See the series of cases under the title of Evans v MIB in our caselaw library for an example of an appeal against an arbitration.

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The first edition of this book was originally published in 1969 under the title “The Motor Insurers Bureau.” Malcolm and Donald worked together on the Ninth Edition in 2003, and we are now due for an update.

Another useful titles is this area of the law is Guide to MIB Claims by Andrew Ritchie published by Jordans 3rd Edition 2008.

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The Claimant was a UK resident, who sustained a serious injury in a road traffic accident in Spain in 2007. He was hit by a vehicle driven by a German national, who was resident in Spain. The vehicle that struck him had a UK registration plate, but did not correspond to that of the vehicle, and the vehicle that originally bore the plate had been scrapped in the UK in January 2004. There was no insurance on the vehicle.

In 2008, the Claimant issued proceedings against the Defendant, the Motor Insurers Bureau in its capacity as a compensation body under Regulation 13 of the Motor Vehicle (Compulsory Insurance)(Information Centre and Compensation Body) Regulations 2003. A preliminary issue was ordered by the court to decide the following issues:-

“Whether the defendant, acting as compensation body for the purposes of the Motor Vehicles (Compulsory Insurance)(Information Centre and Compensation Body) Regulations 2003 is required to pay compensation to the Claimant pursuant to regulation 13(2)(b) assessed in accordance with the law in Spain or in accordance with the law of England.

i) because Regulation EEC (No. 864/2007) on the law applicable to non contractual obligations (Rome II)applied to determine the applicable law in this case; and/or

ii) because the defendant’s obligation to pay compensation is limited to the amount for which the tort faros against whom proceedings could not have been brought in England, would have been liable.

2. If Rome II does not apply and the Defendant’s obligation to compensate is not limited to the amount for which the tortfeasor would have been liable, the Private International Law (Miscellaneous Provisions) Act 1995 applies to determine the applicable law in this case.”

JUDGEMENT:-

Justice Owen considered the legal framework underpinning the Motor Insurers’ Bureau as well as the European Union directives on motor insurance. The Fourth Motor Insurance Directive (2000/26/EC) which had been consolidated into the Sixth Motor Insurance Directive (2009/109/EC) was relevant to the questions before the court, in particular Articles 6 and 7. Article 7 allowed the injured party to applied for compensation from the compensation body in the Member State where he resided, if it was impossible to identify the vehicle or if, within two months following the accident, it was impossible to identify the insurance undertaking. The recitals to the Articles were also relevant. These provisions were reflected in the “Agreement Between Compensation Bodies and Guarantee Fund” dated April 2002 to which the MIB was a party. However Clause 7.2 of that agreement stated:-

“When it makes a compensation payment to an injured party, the Compensation Body shall:…..

-          apply, in evaluating liability and assessing compensation, the law of the country in which the accident occurred.”

Owen J then considered Regulations 13 and 14 of the 2003 Regulations, which brought the Fourth Motor Insurance Directive into effect. Article 13(2) said that where the regulation applied:-

“(a) the injured party may make a claim for compensation from the compensation body, and

(b) the compensation shall compensate the injured party in accordance with the provisions of Article 1 of the second motor insurance directive as if it were the body authorized under paragraph 4 of that Article and the accident had occurred in Great Britain.”

He then considered Regulation (EC No. 864/2007) of the European Parliament and of the Council, dated 11^th July 2007 (otherwise known as “Rome II”). Articles 1 and 2 of this Regulation said that it would apply to non contractual obligations, including tort.  Article 4 said that that general rule was that the law applicable to a non contractual obligation arising out of a tort/delict would be the law of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of the event occurred.

However that rule would not apply where the person claimed to be liable and the person sustained damage both had their habitual residence in the same country. Furthermore the general rule might also be displaced if the tort/delict was manifestly more closely connected with a country other than that by the preceding rules.

Article 15 of the Regulation then set out the way in which the applicable law would govern the basis and the extent of the liability and other features of a legal claim including limitation.

Owen J said that the primary issue between the parties was whether Rome II applied to this case. The MIB argued that it did, and that the applicable law should be that of Spain. However the Claimant argued that because of Regulation 13(2) of the 2003 Regulations, the claim should be assessed on the basis of the law in England and Wales.

Owen J said that it was clear that this case involved a non contractual obligation in a civil or commercial matter. There was obviously a conflict between Regulation 13(2) of the 2003 Regulations and Rome II. According to its recitals, the purpose of Rome II was to establish uniformity of approach to situations involving a conflict of laws and as a Regulation it was binding and directly applicable in all Member States.

On the other hand, Regulation 13(2) of the 2003 Regulations was also clear, and if binding it would mean that this claim had to be assessed under the law of England and Wales.

However a rule of European law would prevail over inconsistent rules of national law. Such primacy was absolute (Case 106/77 Simmenthal [1978] ECR 629). Therefore Rome II must prevail.

