24/01/2019
A round up of recent court decisions raising issues relating to fraudulent claims, agreements on costs, the strict application of limitation, the scope of the MIB’s liability, and the meaning of the vehicle insured for the purposes of the policy.
EUI Ltd v (1) Dodd (2) Tyrell (3) Fitzpatrick [16.11.2018]
The applicant insurance company successfully applied for the committal for contempt of court of three respondents who had participated in the arrangement of a staged motor vehicle accident to profit from fraudulent insurance claims.
Following a confession by the alleged driver of the insured vehicle, the applicant raised suspicions of the respondents, who had already submitted claims, attended medical examinations and issued proceedings. Two of the respondents in witness statements, asserting their claims were genuine and threatened indemnity costs as a result of the applicant’s accusation. All three respondents subsequently made full admissions.
Granting the application, the court reiterated the serious view taken on fraudulent claims, highlighting the considerable time and costs spent by insurers in identifying and investigating fraudulent claims, the consequent higher costs on honest drivers, as well as the waste of valuable court time and resources.
Contact: Martin Stockdale
Related items:
Adelekun v Lai Ho [18.10.2018]
A subsequent agreement in a Tomlin order to pay costs on the standard basis could not be construed as an agreement to pay costs under the fixed regime.
This RTA claim commenced in the portal in January 2014, before being allocated to the fast track, listed for trial and adjourned. Shortly before a hearing for the claimant’s application for re-allocation, the defendant made a Part 36 offer of £30,000 and confirmed they would consent to the re-allocation. The offer was accepted and an agreed Tomlin order provided for assessment of costs on the standard basis.
Subsequently unable to decide whether fixed costs applied (with no formal allocation to the multi-track), the defendant made a successful application for determination as to whether the fixed costs regime applied. The claimant successfully appealed.
The court relied heavily upon the defendant’s Part 36 offer referencing payment of costs pursuant to CPR 36.13, rather than CPR 36.20 (Part 36 offers made in a fixed costs context). It was also noted that the defendant had agreed to the re-allocation, and accordingly the issue as to whether fixed costs applied must have been in the minds of the parties.
Contact: Lewis Thompson
Kriss Spencer v Richard Cruddas and others [25.09.2018]
The court maintained a strong line on the defenders’ statutory protection under the Prescription and Limitation (Scotland) Act 1973.
The original proceedings were re-issued after limitation expired. In her decision, the judge noted that the court has very wide discretion to disapply the time-bar. However, the judge decided not to use this discretion and dismissed the claim, confirming that the prejudice to the defenders outweighed that of the pursuers.
The reasoning focussed on the important protection limitation gives to wrongdoers, where defenders comply fully with the rules of procedure. A further consideration was the pursuer’s remedy by way of a professional negligence claim.
Contact: Peter Demick
Related item: Scottish court takes strong line on limitation
Lewis v Motor Insurers’ Bureau and others [14.9.2018]
The High court rules that the MIB is an emanation of the state. In this case, Mr Justice Soole ruled that the MIB was liable under European law to compensate the claimant injured by an uninsured driver on private land. The driver had driven the uninsured vehicle from a road onto a footpath and then deliberately onto private land towards the claimant and colliding with him.
Accepting he was bound by previous authorities, Soole J found that the injuries had not arisen out of the use of a vehicle on a road or public place, so did not fall within s.145 of the Road Traffic Act 1988 and therefore were outside the scope of compulsory insurance requirements.
However, Soole J ruled that as an emanation of the State the Motor Insurance Directive applied, placing the MIB under an obligation to compensate to the extent of at least €1million. In doing so, he broke with a time honoured belief that the MIB’s compensatory role is restricted to the contractual obligations with the Secretary of State for Transport. The MIB has been given permission to appeal to the Court of Appeal.
Contact: Niall Edwards
Advantage Insurance v (1) Stoodley (2) Trinity Lane Insurance Co Ltd [09.08.2018]
Where a driver’s insurance covers the use of cars in addition to the driver’s own vehicle, the phrase “the vehicle” is not to be read as meaning only the driver’s own car.
The first defendant was insured by the claimant on his own vehicle. His insurance documents stated he was insured to drive other vehicles with the permission of the owner, but that cover was limited to third party only. While driving a friend’s car, the first defendant crashed it killing one passenger and causing catastrophic injuries to another. The claimant refused to indemnify him, submitting that cover for driving other cars was not a liability required to be covered by a policy under s.145 of the Road Traffic Act 1988 (the Act).
The court held that the first defendant was entitled to rely on the certificate of motor insurance and be insured in respect of third party liability that might arise. When he used his friend's car, that car became the vehicle insured for the purposes of the policy, and "the vehicle" for the purposes of s.145(3) of the Act.
Contact: Richard West
