This blog was launched by Nicholas Bevan in April 2013 to alert his fellow legal professionals to the systemic illegality that permeated the UK's national law provision for compulsory third party motor insurance. Major reforms have resulted. Unfortunately, Brexit has stalled this process, making this blog largely redundant. Earlier posts are retained here as archive material.
The Secretary of State to appeal the Delaney decision
Hammond holding back the tide
It is official and it comes first hand from the Department
for Transport: it is in denial!
In Delaney v Secretary of State for Transport  EWHC 1785 (QB) the court exposed the DfT for flouting superior European
Community law in its implementation the European Motor Insurance
Directives. See earlier post:DfT exposed for defying EU Law.
The Uninsured Drivers Agreement 1999 is notorious for its
oppressive and unjust strike out clauses and its unlawful restrictions on the
Motor Insurers Bureau’s liability to compensate motor accident victims. Although the grounds of appeal are not known,
it could hardly have chosen weaker ground to contest the superior authority of
the Motor Insurance Directives and the long line of Court of Justice rulings
The Delaney case comes at a very embarrassing time for the
DfT as its entire transposition of the Motor Insurance Directives is under scrutiny
from the European Commission. The DfT has
consistently maintained the line that it has fully implemented the Directives;
whereas our national law provision in this area is riddled with unlawful
restrictions and exclusions that serve the commercial interests of motor
The man at the Ministry responsible for this farce is
Stephen Hammond MP, the Under Secretary of State for Transport. Someone needs to explain the rule of law to
him and the fact that Parliament has surrendered part of its sovereignty to the
European Union on our accession.
words of the great Lord Denning:
Treaty [of Rome, 1957] does not touch any of the matters which concern
solely England and the people in it. These are still governed by
English law. They are not affected by the Treaty. But when we come to matters
with a European element, the Treaty is like an incoming tide. It flows into the
estuaries and up the rivers. It cannot be held back, Parliament has decreed
that the Treaty is henceforward to be part of our law. It is equal in force to
Bulmer Ltd v J. Bollinger SA  Ch 401 at 418
Challenging old certainties and commonly held misconceptions, featuring
recent thought provoking decisions and important legal developments, this
course seeks to explain their implications for the busy practitioner.
The day will explore:
on contributory negligence, including cycle helmets and children
to Highways Act claims and why Bolam is now relevant
causa its use and misuse
the latest credit hire decision and the likely reform
the latest on the whiplash review and the likely reform
orders and protecting vulnerable claimants
why EU law
is so important and how it impacts on practically every claim
Traffic Act 1988, The EU Rights Against Insurers Regs 2002 and the MIB
our UK law consistently with community law - made easy!
UK provision with community law minimum standards
why the Court of Appeal has got it so wrong
why the Delaney
case has raised its head again and why this is so important
breaches of community law successfully and profitably
major reform and the European Commission’s involvement
According to the Daily Telegraph coverage of Mr Justice Jay's decision in
Delaney v Secretary of State  EWHC 1785, see article published on 4 July 2014, the Department for Transport spokesperson said:
‘We are looking closely at the judgment and are minded to appeal. Even if
the judgment were to stand, claims will be excluded from compensation where
serious criminality and a close connection between the crime and the accident
can be shown.’
Is this bravado or have they really
learnt so little from their futile defence?
The reason why this rather unappealing claimant succeeded in his claim
against the Secretary of State for Transport is that the European Motor
Insurance Directives permit only one instance where the MIB can lawfully exclude
liability to compensate a victim of an uninsured driver in circumstances that
require compulsory third party insurance cover.
That exception is confined by what is now article 10.2 of the Sixth Motor
Insurance Directive to ‘persons who
voluntarily entered the vehicle which caused the damage or injury when the body
can prove that they knew it was uninsured.
It is a simple binary issue: either the case facts match this single criterion
or they don’t. If they do, then the MIB
can lawfully exclude liability to compensate; if they don’t they can’t. Is this really so difficult?
So it is irrelevant whether the injured passenger is a shop lifter
travelling home after a long day’s lifting with his takings, or a drug dealer
visiting his customer or even a wife beater en route to perpetrate his
The Secretary of State for Transport should understand, like it or not,
that in this country the law applies equally to saints and sinners. Outlawry no longer holds sway. No one is above or below the law; not even a minister
of state. So will he please discharge
his legal responsibility as a Minister and reform our national law provision in
this area so that it complies, at the very least, with the minimum standards
imposed under European Community law.
for Transport held liable for flouting the Motor Insurance Directives
On Tuesday 3 June Mr Justice Jay awarded Fracovich damages to a passenger who was gravely injured by an
uninsured driver. InDelaney v Secretary of State for Transport EWHC 1785 (QB)the judge held that the DfT has deliberately flouted superior European
Community law in its implementation the European
Motor Insurance Directives.
