UNFAMILIARITY CAUSES INJUSTICE

Lack of awareness of the EU law remedies

In my earlier posts I indicate the extensive degree to which our UK provision for compulsory third party motor insurance fails to meet the minimum standard of compensatory protection required under EC Directive 2009/103/EC on motor insurance.  Yet the proper application of EU law and its remedies is still capable of enabling genuine claimants to recover their full compensatory entitlement either from the insurer direct or from the Motor Insurance Bureau - through well tried and tested EU law principles. 

In my article ‘Bridging the Gap’ published in the British Insurance Law Journal in 2016  I argue that the Motor Insurance Bureau (MIB) is subject to Article 10 of the Directive’s direct effect, entitling victims to rely on its more generous provisions in preference to conflicting provisions set out within the four current MIB Agreements. I argue that Byrne v MIB & Secretary of State for Transport [2007] EWHC 1268 (QB) erred in ruling to the contrary.  See also my New Law Journal articles ‘Putting Wrongs To Rights’ of 27 May and 3 June 2016.   

In ‘Bridging the Gap’ and in my more recent contribution to Part 9 of the Encyclopaedia of Insurance Law I advance a controversial argument that any organisation, such as the MIB, appointed by the state to discharge its obligations under Article 10 is by definition caught by the direct effect of its provisions.  This amounts to an exception to the basic rule (that European directives cannot be invoked in national courts in claims between private individuals) and it stems from well-established European jurisprudence relating to accountability and state liability for failing to implement EU law and from Becker Case 8/81 and Haim C-424/97 as much as from Foster Case C-188/89. However, Byrne’s shadow continues to act as a deterrent for many practitioners.  I am not aware of a single instance of a claimant seeking to rely on the more generous wording of Article 10 against the Motor Insurers Bureau on the basis that Article 10 has direct effect against it. This is something that needs to change.

The European Court of Justice is expected to deliver an important ruling on the proper test for the direct effect exception in a case referred to it by the Irish Government’s reference for a preliminary ruling in Farrell v Whitty (Case C‑413/15). This could have profound implications not only for the Motor Insurance Bureau but also for the motor insurers who own and control it.

So watch this space!