Sunday, 1 March 2020
This post marks an end of an important chapter in my life.
Between 2012 and 2019 I pursued a law reform campaign that successfully removed many unjust exclusions and restrictions of motor insurer liability.
It is highly regrettable that successive UK governments have been either brow beaten or outwitted by the powerful motor insurance lobby into denying members of the public their proper legal entitlement to adequate compensation. The fact that I, as a private citizen of limited means, was able to force the government to introduce these long overdue reforms is a testament to the force and efficacy of European Law. None of this would have been possible otherwise. The European Union, for all its faults, not only espouses the principle of equality under the law but it enforces it.
Further important reform in this area is highly unlikely due to Brexit. The public are now at the mercy of an indifferent executive and a civil justice system that has rarely been as inaccessible to and institutionally biased against ordinary private citizens, as now.
I list below 19 of these reforms, each one secured in the face of the motor insurance industry's trenchant opposition, as a testament to what has been lost in Brexit.
The Motor Insurers’ Bureau (MIB) was stripped of many of its arbitrary powers to reject genuine claims under the Uninsured Drivers Agreement (UDA) 1999 in July 2015 when the new UDA 2015 was published.
These provisions had been extensively criticised by me as either oppressive, unnecessary or illegal. Their removal was the result of several years of campaigning.
The UDA 2015 addresses many deficiencies in the predecessor scheme, all of which I had exposed and criticised in my published articles, lectures and detailed consultation response to the Department for Transport:
1. It uses clearer language and is half the length of its predecessor
2. The new UDA removes several oppressive conditions precedent to liability and strike-out clauses that present a veritable minefield to the inexperienced practitioner’ and most particularly to lay applicants’ under the UDA 1999. These enable the MIB to dismiss genuine claims for the trivial infractions of procedural rules that were unnecessary and which conferred the MIB with additional powers and discretions beyond anything conferred on ordinary individuals under the Civil Procedure Rules (CPR) governing civil claims. This is particularly inappropriate for a compensatory scheme where the government encourages lay claimants to present their applications to the MIB direct, without independent legal representation:
· Clause 8: required all notices and documentation to be supplied to the MIB by fax, after this technology has long since become obsolete, or by registered or recorded delivery post (when many rural post offices have been closed), set as a condition precedent of any liability, when the CPR stipulated ordinary post;
· Clause 9 (1): required notice within 14 days of commencement of proceedings against the uninsured defendant. One problem with this is its fatal similarity to the wording of the standard notice requirement for insured claims set by s152(1) Road Traffic Act 1988 (RTA) set a precondition to an insurers’ statutory liability under s151(5) RTA (‘before or within 7 days after the bringing of the proceedings’) which I have first-hand knowledge of from defending MIB claims for Direct Line and AXA prior to 1999 (where a similar provision was introduced to the UDA 1988 which then applied) that many inexperienced practitioners regularly confuse and which the MIB invoke to reject claims;
· Clause 9 (2): required such notice to be sent by fax or recorded delivery or registered post (clause 8) accompanied by an excessively extensive dossier comprising no less than seven different categories of supporting documentation. This went far beyond any disclosure prescribed by the Pre-action Protocol or under the CPR and which included documents not necessarily relevant to the claim, such as with Clause 9.2(c) that included household or life insurance policies; along with the requirement for a sealed copy of the claim form or writ to be supplied (at a time when the courts were taking weeks to process new claims);
· Clauses 10 to 12: required claimants to notify it of any significant development in the action, including the service of an amended pleadings within seven days of such a development occurring set as an absolute precondition of any liability and unqualified by reasonableness. This is unnecessary as it has been long established the MIB is entitled to be joined as a party to a claim against an uninsured driver, because it is an interested party with an ultimate liability to compensate;
· Clause 13: a condition precedent that required all claimants to produce evidence that they had reported to the police the defendant’s failure to provide insurance details, contrary to s154 RTA, within a reasonable time of the incident. No definition of what was meant by reasonable is offered. This subverts the statutory aim which is to bolster, not hinder, the prospects of a claimant recovering compensation.
3. The new UDA also removes various unlawful exclusions of liability that are to be found in the UDA 1999:
· Clause 6.1(c): exclusion of subrogated claims (such as by credit hire companies and employers’ sick payments) in circumstances where such claims are recoverable in a normal civil action
· Clause 6.(e): exclusion of claims by passengers with actual or constructive knowledge that the vehicle is being used in furtherance of a crime (any offence, however trivial) or constructive knowledge that it is uninsured, etc;
· Clause 17: which purported to entitle the MIB to deduct any compensation received from other sources. The MIB has exploited this to deduct gratuitous payments by employers or relatives as well as life policies, in circumstances where such sums would be ignored under a normal assessment of damages.
