RoadPeace v Secretary of State for Transport and the Motor Insurers’ Bureau (intervening) EWHC 2725 (Admin) (07 November 2017)
Primary findings of non-conformity
- Sections 145 and 192 of the Road Traffic Act 1988 wrongly restrict mandatory third-party motor cover to vehicle use in public spaces
- Sections 145 and 182 of the Road Traffic Act 1988 wrongly restrict the types of vehicles subject to the compulsory insurance to road vehicles
- Section 152(2) of the Road Traffic Act 1988 wrongly permits an insurer to invoke a misrepresentation or non-disclosure to avoid its statutory liability to compensate a third party
- Regulation 2 of the Rights Against Insurers Regulations wrongly limits the direct right of action against motor insurers to UK accidents
- · unlawfully excludes liability for incidents on land that is not accessible to the public
- · unlawfully exclude liability for a wide range of exotic off-road vehicles
Restricted declaratory findings
Where the judge erred
1. On the UK’s legislative discretion
The UK authorities
The EU law
The rule was first propounded over twenty years ago in Bernaldez  Case C-129/94 and applied to preclude a contractual exclusion of liability to indemnify an intoxicated driver. It has been applied repeatedly by the ECJ in various contexts ever since, such as: in Candolin  Case C-537/03 against a statutory exclusion of liability to a passenger whose fault was amounted to a significant contributing factor in their loss or injury; in Farrell no. 1  Case 356/05 to preclude a statutory provision allowing an insurer to restrict the scope of third party cover to parts of a vehicle equipped with seating; in Churchill  Case C442/10 to preclude the automatic disentitlement of a passenger victim who is also the a policyholder that knowingly permitted an unauthorised person to drive his vehicle, and most recently in Fidelidade-Compania  Case C-287/16 to a statutory provision that purported to entitle an insurer to avoid liability to compensate a third party on the basis that the policy was void ab initio due to the policyholder deceiving the insurer at the inception of the policy. In each of these scenarios, the same passage was recited and applied.
EU law cover that is fit for purpose
- Every motor policy, once issued, consists of a free-standing guarantee to non-contracting third parties to satisfy their compensatory entitlement up to the minimum amounts set by the Directive and subject only to the single permitted passenger exclusion.
- This guarantee is inviolate. Whist the policyholder may face a contractual liability to the insurer for any misuse or other breach of policy, the third party’s entitlement is unaffected by any contractual limitation or exclusion not expressly provided for within the Directive.
Ouseley J’s error
The European law requirement is both clear and fair
2 Specific issues with the MIB Agreements
- The ‘significant injury’ threshold requirement for property damage under the UtDA 2017
- The lack the triple protective measures for children and mentally incapacitated claimants along the lines prescribed by Dunhill v Bergin  UKSC 18 under the UtDA
- The lack of retrospectivity of the police reporting requirements, set as a condition precedent of any liability under the UtDA 2003