The Court of Appeal has dismissed an appeal by the Motor Insurers Bureau ("the MIB") against a High Court decision which extended the liability of the MIB, by requiring it to meet claims for uninsured motor accidents which occur on private land.
Whilst an appeal to the Supreme Court may be forthcoming, the decision once again arguably extends the obligations of the MIB beyond its agreements. The decision widens the potential liabilities of the MIB, and highlights the lack of movement in bringing about UK domestic compliance with existing provisions of the Motor Insurance Directive ("the Directive").
The Claimant was injured whilst walking on private land by an uninsured motor vehicle driven by Mr Tindale. The Claimant pursued a claim against Mr Tindale and the MIB.
The MIB did not dispute that Mr Tindale was liable for the accident. The MIB did argue that as the Claimant's injuries were not sustained on a "road or other public place" per section 145 of the Road Traffic Act ("the RTA") it had no liability further to the Uninsured Drivers Agreement.
Mr Justice Soole found that any judgment obtained by the Claimant against Mr Tindale was not a liability required to be insured under Part VI of the RTA. Interpreting section 145(3) of the RTA to include use of a vehicle on private land would represent an amendment of the RTA. Such an amendment would go "against the grain and thrust" of the RTA.
However, Mr Justice Soole agreed that:
- Article 3 of the Directive gave the Claimant a right to be compensated, irrespective of whether the vehicle used was on private land.
- If domestic legislation did not implement this right, then it was directly effective, and could be enforced against an 'emanation of the (relevant EU Member) State'.
- The MIB was an emanation of the United Kingdom state, referring to the ECJ decision in Farrell v Whitty which categorised the Motor Insurance Bureau of Ireland as an emanation of the Irish state.
- UK law (specifically the RTA) was no longer compatible with the Directive, and therefore the UK's "unimplemented obligation under [the Directive] must be met by its designated compensation body," in this case, the MIB.
The MIB appealed.
The appeal was dismissed.
Lord Justice Flaux, giving the leading judgment, found as follows:
- Mr Justice Soole's conclusions on the issues of direct effect and emanation of the state were correct, in response to the MIB's "fallacious argument" that its obligation to compensation was limited by the RTA liability.
- The Government had failed to fulfil its obligation under Article 3 of the Directive to ensure that civil liability in respect of the use of motor vehicles on private land was the subject of a scheme of compulsory motor insurance, referring to the decision in Vnuk.
- The Government had also failed under Article 10 of the Directive to assign responsibility for meeting the liability regarding use on private land to a compensation body. However, the MIB "has had conferred on it by the UK Government the task under Article 10 [of]… remedying the failure of the government" regarding use on private land.
- The current position of the RTA left a "gap in the insurance cover compulsorily required by the domestic legislation" resulting in "a gap in the protection of victims of motor accidents." Therefore, the suggested distinction between the use of a motor vehicle on roads and on private land was wholly artificial, as it created a gap which the Directive was designed to avoid.
What can we learn?
- The application of this decision in the long term is unclear, as it is not known whether or not the MIB will pursue an appeal to the Supreme Court. However, as the decision extends the MIB's obligations beyond those within the RTA and its own Articles of Association, this would not be surprising.
- In addition, it would not be unexpected to see the MIB make immediate efforts to amend its Articles to allow the transfer of these 'new' liabilities to any relevant insurer of the motor vehicle involved. LJ Flaux himself stated that these issues could be resolved "by amendment to the RTA and/or the MIB Articles of Association".
- It was noted during proceedings that the MIB had issued a Contribution Notice against the Department of Transport in respect of the proceedings and the alleged liability.
- From a European perspective, moves to amend the MID continue, with proposals covering the situation addressed within the Lewis decision. Under an amended Directive, the definition of "use of a vehicle in traffic" would include public and private roadways, and also private terrain accessible by the general public. Such use would need to be covered by a motor insurance policy. The domestic legislation of Member States will need to be amended to ensure that the Directive is correctly transposed, and prevent claims for contravention of EU law in their national courts.
- As with all things domestically, the spectre of Brexit looms large, and proposals to amend the RTA legislation have not progressed since July 2017. In the absence of clarity of the future relationship between the UK and the EU, further details on harmonisation in this area have been in short supply.