PILLING v UK INSURANCE [2019] UKSC 16

Phoenix in flames: lessons from Pilling

R & S Pilling t/a Phoenix Engineering v UK Insurance Ltd [2019] UKSC 16

The first installment of my mini-series on the Supreme Court's decision in Pilling is published in this week's edition of the New Law Journal (17th May 2019). I examine the court's approach to the consistent construction of the Road Traffic Act 1988 and find it wanting.

See my earlier post on this ruling. 

In next week's installment I consider the Supreme Court's approach to policy construction.

IS THE MOTOR INSURERS BUREAU PROPERLY ACCOUNTABLE?

At  APIL’s 2019 annual conference I attended Dominic Clayden’s update on the latest developments within the Motor Insurance Bureau and the new IT platform it is developing to handle personal injury claims by unrepresented members of the public.

After hearing the Motor Insurers Bureau’s new CEO declare that the MIB was the Ministry of Justice’s delivery partner for developing the new portal and on viewing his impressive powerpoint organisational schema that reveals the impressive range and variety of different public services it discharges on behalf of the government, I expressed puzzlement that the MIB still denies its status as an emanation of the state in the ongoing appeal in Lewis v Tindale & MIB.  The appeal was heard last week.

I suggested that the MIB has become a mini-ministry responsible for a significant proportion of the Department for Transport and Ministry of Justice’s responsibilities imposed under the European Motor Insurance Directives.  I invited him to consider reforming the constitution of this motor insurer consortium, given its important public service role.  I suggested that it should co-opt onto its board certain special interest groups, such as RoadPeace, and to make the organisation more open and accountable to the general public, who fund its operations through their insurance premiums.

I was not surprised that Dominic Clayden should reject my suggestion out of hand.  However, I was surprised by the lame excuse he gave.  He claimed that its governance was its own private concern and that if claimants choose to use its services or not then that was a matter of choice for them.  This is as obviously wrong as it is disingenuous.

One may choose to go shopping to one of several stores; claimants do not choose to be injured by another’s negligence, nor does the invocation of their legal entitlement to compensation by the only legally recognised route to redress amount to a question of  choice; it is a matter of compulsion; not free choice.

APIL Conference

Last week I attended the annual conference of the Association of Personal Injury Lawyers, of which I am a senior fellow.

It was a pleasure to join the panel to discuss ‘The Impact of Brexit’ with Katherine Deal QC of 3 Hare Court; Sarah Crowther QC of Outer Temple Chambers; Chris Deacon from Stewarts solicitors; Simon Davis, vice president of the Law Society, and Dominic Clayden the new CEO at the Motor Insurers’ Bureau.

Prior to this, Dominic Clayden presented an update on the latest developments within the MIB and the new IT platform it is developing to deal with personal injury claims by unrepresented members of the public.  He revealed that the insurance industry is investing £15m in this new online portal.  This online claims platform will be linked to a call centre.

Although much is still unknown about its precise workings, the MIB has a target of April 2020 for the system to go live.  The new portal’s launch is intended to coincide with the implementation of new reduced scale tariffs on the damages paid for soft tissue injuries sustained in road traffic accident claims, under the Civil Liability Act 2018. It is also intended to facilitate claims by litigants in person once the government’s extends the scope of the small claims track for motor claims valued up to £5,000, also planned for April 2020.

This new portal and these reforms will effectively remove, on some estimates, at least half of the present volume of road traffic accident claims from the current portal where solicitor’s receive modest levels of fixed costs from the insurers of an at-fault party. This will effectively divert a substantial quantity of routine low value civil liability litigation from solicitors practices.  Many view this as the final turn of the screw for the bulk personal injury claims sector that began with the civil justice reforms in 2013.

Listening in to a seminar that updated the membership on the progress being made on developing the new claims portal, I was reminded of the scene from Monty Python’s ‘Life of Brian’ where Michael Palin, solicitously instructs each participant: ‘Straight out; line up on the left, one cross each…’

LEWIS V TINDALE & MOTOR INSURERS BUREAU 2019

The appeal in Lewis v Tindale & MIB opens today in the Court of Appeal.

Extract from today's cause list:

THE MASTER OF THE ROLLS' COURT COURT 71

Before LORD JUSTICE HENDERSON

LORD JUSTICE FLAUX and

SIR STEPHEN RICHARDS

Wednesday, 15th May, 2019

At half-past 10

APPEAL

From The Queen's Bench Division

FINAL DECISIONS

B3/2018/2411 Michael Lewis (a protected party by his Litigation Friend Janet Lewis) -v- Tindale and Ors. Appeal of Second Defendant from the order of Mr Justice Soole, dated 14th September 2018, filed 5th October 2018.

This appeal will be livestreamed live via the Courts and Tribunals Judiciary website.  For more information and to view the hearing please click the link below.

https://www.youtube.com/channel/UCvLfIeTq5grIEkc7JvOpoxg/live

This appeal is likely to engender a sense of deja vu in Lord Justice Flaux.  

