The High Court has extended the liability of the MIB, requiring it to meet claims for uninsured motor accidents which occur on private land.
Mr Justice Soole ruled that an off-road traffic accident is not a liability required to be insured against under the Road Traffic Act. However, the Court did find that the Motor Insurers Bureau is an 'emanation of the State', meaning that the provisions of the Motor Insurance Directive ("the Directive") can be directly enforced against the MIB.
The MIB is therefore required to satisfy judgments pursuant to the Directive, even where the liability established does not require insurance under the Road Traffic Act 1988, including off-road accidents.
This ruling further highlights the current incompatibility between UK and European law following the landmark decision in Vnuk.
Background
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, it had no liability further to the Uninsured Drivers Agreement.
In the High Court, Mr Justice Soole was asked to consider the following issues:
- Whether a judgment obtained against Mr Tindale by the Claimant would result in a liability required to be insured under the Road Traffic Act ("RTA");
- If a judgment obtained did not result in such a liability, whether the MIB was liable to satisfy it further to the Motor Insurance Directive ("the Directive");
- Whether the provisions of the Directive have direct effect against the MID;
The second and third propositions dealt with effectively the same issue.
Outcome
Mr Justice Soole rejected the first proposition, confirming that any judgment obtained by the Claimant against Mr Tindale was not a liability required to be insured under Part VI of the RTA.
Section 145(3) of the RTA requires that a motor policy must insure injury to a third party as a result of the use of a vehicle on a road or other public place. The Court found that that interpreting section 145(3) 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, in respect of the second and third propositions, Mr Justice Soole agreed.
The Claimant submitted that Article 3 of the Directive gave him the right to be compensated for the accident, irrespective of whether the vehicle used was on private land. The Claimant argued 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 Claimant sought to assert that the MIB was an emanation of the United Kingdom state. The decision of the European Court of Justice in Farrell v Whitty (Case C -413/15) was referred to. This case categorised that the Motor Insurance Bureau of Ireland as an emanation of the Irish state.
Mr Justice Soole agreed with the Claimant's submissions. The decision in Vnuk and subsequent cases made it clear that compulsory insurance obligations extended to vehicle use on private land.
The MIB sought to argue that Farrell was distinguishable, on the basis that it involved a defective implementation of the Directive, as opposed to no implementation of the Directive in this matter. The Court dismissed this, stating that "in each case there has been an incomplete implementation" of the Directive by the relevant Member State; again confirming that UK law was in part no longer compatible with the Directive.
Mr Justice Soole was mindful of "the MIB's central point that it is a private law body whose contract with the Secretary of State (UDA 1999) requires it only to meet a satisfied Part VI liability." However, in being unable to distinguish this matter with Farrell, "the State's unimplemented obligation under the MID must be met by its designated compensation body," in this case, the MIB.
The liability of the MIB was confirmed to be up to €1 million per the minimum guarantee limit at the time of the accident.
The MIB sought and has been granted permission to appeal the decision.
What can we learn?
- The decision arguably extends the obligations of the MIB beyond its agreements, and will have important ramifications for the potential liabilities of the MIB.Once again, the decision has shone a light on the effects of the incompatibility of the Road Traffic Act with the provisions of the Motor Insurance Directive following Vnuk.
- Proposals to amend the domestic law on motor insurance, following Roadpeace, have stalled following the publication of stakeholder responses in July 2017.However, in the absence of clarity regarding harmonisation with the European Union after Brexit, it is perhaps unsurprising.
- It remains unclear what action the UK government will take to make the Road Traffic Act compliant with the MID, or if it will ensure equivalency of policies, in future. The European Commission's REFIT consultation proposed changes to the Directive, which could affect any further efforts at harmonisation of the domestic legislation in the UK.
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