Absolute certainty or more challenges to come?

Cameron v Hussain and Liverpool Victoria Insurance Co Ltd [2019]

The much anticipated decision of the Supreme Court has now been handed down with Lord Sumption delivering the judgment, which was unanimously supported. The judgment is unequivocal in the determination of the issues before the court, but is this the end of matters?


The case concerned a road traffic accident which occurred on the 26 May 2013. The claimant’s vehicle was struck by a Nissan Micra and she sustained injuries. It was common ground that the driver of the Micra was responsible for the accident. The registration number of the Micra was taken down but the driver escaped the scene.

The registered keeper of the vehicle refused to identify the driver and was convicted for failing to do so. The driver of the Micra therefore remained unidentified but the second defendant/appellant, Liverpool Victoria (LV) was identified as having issued a policy of insurance to a Mr Bahadur, for his use of the vehicle. However, LV suspected that this was a fictitious person.

With an unidentified driver this was therefore a claim that would normally be brought against the Motor Insurers Bureau (MIB) under the Untraced Driver’s Agreement (UTDA). However, the claimant sought to pursue the claim against the unidentified driver with a view to having the claim settled by LV in their capacity as the insurer that had issued a policy of insurance for use of the vehicle in question.

Initially suing Mr Hussain for damages, the claimant subsequently amended the proceedings to add a claim against LV for a declaration that it would be liable to meet any judgment obtained against him. The insurer served a defence denying liability on the ground that there was no right to obtain a judgment against Mr Hussain, because there was no evidence that he was the driver at the relevant time.

The claimant then applied to amend the proceedings removing Mr Hussain’s name and instead referring to the “the person unknown” driving the vehicle concerned. At first instance the claimant failed with this approach but that was reversed in the Court of Appeal which held that whenever a policy had been issued in respect of a vehicle, the insurer should compensate irrespective of who the driver was. LV appealed.

Supreme Court judgment

It was unsurprising that the judgment focused heavily on the issue of service, rather than just the fact of issuing on an unnamed defendant, even though this specific issue was not a hotly contested one in the first instance or appeal decisions. It is now abundantly clear that the issuing and service of proceedings is not permitted in circumstances where the existence of the proceedings can never be brought to the attention of the defendant, and that substituted service on the defendant insurer is not an effective solution.

As Lord Sumption stated:

I conclude that a person, such as the driver of the Micra in the present case, who is not just anonymous but cannot be identified with any particular person, cannot be sued under a pseudonym or description, unless the circumstances are such that the service of the claim form can be effected or properly dispensed with.

The judgment restores the position that where the defendant is not identifiable, the usual recourse is via the MIB under the UTDA. Mr Horlock QC made strong submissions on behalf of the MIB on the important role it plays, particularly in respect of its inquisitorial powers under the UTDA, which helps to combat fraud. The court recognised that the current system, where the MIB is “filling the insurance gap”, is compatible with the EC Directives. While this perhaps does the MIB a disservice for the wider role it plays, the MIB does provide a remedy for the victims of uninsured or untraced drivers.

Further challenge on the horizon?

The decision is clear in relation to the issues that were before the court. However, when giving short-shrift to the respondent’s arguments on the EC Directive positon, it seems that Lord Sumption may have left the door slightly ajar for an alternative route that was not pursued here, when referring to Article 18 of the Sixth Motor Insurance Directive:

“I assume (without deciding) that article 18 requires a direct right of action against the insurer in respect of the underlying wrong of the “person responsible” and not just a liability to satisfy judgments entered against that person. It is a plausible construction in the light of the recital and the reference to Directive 2000/26/EC. However, Ms Cameron is not trying in these proceedings to assert a direct right against the insurer for the underlying wrong.”

This could leave the way open to a claimant to contend that under Article 18 they have an absolute right to issue proceedings directly against the insurer of a vehicle irrespective of being able to identify the driver. However, the European Communities (Rights against Insurers) Regulations 2002 only allow a direct right of action against an insurer “covering the responsible person”, which would not apply if the driver cannot be identified. The question remains as to whether that is consistent with the intention of Article 18. In light of Lord Sumption’s comments, quite possibly not.

The prospect of having to deal with litigation pursued against them directly in circumstances where the Claimant has no obligation to identify the driver at all, is concerning for both insurers and the MIB.

It remains to be seen, however, whether a claimant would pursue this line of argument.

Read other items in Motor Brief - May 2019

Related item: Motor Brief: latest decisions January 2019