However the Claimant’s counsel argued that if Rome II applied, then on the proper application of Article 4, the applicable law was that of England and Wales. This was because under Article 4(1) the applicable law was where the damage occurred, and that damage was the failure by the MIB to meet its obligations under the 2003 Agreement. Owen J said that the country in which the damage occurred should be the country where the injury was sustained according to the recitals to Rome II. The purpose of the 2003 Regulations was to provide the machinery for compensating a UK national who had sustained injury in another Member State. The failure of the Defendant to fulfil its obligations under Regulations 13(2) simply meant that the Claimant had not been compensated for the injuries sustained in the accident. That was demonstrated by the scheme under the 4^th Motor Insurance Directive, which allowed reimbursement from the guarantee fund or the compensating body in the member state of the insurance undertaking, or the member state where the vehicle was normally based. The MIB simply acted as an intermediary for the Spanish guarantee fund.

The Spanish guarantee fund also had the right to take over the Claimant’s rights against the person who had caused the accident, the Defendant. If the Claimant’s claim was decided on the basis of the law of England and Wales, the Spanish guarantee fund’s claim against the Defendant would have to be brought under Spanish law, but the difference in the way the claim was assessed between the two jurisdictions would create different valuations. That was not the intention of Rome II.

A similar anomaly would result if both an English and Spanish national had been hit by the German motorist at the same time. One would have his claim assessed under English law, and the other under Spanish law. Again that was contrary to the intention of Rome II.

The Claimant’s counsel also submitted that the case fell within Article 4(2) of Rome II, insofar as the Claimant and the MIB both had their habitual residence in the same country, namely England and Wales.  Owen had said that the person claimed to be liable could not be the MIB. Again the wording of the recitals appeared to contemplate that the person claimed to be liable meant the person who caused the injury.

The Claimant’s counsel then submitted that the case came within Article 4(3), this was here the tort/delict was manifestly connected with another country. This was because the MIB were based in England and Wales, and they were paying the compensation. Owen J rejected this submission.

Therefore Rome II applied to determine the applicable law. The Defendant was required to pay compensation to the Claimant pursuant to Regulation 13(2) to be assessed in accordance with the law of Spain. Owen J did not think it was necessary to him to request a ruling from the European Court of Justice.

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Wilkinson and Evans were two passengers travelling in or on vehicles which they were insured to drive, but the negligent driver of the vehicles was uninsured and was driving with their permission. In one case permission was given with knowledge that the driver was uninsured, and in the other the permission was given without giving any thought to that question. The question in the case was whether they were obliged to repay any compensation that they received from the insurer of the negligent driver.

JUDGMENT:-

Lord Justice Waller quoted the provisions of Sections 151(1) and (2) of the Road Traffic Act 1988.  Section 151(2)(b) provided that even if the insurance policy did not in fact cover driving by the negligent driver, the policy had to be read as if “all persons” were insured.

However Section 151 did not cover an “excluded liability” which was defined by Section 151(4) as any liability for personal injury where the person allowing himself to be carried in the vehicle, knew or had reason to believe that the vehicle had been stolen or unlawfully taken.

Section 151(5) contained the duty on an insurer to satisfy a judgment, notwithstanding that it might be entitled to avoid or cancel the policy. However the insurer was entitled to recover its outlay where an insured had given pemission to drive a vehicle who was uninsured (Section 151(8)). Waller LJ said that it seemed to him that the effect of Section 151(8) was to exclude from the benefit of insurance a passenger who was the insured, but who had given permission to an uninsured driver to drive.

However Waller LJ then considered the impact of European Community law. Waller LJ said that there was an obligation on the courts to construe United Kingdom legislation as far as possible as to fulfil those obligations. The question was, if Section 151(8) was construed so as to exclude an injured insured person from a remedy when travelling as a passenger, which he or she had permitted to be driven by an uninsured driver, would Community law hold such an exclusion was void and unenforceable?

Waller LJ considered the following Directives and cases:-

a)    72/166/EEC

b)    85/5/EEC

c)    90/232/EEC

d)    2009/103/EC

• Ruiz Bernaldez [1996] ECR 1-1847
• Mendez Ferreira [2000] ECR 1-6711

The 2009 Directive consolidated previous Directives. Article 12 of that Directive set out the “Special categories of victim.” Article 13 set out the specific exclusion clauses. Article 13(1) stated:-

“Each Member State shall take all appropriate measures to ensure that any statutory provision or any contractual clause contained in an insurance policy issued in accordance with Article 3 shall be deemed to be void in respect of claims by third parties who have been victims of an accident where that statutory provision or contractual clause excludes from insurance the use or driving of vehicles by:-

(a) persons who do not have express or implied authorization to do so;

(b) persons who do not hold a licence permitting them to drive the vehicle concerned;

(c) persons who are in breach of the statutory technical requirements concerning the condition and safety of the vehicle concerned.

However, the provision of clause referred to in point (a) of the first sub paragraph may be invoked against persons who voluntarily entered the vehicle which caused the damage or injury, when the insurer can prove that they knew the vehicle was stolen.”

Article 12(1) (formerly Article 1 of the Third Motor Insurance Directive) suggested that insurance was required to cover all passengers injured except those contemplated by the second paragraph of Article 13(1), i.e. persons who voluntarily entered the vehicle knowing that it was stolen.

