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Road Traffic Accidents - European Union - Motor Insurers Bureau - Insolvency
 EWCA Civ 454
16 May 2016
The claimant suffered serious injuries following a road traffic accident in Greece as a passenger in a rental car insured by a Greek Insurer. The Greek Insurer, as per Directive 2000/26 had appointed claim representatives in the UK and the claimant claimed against the insurer through these representatives. No response was received within the three-month period after the claim was made and a number of months later the license of the Greek Insurer was revoked and its insolvency was reported. The claimant then brought a claim against the MIB who denied liability and it was established that as a preliminary issue, the liability of the MIB under the directive and Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation body) Regulations would be determined. At first instance it was held that neither the directive nor regulations intended the MIB to compensate in circumstances where an insurer had become insolvent. On appeal, the question was revised and it was held that the MIB were liable to compensate the claimant due to the failure of the insurer or UK representative to provide a reasoned reply in time.
On 30 August 2008 the claimant suffered serious injuries following a road traffic collision in which she was a passenger of a rented vehicle in Greece which was being driven by the first defendant. The vehicle was insured by a large Greek motor insurance company and in accordance with Directive 2000/26 they had appointed claims representatives in the UK.
In May 2009 the claimant made a claim for compensation against the Greek Insurer to its UK claims representative. However, no reply, reasoned or otherwise was received within the three-month period after the claim was made. A reply was eventually received on 16 September 2009 when the claims representative telephoned the claimant’s solicitors and informed them that the car rental company had brought proceedings against the Greek Insurers in Greece and consequently this claim would be put on hold until that one had been resolved.
On 25 February 2010 the license of the Greek Insurer was revoked and its insolvency was reported in the official Gazette on 26 February 2010. The claimant’s solicitors were then informed by letter on 1 March 2010 that the claim representatives had no further mandate to act on their behalf and that they should contact the Greek Guarantee Fund as the accident occurred in Greece.
The claimant’s solicitors then notified the MIB of this in October 2010 who denied that they had any liability under the directive or regulations as they argued that they did not apply to situations where the insurer had ceased trading and had its license withdrawn by reason of insolvency. A trial on this preliminary issue was therefore held.
At trial the preliminary issue was determined in favour of the MIB and it was held that the directive and regulations were not intended to provide and did not have the effect of providing protection or compensation to an injured party in circumstances where the insurer had become insolvent. This determination was made upon review of the terms of the directive and the previous decision in Jacobs v MIB.
The claimant appealed this decision and in the course of doing so the court formed the view that the issue to be determined had not been adequately set out based on the circumstances which had in fact occurred and invited the parties to reconsider the terms of the preliminary issue.The parties then agreed a revised preliminary issue to be determined which was whether the MIB were liable to compensate the claimant following the failure of the insurer or its UK representative to provide a reasoned reply in time where the insurer’s license had been revoked by reason of its insolvency.
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The MIB argued that the Directive was limited in its scope and its liability only extended to the circumstances detailed in Article 6, namely where a reasoned reply to a claim was not received within the relevant time or where claim representatives had not been appointed. It contended that it did not therefore impose liability in circumstances where the insurer had been declared insolvent.
It was held firstly, that as per Article 6, the claimant was entitled to pursue a claim against the MIB from September 2009 as the insurer or its UK claim representatives had not provided a reasoned reply to the claim within three months.
Secondly, it was held that if the Directive had intended to compensate claimants in circumstances of insurer insolvency provision would have been provided and consequently the obligation of the compensatory body was restricted to the circumstances detailed in Article 6. However, in the present case the circumstances in Article 6 had arisen due to the lack of reasoned reply and as the insolvency had not occurred at this time it was not open to the MIB to argue that it deprived the claimant of its right against them.
Finally, it was held that the relevant time for considering whether the insurer was an authorised insurance undertaking as per article 2(a) of the Directive was the time of the accident giving rise to the claim.