When the Secretary of State for Transport refused to remove two illegal clauses from the UDA 2015 or to undertake a wide-ranging review of the sufficiency of the UK’s transposition of the Directive (previously requested by myself and several other respondents in 2013), I recruited RoadPeace to support a judicial review (JR) of the minister’s conduct and introduced them to Leigh Day solicitors.
The judicial review challenged the non-conformity of the RTA, The Rights Against Insurers Regulations 2002 and both MIB Agreements. It also disputed the line taken by the Court of Appeal in two rulings where it concluded that member states enjoy a legislative discretion to permit insurers to invoke contractual restrictions in cover and breaches of policy by their insured against a third-party victim.
The defendant’s first concession to the RoadPeace JR was to issue a consultation paper on reforming the scope of compulsory third party motor insurance. This admitted that the exclusion of incidents on private property and the definition of ‘motor vehicles’ within the RTA do not conform with the wider scope required by the Directive.
This made it a easier to bring a public law action against the state for damages under the Francovich principle.
The government made further concessions, again directly in response to the grounds of complaint raised within the RoadPeace judicial review, by announcing (shortly before the hearing) several reforms to the MIB agreements. These took effect from 1 March 2017:
Uninsured Drivers Scheme
1. The UDA 2015 was amended to remove the two unlawful exclusions of liability, complained of in July 2015: one that purported to exclude any liability for uninsured property damage (clause7 UDA 2015); the other purported to exclude any claim by a victim of a terrorist incident (clause 9 UDA 2015).
Untraced Drivers Scheme
The DfT also published a new Untraced Drivers Agreement (UtDA) 2017 to address the shortcomings and injustices in the UtDA 2003 that had been pleaded in the RoadPeace JR instigated in October 2015 (many of which had also been raised two and a half years before in my consultation response of April 2013):
2. These changes included the omission from the new scheme of the following provisions contained in the UtDA 2003:
· Clause 4(3): that imposed a strict requirement, set as a condition precedent of any liability, that the incident be reported to the police within 5 days (for property damage) or 14 days (injury) on penalty of the entire claim being rejected. In Ellitts & Wilson & MIB  EWCA (unreported, 11 May 2015) Blair J upheld a rejection of a claim based on this clause being invoked against a ten-year-old passenger where his mother reasonably (but erroneously) believed that the responsible driver had correctly identified himself and provided his full insurance details;
· Clause 5 (1) (g) in so far as it purported to exclude any liability for subrogated claims;
· Clause 5(1) (f) for passenger knowledge that the vehicle was being used in furtherance of a crime or used to avoid or escape arrest;
· Clause 9 that excluded any entitlement to interest until one month after receipt of a police report of the incident, in circumstances where police records, let alone reports, are not routinely made in many police authorities;
· Clause 6, that purports to exclude subrogated claims. See above under the July 2015 reforms to the UDA.
3. Other improvements either promised within the JR or incorporated into the UtDA 2017:
· Improved provision to protect children and mentally incapacitated claimants by requiring all such settlements to be approved by an independent arbitrator (Clause14);
· Improved levels of recoverable legal costs in serious injury claims (Clause 21);
· A clearer statement that the formerly unlawful strict 3-year limitation period for bringing a claim was substituted by the normal limitation periods under the Limitation Act 1980 (Clause 3);
· The misleading terminology employed within the UDA 2015 (clause 8 (1) & (3)) and UtDA 2017 (Clauses 8(1) & (3) by the phrase ‘knew or had reason to believe that’ to be explained as requiring actual knowledge as stipulated by the Directive for the single permitted exclusion, this to be clarified by the MIB by amending its notes for guidance;
· The unclear provision concerning the MIB’s right to deduct certain sums, within both the UDA 2015 and UtDA 2017, to be clarified within the MIB’s notes for guidance as being without prejudice to Parry v Cleaver.  AC 1,  2 WLR 821.
4. The DfT also agreed within the JR to publish further guidance on the correct state of mind to trigger the statutory exclusion of insurer liability for guilty passenger knowledge s151(4) RTA. The words ‘knew or had reason to believe’ are required to signify actual knowledge as opposed to constructive knowledge.
I was the first to identify a serious problem with Clause 10 of the 10 January version of the UtDA 2017. This stipulated that the claimant (and no other person) must complete and submit the claim form (when the claim form itself contains a disclosure mandate that, is so excessive in its extent and beyond anything that would be permitted in a civil action under the Civil Procedure Rules and which arguably constituted a breach of the HRC right to privacy). This provision was accompanied by a requirement that only the claimant in person should respond to the MIB’s requests for information or provide statements. This requirement had the effect of preventing claimants from benefiting from independent legal representation.
