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The Vnuk legacy: claims against the MIB for accidents on private land

Lewis v Tindale, Motor Insurers' Bureau & SoS for Transport
High Court (QB)
14 September 2018

The combined impact of Brexit and prolific judicial activity in the field of motor insurance both in the Court of Justice of the European Union and the English and Welsh courts has brought with it unprecedented uncertainty in the insurance market.  This uncertainty impacts not only motor insurers but also insurers of other classes of business, into which compulsory and contractual motor insurance has encroached at a steady and occasionally dramatic pace over the last few years. Amy Jeffs reviews the latest High Court decision in Lewis v Tindale, MIB & Secretary of State  for Transport and where we are currently with proposals to amend the scope of compulsory motor insurance. 

Background

The decision of the CJEU in Vnuk in 2014 began the spate of activity, and further CJEU cases (including notably Rodrigues,Torreiro and most recently Juliana) have laid the foundation for the application of the Motor Insurance Directive. There have followed English decisions which demonstrate that, although ostensibly not directly applicable to English law, the CJEU approach has been influential, as indeed it must be in the case of any ambiguity.  Decisions such as R&S Pilling v UK Insurance (listed for appeal in the Supreme Court on 18 December 2018) display an overt reference to the European approach in the determination of the "use" or "normal function" of the vehicle.

The CJEU approach has therefore been felt and very much factored into the mindset of insurers over recent years. However, the decision of Lewis v Tindale, MIB & Secretary of State for Transport in September 2018 brought the impact of Vnuk and the other cases more immediately and directly into the UK jurisdiction.

The decision will not have come as a surprise with the scene being set in October 2017 with Farrell v Whitty in which the CJEU decided that the Motor Insurers' Bureau of Ireland was an emanation of the state.

Issues

Certain issues were determined in Lewis v Tindale & MIB which came before Mr Justice Soole sitting in the High Court. The claim was brought by a pedestrian who had been injured by an uninsured 4x4 driven by Mr Tindale. The vehicle had initially been driven along a road. It then went through a barbed wire fence, into a private field where the incident occurred.

The issues before the court were:

  1. Whether the judgment against Mr Tindale is a liability which is required to be covered under the Road Traffic Act 1988?

  2. Was the MIB liable to satisfy the judgment under the 2009 Motor Insurance Directive (MID)?

  3. Do the provisions of MID have direct effect against the MIB?

(Although put to the court in this way, issues 2 and 3 were by and large the same issue).

It was said on behalf of the claimant that the Road Traffic Act requirement for cover on a "road or other public place" (s. 145(3)) should apply to render the incident the subject of compulsory cover because Mr Tindale had driven on a road before entering onto private land. Soole J rejected the submission that the earlier use on a road was causative of liability for the incident which occurred on private land.

He found that the Road Traffic Act was clear in its requirement for cover only for vehicles on roads and public places, and the Marleasing principle, which requires the application of the European approach where ambiguity exists in domestic law, could not apply. To require compulsory insurance on private land would be rewriting the Road Traffic Act rather than reinterpreting it in accordance with the CJEU decisions. In addressing the first issue therefore, it was held that liability for an incident on private land did not need to be insured under the provisions of the Road Traffic Act and did not need to be compensated by the MIB.

However, turning to issues 2 and 3, the judge held that following Farrell, the MIB in the UK is an emanation of the state, and as such, the MID has direct effect against the MIB, to the extent that the MID and EU law is clear and precise. It followed that as against the MIB, cover would be required, as applied in Vnuk and reiterated in cases such as Rodrigues, Torreiro and Juliana, anywhere within the territory of the member state, including on private land. 

Comment

  • The decision in Tindale was directed to the highly significant issue of the application of compulsory cover on private land. It immediately opens the MIB to claims for incidents on private land including (subject to arguments of limitation) certain historic cases which have not been factored into premiums and levy payments.

  • The decision has far wider implications than those immediately addressed in the decision, since is also exposes the MIB to the direct application of other aspects of the CJEU approach. It would seemingly bring with it the requirement for cover for any motor vehicle (not only those intended or adapted for use on roads in accordance with the Road Traffic Act) including those vehicles highlighted in various articles and submissions to the EU and UK governments in response to Vnuk,  from motorsport vehicles to ride-on lawn mowers.

  • The CJEU decisions and proposed amendment/clarification of the MID by the EU

  • Commission, to effectively codify the decision in Vnuk, has meant insurers and practitioners have been working in a state of uncertainty, awaiting the UK government's response to recent developments. The latest decision should precipitate a response or at least early consideration of the government's intentions as to current motor insurance issues post Brexit. We currently have a situation in which the MIB (and in reality insurers through the levy) will be required to meet claims with no corresponding obligation to insure such liability.    

  • Conversely, the decision in Tindale may take some of the immediate financial pressure off the government.  The claimant in Tindale had included a Francovich action against the UK government which is no longer relevant in light of the ruling. Instead, the MIB will now be the obvious target for claimants, transferring the impact of Vnuk to the MIB and in turn insurers.  

  • In the first instance the MIB intends to appeal the decision in Tindale, and will need to consider its approach to Article 75 and passing its increased liability directly to insurers.  It is hoped that the government appreciates the pressing need for decisive action in this area. Brexit and its negotiations provide the UK with options to address the issues of concern highlighted through various sources. Insurers and other practitioners will hope that Tindale will push the government to exercise its options to bring about a coherent, clear and sensible compulsory regime sooner rather than later.

Contact

For further information, please contact Amy Jeffs, Director, Commercial Insurance on 0151 907 3303

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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