Evans v Motor Insurers Bureau; White v White

JurisdictionEngland & Wales
Judgment Date01 March 2001
Neutral Citation[2001] UKHL 9
Date01 March 2001
CourtHouse of Lords
White (A.P.)
White and The Motor Insurers Bureau

[2001] UKHL 9

Lord Nicholls of Birkenhead

Lord MacKay of Clashfern

Lord Cooke of Thorndon

Lord Hope of Craighead

Lord Scott of Foscote



My Lords,


Shortly after midnight, in the early moments of 5 June 1993, Brian White was going to a late-night party. He was a front seat passenger in a Ford Capri. The car was being driven by his brother Shane along a country road a few miles outside Hereford. The car crashed and rolled over violently. Brian was very seriously injured. The accident happened at a quiet time of night, and no other vehicle was involved. Shane's driving was at fault. He lost control of the car coming out of a bend through not driving safely and properly.


Shane was at fault in another respect: neither he nor the car was insured. Indeed, he had not passed a driving test and, moreover, he was disqualified from driving. At the time of the accident Brian did not know his brother was unlicensed and, hence, uninsured, but he had known in the past that his brother was driving without a licence. The trial judge, Judge Potter sitting as a judge of the High Court, said that while it would be going too far to say that Brian knew Shane was uninsured, it 'stands out a mile' that he ought to have known. He ought to have made sure one way or the other, and he made no effort to do so.


These simple facts have given rise to this appeal to the House.

Compulsory insurance


Compulsory insurance in respect of the driving of motor vehicles was first introduced in 1930. Before then, most motorists chose to insure themselves against third party risks. But there were cases of serious hardship where the person inflicting the injury was devoid of financial means and, being uninsured, was not able to pay the damages for which he was liable. It was primarily to meet these cases of hardship that the Road Traffic Act 1930 was enacted.


The 1930 Act gave no protection to an innocent road user where the motorist failed to comply with his statutory obligation to insure. In 1937 a committee under the chairmanship of Sir Felix Cassel KC recommended that, in cases of failure to insure as required, an injured third party who had obtained a judgment against the person responsible should be able to recover from a central fund: Report of the Committee on Compulsory Insurance (Cmd 5528). The fund should be set up and financed by insurers licensed to transact compulsory motor vehicle insurance business.


At the end of the war the insurers set up the Motor Insurers' Bureau, which for brevity I will refer to as 'MIB'. MIB is a company incorporated under the Companies Acts. Its primary object is to satisfy judgments in respect of any liability required to be covered by contracts of insurance under the Road Traffic Acts. Its members comprise all insurers which are for the time being transacting compulsory motor vehicle insurance in this country. MIB is funded by levies payable by its members. The amount of the levy is based on the premium income of the members. Ultimately, therefore, the funds of MIB come from the pockets of law abiding motorists who have complied with their statutory insurance obligations.


The obligations of MIB are not to be found in an Act of Parliament. Instead, they are the subject of agreement with the appropriate minister. The first agreement was made on 17 June 1946, between the Minister of Transport and MIB. From time to time this has been brought up to date with supplemental agreements. The latest supplemental agreement is dated 13 August 1999, made between the Secretary of State for the Environment, Transport and the Regions and MIB. The version of the agreement in force at the time of Brian White's accident was dated 21 December 1988. I shall refer to this as 'the 1988 MIB agreement' or simply 'the MIB agreement'.


In these proceedings Brian White is looking to MIB to satisfy his claim for damages against his brother Shane. The amounts involved may be very substantial, and there is no question of Shane being able to meet the claim. Before your Lordships' House Brian White's claim was presented primarily as a claim based on the terms of the MIB agreement. I shall consider this claim first. Under the MIB agreement the basic obligation undertaken by MIB relates to any judgment in respect of a liability which is the subject of a compulsory insurance obligation under the Road Traffic Acts. If such a judgment is obtained against any person in any court in this country, and the judgment is not satisfied within seven days, MIB will satisfy the judgment. MIB will do so, regardless of whether the person against whom judgment was obtained was in fact covered by any contract of insurance.