These requirements were imposed as a condition precedent to any liability. It made no allowances for children, handicapped individuals or claimants who cannot read or speak English.
In early February I approached MASS, APIL and the Law Society as well as a number of leading law firms and briefed them on how this infringed the HRC Art 6 right to a fair trial as well as the time-honoured British right to independent legal representation. They supported me. The New Law Journal published my opinion piece. This highlighted this unconstitutional restriction as an example of the sort of problem that results where an agency of a powerful industry (which is itself a consortium owned and operated by that industry) enjoys such extensive political leverage and lack of proper scrutiny that it can influence a minister, in private, to approve provisions that undermine the fairness of the scheme that he is responsible for regulating..
This flash campaign resulted in the 10 January version of the UtDA 2017 being hurriedly substituted within a week of it coming into force by a revised verstion, backdated to 28 February 2017. This omitted the offending provision thus entitling all claimants to be represented.
On 7 November Mr Justice Ouseley handed down his judgment in RoadPeace v Secretary of State for Transport  EWHC 2725 (Admin).
The judgment identifies the following infringements of the Directive:
· 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 2002 wrongly limits the direct right of action against motor insurers to UK accidents
Unfortunately, the learned judge declined to provide a Marleasing style purposive interpretation of these provisions to cure them of their non-conformity with EU law.
But for the timely coincidence of the European Court of Justices (ECJ)’s ruling in Farrell v Whitty 2  Case (C‑413/15) on 10 October 2017 accident victims would still have found it very difficult, if not impossible, to invoke their rights in these circumstances, as it the government shows little sign of taking any steps to remedy these infringements, particularly in the wake of Brexit. Fortunately, this ruling now makes it highly probable that the provisions of the Motor Insurance Directives can be relied on in an ordinary personal injury action against the MIB (as though enacted word-for-word within UK legislation) because of the MIB’s close association with the state on Foster v British Gas principles of direct effect.
In the circumstances, these specific findings in the JR have an immediate and direct legal effect, even if the government has no intention of introducing any statutory reform in view of Brexit.
Accordingly, victims injured by motor vehicles on private property or by unusual off-road vehicles that are not subject to compulsory insurance under the RTA or victims of mechanical defects not attributable to the vehicles’ user or owner - can now recover their civil law entitlement to damages directly from the MIB, in place of the absent insurer, without having to pursue a risky, expensive and lengthy public law action against the state.
The first two JR findings of non-conformity also impact on both MIB schemes, because they each purport to restrict their scope to events that are subject to compulsory third-party cover as prescribed by the RTA. A corollary of these JR findings is that the scope of both MIB schemes is also extended in parallel by the EU law direct effect principle.
Accordingly, the MIB is liable to meet claims where the vehicle responsible is insured but the policy is restricted to liabilities occurring on roads or other public places.
I was the first and possibly the only legal commentator to spot the glaring flaw in the Road Traffic Act 1988 and the governments flagship legislation, the Automated and Electric Vehicles Act 2018 that was intended to ensure that victims of accidents caused by automated vehicles would be guaranteed no fault liability compensation. This concept was predicated on their being a valid and enforceable policy of motor insurance in place. In my two-part serialised feature Driverless Vehicles: a future perfect? I warned that motor insurers most common defence ploy was to apply, after the incident giving rise to a claim, for an order under s152 Road Traffic Act 1988 that the policy was void ab initio due to a misrepresentation by a policyholder. I demonstrated, as early as 2013, that this was unlawful as it breached EC Directive 2004/103. In June 2019 ex post facto declarations under section 152(2) Road Traffic Act 1988 were effectively abolished under Regulation 6 of The Motor Vehicles (Compulsory Insurance) (Miscellaneous Amendments) Regulations 2019, unless unequivocally invoked prior the incident giving rise to the claim.
Also in June, the Court of Appeal delivered a landmark ruling in which it gave judgment against the Motor Insurers Bureau in MIB v Lewis  EWCA Civ 909 in a complicated comparative law case based on the MIB’s surrogate liability for the state, due to its close working relationship with the Department for Transport. The court applied precisely the same ratio and case authorities outlined, for the first time by me, in my independent research: published in my 2016 doctoral paper as well as in my New LW Journal Articles dating back to 2015 and in particular, in ‘Putting wrongs to rights’, Parts 1 & 2, in May and June 2016.
In practical terms, this ruling fixes the MIB with an entirely new category of liability, independently of those under (i) its contractual obligations with the Secretary of State for Transport, currently set out in the Uninsured Drivers Agreement 2015 (UDA) and the Untraced Drivers Agreement 2017 (UtDA) and (ii) its statutory obligations under the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003.
