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Motor Insurance / MIB Update - Julie-Anne Luck, 9 St John Street Chambers

16/11/18. The potential impact of recent UK and European decisions upon the cost of motor insurance and claims following road traffic accidents cannot be underestimated. The industry is awaiting appeals on two important decisions, which have caused ripples for insurers and the MIB alike.

The obligation on the UK courts is to construe the Road Traffic Act 1988 in accordance with the relevant European "Motor Insurance Directives“, the most recent of which being the Sixth Directive (2009/103/EC) ("the 2009 MID") . Article 3 of the 2009 MID sets out the minimum compulsory insurance requirements, and requires member states to “ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance”.

Most are already aware of Vnuk v Zavarovalnica Triglav D. D. [2016] RTR 188, the so- called “Complete Game-Changer” for the insurance industry (see the Department of Transport Technical Consultation on the Motor Insurance, which commenced December 2016). The Government has recently maintained that “Extending the scope of the mandatory insurance requirement to vehicles used only on private land… … raises the possibility that motorised children’s toys and ride-on lawnmowers could require insurance”, and would “increase insurance premiums in the UK by £2 billion per year” - see

The recent case of Lewis v. Tindale, MIB and Secretary of State for Transport [2018] EWHC 2376 (QB) has brought further headache to the MIB. The facts were as follows:

On 9 June 2013, Mr Lewis was a pedestrian on Mr Tindale’s private farm. Mr Tindale thought Mr Lewis was there to steal scrap metal. Mr Lewis suffered catastrophic injuries in a motor accident when he was hit by Mr Tindales’s 4X4 vehicle, whilst he was still on his private farm. Mr Tindale was uninsured for the claim, and so he, the MIB and the Secretary of State were all named as Defendants in Mr Lewis’ claim for damages.

Firstly, and unsurprisingly, the decision confirmed that any judgment Mr Lewis might obtain against Mr Tindale was not a liability which was required to be insured under the RTA 1988, because it occurred on private land. As such, the MIB sought to maintain that it had no contingent liability to Mr Lewis pursuant to the Uninsured Drivers Agreement 1999.

The Honorable Mr Justice Soole noted “the CJEU has made it unequivocal that the obligation of compulsory insurance extends to the use of vehicles on private land. This is implicit in Vnuk and explicit in subsequent decisions” (Paragraph 96).

On whether Mr Lewis could bring a claim against the MIB, Mr Justice Soole stated:

  1. the MIB is an emanation of the state for the full measure of the Article 3 obligation” (paragraph 101).

  2. That both in the current case, and in Farrell v Whitty [2017] EUECJ C-413/15 (Farrell 2), “… there has been an incomplete implementation of the obligation placed on member states by Article 3. In my judgement in each case the effect of European law is to treat the designated compensation body as if the obligation imposed on the state had been delegated to it in full” (paragraph 131).

So in summary the judgment concludes:

  • The provisions of the MID 2009 have direct effect against the MIB,

  • The MIB is obliged to satisfy any judgment Mr Lewis may obtain against Mr Tindale, despite the liability not requiring insurance pursuant to the RTA 1988.

However, the Honourable Mr Justice Soole points out that the “minimum requisite cover” is EUR 1M per victim (see paragraph 134).

Lewis v. Tindale, MIB and Secretary of State for Transport is subject to appeal by the MIB, the outcome of which is eagerly awaited.

Also due for appeal is Cameron v Hussain & Liverpool Victoria Insurance [2017] EWCA Civ 366, which is listed before the Supreme Court on 28th November 2018. This was the case in which a Claimant sought to amend her Claim Form to substitute the First Defendant (who had turned out to be a fictitious person) for “the person unknown driving vehicle registration number...”.

The court of Appeal concluded that this was permissible, in a decision which exposes insurers to claims they previously thought would fall to the MIB under the Untraced Drivers Agreement. The decision has also provoked a fear that it will increase the scope for fraud – with policies be opened for fictitious drivers with the purpose of claiming against an untraced driver. I understand that some insurers have very large reserves on some claims, riding on the outcome of this final appeal.

Julie-Anne Luck
Barrister, 9 St John Street Chambers
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