Twelve years ago, in Byrne v MIB & Secretary of State for Transport  [2007] EWHC 1278 (QB), Flaux J (as he was then)  found that the MIB was not an emanation of the state and this led him to conclude that it was not bound by the direct effect, under EU law, of the provisions of the Motor Insurance Directives.

My independent research, first published in 2012, revealed that the learned judge was not only misinformed on the legal test for establishing state liability but he was also misled about the true nature and status of the MIB and its close working relationship with the Department for Transport as well as to the degree of control exercised by the latter over the MIB's compensatory role. 

It should not be forgotten that Flaux J’s judgment delivered justice to the claimant.  He found that the MIB’s strict three year time limit for applying to the MIB under the scheme for untraced drivers had been unlawfully applied against a child.  His Francovich award against the minister was later upheld by the Court of Appeal ([2008] (EWCA Civ 574), and unanimously so, it was not necessary to revisit his findings on direct effect.

My critique of the Byrne ruling is set out in my New Law Journal article: Putting wrongs to rights (Part 2), from 3 June 2016. 

The case is even stronger now, after the Court of Justice's ruling in Farrell v Whitty (no. 2) [2017]  Case C‑413/15, fixed  the Irish MIB with the state’s liability (‘vicariously’ so to speak): to provide redress for motor accident victims who ought (under EU law) to benefit from the compensatory guarantee mandated by the Motor Insurance Directives but who are not - due to the Irish government’s failure to fully implement that law within the Road Traffic Act 1961.  

The Irish MIB was incepted and is governed under almost identical principles to the MIB in the UK.  There are numerous disparities between the minimum standard of compensatory protection mandated by the European Motor Insurance Directives and the UK's implementation of that law within Part VI of the Road Traffic Act 1988.

This ruling had a profound influence in the first instance decision in Lewis.  The implications of  Soole J's decision being upheld in this appeal will be profound.

For my analysis on the implications of Farrell (no. 2) see my mini-series of articles in the New Law Journal:  State liability: betwixt & between Brexit (Parts 1 & 2), 27 October and 3 November 2017

NEW WEBINAR: WINNING THE UNWINNABLE MOTOR CLAIM

LEWIS V TINDALE AND THE MOTOR INSURERS' BUREAU 2019

The MIB's appeal against the landmark first instance decision in Lewis v Tindale & MIB is listed for a 1.5 day trial in the Court of Appeal in mid May this year.

The Court of Appeal's decision will be something of a moment of truth for me as the first instance decision was largely based on my earlier research.  See my earlier posts and my New Law Journal articles, over several years, that have advocated for the MIB's liability to compensate victims falling through the gaps left by the government's longstanding failure to implement the EU Directive 209/103/EC on motor insurance properly.

FORTHCOMING WEBINAR ON LEWIS V TINDALE AND MIB (and more) 19 June 2019.

The webinar will consider the Court of Appeal's judgment and, if time, it will also explain why two recent Supreme Court rulings are badly flawed and what remedies are available.

See Lewis v Tindale Court of Appeal ruling for details:

PILLING V UK INSURANCE 2019 - ANOTHER MISRULING

R & S Pilling t/a Phoenix Engineering v UK Insurance Ltd [2019] UKSC 16

This is the second time in as many months that five justices of the UK Supreme Court have misdirected themselves on European law and reached a decision based on a line of reasoning that fails to withstand close scrutiny.  

See my earlier blog on Cameron v Liverpool Victoria Insurance [2019] UKSC 6 and my New Law Journal feature from 15 March 2019.

  

The Pilling case featured a a dispute between a motor insurer and a public liability insurer as to who was liable to indemnify the owners of business premises for an extensive fire.  The conflagration was caused by an attempted DIY welding repair to an employee's privately owned car.  This set his car ablaze.  The fire then spread; gutting the employer's business premises. The key issues were:

  

• whether a repair undertaken to return a car to immediate road-use after it had failed its MOT was a 'use of a vehicle' that is required by law to be covered by compulsory third party motor insurance.

• whether UKI's motor policy that certified that it conformed with the UK law insurance requirement, and which was ambiguously worded, should be construed to confer such cover.

  

The Court of Appeal held that  the motor insurer was liable indemnify the claim but the Supreme Court disagreed; unanimously.

As to the first issue, the Supreme Court misapplied the EU law that governs how national courts should set about construing UK implementing law, in its approach to interpreting the wording of the Road Traffic Act 1988.  This Act regulates compulsory third-party motor insurance in the UK and it is supposed to fully implement EU Directive 2009/103/EC on motor insurance. The Supreme Court also failed to consider two recent and highly relevant (and binding) Court of Justice rulings on ‘use of vehicles’ or to note that there is also an ongoing reference to the Court of Justice on a similar point.

On the second issue, the rationale for the three step approach devised by the Supreme Court to policy construction is badly flawed.

The first instalment of my two part feature criticising this decision is due to be published in the New Law Journal next week. 

The Pilling ruling also has a wider significance.  It provides a useful insight into how ‘EU-derived domestic legislation’ is likely to be interpreted by our courts under the EU Withdrawal Act 2018.