McCall v Poulton, MIB and Another [2008]

FACTS:-

The Claimant was the blameless victim of a motor accident caused by Mr Poulton. He owned a taxi and he needed a replacement, so he hired a car from Helphire (UK) Limited (“Helphire”). He was also provided with an insurance policy issued by Angel Assistance Ltd (“Angel”). This provided post accident cover for the legal costs of the Claimant and Helphire’s charges in the event that they were not recovered from Mr Poulton. Mr Poulton was uninsured and he paid no compensation.

The Claimant made a claim on his Angel policy, which was paid. He then sued Mr Poulton and the MIB. The MIB compensated the Claimant for his injury and the other losses that he had suffered, but refused to compensate him for the hire charges. It relied upon two clauses in the 1999 MIB Agreement. The first was Clause 6(1)(c) which excluded the MIB’s liability to meet claims made:

“By, or for the benefit of, a person (“the beneficiary”) other than the person suffering death, injury or damage which was made…..pursuant to a right of subrogation or contractual or other right belonging to the beneficiary.”

The second was contained in clause 17(1):

“Where a Claimant had received compensation from …..(b) an insurer under an insurance agreement or arrangement, or (c) any other source……MIB may deduct…..an amount equal to that compensation.”

Helphire and Angel applied to be joined in the proceedings between pursued in the Claimant’s name. The trial judge decided that it was necessary to make a reference to the European Court of Justice. There was an appeal to the Court of Appeal.

HELD:-

Lord Justice Waller said that English law entitled the Claimant to make a claim for hire charges, when a replacement vehicle was required. He turned to Article 1.4 of Council Directive 84/5/EEC of the 30th December 1983 (“the Directive”).

The Claimant’s counsel had submitted that the Uninsured Drivers Agreement was a contract made for the purposes of discharging the United Kingdom’s obligations under the Directive. Article 249 of the European Community Treaty provided for the application of regulations, directives and decisions to national law. In the case of Marleasing SA v La Comercial Internacional de Alimentacion SA C-106/89 [1990] ECRI-4135 the European Court of Justice had said that in applying national law, national courts should interpret national law, so far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by a directive.

Therefore the effect of Marleasing (according to the Claimant’s counsel) would be to put a blue pencil through the exclusions relied on by the MIB.

The Claimant’s counsel had also argued that Article 1.4 of the Directive was directly effective. One of the conditions for direct effect was that the MIB should be an “emanation of the State”. It was argued by the Claimant’s counsel that the MIB was such an emanation.

The MIB’s counsel answered that the Uninsured Drivers’ Agreement was a private contract to which Marleasing would not apply. Article 1.4 was not directly effective, and in any event could not be directly invoked against the MIB, as the MIB was not an emanation of the State. Article 1.4 should be interpreted so as to compensate the victim of the accident, not a commercial organisation such as Helphire or Angel.

Waller LJ considered Article 249 of the European Community treaty. The question in this case was whether the principle in Marleasing applied to a contract like the MIB Uninsured Drivers’ Agreement, albeit that was a contract entered into in fulfilment of obligations arising under a directive.

In the cases of Mighell v Reading, Evans v MIB and White v White [1999] Lloyds Law Reports 30 the Court of Appeal had said the Marleasing principle did not apply to the MIB Agreement. The MIB was a private law contractor. The case of White v White then went to the House of Lords in White v White [2001] 1 WLR 481 the majority of whom agreed with the Court of Appeal on that point.

However the European Court of Justice had said in a later case, Evans v MIB [2003] ECR 1-4447 and Pfeiffer v Deutches Rotes Kreuz [2004] ECR I-8835 that the fact that the source of the obligation of the body in question lay in an agreement concluded between it and a public authority was immaterial, provided that the agreement was interpreted and applied as obliging that body to provide victims with the compensation guaranteed to them by the Directive.

There was then the issue of whether the MIB was an emanation of the state. In the case of Mighell the Court of Appeal had said that the MIB was not an emanation of the state and that had also been the conclusion of Justice Flaux in the recent case of Byrne (A Minor) v MIB and the Secretary Of State for Transport [2008] EWCA Civ 574. However the ECJ had expressed doubts on that view. In Farrell v Whitty Case C-356/05 the Advocate General had said that the Irish MIB was an emanation of the state. The following judgment of the ECJ had said that a directive could not be relied upon against an individual, but it could be relied upon against the State. They had not expressed ruled that the Irish MIB was an emanation of the State, but said that it was a matter for the national court. When the case was returned to the Irish High Court, it had concluded that the MIB of Ireland was indeed an emanation of the State.

Waller J said that the matter was still unclear and this was a case where guidance from the ECJ was required. The answer to these issues held the key to the liability of the MIB, which would affect other cases. The issues were as follows:-

•    Whether the Marleasing doctrine applied to the MIB Agreements
•    Whether the MIB was an emanation of the State

Therefore these questions would be referred to the ECJ.

Carnwath LJ and Wilson LJ agreed.

Related posts:

1. Byrne (A Minor) v The Motor Insurers Bureau And The Secretary Of State For Transport [2007]