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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Motor Insurers' Bureau v Lewis [2019] EWCA Civ 909 (05 June 2019) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2019/909.html Cite as: [2019] 2 All ER (Comm) 936, [2019] 3 All ER 1064, [2019] EWCA Civ 909, [2019] 1 WLR 6298, [2020] RTR 3, [2019] Lloyd's Rep IR 390, [2019] WLR 6298, [2019] PIQR P19 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
SOOLE J
Strand, London, WC2A 2LL |
||
B e f o r e :
LORD JUSTICE FLAUX
and
SIR STEPHEN RICHARDS
____________________
![]() ![]() ![]() ![]() ![]() | Appellant |
|
- and - |
||
MICHAEL ![]() ![]() ![]() | Respondent |
____________________
Viney
(instructed by Weightmans LLP) for the Appellant
Mr Philip Moser QC and Mr David Knifton QC (instructed by Thompsons Solicitors LLP) for the Respondent
Hearing date: 15 May 2019
____________________
VERSION
OF JUDGMENT APPROVED
Crown Copyright ©
Lord Justice Flaux:
Introduction and background
(1) Whether any judgment the claimant obtains against Mr Tindale is a liability which is required to be insured
against pursuant to Part
VI
of the 1988 Act;
(2) If any judgment the claimant may obtain against Mr Tindale is a liability which is not required to be insured
against pursuant to Part
VI
of the 1988 Act, whether the MIB is otherwise obliged to satisfy such judgment pursuant to the 2009 Directive;
(3) Whether the provisions of the relevant Directives have direct effect against the MIB in the circumstances of this claim.
"143 (1) Subject to the provisions of this Part of this Act – (a) a person must not use amotor
![]()
vehicle
on a road or other public place unless there is in force in relation to the use of the
vehicle
by that person such a policy of
insurance
or such a security in respect of third party risks as complies with the requirements of this Part of this Act…
145 (1) In order to comply with the requirements of this Part of this Act, a policy ofinsurance
must satisfy the following conditions. (2) The policy must be issued by an authorised
insurer.
(3) Subject to subsection (4) [which contains exceptions not relevant for present purposes] below, the policy – (a) must
insure
such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person or damage to property caused by, or arising out of, the use of the
vehicle
on a road or other public place in Great Britain…"
"CHAPTER 1
GENERAL PROVISIONS
Article 3
Compulsoryinsurance
of
vehicles
Each Member State shall, subject to Article 5, take all appropriate measures to ensure that civil liability in respect of the use ofvehicles
normally based in its territory is covered by
insurance.
The extent of the liability covered and the terms and conditions of the cover shall be determined on the basis of the measures referred to in the first paragraph.
Theinsurance
referred to in the first paragraph shall cover compulsorily both damage to property and personal injuries.
…
CHAPTER 3
MINIMUM AMOUNTS COVERED BY COMPULSORYINSURANCE
Article 9
Minimum amounts
1. Without prejudice to any higher guarantees which Member States may prescribe, each Member State shall require theinsurance
referred to in Article 3 to be compulsory at least in respect of the following amounts:
(a) in the case of personal injury, a minimum amount of cover of EUR 1 000 000 pervictim
or EUR 5 000 000 per claim, whatever the number of
victims
…
CHAPTER 4
COMPENSATION FOR DAMAGE CAUSED BY AN UNIDENTIFIEDVEHICLE
OR A
VEHICLE
FOR WHICH THE
INSURANCE
OBLIGATION PROVIDED FOR IN ARTICLE 3 HAS NOT BEEN SATISFIED
Article 10
Body responsible for compensation
1. Each Member State shall set up or authorise a body with the task of providing compensation, at least up to the limits of theinsurance
obligation for damage to property or personal injuries caused by an unidentified
vehicle
or a
vehicle
for which the
insurance
obligation provided for in Article 3 has not been satisfied.
…
CHAPTER 5
SPECIAL CATEGORIES OFVICTIM,
EXCLUSION CLAUSES, SINGLE PREMIUM,
VEHICLES
DISPATCHED FROM ONE MEMBER STATE TO ANOTHER
Article 12
Special categories ofvictim
1. Without prejudice to the second subparagraph of Article 13(1), theinsurance
referred to in Article 3 shall cover liability for personal injuries to all passengers, other than the driver, arising out of the use of a
vehicle.
2. The members of the family of the policyholder, driver or any other person who is liable under civil law in the event of an accident, and whose liability is covered by theinsurance
referred to in Article 3, shall not be excluded from
insurance
in respect of their personal injuries by
virtue
of that relationship.