The Delaney case: brief
The MIB had previously
refused his claim, relying on clause 6(1)(e)(iii) of the Uninsured Drivers
Agreement 1999. That clause entitled
them to exclude any liability because it was established that he knew the vehicle was being used in the course of or furtherance of a crime. The
claimant’s appeal failed in Delaney v
Pickett  EWCA Civ 1532. However
that decision was remarkable because no one thought to argue that this clause
was inconsistent with the European Motor Insurance Directives, so the issue as
to whether the exclusion was lawful was never considered.
Matters were eventually put right in this Francovich action. Here, our
national law provision for guaranteeing the compensatory rights of motor
accident victims was put under proper scrutiny and it was found badly wanting
by the judge.
This decision cannot be anything other than a major embarrassment to the
Secretary of State for Transport.
As recently as July 2013 the Minister was blithely asserting in a statement
of intent, in the face of numerous written submissions to the contrary,
that...’These [MIB] agreements fulfil the UK’s obligations
under EU motor insurance law ....’
The court’s findings:
That the meaning of the relevant provisions within the European Motor
Insurance Directives was clear and obvious to the point that they were ‘close to being self-evident’.
That there was no evidence that the DfT even took legal advice.
That the DfT had made a deliberate decision to add an exclusion of
liability in clause 6 of the 1999 Agreement when it was clearly not permitted under
The judge found the DfT ‘guilty of a
serious breach of Community law’, of such severity as to warrant Francovich damages.
He rejected the DfT's plea that its infraction was somehow inadvertent or excusable.
As to the conflict between its policy decision and what was required under European law, the judge said: ‘the best that may be said is that the Defendant decided to run the
risk, which was significant, knowing of its existence’.
The judge repeatedly expressed his surprise at the ‘remarkable’ lack of any
relevant documentary records, when ‘A
provision of this sort must have been the subject-matter of detailed written
discussion and deliberation within the department, and (one would have thought)
a Ministerial submission. And yet we have nothing’.As to the DfT’s failure to explain its policy
position, he described this as a ‘deafening
Many other UK law provisions in this area conflict with European Law. For example, the Minister’s statutory provision implementing article 3 of the Sixth Motor
Insurance Directive civil liability insurance cover provisions within Part VI
of the Road Traffic Act 1988 was held to be seriously flawed in Churchill v Wilkinson  EWCA Civ 116). In
that case, the defect obliged the Court of Appeal to adopt a bizarre and unprecedented measure: it effectively legislated an amendment to a statutory provision by adding a new ‘notional’ clause to section 151(8) of the 1988 Act
as a stop gap measure.
DfT inaction and obfuscation
The facts speak for themselves:
Discussions with the MIB and various representative groups over much need
reform to both the Uninsured and Untraced Drivers Agreements had reached an impasse
by late 2009.
In February 2013 I set out the case for extensive reform of the UK
statutory and extra-statutory provision in my four part series of articles published
in consecutive weeks in the New Law Journal under the tile: On the Right Road?. I warned the Minister that he faced judicial
review or an infringement action if he continued to do nothing to rectify the
many serious breaches of European Community law.
This warning was repeated by myself and others in response to his flawed
consultation that quickly followed, see: Review
of the MIB Agreements.
The Minister then ignored our calls for a dialogue.Instead he preferred to consult with the MIB,
who are most probably the true authors of the MIB Agreements.
When I was approached by the Law Commission and asked to prepare a detailed
law reform proposal for them to submit to the Lord Chancellor, which I did,
their involvement was later blocked by the Minister.
The Minister promised to publish a report setting out his detailed proposals
for reforming the MIB Agreements in July 2013, that was postponed to the Autumn
of 2013 and yet we have heard nothing more.
It can hardly be very surprising then, when every attempt to persuade the
Minister to discharge his legal obligations had been thwarted, that I should
resort to presenting a formal infringement complaint to the European Commission. This was filed in late August 2013. The complaint identifies over 40 instances of
potential breach of Community law in our statutory and extra statutory national
law provision for victims of motor accidents.
The European Commission has decided to act on the infringement complaint. In March 2014 it incepted the EU equivalent
of our pre action protocol enquiry procedure by asking the UK Government to explain how it implements the Directives across a
number of different areas; calling for a response.
