Legal & Claims News: MIB Fund IS Liable for Incidents on Private Land

Here’s some interesting legal news we spotted on the Keoghs website recently;

On 5th June 2019 the Court of Appeal handed down judgment in the case of Motor Insurers’ Bureau v Lewis [2019] EWCA Civ 909. This judgment extends the scope of the MIB’s liability to indemnify uninsured drivers and creates an additional pool of cases, albeit a small one, which fall to be funded by the MIB and, consequently, motor insurers and their customers via the levy.

The facts and decision

The claimant, Mr Lewis, was walking on private land when they were struck by an uninsured 4×4 vehicle being driven by Mr Tindale. Mr Lewis sustained serious injury as a result of this accident and sued.

Mr Lewis obtained judgment against Mr Tindale and the key question was the extent to which, if any, MIB had any liability to satisfy the judgment obtained against the uninsured driver. This question was brought before Mr Justice Soole at a trial.

Mr Justice Soole held that MIB were liable to indemnify the claimant, despite the accident occurring on private land, given that MIB were an “emanation of the state” for the purposes of the EU Motor Insurance Directives (‘the Directives’) thus extending MIB’s liability beyond the previously held boundaries of compulsory insurance as set out in the Road Traffic Act 1988.

The decision of the Court of Appeal

The Court of Appeal upheld the judgment of Mr Justice Soole in favour of the Claimant. LJ Flaux gave the only judgment and referenced several recent key decisions when reaching their decision.

The European decision in Vnuk v Zaraovalnica was the first of a number of cases which held that the elements of the current regime of UK insurance law are incompatible with the Directives. As such the UK Government has not complied with its obligations under the Directives to ensure compulsory insurance, including cover for use of vehicles on private land.

MIB accepted that they were an “emanation of the state” for the purposes of Article 10 of the Directive, relating to a compulsory body being in place to compensate victims of uninsured or unidentified vehicles.

However, MIB did not accept that they were an “emanation of the state” for the purposes of Article of the Directive, which relates to member states ensuring that civil liability in respect of vehicles based in its territory are covered by compulsory insurance.

Therefore, the Court of Appeal had to decide whether the UK Government had, as a result of the decision in Vnuk, delegated the entirety of their obligations under the relevant articles of the Directives to the MIB, in which case MIB would be liable as the Directives have direct effect, or whether the UK Government had only delegated their obligations to the extent of the requirements of the Road Traffic Act 1988 (i.e. use of a vehicle on a public road) in which case MIB would not be liable.

The recent European decision of Farrell v Whitty (No. 2) played a significant role in LJ Flaux’s judgment. The decision in Farrell held that the Motor Insurers’ Bureau of Ireland (‘MIBI’), which operates in much the same way as the MIB in the UK, was an “emanation of the state” for similar purposes and therefore the Court of Appeal (somewhat inevitably) reached the same conclusion in Lewis.

You can read a full analysis of the judgement, and more details on the direction that uninsured driver cases are likely to take in the future, at the Keoghs website. 

About InsuranceEdgeEditor (1613 Articles)
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: