legally, the handling of excess differs according to the provisions in the contract: If excess is agreed on a per-claim basis, it is incurred anew for each event. If it is set per insurance period, it applies as a total sum for all losses within a given time frame. Special care is needed in cases of serial losses or related events, as it must be determined for insurance purposes whether there is one or several insured events. The interpretation of such clauses is a frequent subject of court disputes, particularly with large-volume insurance policies in industrial and reinsurance sectors.
When is an agreed excess legally invalid?
Excess may be invalid for various legal reasons: For example, if the clause is surprising or non-transparent (§ 305c BGB), if it unduly disadvantages the policyholder (§ 307 BGB), if excess is stipulated in areas where individual deductibles are not allowed (e.g., compulsory portions in motor vehicle liability insurance), or if mandatory minimum benefits required by law are undercut. Clauses that are contrary to public policy or intentionally misleading are likewise void.
What special legal issues arise in international insurance relationships with respect to excess?
In cross-border insurance relations, particularly in the European internal market, different national legal systems and, where applicable, EU regulations must be considered. Key issues concern the admissibility of excess under the respective law, mandatory provisions for consumer protection, applicable law, and international jurisdiction in the event of disputes. In some countries, stricter provisions regarding minimum amounts, transparency, and applicability of excess apply, which may go beyond German law. Insurance terms should therefore always be adapted to the relevant jurisdiction; especially for multinational insurance programs, legal advice is indispensable to ensure the effectiveness of excess clauses in all relevant jurisdictions.
