RTA requirements incompatible with the obligations under the EC directives
MIB v Michael Lewis (a protected party) [05.06.19]
In dismissing the submissions on behalf of the Motor Insurance Bureau (MIB), the Court of Appeal have determined that the MIB are to compensate the claimant despite the fact that the road traffic accident occurred on private land.
The case related to a road traffic accident, which occurred on the 9 June 2013. Mr. Lewis (the claimant), was walking on private land when he was struck by a vehicle driven by Mr Tindale. There was no doubt that Mr Tindale was negligent but he was uninsured. The claimant sustained very serious injuries and pursued a claim for compensation against Mr Tindale, the MIB and the Secretary of State for Transport.
Mr Tindale did not enter a defence and was subsequently debarred from taking any further part in the proceedings. The MIB admitted that Mr Tindale was liable for the accident but denied any liability to satisfy any judgment obtained against him on the basis that the accident occurred on private land. The MIB’s case was that they had no contingent liability under the Uninsured Drivers Agreement 1999 because the accident was not caused by the use of a vehicle on a road or public place. This was a direct reference to the requirements of s.145 of the Road Traffic Act 1988 (the RTA).
At first instance, Mr Justice Soole (sitting in the Birmingham District Registry) asked and answered three preliminary issues:
- (i) Whether a judgment obtained by the claimant was one, which was required to be insured against, under the RTA? - Given the clearly stated wording of the RTA, the judge had little trouble concluding that the answer was ‘No’.
- If not, then (ii) whether the MIB was nevertheless obliged to satisfy a judgment pursuant to the 2009 EU Directive relating to compulsory insurance in respect of motor vehicles (2009/103/EC)? And (iii), whether the provisions of the relevant Directives have direct effect against the MIB? - The judge found that the MIB was a public service controlled by the government (an emanation of the state) and as such the Directives have direct effect.
The court therefore decided that the claim could be enforced against the MIB. The MIB appealed to the Court of Appeal who unanimously agreed with the decision at first instance and the appeal was dismissed.
As matters currently stand, the MIB will be liable to satisfy all judgments obtained by persons injured as a result of motor vehicle accidents which occur on private land.
Even where private motor insurance is in place for the vehicle, the insurer will not be liable to satisfy the judgment as the coverage will no doubt be limited to the requirements of the RTA. As such, there can be no direct application of the 2009/103/EC against a motor insurer (unlike the MIB).
The MIB will surely not allow the situation, as it now is, to remain. Whilst there may be a further appeal to the Supreme Court, there will inevitably be an attempt to re-consider the RTA to ensure that the coverage provided by motor insurers extends to cover accidents on private land, which would avoid the need for the MIB to be involved at all.
However, re-drafting legislation takes time so we can expect the MIB to take urgent steps to amend their ‘Articles of Association’, to ensure that motor insurers remain liable for judgments in respect of accidents involving the vehicle covered by the policy. As is always the case, any such amendment will have immediate and retrospective effect. This will however leave insurers liable for a risk that they did not perhaps anticipate when setting the premium.