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.
July 2015
The Motor Insurers’ Bureau (MIB) was stripped of many of its arbitrary powers to reject genuine claims under
the Uninsured Drivers Agreement (UDA) 1999[1]
in July 2015[2] when
the new UDA 2015 was published.
These provisions had been extensively criticised by me[3]
as either oppressive, unnecessary or illegal[4].
Their removal was the result of several
years of campaigning.
The Reforms
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[5]
to the Department for Transport[6]:
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[7]. 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[8],
without independent legal representation:
·
Clause 8[9]:
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[10];
·
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[11]
·
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[12],
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[13],
in circumstances where such sums would be ignored under a normal assessment of
damages.
Autumn 2016 / Early 2017
When the Secretary of State for Transport refused to remove
two illegal clauses[14]
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[15]
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[16]
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[17].
December 2016
The defendant’s first concession to the RoadPeace JR was to issue a consultation paper[18]
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[19]
principle.
10 January 2017
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[20]
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)[21].
Untraced Drivers Scheme
The DfT also published a new Untraced Drivers Agreement (UtDA) 2017[22]
to address the shortcomings and injustices in the UtDA 2003[23]
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[24]. In Ellitts
& Wilson & MIB [2015] 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[25];
·
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[26];
·
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[27]
as being without prejudice to Parry v
Cleaver. [1970] AC 1, [1969] 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[28]. The words ‘knew or had reason to believe’ are required to signify actual
knowledge as opposed to constructive knowledge.
3 March 2017
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[29]
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[30]. 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.[31].
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[32]
thus entitling all claimants to
be represented.
7 November 2017
On 7 November Mr Justice Ouseley handed down his judgment in
RoadPeace v Secretary of State for
Transport [2017] EWHC 2725 (Admin)[33].
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 [2017] Case (C‑413/15)[34]
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[35].
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[36],
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.
July 2019
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 [2019] 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.
[3]
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
[4] 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
[5] My
full consultation response is available online at: http://nicholasbevan.blogspot.co.uk/2013/04/the-full-monty.html
[6]
The DfT Consultation on the MIB Agreements, in 2013
[7]
Which remains in force for accidents predating 1 August 2015 despite my seeking
for the changes to be given retrospective effect
[9]
All these clauses refer to the UDA 1999 and are excised from the new UDA
[10] Gurtner v Circuit 1968 QB 587
[11]
In contravention of the equivalence principle in Evans V SST [2003] (Case C 63/01)
[12] In
contravention of the equivalence principle in Evans V SST [2003] (Case C 63/01)
[13] In
contravention of the equivalence principle in Evans V SST [2003] (Case C 63/01) and held to be unlawful in Delaney v SST [2015] EWCA Civ 172
[14]
See the entry below under January 2017 where these provisions are removed from
both schemes with effect from 1 March
[15]
Issued in October 2015 and whose first instance finding is reported in RoadPeace v SST and MIB [2017] EWCH 2725
(Admin)
[16] EUI v Bristol Alliance Limited Partnership
[2017] EWCA Civ 1267 and Sahin v Havard
[2016] EWCA 1202
[17]
Whereas in Ruiz Bernaldez [1996] 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]
[19] Francovich,v Italian Republic and Bonifaci
and others v. Italian Republic [1992] IRLR 84 (Cases C-6/90 and C-9/90)
[21]
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.
[24] In Ellitts
& Wilson & MIB [2015] 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.
[25]
Previously conceded in a similar provision in the UDA 1999 in July 2015
[27] Supra
[28]
This is outstanding
[30] Conflicts of Interest?, Nicholas Bevan,
NLJ, 3 March 2017
[31]
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.
[32]
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.
[34]
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
[35]
See my submission in which I explain how my research and published articles
anticipated this development
[36]
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
