Hardy v Motor Insurers’ Bureau [1964]

FACTS:-

The Claimant was the chief security officer of a big metal company. He saw a van in a car park near the premises of the company. There was a road tax licence on the windscreen of the van which had been stolen from one of the company’s cars. He later stopped the car which was being driven by P, an employee of the company on a private road about ten yards from the main road. He stood by the van with one hand on the jamb, one hand on the top of the door and his head and shoulders inside. He then asked P to drive onto the side of the road, but P drove off dragging the Claimant out on the main road and injuring him. P was convicted of theft of the road tax licence, driving whilst uninsured and of maliciously inflicting grievous bodily harm on the Claimant. The Claimant sued P and obtained judgment, which was unsatisfied. He then sued the MIB under the 1946 Motor Insurers Bureau’s Agreement with the Minister of Transport and obtained judgment. The MIB appealed on the basis that P’s liability to the Claimant was a liability for the consequences of his own deliberate act and was not required to be covered by a policy of insurance under section 203 of the Road Traffic Act 1960.

HELD:-

Lord Denning MR repeated the broad rule of public policy that no person can claim indemnity or reparation for own wilful and culpable crime. However the policy of insurance, which a motorist is required by statute to take out, must cover any liability which may be incurred by him arising out of the use of the vehicle by him. That would be wide enough to cover, in general terms, any use by him of the vehicle, be it an innocent use or a criminal use, or be it a murderous use or a playful use. There was no doubt here that there had been an intention to injure the Claimant, but that did not preclude him claiming against the MIB. This was a liability which the culpable motorist was required to cover under section 207 of the then Road Traffic Act 207.

Lord Justice Pearson quoted the judgment of Fry LJ in Cleaver v. Mutual Reserve Fund Life Association [1891-1894] All ER Rep at 342:-

“…..the rule of public policy should be applied so as to exclude from benefit the criminal and all claiming under her, but not so as to exclude alternative or independent rights.”

Pearson LJ also referred to Beresford v. Royal Insurance Co. Ltd [1938] 2 All ER at p. 607 where although the personal representative of a person who had committed suicide while sane could not recover under a life policy purporting to provide indemnity in such a case, yet a person to whom the benefit of the policy had been assigned for value before the suicide might be able to enforce the policy, at any rate to the extent of his interest. The then Road Traffic Act 1960 conferred alternative or independent rights in certain events on the persons to whom the insured has become liable. Public policy should be applied so as not to diminish their rights.

Lord Diplock agreed. At common law, the benefit of a contract of insurance indemnifying the assured against his liability to third parties is incapable of assignment, for an assignee would have no insurable interest in the subject matter of the insurance. The point of the Road Traffic Act 1960 was not to effect a statutory assignment of the assureds’ rights under his contract of insurance but to confer on a third party, who suffers bodily injury as a result of the tortuous act of the assured and obtains judgment against him, a direction right of action against the insurers.

Related posts:

1. Cooper v Motor Insurers Bureau 1985
2. Evans v The Secretary Of State For The Environment, Transport And The Regions And The Motor Insurers Bureau – Opinion Of Advocate General
3. Randall v Motor Insurers Bureau [1969]
4. Farrell v The Minister For The Environment (Ireland) And The Motor Insurers Bureau Of Ireland [2007]
5. Mills v Toner and the Motor Insurers Bureau [1995]