Byrne v Motor Insurers' Bureau and Another

JurisdictionEngland & Wales
Judgment Date05 June 2007
Neutral Citation[2007] EWHC 1268 (QB)
Docket NumberCase No: HQ06X00793
CourtQueen's Bench Division
Date05 June 2007

[2007] EWHC 1268 (QB)




The Honourable Mr Justice Flaux

Case No: HQ06X00793

Ben Byrne (a minor by his litigation friend, Julie Byrne)
(1) The Motor Insurers Bureau
(2) The Secretary of State for Transport

Mr Nicholas Paines QC and Mr Josh Holmes (instructed by Pinto Potts LLP) for the Claimant

Mr Dermod O'Brien QC and Mr Fergus Randolph (instructed by Greenwoods) for the 1 st Defendant

Mr Jonathan Crow QC, Ms Jemima Stratford and Mr David Barr (instructed by Treasury Solicitor) for the 2 nd Defendant

Hearing dates: 15 and 16 May 2007

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.


Introduction and background


This case involves the trial of various preliminary issues concerning whether or not the Untraced Drivers Agreement between the Department of Transport and the Motor Insurers Bureau (“MIB”) complies with the provisions of Article 1 (4) of the Second Motor Insurance Directive. The underlying dispute concerns a hit and run incident alleged by the Claimant to have occurred in June 1993. I should state at the outset of this judgment that neither the Secretary of State nor the MIB admits the facts concerning the alleged incident, but for the purposes of the determination of the preliminary issues, I am asked to assume as follows. The Claimant was born in 1989. In about June 1993 (the precise date of the incident remains unclear, the Claimant having pleaded that it occurred on 1 May but now accepting that it was probably 21 June 1993) when aged three, he was crossing the road near his home with his father (and possibly also his mother) when a car pulled out of a side road too fast and ran into the Claimant, injuring him. The car did not stop and the driver was never traced. The Claimant sustained injuries and was treated in hospital. At the time it appears that the Claimant's parents did not obtain legal advice and were thus unaware of the existence of the MIB.


The MIB was incorporated as a company under guarantee in 1946, its members being the various insurers who from time to time are authorised pursuant to the relevant statutory provisions to carry on motor insurance business. Originally, the MIB provided protection for victims of uninsured drivers pursuant to an agreement, the Uninsured Drivers Agreement, with the Secretary of State, under which the MIB honours judgments obtained against uninsured drivers which the claimant has not been able to enforce. It also protected victims of untraced drivers on an ex gratia basis until the first formal Untraced Drivers Agreement with the Secretary of State in 1969. The Agreement with which this case is concerned is the Untraced Drivers Agreement, made between the MIB and the Secretary of State on 22 November 1972, just before the accession of the United Kingdom to the European Community. It provides for application to be made by victims of untraced drivers to the MIB which carries out an investigation and, if the various provisions of the Agreement are satisfied, it will award to the applicant “a payment of an amount which shall be assessed in like manner as a court, applying English law…would assess the damages which the applicant would have been entitled to recover from the untraced person in respect of that death or injury if proceedings to enforce a claim for damages in respect thereof were successfully brought by the applicant against the untraced person”. (Clause 3). An applicant who is dissatisfied with the award or with a decision not to indemnify him is given a right of appeal to an arbitrator on a panel of Queen's Counsel drawn up by the Lord Chancellor. The Secretary of State is given the power to appoint the arbitrator from that panel.


The Agreement contains in Clause 1 (1) various conditions which have to be fulfilled in relation to an application. Particularly relevant to the present dispute are the following:

“…this Agreement applies to any case in which an application is made to MIB for a payment in respect of the death of or bodily injury to any person caused by or arising out of the use of a motor vehicle on a road in Great Britain and the case is one in which the following conditions are fulfilled, that is to say—

(c) the death or injury was caused in such circumstances that on the balance of probabilities the untraced person would be liable to pay damages to the applicant in respect of the death or injury;

(f) the application is made in writing within three years from the date of the event giving rise to the death or injury.”


It would appear that the Claimant's parents first became aware of the possibility of claiming compensation for his injuries from the MIB in October 2001. An application was made to the MIB, but in December 2001, the MIB rejected that application, relying on Clause 1 (1) (f), the three year time limit provided by that clause having expired in June 1996. The Claimant and his parents did not seek to appeal that decision to the arbitrator pursuant to the procedure laid down by the Untraced Drivers Agreement. Instead the present proceedings were commenced in March 2006, claiming damages for breach by the MIB of the Untraced Drivers Agreement as it should be properly interpreted in accordance with Community law, alternatively for breach of statutory duty arising out of Community law directly applicable to the MIB. In the alternative, the Claimant made a claim against the Secretary of State for damages for breach of statutory duty in failing properly to implement Article 1 (4) of the Second Directive.


The Defendants both filed Defences taking issue with all these claims. It is to be noted that the MIB raises in terms that the claim by the Claimant against the MIB for breach of the Agreement is wholly misconceived because no claim lies outside the application procedure under the Untraced Drivers Agreement. Reliance is placed in the pleading and was placed at the trial by Mr O'Brien QC on behalf of the MIB on the decision of the Court of Appeal in Persson v London County Buses [1974] 1 WLR 569, from which it is clear that there is no cause of action available to a victim of an untraced driver against the MIB outside the terms of the Agreement. As Counsel for the MIB in that case argued, the Untraced Drivers Agreement is enforceable by the Secretary of State and (by consent of the MIB) by an applicant but only in accordance with the terms of the Agreement. That argument was accepted by the Court of Appeal.


Mr O'Brien relies upon that case as demonstrating that the procedure under the Untraced Drivers Agreement is a self-contained and exclusive procedure. He reserves the right to contend, on the basis of that case that, not having pursued an appeal from rejection of the Claimant's application to the arbitrator under the procedure set out in the Agreement, even if the Claimant succeeds on the preliminary issues against the MIB, it will not be open to him to make a fresh application to the MIB. As I indicated at the hearing that is not a matter which I can determine at this stage and I simply note the reservation.

The preliminary issues


When the matter came before Master Yoxall at a case management conference on 13 October 2006, the parties were agreed that there should be a trial of the preliminary issues set out in the Schedule to the Order made at that hearing. Those preliminary issues are as follows:

“1. On the true construction of Directive 84/5/EEC and/or by reason of the European Community principle of equivalence, must the making of a claim for compensation in respect of injury caused by an untraced driver under the national provisions implementing, and/or relied upon by the Member State as implementing, Article 1(4) of Directive 84/5/EEC be subject to a limitation period no less favourable than that which applies to the commencement of actions in the courts in respect of claims brought by minors for personal injury in tort against a traced driver?

2. If the answer to Question 1 is yes, must the contract between the First and the Second Defendants namely the Untraced Drivers Agreement 1972 whereby the First Defendant undertook to provide compensation under specified terms for persons injured by untraced drivers, and under which the Claimant made a claim for compensation be construed so as to give effect to Article 1(4) of Directive 84/5/EEC and/or the European Community principle of equivalence?

3. If the answer to Question 1 is Yes and the answer to Question 2 is No, does European Community law impose a directly effective obligation on the First Defendant to provide compensation to a minor who makes a claim that falls within Article 1(4) of Directive 84/5/EEC later than three years after the accident which gives rise to such a claim but within three years from the date at which he attained his majority?

4. If the answer to Question 3 is No, is the United Kingdom in sufficiently serious breach of its Community law obligations under Article 1(4) of Directive 84/5/EEC and/or the principle of equivalence; and did the breach cause loss to the Claimant such as to entitle the Claimant to damages against the Second Defendant?”

The first issue


In considering the first issue, it is important to have in mind the two applicable Council Directives on motor insurance. The First Directive 72/166/EEC of 24 April 1972 obliges each Member State to ensure that civil liability in respect of the use of motor vehicles is covered by insurance. More detailed obligations are then imposed by the Second Directive 84/5/EEC of 20 December 1983. Article 1(4) provides as follows:

“Each Member State shall set up or...

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