Third Party Insurance: Compulsory Third Party Insurance
| Author | R. S. T. Chorley,A. M. Finlay |
| Date | 01 June 1938 |
| Published date | 01 June 1938 |
| DOI | http://doi.org/10.1111/j.1468-2230.1938.tb00391.x |
36
MODERN LAW REVIEW
June,
1938
THIRD
PARTY
INSURANCE
COMPULSORY THIRD PARTY INSURANCE
N
his
interesting article published in the previous number of the
MODERN
LAW
REVIEW,
Mr.
Hector Hughes,
K.C.,
criticises somewhat severely
I
what he describes
as
a “series of important interferences with the con-
tractual freedom of insurers in the name of injured third parties.” In this
regard he appears to be swimming against the general stream of modem
social legislation and,
as
the question of principle
is
particularly well
raised by the series of statutes relating to compulsory third party insurance
with which he deals, it may be of interest to say something about the oppos-
ing point of view.
To deal
first
of all with
Mr.
Hughes’s criticism on the narrowest ground,
namely that it favours one section of the community
as
opposed to another,
a
close analysis of the actual facts of the situation hardly bears this out,
at
any rate on the grounds which he takes up.
On
the one side the Act confers
a
right upon citizens generally, a right which
Mr.
Hughes himself proves
to be somewhat limited in its extent. On the other side it is true
that
it
cuts down in some degree that complete freedom of contract which in-
surers have
so
far enjoyed. This, however, is
at
most a superficial burden
because the financial obligations of the insurers are nicely calculated in
accordance with their premium incomes, and if the obligations placed
upon them by Parliament are found to be too onerous there
can
be no
question that the insurance companies
will
quickly make provision to meet
them by a general increase of premiums. In actual fact, however, by
making third party insurance compulsory Parliament has presented to the
insurers a substantial volume of new business, and this may well explain
the comparatively small adjustment in regard to premium charges which
followed the introduction of the legislation under discussion.
Assuming, however, for the sake of the argument that higher premiums
will in fact be charged, Mr. Hughes may well argue that his thesis is correct
because the motor car users are being made to pay extra in order to provide
rights for the general population. On the face of it there is an element of
truth in this proposition, but one must remember that motorists them-
selves are members of the general population and are equally, if not more,
exposed to those risks of personal injury for the monetary compensation of
which the legislature has aimed to provide.
It
should always be remembered
that it is a considerable privilege to be allowed to use a dangerous object
such
as
a motor car upon the highway, and that, indeed, there was a dis-
tinct tendency in the earliest cases to treat a motor car as a nuisance which
its owner brought on to the highway at his own risk. To insist, therefore,
that all motorists should take an elementary precaution to protect those
who may be injured through their carelessness-a precaution which
already before
1930
probably ninety-nine out of every hundred motorists
were taking-can only be regarded as an injustice in the language
of
hyperbole.
There is of course a much wider ground upon which Mr. Hughes’s
attitude may be challenged. To state it fully would require an article, but
some reference to it is necessary. The conditions
of
modern society have
long passed beyond the stage where the relationships which it entails can
be satisfactorily adjusted on the basis of the Common Law alone.
It
is true
that the Courts have of recent years proved the elasticity of the Law of
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