19 MAY 2015
Delaney v Secretary of State for Transport  EWCA Civ 172
MIB Uninsured Driver's Agreement - Exceptions - EU Directives
Court of Appeal, Civil Division
9 March 2015
Richards, Kitchin and Sales LJJ
The defendant's appeal against the finding that clause 6.1(e)(iii) of the Motor Insurers' Bureau ("MIB") Uninsured Drivers’ Agreement 1999 was incompatible with EU law was unsuccessful.
The claimant was seriously injured in a car accident. The car was being driven by Mr Pickett. The driver's insurer were able to avoid the policy as he had failed to disclose medical conditions and habitual drug use. The accident therefore fell under the MIB Uninsured Drivers’ Agreement1999. However, as the car was being used to transport a substantial quantity of cannabis during the accident, the MIB invoked clause 6.1(e)(iii) and rejected the claim. This is because the claimant “knew” or “ought to have known” that the car was being used in the course or furtherance of a crime. The claim failed.
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The claimant therefore brought the current claim contending that (1) the exclusion in clause 6.1(e)(iii) was incompatible with EU directives; and (2) that the breach was sufficiently serious to give rise to damages under Francovich v Italy . The relevant EU Directives state that (1st) Member States have to ensure the existence of motor vehicle insurance to cover civil liabilities; (2nd) extending the required insurance to property; and (3rd) extending the required insurance to protection of passengers. The claimant succeeded in his claim and the defendant appealed.
On the first issue, the Court of Appeal stated that Member States are permitted to exclude payment of compensation however, the only the exclusions stated in the directives were permitted, which are (1) the injured party knew the vehicle was uninsured; (2) limiting compensation for property damage by anunidentified vehicle; and (3) allowing an excess of not more than 500 Euros in relation to property damage. There was no basis to say the directives allow for further exclusions and it was a general principle of EU law that derogations are to be strictly construed.
On the second issue, it was found that the conclusion of the judge at first instance was not flawed by material errors in his analysis, that he had directed himself correctly to the multifactorial approach set down in Factortame in relation to the second condition of Francovich and that the Court of Appeal agreed with the conclusion reached by the court of first instance. The appeal was dismissed.
This case highlights the need to ensure that all avenues are followed to attempt to obtain compensation for your clients. It is a very important decision and will prove to be invaluable to those that find themselves in a similar situation.
Adam Dyl and Jodee Mayer, Anthony Gold Solicitors