Byrne v Motor Insurers' Bureau and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Carnwath:,Lord Justice Keene,Lord Justice Waller |
| Judgment Date | 22 May 2008 |
| Neutral Citation | [2008] EWCA Civ 574 |
| Docket Number | Case No: A2/2007/1622 and A2/2007/1627 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 May 2008 |
[2008] EWCA Civ 574
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
MR JUSTICE FLAUX
HQ06X00793
Lord Justice Waller
Lord Justice Keene And
Lord Justice Carnwath
Case No: A2/2007/1622 and A2/2007/1627
Mr Nicholas Paines QC and Mr Josh Holmes (instructed by Pinto Potts LLP) for the Respondent
Mr Dermod O'Brien QC and Mr Fergus Randolph (instructed by Greenwoods) for the 1 st Appellant
Mr Jonathan Crow QC, Ms Jemima Stratford and Mr David Barr (instructed by Treasury Solicitors) for the 2 nd Appellant
Hearing dates:6 th and 7th may 2008
Introduction
These two appeals are brought by the Motor Insurers Bureau (“the MIB”) and the Secretary of State for Transport. The decision appealed is that of the Hon Mr Justice Flaux dated 5 June 2007, answering a series of preliminary questions relating to the “Untraced Drivers Agreement”, made in 1972 between the Department of Transport and the MIB. The issues before us are, in short, whether the limitation provisions of the agreement comply with EU law, and, if not, whether the Secretary of State is liable in damages under the so-called Francovich principle ( Francovich v. Italian Republic [1991] ECR I-5357). The relevant EU law is found in Article 1(4) of Directive 84/5/EEC of 30 December 1983 (“the Second Directive”) on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles ( OJ 1984 L 8, p. 17).
The underlying dispute concerns a potential claim for compensation by the Claimant, Ben Byrne, following a hit-and-run incident in about June 1993. The facts concerning the alleged incident are not admitted, but for the preliminary questions Flaux J was invited to assume as follows. The Claimant was born on 13 July 1989. In about June 1993, when he was three years old, he was crossing the road near his home with his father when a car pulled out of a side road too fast and ran into him causing injury. The car did not stop and the driver was never traced. Ben Byrne sustained injuries, which required hospital treatment. At the time his parents did not obtain legal advice and were thus unaware of the existence of the MIB scheme.
The parents appear to have first become aware of the possibility of claiming compensation from the MIB in October 2001, and submitted a claim on Ben's behalf. However, it was rejected by the MIB because it was made outside the three-year time limit set by Clause 1(1)(f) of the Untraced Drivers Agreement 1972. The Agreement, unlike the Limitation Act 1980, contained no provision suspending the limitation period during the claimant's minority. In March 2006 Ben, by now aged 16, began proceedings against the MIB and the Secretary of State for Transport. It was claimed that the Untraced Drivers Agreement 1972, interpreted in accordance with the Community law, conferred a right to make an application to the MIB within time limits no less favourable than those contained in the Limitation Act 1980. In the alternative, he claimed against the Secretary of State for breach of statutory duty in failing properly to implement Article 1(4) of the Second Directive.
By his Order of 28 June 2007, Flaux J made two declarations in favour of the Claimant, which are in issue before us:
i) Declaration (1) that on the true construction of the Second Directive and/or by virtue of the Community principle of equivalence, the MIB procedure should 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 (“the limitation issue”);
ii) Declaration (4) that the UK was in “sufficiently serious breach” of its obligations under European Community law to give rise in principle to liability in damages for failure to ensure conformity with the Directive in that respect (“the liability issue”).
The judge himself gave permission to appeal on both issues.
