Mr Michael Howe v Motor Insurers' Bureau
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice McFarlane,Sir James Munby |
| Judgment Date | 06 July 2017 |
| Neutral Citation | [2017] EWCA Civ 932 |
| Docket Number | Case No: A2/2016/1904 |
| Court | Court of Appeal (Civil Division) |
| Date | 06 July 2017 |
[2017] EWCA Civ 932
Sir James Munby,
PRESIDENT OF THE FAMILY DIVISION
Lord Justice McFarlane
and
Lord Justice Lewison
Case No: A2/2016/1904
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MR JUSTICE STEWART
HQ14P05029
Royal Courts of Justice
Strand, London, WC2A 2LL
Benjamin Williams QC (instructed by Fieldfisher LLP) for the Appellant
Howard Palmer QC (instructed by Weightmans LLP) for the Respondent
Hearing dates: 28 th June 2017
Approved Judgment
For the purposes of CPR Part 44.13, which describes the claims eligible for Qualified One-Way Costs Shifting ("QOCS"), what is a claim for damages for personal injury? As Stewart J said it is a simple question but does not yield a simple answer.
The context in which the question arises is as follows. Mr Howe was driving a lorry on the A16 in France when a wheel detached from a lorry in front of him. Through no fault of his own, Mr Howe collided with the wheel. The resulting accident left him severely injured. Neither the other vehicle nor its driver has been traced. After a long delay Mr Howe brought a claim against the Motor Insurers' Bureau ("MIB"). Stewart J dismissed the claim on the ground that it was statute barred. His judgment is at [2016] EWHC 640 (QB), [2016] 1 WLR 2707. Mr Howe appealed against that decision. However, in the light of the decision of the Supreme Court in Moreno v MIB [2016] UKSC 52, [2016] 1 WLR 3194 this court struck out the appeal on 7 February 2017 on the ground that it was bound to fail: see [2017] EWCA Civ 302. It is thus now accepted that his substantive claim against the MIB is at an end. The remaining issues relate to the costs of that claim and of the unsuccessful appeal. In his second judgment Stewart J held that Mr Howe's claim was not a claim for damages for personal injury for the purposes of CPR Part 44.13. His second judgment is at [2016] EWHC 884 (QB), [2016] 1 WLR 2751. The judge himself gave permission to appeal and we have been assisted on this appeal by Senior Costs Judge Master Gordon-Saker. I am most grateful for his assistance but this judgment is mine alone.
Although at one stage it appeared that one of the issues was whether QOCS applied to appeals in cases that otherwise fell within its scope, it is now common ground that it does.
Mr Howe's claim against the MIB was brought under regulation 13 of the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 ("the Regulations"). Regulation 13 provides:
" Entitlement to compensation where a vehicle or insurer is not identified
(1) This regulation applies where— (a) an accident, caused by or arising out of the use of a vehicle which is normally based in an EEA state, occurs on the territory of— (i) an EEA state other than the United Kingdom, or (ii) a subscribing state, and an injured party resides in the United Kingdom, (b) that injured party has made a request for information under regulation 9(2), and (c) it has proved impossible— (i) to identify the vehicle the use of which is alleged to have been responsible for the accident, or (ii) within a period of two months after the date of the request, to identify an insurance undertaking which insures the use of the vehicle.
(2) Where this regulation applies— (a) the injured party may make a claim for compensation from the compensation body, and (b) the compensation body shall compensate the injured party in accordance with the provisions of article 1 of the second motor insurance Directive as if it were the body authorised under paragraph 4 of that article and the accident had occurred in Great Britain."
Regulation 16 provides:
"Any sum due and owing pursuant to these Regulations shall be recoverable as a civil debt."
In his Particulars of Claim Mr Howe pleaded the accident and alleged that it was caused by the driver of the lorry in front of his. It then referred to the MIB as the compensation body.
Paragraph 6 of the Particulars of Claim alleged that the MIB was "liable to compensate the claimant in respect of his injuries and losses." The relief claimed was:
"(1) Damages Exceeding £300,000
(2) Provisional Damages
(3) Interest
(4) Costs"
Shortly before trial Mr Howe amended his Particulars of Claim. The amendments introduced two allegations which, in essence, were designed to overcome the limitation defence that the MIB had advanced. In consequence the relief sought was amended to include a claim for:
"A declaration that the MIB is liable to compensate the Claimant in accordance with the Untraced Drivers' Agreement …"
Apart from being renumbered, the original relief claimed remained in the statement of case.
