Roadpeace v Secretary of State for Transport Motor Insurer's Bureau (Interested Party)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Ouseley |
| Judgment Date | 07 November 2017 |
| Neutral Citation | [2017] EWHC 2725 (Admin) |
| Docket Number | Case No: CO/4681/2015 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 07 November 2017 |
[2017] EWHC 2725 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Ouseley
Case No: CO/4681/2015
and
Mr Jeremy Hyam QC and Miss Hannah Noyce (instructed by Leigh Day Solicitors) for the Claimants
Mr Robert Palmer (instructed by The Government Legal Department) for the Defendant
Mr Stephen Worthington QC and Mr Richard Viney (instructed by Weightmans Solicitors) for the interested party
Hearing dates: 14, 15 and 16 February 2017
Written submissions: 5, 12 and 26 October 2017
Judgment Approved
RoadPeace is a national charity, providing support for road crash victims and seeking to improve road safety. In these proceedings, it challenges various provisions of domestic law, which govern compulsory insurance for motor vehicles and make provision for the payment of compensation in respect of injury and damage caused by uninsured or unidentified drivers. It does so on the grounds that they contravene various provisions of EU law, or do not comply with it sufficiently to give it lawful effect.
The domestic legislation at issue is in the Road Traffic Act 1988, notably s143 and s151, the Third Parties (Rights Against Insurers) Act of 2010, replacing the 1930 Act, and the European Communities (Rights Against Insurers) Regulations 2002 S.I. No. 3061.
These legislative provisions are supported by agreements between the Motor Insurers' Bureau, MIB, the Interested Party and the Secretary of State for Transport, SST, the Defendant. The MIB is a company to which all authorised motor insurers must belong and which they fund. One set of agreements, deals with Uninsured Drivers, the UDA, and the other with Untraced Drivers, the UtDA. The MIB has compensated the victims of uninsured drivers under UDAs since 1946, and of untraced drivers under UtDAs since 1969. The current UDA of July 2015 was brought into force on 1 August 2015, but the 1999 UDA remains in force in respect of accidents occurring between 1999 and 1 August 2015. A supplemental agreement of January 2017, removing the "terrorism" exception, came into force on 1 March 2017 in relation to accidents occurring on or after that date. UtDA applicable at the time of the oral hearing came into force in 2003, was amended by a supplemental agreement of 2011, and both are replaced, but only in relation to accidents occurring after 1 March 2017, by the January 2017 UtDA. There have been other supplemental agreements, immaterial for present purposes.
The relevant EU Directive is Directive 2009/103/EC, the Sixth Directive, the Directive, relating to compulsory insurance in respect of the use of motor vehicles. It consolidates its five predecessors, without introducing any new provisions, at least of any note. So the EU legislative structure has been in force for many years. It was the subject of a reference from Slovenia; Vnuk v Zavarovialnica Triglav D.D. C- 162/13, 4 September 2014, [2016] RTR 10. This enlarged the scope of the compulsory insurance obligation, in relation to the use of motor vehicles on private land, in an unexpected way.
Many of the issues raised in the Claim Form, about the compatibility of domestic law, and of the arrangements between the MIB and SST, with EU law were not pursued. Three groups of issues remain. The first group relates to the compatibility of UK statutes with the Directive: (1) ss143, 145 and 151 of the Road Traffic Act 1988, RTA, and allied provisions which permitted insurance policies to include limitations and exclusions on the use insured, such as confining the insured use of the vehicle to "social domestic or and pleasure use"; (2) Regulation 3(2) of the European Communities (Rights Against Insurers) Regulations 2002, the Regulations, which it was said permitted the insurer, as against the innocent third party victim of the insured, to rely on breaches of the policy by the policyholder, unlawfully qualifying the absolute protection which RoadPeace said the Directive required; ( 3) s153(3) of the RTA and s2(4) of the Third Parties (Rights Against Insurers) Act 2010, RAIA, which enabled the insurer to raise, against the innocent third party, rights which the insurer had against the policyholder, again unlawfully qualifying the absolute protection which RoadPeace said the Directive required.