Waller LJ said that if its effect was as wide and straightforward as that, then much of Article 13 would seem to be for the avoidance of doubt. For example Article 13(3) prohibited the exclusion of a passenger injured where he knew the driver was intoxicated and Article 13(1)(b) and (c) which prohibited certain exclusions would not seem to be strictly necessary.

If Article 12(1) did have that wide meaning, then the question that arose was whether a provision which required repayment from the insured passenger was an exclusion within the classes prohibited by Article 13(1). The only candidate was Article 13(1)(a).

Waller LJ summarized the competing arguments.

The Defendant insurers said that in these cases, the driver had the authority of the insured and thus Article 13(1)(a) did not apply because the driver did in fact have permission from the insured to drive the vehicle. Thus Section 151(8) of the Road Traffic Act 1988 was only dealing with a case where permission has been given.

The Claimants argued that Article 13(1) was intended to prevent insurers excluding from insurance vehicles being driven by persons unauthorized by the insurers.

Waller LJ said that Article 12(1) did have the wide meaning suggested above, taking into account judgements from the European Court of Justice including that of Ruiz Bernaldez and Candolin. In the case of Candolin, the European Court of Justice had said that the owner of a car who was travelling in the case as a passenger could not therefore be treated more severely than the other passenger on the ground that he permitted his car to be driven by someone who was acting under the influence of alcohol.

If the reasoning in these two cases was followed, the insurers could not argue that Article 13(1) defined the only prohibited exclusions.

However there were points of difference between this case and Ruiz Bernaldez and Candolin. Firstly whilst knowledge of a driver’s intoxication might well give rise to a finding of contributory negligence, Waller LJ did not see how knowledge of no valid insurance would give rise to such a finding. Secondly why did Community law suggest that a passenger who knew that there was no insurance was excluded from compensation, whereas as far as Road Traffic Act insurers were involved, the position was different.

Therefore Waller LJ would suggest that the issue of whether Section 151(8) complied with Community Law and/or whether some amendment might solve that issue, should be referred to the European Court of Justice.

Lord Justice Wall and the Master of the Rolls agreed.

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On the 12^th December 2008 a car was driven by the First Defendant into a House of Fraser store in Bristol, causing in excess of £200,000 of damage. The Claimant’s insurers took action against the First Defendant and the Second Defendant, the First Defendant’s insurers (using their rights of subrogation), for the purposes of the Road Traffic Act 1988 applied to be joined into the action.

JUDGEMENT:-

Mr Justice Tugendhat said that the claim was brought in negligence, which was admitted by the First Defendant. However his insurers said that he had done the damage deliberately, in an attempt to commit suicide. He had pleaded guilty to the offence of criminal damage but it was unclear whether the plea was on the basis that he acted intentionally or recklessly. The driver’s insurers said that if the accident was deliberate, then the Motor Insurers’ Bureau would be liable under the terms of their 1999 Agreement. However in such a case, the MIB would not be liable to pay any subrogated claim. Whilst they were liable under Article 75 of the Articles of Association of the MIB (of which they were a member), they could still rely on the terms of the MIB Agreement. That was the issue in this case.

Tugendhat J considered the policy of insurance, which excluded deliberate acts. He also considered Part VI of the Road Traffic Act 1988, and in particular Section 148(1) and (2) which prevented insurers from avoiding a policy on certain grounds and Section 151, their duty to pay certain claims.

Section 148 and 151 allowed the insurers to avoid certain exceptions to policies, but not others. The exception in relation to deliberate damage was not listed in either section, as one that could not be avoided by the insurer. In the case of Charlton v Fisher [202] QB 578, Laws LJ had set out two competing propositions in this area of the law.

The general rule that an insured person was not covered by an insurance contraction in respect of loss caused by his own intentional act. (Beresford v Royal Insurance Co. Ltd [1938] AC 586 and Gray v Barr [1971] 2 QB 554)

The user of a vehicle was required by statute to be insured in respect of any liability which he might incur by virtue of the death of or personal injury to any person (or damage to property) which was occasioned by the used of the vehicle on a road in Great Britain, and that included the case where the injury was deliberately and criminally caused. (Hardy v MIB [1964] 2 QB 745 and Gardner v Moore [1984] AC 548).

In Charlton Laws LJ had said that although the word “accident” could include a deliberate act, the purpose of the first proposition was to prevent the insured from recovering anything for his own benefit and the purpose of the second proposition was to protect the innocent victim of the accident.

Section 151 provided a duty on motor insurers to satisfy judgments. Provided certain conditions were met and the insurer had none of the statutory defences available to it, by section 151 an insurer had to pay a judgment obtained by a third party in respect of death, bodily injury and damage to property. The third party was the Claimant in this case, who had suffered damage to its property albeit the Claimant’s property insurers were exercising their subrogated rights.

Tugendhat J said that if he was wrong on the above, he would then consider the impact of European Union law. He considered the five Motor Insurance Directives, which the 1988 Act implemented.

a)    72/166/EEC

b)    85/5/EEC

c)    90/232/EEC

d)    2002/26/EEC

e)    2005/14/EEC

The 1988 Act had to be interpreted, as far as possible, to give effect to those Directives in accordance with the case of Marleasing SA v La Comercial Internacional de Alimentacion SA C-106/89 ECRI-4135.

