Uninsured road accidents on private land – Supreme Court rejects application by the Motor Insurers’ Bureau
MIB v Michael Lewis (a protected party) [05.06.19]
The Supreme Court has recently rejected an application by the Motor Insurers’ Bureau (MIB) for permission to appeal against the Court of Appeal decision in the case of MIB v Michael Lewis (a protected party) [05.06.19] to uphold the original High Court judgment. This leaves the MIB with the Court of Appeal decision extending the liability of the MIB to meet claims for uninsured motor accidents which occur on private land.
The case involved a road accident in June 2013 occurring on private land (not a road or public place) in which the fault driver was in any event uninsured and struck Mr Lewis (a pedestrian) causing injury. The MIB asserted, ultimately without success, that because the accident occurred on private land there was no obligation on the MIB to meet the claim from Mr Lewis - there not being a relevant liability under the Uninsured Drivers’ Agreement 1999 (UDA).
For a more detailed consideration of the decision at first instance and then the Court of Appeal decision, see our earlier article.
The position now
The appellate court and then Supreme Court in the UK, have upheld Article 3 of the 2019 European Union (EU) Directive (2009/103/EC) over and above the MIB Articles of Association and UDA. Both courts finding that the MIB was an emanation of the state and, as such, the same directive would (currently) have direct effect upon them.
In short, that directive requires that the innocent victims of motor vehicle accidents have a right to compensation whether an accident occurs on public land or indeed private land. The MIB are therefore not free to avoid paying such claims on the basis there is no relevant liability under the UDA. Claimants are in general terms (subject to other exclusions or exceptions in the UDA) free to pursue the MIB for recovery of their losses even though they were injured on private land.
Significantly as well, the MIB are in a noticeably different position to motor insurers under Part IV of the Road Traffic Act 1988 (RTA). The latter only have to potentially bear a statutory liability to meet third party civil judgments where they arise from an accident on a road or public place involving use of a vehicle.
It seems to follow that any civil claims arising from accidents occurring on private land, caused by negligent use of a motor vehicle - not including, arguably, cases where the same motor vehicle had only just left the road or public place immediately before the accident occurred, would:
(a) Not fall to be covered by compulsory motor insurance under the RTA, but
(b) Would fall to be covered by the MIB – whether or not the at-fault vehicle was insured otherwise by a motor insurer.
In the Court of Appeal, Lord Justice Flaux suggested that the issues brought about by this decision could be “addressed by amendment to the RTA and/or the MIB Articles of Association”.
There are several directions the government and the MIB could take following this decision.
For their part the MIB have refused to be drawn yet on whether they will seek to amend their own Articles of Association (and the UDA). The MIB has however, expressed disappointment at being refused permission to appeal, and that the current position places an unfair financial burden on ordinary motorists.
Further, the MIB have very deliberately raised the prospect of seeking to recover any damages paid out on similar claims from the fault motorist who causes the loss on private land.
The government could seek to amend the RTA to impose a statutory liability on the (motor) insurers of vehicles to meet third party judgments for claims arising from use of the same vehicles on private land. This would mean compulsory motor insurance would extend to cover for third party claims arising from use of the vehicle on private land. This seems an unlikely step for the government to take, particularly given that accidents involving motor vehicles on private land are fairly uncommon. Essentially, most motorists would be paying an increased premium to cover those few claims arising on private land and involving motor cars.
That all being said, the government has of course recently extended compulsory motor insurance under the RTA to cover use of vehicles in autonomous mode. However, making a fundamental change to a well-established statute to comply with an EU directive which will not have direct effect from, feasibly, December 2020, is a factor that potentially makes such amendment unlikely.
It seems certain that, in the short-term, the MIB will be looking for other routes to avoid such exceptional claims. For example, on the basis that the losses arising are covered by other insurances, and where there are other potentially negligent parties involved or through application of other still-valid exclusions under the UDA.
Ultimately, the government is going to have to address these and other thorny issues in relation to motor liability and cover when negotiating any trade deal with the EU. Where motor cover starts and stops, how vehicles are to be defined, how use of a vehicle is defined, what liabilities the MIB can still avoid as an insurer of last resort – all of these issues are now front and centre on the negotiating table.