This new liability is based on directly applicable European law, which will survive as retained EU law unless and until this outcome is reversed by the Secretary of State for Transport after the Brexit implementation period.Under this new law the MIB is obliged to compensate motor accident victims who have been wrongly denied a compensatory guarantee through compulsory insurance due to the government’s failure to implement fully Article 3 of the Sixth Motor Insurance Directive 2009/103 (the Directive) within the provisions of Part VI of the Road Traffic Act 1988 (the 1988 Act) and the EC Rights Against Insurers Regulations 2002.
 See (MIB Reform) Part II: Why the Uninsured Drivers Agreement 1999 Needs to be Scrapped, JPIL 2011 issue 2; On the right road? Parts 1-4, February 2013; Consultation Response by Nicholas Bevan, 22 April 2013, to the DfT Consultation on the MIB Agreements, an infringement complaint to the European Commission in October 2013 and in a detailed paper prepared at the Law Commission’s behest in December 2013 with further ad hoc articles and case commentaries that feature these failings
 On the basis that they breached the EU law prohibition of exclusions and restrictions of liability, save where expressly permitted within the Motor Insurance Directives
 My full consultation response is available online at: http://nicholasbevan.blogspot.co.uk/2013/04/the-full-monty.html
 The DfT Consultation on the MIB Agreements, in 2013
 Which remains in force for accidents predating 1 August 2015 despite my seeking for the changes to be given retrospective effect
 All these clauses refer to the UDA 1999 and are excised from the new UDA
 Gurtner v Circuit 1968 QB 587
 In contravention of the equivalence principle in Evans V SST  (Case C 63/01)
 In contravention of the equivalence principle in Evans V SST  (Case C 63/01)
 In contravention of the equivalence principle in Evans V SST  (Case C 63/01) and held to be unlawful in Delaney v SST  EWCA Civ 172
 See the entry below under January 2017 where these provisions are removed from both schemes with effect from 1 March
 Issued in October 2015 and whose first instance finding is reported in RoadPeace v SST and MIB  EWCH 2725 (Admin)
 EUI v Bristol Alliance Limited Partnership  EWCA Civ 1267 and Sahin v Havard  EWCA 1202
 Whereas in Ruiz Bernaldez  Case C-129/94 the ECJ decreed:
‘Article 3(1) of the First Directive [which first imposed the motor insurance requirement] precludes a company insuring against civil liability in respect of the use motor vehicles from relying on statutory provisions or contractual clauses in order to refuse to compensate those victims for an accident caused by the insured vehicle.’ [para 20]
 Francovich,v Italian Republic and Bonifaci and others v. Italian Republic  IRLR 84 (Cases C-6/90 and C-9/90)
 Neither of which are permitted by the Directive, see the ECJ rulings in Bernaldez 1996, Candolin 2005, and Churchill 2011. The terrorism exclusion produced anomalies due to the widely scope definition adopted from the terrorism. The result being that the MIB would be liable for an injury caused by a fleeing bank robber or murder but not a fleeing GM arsonist.
 In Ellitts & Wilson & MIB  EWCA (unreported, 11 May 2015) Blair J upheld this clause being invoked against a ten-year-old passenger where his mother reasonably (but erroneously) believed that the responsible driver had correctly identified himself and provided his full insurance details.
 Previously conceded in a similar provision in the UDA 1999 in July 2015
 This is outstanding
 Conflicts of Interest?, Nicholas Bevan, NLJ, 3 March 2017
 The need for better governance of the MIB is argued at some length in Reforming the Motor Insurers Bureau, Part 1 the MIB’s role, Nicholas Bevan, JPIL, 2011 Issue 1.
 For the MIB’s narrative explaining the change, see: https://www.mib.org.uk/media-centre/news/2017/february/mib-clarifies-who-can-submit-a-claim-untraced-drivers-agreement/ The original 10 January 2017 version has since been removed from the MIB website.
 Access the transcript online at: http://www.bailii.org/ew/cases/EWHC/Admin/2017/2725.html
 The transcript is available online at: http://curia.europa.eu/juris/liste.jsf?language=en&num=C-413/15 , see also my blog: State Liability: betwixt a http://nicholasbevan.blogspot.co.uk/2017/11/mib-liable-for-gaps-in-road-traffic-act.html
 See my submission in which I explain how my research and published articles anticipated this development
 See State Liability: betwixt and between Brexit, Nicholas Bevan, NLJ, 37 October 27 and 3 November 2017, available online at: http://nicholasbevan.blogspot.co.uk/2017/11/mib-liable-for-gaps-in-road-traffic-act.html