In the case of Ruiz Bernaldez [1996] ECR 1-1847 the European Court of Justice had said that the Directives should be interpreted as meaning that compulsory motor insurance must enable third party victims of accidents caused by vehicles to be compensated for all the damage to property and personal injuries sustained by them, up to the limits fixed by the Directive.

Tugendhat J said that applying Marleasing, Part VI of the Road Traffic Act had to be interpreted as requiring the user of a motor vehicle to be insured under a policy that satisfied the minimum requirements of the Directives. Interpreting the policy in this case, the cover it provided did meet those minimum requirements, at least so far as material to this case.

Consequently the Claimant was entitled to recover from the Second Defendant, even though the damage to the Claimant’s premises was deliberate and the Second Defendant’s insurance policy excluded such acts.

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APPEAL from Judge Baxter sitting at West London County Court.

On April 23, 1966, the Claimant, Miss Barbara White, and the Defendant, Mr. A. R. Weston, were involved in a car collision. The Claimant alleged that it was the Defendant’s fault, which he denied. They exchanged names and addresses. The Defendant gave his address as No. 46 Northbrook Road, Ilford, Essex, where he then lived. The Defendant informed his insurance brokers and filled in a claim form for his insurers, the National Motor & Accident Insurance Union Ltd. The Claimant got in touch with a Royal Automobile Club solicitor, Izod. Correspondence followed about liability between the Defendant’s insurers and Mr. Izod; on one side liability of the Defendant was asserted, and on the other denied. On October 17, 1966, the Claimant’s present solicitors wrote to the insurers as follows:

“Dear Sirs, Your letter of June 22 addressed to Mr. J. B. Izod has now been passed to us for attention as we are instructed in place of Mr. Izod on behalf of Miss White.  Our instructions are to commence proceedings, which we have accordingly done in the West London County Court, and as a matter of courtesy we enclose herewith a copy of the particulars of claim.”

That letter was not answered by the insurers, who took no action on it.

In the meantime, in May, 1966 the Defendant changed his job and moved his residence to Romford. He informed the insurance brokers of his new address in September, 1966. He was not in touch with the Claimant or her solicitors.

The Claimant’s solicitors, as indicated in their letter, started proceedings in the West London County Court in the normal way by filling in a praecipe for an ordinary summons against a Defendant out of the district, filling in as the Defendant’s address the Ilford address. The claim was for £200. The court prepared and issued the summons and sent it to the Ilford court for that court to effect service. The summons bore a rubber stamp dated 28^th October 1966, signed by the Ilford bailiff in the following terms: “Unable to meet Defendant. He resides at address given and would get summons by post.” How that could have happened was not known because the Defendant had left over five months previously.

Pursuant to Ord. 8, r. 8 (3) , the Ilford Registrar put another rubber stamp on the summons: “Send summons by post,” and another Ilford official posted it to the Defendant at the Ilford address on October 28, 1966, filling in a form on the summons to that effect. What happened to the summons and two other letters sent to the Defendant by the county court at the Ilford address was not known but they never reached the Defendant; they came back to the Ilford County Court some time late in June 1967, and found their way into the West London County Court file of the case.

The case was heard at West London County Court on 25^th November 1966, when the judge, being satisfied that negligence was established, gave judgment for the Claimant for £134 damages and costs on scale 4, which ultimately taxed at £86. The Defendant knew noting of this. Ultimately he heard of it by meeting the Claimant at a magistrates’ court where he was charged with some offence connected with the incident. The Defendant on 16^th June 1967, applied to the county court for the judgment to be set aside under Ord. 37, r. 2 (1) , on the ground that he had not been served. It appeared that he failed to persuade the judge of his ignorance of the proceedings, and his application was dismissed with costs. Armed with better evidence, the Defendant applied again on July 18, 1967, to set aside the judgment of November, 1966. There was a difficulty in renewing an application under the same rule which had already been refused, but that time no reference was made to any rule, and the application was to set aside the November judgment on the ground that the summons was sent by post to an address that the Defendant had long since vacated. According to the county court judge, that application was made under Ord. 37, r. 1.

At that further hearing the county court judge believed the Defendant’s evidence, and that belief was fortified by the discovery by the judge in the court file of the envelopes of the two other communications sent to the Defendant and the summons. He accordingly on July 26, 1967, ordered that the November order be set aside, and a new trial be had. He made no order as to costs of that application, but ordered that the costs of the November hearing should be costs in the cause.

The Defendant appealed on the ground that the judge was wrong to make an order under which the Defendant might be liable to pay costs in respect of proceedings to which he was not a party.

HELD:-

The appeal was allowed with costs.  On the true construction of Ord. 8, r. 8 (3) and section 26 of the Interpretation Act, 1889 , the summons was never served and the Defendant had a right ex debito justitiae to have the judgment set aside without the imposition of any term whether as to costs or otherwise, and accordingly the order for costs should be set aside.