MIB's basic obligation is subject to some exceptions. The success or failure of Brian White's claim, so far as it is based on the terms of the MIB agreement, depends on the proper interpretation of one of these exceptions, set out in clause 6(1)(e). MIB's obligations do not apply in a case where the injured passenger 'knew or ought to have known' that the vehicle had been stolen or was uninsured. Clause 6(1) reads:

'(1) MIB shall not incur any liability under Clause 2 of this Agreement in a case where -

(e) at the time of the use which gave rise to the liability the person suffering death or bodily injury .. was allowing himself to be carried in or upon the vehicle and .. before the commencement of his journey in the vehicle .. he -

(i) knew or ought to have known that the vehicle had been stolen or unlawfully taken, or

(ii) knew or ought to have known that the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part VI of the Road Traffic Act 1972.'

The crucial phrase for the purposes of this case is 'knew or ought to have known'.

The Motor Insurance Directive


When interpreting any document it is always important to identify, if possible, the purpose the provision was intended to achieve. This makes it necessary, in the present case, to go to the Second EEC Motor Insurance Directive 84/5/EEC, of 30 December 1983, on the approximation of the laws of the member states relating to insurance against civil liability in respect of the use of motor vehicles. It is necessary to do so because the purpose of the 1988 MIB agreement was to give effect to the terms of this Directive.


The main purpose of the Directive was to improve guarantees of compensation for victims of motor accidents by ensuring a minimum level of protection for them throughout the Community. One aspect of this was the need, as stated in the preamble, 'to make provision for a body to guarantee that the victim will not remain without compensation where the vehicle which caused the accident is uninsured or unidentified'. Member states, however, were to have the opportunity of applying certain 'limited exclusions'.


Article 1 of the Directive requires each member state to have compulsory motor insurance covering third party liability for both personal injury and damage to property. It sets minimum standards of protection up to which compensation must be available for the victims of accidents throughout the Community. Article 1(4) makes provision regarding unidentified and uninsured vehicles:

'Each Member State shall set up or authorize a body with the task of providing compensation, at least up the limits of the insurance obligation, for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied.'

The permitted exception is then stated in these terms:

'However, Member States may exclude the payment of compensation by that body in respect of persons who voluntarily entered the vehicle which caused the damage or injury when the body can prove that they knew it was uninsured.'

Thus, member states may exclude compensation for damage or injury caused by the driver of an uninsured vehicle if the person who suffered damage or injury 'voluntarily' entered the vehicle and 'knew' it was uninsured. It should be noted that, unlike the corresponding exception in the MIB agreement ('knew or ought to have known'), the exception permitted by the Directive uses the word 'knew' without any adornment. It is this difference in language which gives rise to the issues arising on this appeal.


What is meant by 'knew' in the context of the Directive? The interpretation of the Directive is a matter governed by Community law. If the meaning of 'knew' in article 1 is doubtful, and it is necessary to resolve the doubt in order to decide this appeal, then a reference to the European Court of Justice must be made. Rightly so, because it is important that the provisions of this Directive are applied uniformly throughout the Community. So I turn to consider what 'knew' means in the Directive and whether there is any relevant ambiguity.


The context is an exception to a general rule. The Court of Justice has stressed repeatedly that exceptions are to be construed strictly. Here, a strict and narrow interpretation of what constitutes knowledge for the purpose of article 1 is reinforced by the subject matter. The subject matter is compensation for damage to property or personal injuries caused by vehicles. The general rule is that victims of accidents should have the benefit of protection up to specified minimum amounts, whether or not the vehicle which caused the damage was insured. The exception, therefore, permits a member state, contrary to the general rule, to make no provision for compensation for a person who has suffered personal injury or damage to property. Proportionality requires that a high degree of personal fault...

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