Second, and also a question of the compatibility of UK statute law with the Directive, are the contentions which arise out of the CJEU Chamber decision in Vnuk. This applies to ss143, 145, 151 RTA and the Regulations, R2(1). RoadPeace contended that the restriction of compulsory insurance to the use of a motor vehicle "intended or adapted for use on roads" and to its use "on a road or public place" is not consistent with the decision in Vnuk. That is not at issue.
There is a large issue about what remedy, if any, is appropriate while the European Commission decides whether there should be an amending Directive, and the Government decides what legislative changes are required.
There is a related aspect as to the meaning of "accident" in Reg 2(1) the Regulations which I shall deal with under that head.
Third, there is a group of issues which relate to the compatibility of the UDA and UtDA with the Directive. (1) RoadPeace contends that the existing UtDA is unlawful and, though improved in the new agreement, remains unlawful, because it fell and still falls short of the protection required to be given to minors and protected persons involved in seeking compensation from the MIB equivalent to the protection they would receive in civil litigation under the CPR. (2) There are two issues where RoadPeace accepts that the new UtDA will meet EU law requirements, but contends that the existing UtDA, which will apply to accidents up to 1 March 2017, does not. These issues are (a) the time limit on the requirement for reporting accidents to the police, and (b) the definition of "significant personal injury", which is a threshold requirement for property damage claims. (3) There is an issue about the "terrorism exception" not now in the agreements, but still applicable to accidents happening before 1 March 2017. The SST, but not the MIB, accepts that the exception is not permissible under the Directive. The debate before me therefore was largely about the remedy in relation to accidents which had occurred before that date and to which the exclusion in respect of acts of terrorism would apply. The SST contended that damages under Francovich v Italy [1991] E R I-3061, [1995] ICR 722 and Brasserie du Pecheur v Germany; R v SST ex p Factortame (No. 4), [1996] QB 405 ECJ, were the appropriate remedy, if the conditions were met. RoadPeace contended that that would be inadequate.
The domestic legislation
The history behind the current legislation and the agreements up to 2010 is set out in the judgment of Hickinbottom J in Carswell v SST and MIB [2010] EWHC 3230 (QB), [7–13]. The relevant parts of the domestic legislation are as follows. S143(1)(a) RTA makes it an offence for a person to "use a motor vehicle on a road or other public place unless there is in force in relation to the use of the vehicle by that person such a policy of insurance…in respect of third party risk as complies with …this Act." I note the limit to "road or other public place", and that it is the use by a particular person which is to be insured, rather than any user of the vehicle. It does not apply to invalid carriages. Certain other vehicles are excepted from s143 by s144, such as police vehicles, ambulances and local authority vehicles.
S145(3) spells out the requirements of the Act in respect of an insurance policy under s143. A policy "(a) must insure such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of death or bodily injury to any person or damage to property caused by or arising out of the use of the vehicle on a road or other public place in Great Britain… and (b) must in the case of a vehicle normally based in Great Britain insure him or them in respect of any liability which may be incurred by him or them in respect of the use of the vehicle and of any trailer, whether or not coupled, [in another EU member state, according to its compulsory insurance law]". There is a converse requirement for vehicles normally based in another member state but used in Great Britain.
S148 invalidates certain exceptions in a compulsory insurance policy in so far as they relate to the liabilities which have to be insured. I note the invalidation of exceptions related to the age, physical or mental condition of the driver, the condition of the vehicle, its horsepower, and the time and areas within which the vehicle may be used. S149 invalidates any restriction of liability to or acceptance of the risk of negligence on the part of a passenger.
S151 is important, not just for the protection it gives to victims by enabling them to enforce judgments directly against the insurer in respect of compulsory insurance obligations, but also for its effect on remedies sought here by RoadPeace. S151(5) entitles the victims of road accidents, who have the benefit of a judgment against an insured person, to require the insurer to pay the sum payable under the judgment to the victim directly, subject to a £1m limit in respect of property damage, and whether or not the insurer would be entitled to avoid the policy. This obligation applies where, by subsection (1), a policy has been issued for the purposes of s145, and a judgment of the sort set out in subsection (2) has been obtained. That is a judgment in relation to a liability required to be covered by a compulsory...
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