Reg. v. London County Quarter Sessions Appeals Committee, Ex parte Rossi[1956] 1 Q.B. 682  was considered.

Per Russell L.J. A summons sent to an address with which the Defendant has had no connection for five months cannot be properly addressed within the meaning of section 26 of the Interpretation Act, 1889. The function of service is primarily to bring to the attention of the person to be served the fact that he is being sued and particular language is required if something short of that is to constitute service.

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The Claimant’s parents bought their son a car, which was insured through Churchill. The policy holder was Mr Wilkinson, but the son was a named driver. The Claimant allowed the First Defendant to drive his car and an accident occurred. The First Defendant was subsequently convicted of dangerous driving, driving with excess alcohol and driving without insurance.

The Claimant tried to recover damages for his injuries, but Churchill refused saying that they had a right of recovery against him pursuant to Section 151(8) of the Road Traffic Act 1988, as a consequence of him causing or permitting the First Defendant to drive his car. Therefore even if he made a recovery against the First Defendant and Churchill, he would have to pay back those damages to Churchill.

A trial was ordered of the following preliminary issues:-

a)    Whether the Second Defendant (Churchill) had to indemnify to the First Defendant in respect of the Claimant’s claim
b)    Whether the Second Defendant had any right to recover such amount from the Claimant pursuant to Section 151(8) of the Road Traffic Act 1988 or otherwise.

a) was not in dispute. It was also agreed that the Claimant knew that the First Defendant was not insured under the policy at the time of the accident.

JUDGMENT

Blair J went over the legislative background to the case. There were three types of bodies potentially liable:-

a)    Contractual insurers
b)    Statutory insurers (sometimes called Road Traffic Act insurers)
c)    The Motor Insurers Bureau

He also considered the European Community’s Motor Insurance Directives. The argument in this case centred on the Second Motor Insurance Directive (84/5/EEC). Article 2 of that Directive stated that:-

“Each Member State shall take the necessary measures to ensure that any statutory provision or any contractual clause contained in an insurance policy issued in accordance with Article 3(1) of Directive 72/166/EEC, which excludes from insurance the use or driving of vehicles by:

-    persons who do not have express or implied authorization thereto, or
-    persons who do not hold a licence permitting them to drive the vehicle concerned, or

-    persons who are in breach of the statutory technical requirements concerning the condition and safety of the vehicle concerned, shall, for the purposes of Article 3(1) of Directive 72/166/EEC, be deemed to be void in respect of claims by third parties who have been victims of an accident.

However the provision or clause referred to in the first indent may be invoked against persons who voluntarily entered the vehicle which caused the damage or injury, when the insurer can prove that they knew the vehicle was stolen.”

The United Kingdom implemented the Second Motor Insurance Directive by the Motor Vehicles (Compulsory Insurance) Regulations 1987 (SI No. 2171) and the same provisions were enacted in Section 151 of the Road Traffic Act 1988.

Churchill was obliged under Section 151(5) to satisfy any judgment obtained against the First Defendant, notwithstanding that it could avoid or cancel the policy. However Section 151(8) allowed Churchill to recovery the judgment against any person who was not insured, or who was insured, but who caused or permitted the use of the vehicle which gave rise to the liability.

The Claimant’s counsel argued that Section 151(8) created an uncompensated class of victim, of which the Claimant was an example. A blanket exclusion of a class of victim beyond Article 2 was impermissible.

Churchill’s counsel argued that Section 151(8) was not incompatible with the Directive. On the plain reading of the words of that sub section, the money could be recovered and it was not an exclusion of the right to compensation. There was nothing unconscionable in the insurer being able to recover its loss from the insured person who permitted the unauthorised use. Alternatively if Section 151(8) could not be interpreted in line with the Directive, then consequently the Claimant should take out “Francovich” type (Francovich v Italian Republic [1991] ECR I) claim against the United Kingdom government for failing to implement the Directive properly,as was done in Byrne v MIB [2008] EWCA Civ 574.

The Claimant’s counsel had argued that Section 151(8) should not include a person entitled to the benefit of a judgment to which Section 151 referred. However the Defendant’s counsel argued that there were limits to a domestic court’s power and duties of interpretation. The principle in the case of Marleasing SA v La Comercial Internacional de Alimentacion SA C-106/89 [1990] ECR I-4135 required the interpretation of national law in the light of the wording and purpose of the Directive in order to achieve its result only “so far as possible.” The construction placed on Section 151(8) by the Claimant’s counsel did violence to its language. Therefore the correct remedy for the Claimant was to mount a “Francovich” claim.

Blair J referred to the case of Evans v Secretary of State for Transport and MIB [2003] ECR I-14447, where the European Court of Justice explained that the purpose of the Second Directive was to entitled victims of damage or injury caused by unidentified or insufficiently insured vehicles to protection equivalent to, and as effective as, that available to person injured by identified and insured vehicles.