3. Theinsurance
referred to in Article 3 shall cover personal injuries and damage to property suffered by pedestrians, cyclists and other non-
motorised
users of the roads who, as a consequence of an accident in which a
motor
![]()
vehicle
is involved, are entitled to compensation in accordance with national civil law.
This Article shall be without prejudice either to civil liability or to the quantum of damages."
The judgment below
Consideration of Farrell v
Whitty
(1) Under Article 1 of [the Third] Directive ..., is Ireland obliged, as of 31 December 1995 - the date by which Ireland was obliged to implement the provisions of the Third Directive in respect of passengers onvehicles
other than
motorcycles
- to render
insurance
compulsory in respect of civil liability for injury to individuals travelling in a part of a
motor
![]()
vehicle
not designed and constructed with seating accommodation for passengers?
(2) If the answer to Question 1 is in the positive, does Article 1 of the Third Directive confer rights on individuals that may be relied upon directly before the national courts?'
Article 1 of the Third Directive corresponds with Article 12.1 of the 2009 Directive.
"Given that, first, the right to derogate from the obligation to protect accidentvictims
is defined and circumscribed by Community law and, secondly, the realisation of the objectives referred to above requires a uniform approach to the
insurance
cover in respect of passengers at Community level, the Member States are not entitled to introduce additional restrictions to the level of compulsory
insurance
cover to be accorded to passengers."
"It follows that the answer to the first question is that the test in Foster as to what constitutes an emanation of the State for the purposes ofvertical
direct effect of directives is to be found in paragraph 18, not paragraph 20, of the judgment in that case. The test there formulated is to be read neither conjunctively nor disjunctively. Rather, it contains a non-exhaustive listing of the elements that may be relevant to such an assessment."
"In the light of the foregoing, the answer to the first question is that Article 288 TFEU must be interpreted as meaning that it does not, in itself, preclude the possibility that provisions of a directive that are capable of having direct effect may be relied on against a body that does not display all the characteristics listed in paragraph 20 of the judgment of 12 July 1990, Foster and Others (C-188/89, EU:C:1990:313), read together with those mentioned in paragraph 18 of that judgment."
"Such organisations or bodies can be distinguished from individuals and must be treated as comparable to the State, either because they are legal persons governed by public law that are part of the State in the broad sense, or because they are subject to the authority or control of a public body, or because they have been required, by such a body, to perform a task in the public interest and have been given, for that purpose, such special powers."
"35 Accordingly, a body or an organisation, even one governed by private law, to which a Member State has delegated the performance of a task in the public interest and which possesses for that purpose special powers beyond those which result from the normal rules applicable to relations between individuals is one against which the provisions of a directive that have direct effect may be relied upon.
36 In this case, it must be noted that, under Article 3(1) of the First Directive, the Member States were obliged to take all appropriate measures to ensure that civil liability in respect of the use ofvehicles
normally based in its territory was covered by
insurance.
37 The importance attached by the EU legislature to the protection ofvictims
led it to supplement those arrangements by requiring Member States, under Article 1(4) of the Second Directive, to establish a body with the task of providing compensation, at least up to the limits laid down by EU law, for damage to property or personal injuries caused by an unidentified
vehicle
or a
vehicle
for which the
insurance
obligation under Article 1(1) of that directive, which refers to Article 3(1) of the First Directive, was not satisfied (Csonka
v
Magyar Allam, (Case C-409/11), [2014] 1 CMLR 14, paragraph 29).
38 Therefore, the task that a compensation body such as MIBI is required by a Member State to perform, a task that contributes to the general objective ofvictim
protection pursued by the EU legislation relating to compulsory
motor
![]()
vehicle
liability
insurance,
must be regarded as a task in the public interest that is inherent, in this case, in the obligation imposed on the Member States by Article 1(4) of the Second Directive.
39 In that regard, it must be borne in mind that, in case of damage to property or personal injuries caused by amotor
![]()
vehicle
for which the
insurance
obligation provided for in Article 3(1) of the First Directive has not been satisfied, the Court has held that the intervention of such a body is designed to remedy the failure of a Member State to fulfil its obligation to ensure that civil liability in respect to the use of
motor
![]()
vehicles
normally based in its territory is covered by
insurance
(see, to that effect, Csonka's case paragraph 31).
40 As regards the MIBI, it must be added that, under Section 78 of the 1961 Act, the Irish legislature made membership of that organisation compulsory for allinsurers
who carry on
motor
![]()
vehicle
![]()
insurance
in Ireland. In doing so, the Irish legislature conferred on the MIBI special powers beyond those which result from the normal rules applicable to relations between individuals, in that, on the basis of that statutory provision, that private organisation has the power to require all those
insurers
to become members of it and to contribute funds for the performance of the task conferred on it by the Irish State.