Section II of CPR Part 44 is headed "Qualified One-Way Costs Shifting." Part 44.13 begins:
"(1) This Section applies to proceedings which include a claim for damages:
(a) For personal injuries…"
The question is whether Mr Howe's claim falls within that rule. The origins of QOCS lie in Sir Rupert Jackson's report into Civil Litigation Costs. Chapter 19 of the report dealt with one-way costs shifting in the context of personal injuries litigation which, Sir Rupert said, he was treating as "a broad concept". Once ATE premiums ceased to be recoverable it was necessary to protect claimants from the risk of adverse costs orders obtained by insured or self-insured parties with deep pockets. His proposal was that all claimants in personal injury cases be given a broadly similar degree of protection against adverse costs orders as that enjoyed by legally aided claimants. Plainly, this recommendation was designed to protect claimants who lost their cases, as successful claimants would not be liable to pay an unsuccessful defendant's costs. It was intended to overcome the deterrent effect on bringing claims for personal injury of the risk of paying a defendant's costs if the claim failed. Although the broad thrust of Sir Rupert's recommendation was accepted, the eventual scheme embodied in the CPR did not follow the legal aid model. As Mr Palmer QC for the MIB submitted, it is much more prescriptive than the broader more discretionary approach that Sir Rupert recommended.
In order to decide whether Mr Howe's claim falls within the scope of QOCS it is necessary to look at his claim and the legal background to it in a little more detail. Regulation 13 was enacted in order to give effect to the United Kingdom's obligations under the Fourth Motor Insurance Directive ( Directive 2000/26/EC). The objectives of that Directive are set out in a number of its recitals (some of which are annexed to the judge's judgment on liability):
"(8) It is in fact appropriate to supplement the arrangements established by Directives 72/166/EEC, 84/5/EEC and 90/232/EEC in order to guarantee injured parties suffering loss or injury as a result of a motor vehicle accident comparable treatment irrespective of where in the Community accidents occur
(25) It is necessary to make provision for a compensation body to which the injured party may apply where the insurance undertaking has failed to appoint a representative or is manifestly dilatory in settling a claim or where the insurance undertaking cannot be identified to guarantee that the injured party will not remain without the compensation to which he is entitled; the intervention of the compensation body should be limited to rare individual cases where the insurance undertaking has failed to comply with its duties in spite of the dissuasive effect of the potential imposition of penalties.
(26) The role played by the compensation body is that of settling the claim in respect of any loss or injury suffered by the injured party only in cases which are capable of objective determination and therefore the compensation body must limit its activity to verifying that an offer of compensation has been made in accordance with the time-limits and procedures laid down, without any assessment of the merits."
Article 1.1 of the Fourth Directive provides:
"The objective of this Directive is to lay down special provisions applicable to injured parties entitled to compensation in respect of any loss or injury resulting from accidents occurring in a Member State other than the Member State of residence of the injured party which are caused by the use of vehicles insured and normally based in a Member State."
Article 6.1 provides:
"Each Member State shall establish or approve a compensation body responsible for providing compensation to injured parties in the cases referred to in Article 1."
Article 7 provides:
"If it is impossible to identify the vehicle or if, within two months following the accident, it is impossible to identify the insurance undertaking, the injured party may apply for compensation from the compensation body in the Member State where he resides. The compensation shall be provided in accordance with the provisions of Article 1 of Directive 84/5/EEC."
Article 1.4 of the Second Motor Insurance Directive (Directive 84/5/EEC) provides:
"Each Member State shall set up or authorize a body with the task of providing compensation, at least up to 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."
Lord Mance discussed the scheme required by the various Motor Insurance Directives in Moreno. He said at [30] that:
"Viewing its development holistically, it can be seen to be a scheme of which the constant aim has been to improve the prospects and ease with which injured parties can recover the compensation to which they are "entitled" in respect of any loss or damage...
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