There was then the case of Ruiz Bernaldez Case C129/94 [1996] ECR I-1847 where the European Court of Justice said that Article 3(1) of the First Motor Insurance Directive did not preclude statutory provisions or contractual clauses under which it was possible for the insurer to claim against the insured in certain cases. That applied in particular to provisions or clauses that allowed the insurer to claim against the insured with a view to recovering the sums paid to the victim of a road traffic accident. However that passage did not in terms recognise recovery where the insured and victims were the same person. This was a case of recovery by insurers against a policy holder, and not against the victim of an accident.

Ruiz Bernaldez was a case where the driver of the vehicle was intoxicated. The effect of the decision was that a compulsory insurance contract could not provide, in certain cases, in particular where the driver of the vehicle was intoxicated, that the insurer did not have to pay compensation for damage to third parties by the insured vehicle. It might however allow the insurer to have a right of recovery against the insured. Blair J commented that this case did not appear to be dispositive of the issues in this case, because it involved a recovery by the insurers against the policy holder and not against the victim of the accident.

In Mendes Ferreira [2000] ECR I-6711 the European Court of Justice considered the first three Motor Insurance Directives. This was a case involving a car belonging to Mr Ferreira and driven by one of his sons, in which another son was fatally injured. No other vehicle was involved in the accident and the driver of the vehicle was not at fault. Portuguese law at the time distinguished between passengers carried free of charge who were required to prove fault in order to recover compensation, and paying passengers who did not have to prove fault.

The European Court of Justice said that the First Motor Insurance Directive established a system based on the presumption that vehicles normally based on Community territory were covered by insurance. However Member States were left to determine the damage covered and the terms and conditions of the compulsory insurance against civil liability for damage to property. The Second Motor Insurance Directive required that, as regards personal injuries, the members of the family of the insured person or of the driving could not be excluded from cover on the grounds of their family relationship. The Third Motor Insurance Directive extended that obligation to provide cover from personal injuries to passengers other than the driver.

Churchill’s counsel submitted that provided the laws of the Member States complied with the Directives, then the precise rules of civil liability were a matter for each State. There was nothing to stop a Member State allowing a recovery from the uninsured tortfeasor or the insured. The Claimant’s counsel pointed out that third party victims of an accident could be excluded from compulsory motor vehicle insurance for the simple reason that they were members of the family of the insured person or the driver. Mendes Ferreira was an illustration of the strictness with which the European Court of Justice limited the ambit of the right of Member States to have in their domestic law anything inconsistent with the provisions of the Second Motor Insurance Directive.

The final authority was the case of Candolin [2005] ECR I-5745 which was the nearest authority to the Claimant’s case. This was a case where passengers and driver in a car were all intoxicated. R was driving P’s car, in which P, V and C were passengers. The car crashed and C died. The driver was imprisoned and the insurance company ordered to pay compensation. The European Court of Justice reiterated the aims of the First and Second Motor Insurance Directive and referred to the case of Ruiz Bernaldez. Those Directives were intended to avoid the situation where Members States could limit payment of compensation to third party victims of a road accident to certain circumstances. The European Court also said that the fact that the injured passenger was also the owner of the vehicle was not relevant.

Churchill’s counsel’s answer to the case of Candolin was that there was a crucial difference between that case and this one. In Candolin the insurer was seeking to avoid liability completely based on Article 2.1 of the Second Motor Insurance Directive. However the European Court did not allow them to do this. In this case, the insurer was not seeking to rely upon Article 2.1. T

he effect of Section 151(8) Road Traffic Act 1988 was not to exclude liability but rather to give the insurer the right of recovery in certain limited circumstances.

Blair J also referred to the case of Lloyd-Wolper v National Insurance Guarantee Corp plc [2004] EWCA Civ 766. However that case was very different from the present case. Reference was also made to an Isle of Man case, Kelly v McClure, 24th October 2000 but the Isle of Man was not within the European Union.

Blair J said that this case was difficult and he had considered making a reference to the European Court of Justice as had been done recently in McCall v Poulton [2008] EWCA Civ 1313. However he was persuaded that it was better to have the matter dealt with at appellate level if need be.

Clearly on the stance taken by the insurer, the Claimant would receive nothing.

Article 2 of the Second Motor Insurance Directive said:-

“Each Member State shall take the necessary measures to ensure that any statutory provision or any contractual clause contained in an insurance policy issued in accordance with Article 3(1) of Directive 72/166/EEC, which excludes from insurance the use or driving of vehicles by:

-    persons who do not have express or implied authorization thereto, or….”

Blair J preferred the argument advanced by the Claimant’s counsel. Article 2 of the Second Motor Insurance Directive was directed to statute or policy provisions which affected the cover provided by the insurance. The only person who could give or withhold authorisation to a person or class of persons to drive or use and be covered by the policy was the insurer. The giving or withholding of physical authorisation of physical authorisation to use or drive by a vehicle owner or a person having control over a vehicle cannot exclude or include the user or driver under cover of the policy. Authorisation meant authorisation for insurance purposes.

Blair J accepted the distinction drawn by Churchill’s counsel between an injured person’s right to compensation and an insurer’s right of recovery. However the reality of the Claimant’s position was that he would lose whatever compensation he recovered immediately. The position was the same as that stated in the case of Candolin. National provisions that governed compensation for road accidents could not deprive those provisions of their effectiveness. The satisfaction of a judgment followed by immediate recoupment of the proceeds did not achieve the purposes of the Motor Insurance Directives.