41 The provisions of a directive that are unconditional and sufficiently precise may consequently be relied upon against an organisation such as the MIBI.
42 In the light of the foregoing, the answer to the second and third questions is that provisions of a directive that are capable of having direct effect may be relied on against a private law body on which a Member State has conferred a task in the public interest, such as that inherent in the obligation imposed on the Member States by Article 1(4) of the Second Directive, and which, for that purpose, possesses, by statute, special powers, such as the power to obligeinsurers
carrying on
motor
![]()
vehicle
![]()
insurance
in the territory of the Member State concerned to be members of it and to fund it."
The parties' submissions
"31 As regards the determination of the actual circumstances in which theinsurance
obligation laid down in Article 3(1) of the First Directive may be regarded as not having been satisfied, it is significant – as the Advocate General stated in point 32 of his Opinion – that the European Union legislature did not confine itself to providing that the body must pay compensation in the event of damage caused by a
vehicle
for which the
insurance
obligation has not been satisfied in general, but made it clear that that was to be the case only in relation to damage caused by a
vehicle
for which the
insurance
obligation provided for in Article 3(1) of the First Directive has not been satisfied, that is to say, a
vehicle
in respect of which no
insurance
policy exists. Such a restriction is explained by the fact that Article 3(1) of the First Directive – as has been pointed out in paragraph 28 above – requires each Member State, subject to the derogations allowed under Article 4 of that directive, to ensure that every owner or keeper of a
vehicle
normally based in its territory takes out a policy with an
insurance
company for the purpose of covering, up to the limits established by European Union law, his civil liability arising as a result of that
vehicle.
![]()
Viewed
in that light, the
very
fact that damage has been caused by an uninsured
vehicle
attests to a breakdown in the system which the Member State was required to establish and justifies the payment of compensation by a national body providing compensation.
32 It follows from the foregoing that, contrary to the line of argument put forward by the applicants in the main proceedings, the payment of compensation by such a national body, as provided for under the First and Second Directives, cannot be regarded as the implementation of a guarantee scheme in respect ofinsurance
against civil liability relating to the use of
motor
![]()
vehicles;
rather, it is intended to take effect only in specific, clearly identified, sets of circumstances."
Mr Mercer QC placed particular reliance on [31] as demonstrating that the compensation body provided for in Article 10 will only respond in circumstances where there has been a breakdown in the system established, not where there is no system at all. The present case fell into the latter category because there was no system of compulsory motor
insurance
for
vehicles
being driven on private land.
"As the Advocate General states in point 34 of his Opinion, the scope of obligatory intervention of the compensation body referred to in Article 1(4) of the Second Directive [i.e. Article 10 of the 2009 Directive] is therefore, as regards the damage or injuries caused by an identifiedvehicle,
coextensive with the scope of the general
insurance
obligation laid down in Article 3(1) of the First Directive. The obligatory intervention of that body in such a situation cannot therefore extend to situations in which the
vehicle
involved in an accident was not covered by the
insurance
obligation."
He submitted that that paragraph not only demonstrated that Articles 3 and 10 of the 2009 Directive were co-extensive with each other, but that Article 10 did not extend to provide compensation in situations where the national legislation did not provide for compulsory motor
insurance,
such as in the present case.
"Here, the directly effective right that Ms Farrell seeks to assert (compensation for injuries received as a passenger travelling in amotor
![]()
vehicle)
under Article 1 of the Third
Motor
![]()
Insurance
Directive is precisely the type of right for which Ireland had already conferred residual liability, where the driver is unidentified or uninsured, upon the MIBI."
Analysis and conclusions
"Moreover, the interpretation set out in paragraphs 38 to 42 of the present judgment makes it possible to ensure the attainment of the objective of protecting thevictims
of accidents caused by
motor
![]()
vehicles,
laid down by the directives concerning
insurance
against civil liability in respect of the use of
vehicles,
which has consistently been pursued and reinforced by the EU legislature (Rodrigues de Andrade, (Case C-514/16), [2018] 4 WLR 75, paragraphs 32 and 33 and the case-law cited). That interpretation guarantees that those
victims
are, in any case, compensated, either by the
insurer,
under a contract entered into for that purpose, or by the body referred to in Article 1(4) of the Second Directive, in the event that the obligation to
insure
the
vehicle
involved in the accident has not been satisfied or where that
vehicle
has not been identified."
Sir Stephen Richards
Lord Justice Henderson
Note 1 Like the judge I will refer to the European Court of Justice and the Court of Justice of the European Union throughout my judgment as “the CJEU”. [Back] Note 2 So far as possible I will refer to the equivalent provisions in the 2009 Directive to avoid confusion. [Back]