The inconvenient truth is that the UK’s national law provision for compulsory third party motor insurance is unfit for purpose. Unfortunately neither the Minister for Transport nor the judiciary seem to be prepared or able to tackle the extensive injustices caused by decades of bungled legislation and ministerial incompetance.
Drawing a line on reform
Reflections on the judicial review
- the doctrine of EU law consistent construction of UK law (to bring the defective UK law into line with the EU law it is supposed to implement) applying the principles developed in the Marleasing and Pfeiffer rulings;
- the direct vertical and potentially horizontal effect of some of the Directive’s provisions against certain institutions (that allow individuals to rely on the wording of a directive in an action as though it they were enacted in UK legislation) and,
- as a last resort only, an action for damages against the government for its failure to implement a directive under Francovich principles.
RoadPeace v Secretary of State for Transport  EWHC 2725 (Admin)
Parliament’s legislative aim subverted
- ‘ I start my analysis the basic proposition that the policy of the regime imposed by Part VI of the 1988 Act makes clear that, where a policy of insurance is in place in respect of a vehicle, the insurer must, where it has received statutory notice (under section 152 of the 1988 Act) of the issue of third party proceedings, generally meet liabilities to a third party victim irrespective of whether the policy covers the driver/tortfeasor, and irrespective of the identity of the tortfeasor.
- . That policy is wholly consistent with common sense. If an insurer agrees to effect an insurance policy in respect of a specific vehicle and receives a premium in respect of accept-ing that risk, then prima facie, at least, and subject to any right to avoid the policy, the insurer, having received the economic benefit, should bear the economic risk as to the following matters: the existence or non-existence of the insured or named drivers; the fact that such persons may allow uninsured persons to drive the vehicle; and the fact that, because the vehicle is on the road, it may be driven unlawfully by persons without the consent of the insured.’
Concessions made within the judicial review
- In December 2016 he publicly admitted that the geographic scope of the insurance requirement and the definition of motor vehicle were both too narrowly defined in the Road Traffic Act 1988 (as well as in both MIB compensation schemes that relied on the statutory definitions for their own scope) so that they failed to comply with the Directive. Another consultation exercise was initiated by the minsiter, ostensibly into the options for implementing the European Court of Justice’s ruling in Damijan Vnuk (Case C-162/13). It should be noted that this illegality had been spelt out to the minister in April 2013 by myself and supported by RoadPeace and a number of other representative bodies back in April 2013 (over three years before) and again following the Vnuk ruling in September 2014 (over two years before) but in both cases nothing was done.
- In January 2017, the minister announced extensive reforms to the MIB compensation schemes. These included the removal of the two illegal clauses in both schemes that RoadPeace had warned him about in July 2015 and prior to bringing the judicial review, as well as a number of curbs on the MIB’s arbitrary powers under the Untraced Drivers Agreement 2003
Status Quo defended
- 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
- ‘20. 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.’ [words in parenthesis added]
- It will readily be perceived that this prohibition applies not only to contractual provisions, such as social and domestic use restrictions and unauthorised use exclusions but also to statutory exclusions of liability, such as is found in section 151(4) Road Traffic Act where a passenger knew or ought to have known the vehicle they were riding in had been unlawfully taken.'
- ‘It would be remarkable if, without spelling it out in so many words, the [Court of Justice] had decided as far back as Bernaldez, the language of which, in its usual way, it repeats in subsequent cases, that any use which could be made of a motor vehicle required compulsory insurance.’ [words in parenthesis added]
Where does this leave us?
The European law standard
Justice tempered by convenience
EU law remedies
For a timeline of the Department for Transport's inaction: see Action Not Words from 2016. Since when the DfT issued its consultation on implementing the Court of Justice's ruling in Vnuk from September 2014 (which the DfT published in December 2016) but no further action has been taken.