On the facts of this case, there were plainly significant issues of contributory negligence, but it was compatible with the Directives to deny compensation altogether.

The final issue was whether the court should interpret section 151(8) of the Road Traffic Act 1988 in line with the Directives. This exercise was not an untrammelled one. It did not require national courts to impose an artificial or strained interpretation of national law.

The Claimant’s counsel argued that wording should be implied into the first part of Section 151(8) so that the statutory entitlement to recover the amount in question from any person who is insured by the policy should include the following proviso, “not being a person entitled the benefit of a judgment to which this section refers.”

Blair J agreed with the insurer’s submission that a victim should not be immune from the consequences of his own actions, but considered that in the light of the Directives and their interpretation by the European Court of Justice, that this was a proper function of the principles of contributory negligence, and not the statutory right of recovery.

Therefore:-

a)    The Second Defendant had to indemnify the First Defendant in respect of the Claimant’s claim; and
b)    The Second Defendant did not have the right to recover such amount from the Claimant pursuant to section 151(8) of the Road Traffic Act 1988.

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On 23 August 1997, the claimant was driving when she was injured in a collision with the first defendant’s vehicle. She suffered serious injury. The first defendant was killed. The second defendant was the owner of the car being driven by the first defendant.

On 5 August 2000, the claimant’s solicitors issued proceedings against the first and second defendants. The official solicitor was appointed to accept service on behalf of the first defendant’s estate. The first defendant was uninsured at the time of the accident and the Motor Insurers Bureau was added to the proceedings as the third defendant.

On 27 October 2000, the third defendant admitted liability on behalf of the first defendant. On 1 November 2001, the claimant’s solicitors (N) discontinued the claim because they had failed to serve notice of proceedings under cl 5(1) of the Motor Insurers Bureau agreement (the agreement). Clause 5(1) of the agreement was a condition precedent to liability. The claimant commenced proceedings against N for professional negligence.

Thereafter, there was some delay as a result of the suggestion by N in the professional negligence claim that proceedings should be instituted against the original defendants. On 30 July 2007, a claim form was issued against the defendants. The third defendant raised a limitation defence. By consent, the claim against the second defendant was discontinued. The claimant applied to disapply the limitation period under s 33 of the Limitation Act 1980.  She contended, inter alia, that the third defendant was not prejudiced in relation to the issue of liability as it had already admitted liability in the original action. 

HELD:-

In all the circumstances, it was inequitable to permit the application to disapply the limitation period. It was difficult to conceive how the instant application would be in the interest of anyone other than N.  Accordingly, the application would be dismissed and judgment would be entered for the first and second defendants.

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The Defendant was the legal and beneficial owner of a flat under a 99- year lease. The Claimant was the Landlord of the flat. The Defendant let his stepfather stay in the flat rent-free on the condition that he would pay all the bills, including the ground rent and service charge. The arrangement was not notified to the Landlord or the managing agents, nor were they given any other address to which communications should be sent. The Defendant last saw his stepfather in 1986 and did not visit the flat until 1991 when he found that his stepfather had left and someone else was in occupation

In 1990, pursuant to Ord 3 rule 3(1), the Landlord filed a request in the county court for the issue of a summons against the Defendant for possession of the flat. The request was made on from N204, which is headed “Request for issue of Summons for Possession of Land”. It is not a form prescribed by the County Court Rules, but a practice form approved by the Lord Chancellor. The summons was sent to the Defendant at the flat in accordance with CCR Ord 7, rule 10(1)(b), which provided that the service of a summons could be effected “by an officer of the court sending it by first class post to the Defendant at the address stated in the request for summons”

However, the summons did not reach the Defendant and in his absence judgement was entered for the Claimant for possession of the flat. The Defendant applied to have the judgement set aside but the judge dismissed the application on the ground that the summons had been properly served on the Defendant since the address was one with which he had a direct and immediate connection and in the circumstance, in particular since rights of innocent third parties who were occupying the flat had arisen the judge would not exercise his discretion to set the judgement aside.

The Defendant appealed to the Court of Appeal on the ground that the delivery of the summons had not been properly effected pursuant to Ord 7, rule 10(1)(b) since it had been sent to the Defendant at premises which had never been his address.

The appeal was heard before Lord Justice Nourse and Justice Thorpe.

HELD:

Lord Justice Nourse determined that the central issue in this appeal what was the Defendant’s address for the purpose of service?