Domestic law
The MIB regime
The MIB was established in 1946 as a private company limited by guarantee for the purpose of entering into agreements with the government to compensate victims of negligent uninsured motorists. Every insurer, underwriting compulsory motor insurance, is obliged, by virtue of the Road Traffic Act 1988, to be a member of the MIB and to contribute to its funding. Originally, the MIB provided protection for victims of uninsured drivers pursuant to the “Uninsured Drivers Agreement” with the Secretary of State. The MIB honoured judgments obtained against uninsured drivers, which the claimants would not be able to enforce. It also protected victims of untraced drivers on an ex gratia basis, until the first formal Untraced Drivers Agreement made in 1969.
On November 1972, just before the accession of the United Kingdom to the European Economic Community (as it then was), the previous agreements were replaced by the Uninsured Drivers Agreement 1972 and the Untraced Drivers Agreement 1972. Liability under the former was parasitic on court proceedings. A claimant, who obtained judgment against an uninsured driver, could submit a claim to the MIB. Thus the claim would be subject to the ordinary rules governing court proceedings, including the statutory limitation regime.
The Untraced Drivers Agreement adopts a different mechanism, not dependent on court proceedings. A claim can be made to the 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, where the applicant is unable to trace any person responsible for the death or injury (Clause 1). The application must be made within three years from the date of the event giving rise to the injury (Clause 1(1)(f)). In the 1972 Agreement there was no provision for extension.
The amount of the MIB award is to be assessed in the same way as a court would have assessed the damages in successful proceedings against the untraced driver (Clause 3). The MIB must cause any application under the Agreement to be investigated and decide whether to make an award (Clause 7). The applicant has a right of appeal to an arbitrator against any decision of the MIB (Clause 11). The arbitrator is selected from a panel of Queen's Counsel appointed by the Lord Chancellor (Clause 18). The arbitrator decides whether the MIB should make an award under the Agreement and, if so, the amount (Clause 16). The arbitrator decides the appeal on the documents submitted to him, although he may ask the MIB to make further investigation and the applicant may submit comments on the findings of such investigation (Clause 17).
The 1972 Agreement was superseded by the Untraced Drivers Agreement 1996, which applied in respect of accidents occurring on or after 1 July 1996, and therefore does not apply to Ben's case. That, in turn, was replaced by the current Untraced Drivers Agreement 2003, which applies in respect of accidents on or after 14 February 2003. The 2003 Agreement continues to have a limit of three years for claims for personal injury; but, unlike the 1972 Agreement, it provides for an extension of time, subject to a longstop of 15 years, for cases where the applicant could not reasonably have been expected to become aware of the existence of bodily injury (Clause 4(3)).
Under the Limitation Act 1980 the period applicable to personal injury claims is three years from the date on which the cause of action accrued (s.11(4)(a)). However, that period is suspended under section 28 when the injured person is under a disability, until that person ceases to be under a disability. By section 38(2) this extends to minors.
It is common ground that, had the negligent driver been traced but uninsured, Ben could have brought an action within three years of attaining his majority (that is, up to 2011), and, if successful could have made a claim against the MIB under the Uninsured Drivers Agreement. However, the possibility of a claim under the Untraced Drivers Agreement was barred by 1996 (that is, three years from the date of the accident).
Community law
The First and Second Directives
The First Directive (Directive 72/166/EEC of 24 April 1972) required Member States to take appropriate measures to ensure that civil liability in respect of the use of motor vehicles was covered by insurance.
The Second Directive added detail to the insurance obligation, and also provided for the establishment of bodies to take responsibility for meeting liabilities of unidentified drivers. To give the context I shall set out the relevant parts of Article 1 in full:
“1. The insurance referred to in Article 3(1) of Directive 72/166/EEC shall cover compulsorily both damage to property and personal injuries.
2. Without prejudice to any higher guarantees which Member States may lay down, each Member State shall require that the amounts for which such insurance is compulsory are at least:
—in the case of personal injury, ECU 350 000 where there is only one victim; where more than one victim is involved in a single claim, this amount shall be multiplied by the number of victims,
—in the case of damage to property ECU 100 000 per claim, whatever the number of victims.
Member States may, in place of the above minimum amounts, provide for a minimum amount of ECU 500 000...
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