Farrell v The Minister For The Environment (Ireland) And The Motor Insurers Bureau Of Ireland [2007]

FACTS:-

The Claimant, Ms. Farrell was involved in a road traffic accident on the 26th January 1996 in the Republic of Ireland. She was travelling in a van that was not designed and constructed for the carriage of passengers in the rear of the vehicle. Mr Whitty, the owner and driver of the vehicle lost control of his vehicle, which then collided with a wall. Since the vehicle had no seating accommodation in the rear, Ms. Farrell was seated on the floor of the van at the time of the accident. It later transpired that Mr Whitty was uninsured.

The Claimant sought damages from the Motor Insurers Bureau of Ireland (MIBI) under the terms of an agreement entered into between that organisation and the Irish government.

The MIBI refused to compensate the Claimant on the ground that she was travelling in a part of the vehicle that was not designed and constructed with seating accommodation for passengers. It said that this was not a liability for which insurance was compulsory under the Road Traffic Act 1961 and Article 6 of the Road Traffic (Compulsory Insurance) Regulations 1962, as amended.

The effect of that legislation was that a person using a vehicle had to have an approved policy of insurance to cover any liability for personal injuries caused to persons travelling in the vehicle other than “excepted persons”. Excepted persons were those persons claiming in respect of an injury sustained while in a vehicle other than a type of vehicle specified by ministerial regulation. The Minister for the Environment did not have the power to extend the compulsory insurance obligation in respect of liability for injury to individuals travelling in a part of the vehicle, which had not been designed and constructed with seating accommodation. For that reason, the Claimant was an excepted person. The liability was not one for which insurance was compulsory under the 1961 Act, and therefore the Agreement between the MIBI and the Irish government did not apply.

The Claimant obtained judgment against Mr Whitty in the High Court. She argued that the Irish court should declare that the national implementing measures in force at the time of the accident did not properly implement the relevant provisions of the First and Third Directives, in particular Article 1 of the Third Directive.

The High Court decided to stay the proceedings and to refer the following question to the European Court of Justice for a preliminary ruling. The questions were as follows:-

“(1) Under Article 1 of [the Third] Directive…., is Ireland obliged, as of 31 December 1995 – the date by which Ireland was obliged to implement the provisions of the Third Directive in respect of passengers on vehicles other than motorcycles – to render insurance compulsory in respect of civil liability for injury to individuals travelling in a part of a motor vehicle not designed and constructed with seating accommodation for passengers?

(2) If the answer to Question 1 is in the positive, does Article 1 of the Third Directive confer rights on individuals that may be relied upon directly before the national courts?”

HELD:-

The Court considered Question 1.

The Court (First Chamber) went over the terms of the relevant Directives. Article 1 of the Third Directive provided that compulsory insurance was to cover liability for personal injuries to all passengers, other than the driver, arising out of the use of a vehicle. It would be contrary to the objectives of the Community Legislation to exclude from the concept of “passenger” and so from insurance cover, injured parties seated in a vehicle which was not designed for their carriage or equipped for that purpose. According to the fourth and fifth recitals in the preamble to the Third Directive, the objective of that legislation included the filling of gaps in the compulsory insurance cover of passengers in certain Member States, the protection of that particularly vulnerable category of potential victims, coupled with the guaranteeing of comparable treatment to motor vehicle accident victims irrespective of where in the Community accidents occur.

Caselaw supported this interpretation. In Case C-158/01 Withers [2002] ECR I-8301 the Court has held that Article 1 of the Third Directive extended, from that date the compulsory insurance cover imposed by Article 3(1) of the First Directive, as amplified and supplemented by the Second Directive, to personal injuries to passengers other than the driver. The court in that case had held that such persons were passengers irrespective of the fact that the part of the vehicle in which they were travelling was not adapted for the transport of seated passengers.

The exceptions set out in Article 1(4) and Article 2(1) of the Second Directive was clear. Member States were not permitted to admit additional restrictions.