He began answering this question by discussing what he believed an address to be. He stated in ordinary parlance a person’s address is a place at which written communications can be delivered to him. In order that they can be delivered to him, he must, to a greater or lesser extent, be present to receive them. But if he is never there at all, it cannot properly be called his address. A forwarding address is not the same thing as an address

He was heavily persuaded by the authorities addressed by the Defendant. Denning LJ stated in R v Appeal Committee of County of London Quarter Sessions, ex p Rossi [1956] 1 All ER 670 at p 674;

When construing this section, it is to be remembered that it is a fundamental principle of our law that no one is to be found guilty or made liable by an order of any tribunal unless he had been given fair notice of the proceedings so as to enable him to appear and defend them. The common law has always been very careful to see that the defendant is fully apprised of the proceedings before it makes any order against him”

Further support was given by White v Weston  [1968] 2 All Er 842. Russell LJ said [1968] 2 All ER 842 at 845,

“a summons addressed to an address with which the defendant has had no connexion for five months or more cannot be said to be properly addressed… the function of service is primarily to bring to the attention of the person to be served the fact hat he is being used, and particular language is my judgement required if something short of that us to constitute service”

Sachs LJ added at p847;

“I can find no warrant in any of the CCR or in s 26 of the Interpretation Act, 1889, for holding that service in purported pursuance of CCR Ord 8 r3 at an address which at the relevant time was not the abode, residence, or place of business of a defendant, is good service should the relevant document not in fact reach him”

Counsel for the Claimant submitted that the first of the observations of Russell LJ supports the judge’s “direct and immediate connection view” of the question. Lord Justice Nourse rejected this submission, he regarded it as essential that the Defendant should have some continuing presence there before the residence in question could properly have been called his address.

He accepted that the position before him was that the three relevant authorities support he view that the word “address” in Ord 7, r 10(1)9b) should be construed in accordance its ordinary meaning. Thus it dos not include a place which the defendant is never present at which the process does not come to his notice, albeit that it is a place, which in the circumstances of this case, may well have had a direct and immediate connection with him.

It follows that the summons were not correctly and properly served on the Defendant and consequently the decision must be set aside ex debito justitiae.

Justice Thorpe agreed that the circumstances are highly unusual. He iterated the fact that Ord 7 r 10 (1)(b) of the CCR governed the service of the Claimant’s default summons. That rule provides;

By an officer of the court sending it by first class post to the Defendant at the address stated in the request for summons

He agreed with Lord Justice Nourse that the question of law in the appeal was whether the judge was right to construe the words “the address” in Ord 7, r 10(1)(b) as “an address which has direct and immediate connection with the Defendant”. He came to the conclusion that, despite submissions for the Claimant, the judge was wrong in that construction. There was no authority for its adoption and was contrary to the rules in White v WestonThe principle is stated by Sachs LJ at 847:

“it follows that only an explicit and clear provision in a statute, or in rules having statutory force, can operate to deprive a citizen of his rights to receive notice of the commencement of process against him; and to permit service other than personal at an address which is not in fact his abode”

Justice Thorpe came to the conclusion that far form formulating a test so wide and potentially productive of injustice, Russell LJ was upholding the principle that the function of service is to bring to the attention of the person to be served the fact he is being sued and particular language is required if anything short of that is to constitute service. He did not see any useful distinction between the proposed defendant’s abode and the proposed defendant. In most cases the address in Ord 7 r 10(1)(b) will be the address at which the defendant ordinarily resides or works. In addition he concluded that the summons had not been served in accordance with the rules, and the judgement should be set aside as of right ex debito justitiae.

Appeal allowed.

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The appellant was stopped by the police when she was riding a ‘city bug’ electric scooter.  She was charged with using a vehicle with no insurance, in contrary to s.143 Road Traffic Act 1988 and Sch 2 of the Road Traffic Offenders Act.  She accepted that she had no insurance but contended that the city bug was exempt under s.189(c) of the Act as an electronically assisted pedal cycle. 

Section 185 of the Act defined ‘motor cycle’ as ‘a mechanically propelled vehicle which was not an invalid carriage, with less than four wheels and the weight of which unladen does not exceed 410 kilograms’. The appellant said in evidence, which was accepted by the Crown Court, that she had used the pedals to achieve forward propulsion and had propelled the conveyance a few metres at a time.

The Crown Court found as facts that the vehicle was intended primarily to be powered by an electric motor; that it was capable of being propelled by the use of the pedals only but it was a difficult and precarious exercise that would require much practice; and that it would be impossible for anyone to use this machine safely on the roads if reliance was placed on the pedals alone. The Crown Court concluded that the city bug satisfied all the requirements of reg 4 of the Electrically Assisted Pedal Cycle Regulations 1983 with the exception of condition (b), which required the vehicle to be ‘fitted with pedals by means of which it is capable of being propelled’. It therefore found the appellant guilty.  The appellant appealed by way of case stated.

HELD:

The appeal was dismissed. It was held that a purposive construction should be adopted to reg 4(b) to give effect to the intention of Parliament, which had to be to require the pedals on an electrically assisted pedal cycle to be capable of propelling the vehicle in a safe manner in its normal day to day use. In the alternative, the court read the words ‘fitted with pedals by means of which it is capable of being propelled’ as meaning that the vehicle was required to be ‘reasonably capable of being propelled’ by the pedals. The critical finding of fact in the instant case was that it would be impossible for any one to use the city bug safely on the roads if reliance was placed on the pedals alone; accordingly, the Crown Court had not erred in its conclusions and therefore the appeal was dismissed.

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