Mr Justice Jay’s ruling could hardly have come at a worse time for the
Minister, given that he has exposed the DfT for deliberately flouting the minimum
standards of protection imposed under the Directives.
This decision has
profound implications for all RTA practitioners:
Firstly, is demonstrates that our national law
provision for protecting victims' compensatory entitlement cannot be taken at
Secondly, when the correct interpretive approach is
applied to our statutory and extra-statutory provision in this area it is
revealed as being replete with unlawful
exclusions, limitations and exceptions which favour insurers at the expense of
innocent victims. This applies not
just to the MIB’s duty to compensate under the Uninsured Drivers Agreement 1999
but equally to the duty to insure and
the insurer’s duty to indemnify under Part VI of the Road Traffic Act 1988 (see
Churchill above);to the EC Rights
against Insurers Regulations 2002; as well as to both the MIB Agreements.
Thirdly, the evidence
suggests that many of these defects are the result of deliberate policy
decisions that the DfT have taken but where, strangely, no documentary evidence
relating to that decision survives. As a
result, all our national law provision in this area is to be treated with circumspection.
Fourthly, the judgement ignores the unanimous Court of Appeal ruling in EUI v Bristol Alliance Partnership 
EWCA Civ 1267
that wrongly confines the application of an important CJEU ruling in RafaelBernaldezCase
C-129/94to criminal cases. I say wrongly because the Bernaldez ratio has been extended by
the CJEU to civil liability scenarios in a number of subsequent rulings. Jay J applied the Bernaldez ruling as well as those ofCandoline Case C-537/03
and Farrellv Whitty, Case
C-356/05to interpret the MIB Agreement.
These rulings support only a very restrictive interpretation of the
exclusions of liability permitted by the Directives to those expressly provided
for within the Directives. This is
confined to the provision within article 10.2 of the Sixth Directive (article
1.4 of the Second Directive), namely: against ‘persons who voluntarily entered the vehicle which caused the damage or
injury when the body can prove that they knew it was uninsured.’
Fifthly, it confirms the long line of Court of Justice rulings to the
effect that the only circumstances in which a compulsory third party motor
insurance policy can exclude or restrict liability to indemnify a third party victim for damage is that set out in what
is now article 13 of the Sixth Motor Insurance Directive (article 2.1 of the
Second Directive), this is restricted to ‘persons
who voluntarily entered the vehicle which caused the damage or injury, when the
insurer can prove that they knew the vehicle was stolen’. This puts in doubt the
ability of an insurer to apply, ex post facto, for a
court declaration to the effect that an insurance policy is void for material non disclosure
or misrepresentation, even though this is expressly provided for under s152 of the 1988 Act. Although this occurred in Delaney it was not raised as a contentious
issue; perhaps it should have been. What is practically beyond any doubt is the fact that policy exclusions and restrictions not specifically listed in s148 of the 1988 Act as void against a third party (e.g. restrictions in use) are unlawful under Community law. This goes against the recent and unanimous ruling by the Court of Appeal in EUI above, even so it is still bad law. Many other infractions exist within this field of law.
Call to action
It is our role as claimant representatives to identify and challenge unlawful
restrictions to our clients’ legal entitlements. These issues, where they exist, should be flagged
up at the pre action protocol stage, and challenged in the first instance
proceedings; not years later. It has
been settled law since1984 that
our national courts must apply superior Community law, see Case
14/83Von Colson and Kamann  ECR 1891, paragraph 26: this
applies to District Judges and Justices of the Supreme Court alike. Ultimately, the exercise of our clients’ legal
rights under the Directives does not depend on the DfT transposing them into
national law but it does depend on legal professionals spotting and contesting unlawful infringements to full and fair compensation under the rule of law.
Competency in European law is an essential requirement in RTA tort law,
just as much as it is in employment law or health and safety law. We are all European lawyers now; ignorance
is no excuse.
DfT in disarray
The DfT’s policy in this area is not just discredited by this decision,
it is in tatters. The European
Commission is investigating widespread infringements in this area and so major
reform is likely. In the meantime opportunities
for successful legal challenges are legion.
I was delighted to present a talk at a Shakespeares' client event
recently. I was joined by Julia Holden, A partner and insurance service
specialist, and of course, who else but Professor Dominic
Regan. It was a really fun day, despite the rather grim topic.
My brief was to present a claimant perspective on the civil justice
reforms, which has hardly been a sublime experience for most of us, to say the
least. My talk examined the antecedents
to Sir Rupert Jackson’s report and flagged up a growing concern that our
government, far from wanting to extend its citizen’s access to justice,
actually perceives this as a social and economic ill.