The Irish government had argued that its approach was consistent with a joint statement of the Council and the Commission recorded in the minutes of the Council at the time of the adoption of its common position on the draft of the Third Directive. Those minutes stated that Article 1 of the Third Directive was without prejudice to provisions in Member States’ legislation concerning compensation for passengers incurring liability in respect of an accident, passengers whose numbers exceeded the permitted limits or passengers who were carried in a vehicle which was not designed to carry person other than the driver.

The Court said that it was settled case that, where a statement recorded in Council minutes is not referred to in the wording of a provision of secondary legislation, it cannot be used for the purpose of interpreting that provision. The court referred to a number of cases in support including Case C-292/89 Antonissen [1991] ECR I-745).

The obligation to provide insurance cover for passenger was guaranteed by Community law, whereas the amount of their compensation was defined by national law. Member States were also able to determine the rules of civil liability applicable to road traffic accidents, but that civil liability had to be covered by insurance which complied with the provisions of the three Motor Insurance Directives in question.

It was also clear from caselaw that Member States could not create national provisions governing the payment of compensation, which effectively deprived Article 1 of the Third Directive of its effectiveness. The Court referred to the cases of Case C-129/94 Ruiz Bernaldez [1996] ECR I-1829 and Case C-537/03 Candolin v Vahinkovakuutusosakeyhtio Pohjola.

Therefore the answer to Question 1 was that Article 1 of the Third Directive was to be interpreted as precluding national legislation whereby compulsory motor vehicle liability insurance does not cover liability in respect of personal injuries to personal travelling in a part of a motor vehicle, which had not been designed and constructed with seating accommodation for passengers.

The Court then considered Question 2, which was whether Article 1 of the Third Directive had direct effect. Under caselaw, it had been consistently held that a provision in a Directive had direct effect if it appeared, as its subject matter was concerned, to be unconditional and sufficiently precise. The Court said that Article 1 was directly effective.

That Article allowed both the obligation of the Member State and the beneficiaries to be identified, and its provisions were unconditional and precise. Article 1 could therefore be relied upon in order to set aside provisions of national law which excluded form the benefit of the guarantee provided by compulsory insurance cover persons travelling in any part of a vehicle which was not designed and constructed with seating accommodation for passengers.

However a Directive could not be relied upon against individuals, whereas it might be relied upon as against a State, regardless of the capacity in which the State was acting. The entities against which the provisions of a directive that are capable of having direct effect may be relied upon include a body, whatever its legal form, which has been made responsible for provided a public service under the control of the State and has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals.

Since the national court in Ireland had not provided sufficient information regarding the MIBI for it to be possible to determine whether MIBI could be seen as such a body as described in the paragraph above, it was for the national court to ascertain, taking account on the basis of the above consideration, of the status of the MIBI and its relationship with the Irish State.

If the national court decided that the Directive could not be relied upon against the MIBI, it would be bound when applying domestic law, and in particular legislative provisions specifically adopted for the purpose of implementing the requirements of a directive, to interpret national law, as far as possible.

In any event, the Member State might still have a liability to make good damage caused by a failure to transpose the Directive, within the meaning of the judgment in Joined Cases C-6/90 and C-9/90 Francovich and Bonifaci v Italian State [1991] ECR I-5357.

Therefore the answer to the second question would that Article 1 of the Third Directive satisfied all the conditions necessary for it to produce direct effect and accordingly conferred rights upon which individuals might rely direct before the national courts. However it was for the national court to determine whether that provision might be relied upon against a body such as the MIBI.

Related posts:

1. Evans v The Secretary Of State For The Environment, Transport And The Regions And The Motor Insurers Bureau [2001]
2. Evans v The Secretary Of State For The Environment, Transport And The Regions And The Motor Insurers Bureau – Opinion Of Advocate General
3. Evans v The Secretary Of State For The Environment, Transport And The Regions And The Motor Insurers Bureau [2001] Court of Appeal
4. Evans v The Secretary Of State For The Environment, Transport And The Regions And The Motor Insurers Bureau – Case c-63/01 [2003]
5. Byrne (A Minor) v The Motor Insurers Bureau And The Secretary Of State For Transport [2007]