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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Delaney v Secretary of State for Transport [2015] EWCA Civ 172 (09 March 2015) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2015/172.html Cite as: [2015] RTR 19, [2015] 2 CMLR 30, [2015] EWCA Civ 172, [2015] PIQR P17, [2015] WLR 5177, [2015] CP Rep 25, [2015] 1 WLR 5177, [2015] Lloyd's Rep IR 441, [2015] 3 All ER 329, [2015] WLR(D) 112 |
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OF
APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF
JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice Jay
![]() ![]() Strand, London, WC2A 2LL |
||
B e f o r e :
LORD JUSTICE KITCHIN
and
LORD JUSTICE SALES
____________________
Sean Robert ![]() ![]() |
Respondent |
|
- and - |
||
![]() ![]() ![]() ![]() |
Appellant |
____________________
(Transcript of
the Handed Down Judgment
of
WordWave International Limited
A Merrill Communications Company
165 Fleet Street, London EC4A 2DY
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Philip Moser QC and Eric Metcalfe (instructed by Pinto Potts Solicitors) for the Respondent
Hearing date : 11 February 2015
____________________
OF
JUDGMENT
Crown Copyright ©
Lord Justice Richards :
Introduction
"a claimant who, at the timeof
the use giving rise to the relevant liability was voluntarily allowing himself to be carried in the vehicle and, either before the commencement
of
his journey in the vehicle or after such commencement if he could reasonably be expected to have alighted from it, knew or ought to have known that –
…
(iii) the vehicle was being used in the course or furtheranceof
a crime."
The EU directives on motor insurance
i) Directive 72/166/EEC of
24 April 1972 on the approximation
of
the laws
of
the Member
States
relating to insurance against civil liability in respect
of
the use
of
motor vehicles, and to the enforcement
of
the obligation to insure against such liability ("the First Directive");
ii) Directive 84/5/EEC of
30 December 1983 on the approximation
of
the laws
of
the Member
States
relating to insurance against civil liability in respect
of
the use
of
motor vehicles ("the Second Directive"); and
iii) Directive 90/232/EEC of
14 May 1990 on the approximation
of
the laws
of
the Member
States
relating to insurance against civil liability in respect
of
the use
of
motor vehicles ("the Third Directive").
"Each MemberState
shall … take all appropriate measures to ensure that civil liability in respect
of
the use
of
vehicles 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
these measures."
"Whereas, however, major disparities continue to exist between the lawsof
the different Member
States
concerning the extent
of
this obligation
of
insurance cover; whereas these disparities have a direct effect upon the establishment and operation
of
the common market;
Whereas, in particular, the extensionof
the obligation
of
insurance cover to include liability incurred in respect
of
damage to property is justified;
…
Whereas it is necessary to make provision for a body to guarantee that the victim will not remain without compensation where the vehicle which caused the accident is uninsured or unidentified; whereas it is important … to provide that the victimof
such an accident should be able to apply directly to that body as a first point
of
contact; whereas, however, Member
States
should be given the possibility
of
applying certain limited exclusions as regards the payment
of
compensation by that body and
of
providing that compensation for damage to property caused by an unidentified vehicle may be limited or excluded in the view
of
the danger
of
fraud;
Whereas it is in the interestof
victims that the effects
of
certain exclusion clauses shall be limited to the relationship between the insurer and the person responsible for the accident; whereas, however, in the case
of
vehicles stolen or obtained by violence, Member
States
may specify that compensation will be payable by the aforementioned body;
Whereas in order to alleviate the financial burden on that body, MemberStates
may make provision for the application
of
certain excesses where the body provides compensation for damage to property caused by uninsured vehicles or, where appropriate, vehicles stolen or obtained by violence …." (emphasis added).
"Article 1
1. The insurance referred to in Article 3(1)of
[the First Directive] shall cover compulsorily both damage to property and personal injuries.
…
4. Each MemberState
shall set up or authorize a body with the task
of
providing compensation, at least up to the limits
of
the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied. …
The victim may in any case apply directly to the body which, on the basisof
information provided at its request by the victim, shall be obliged to give him a reasoned reply regarding the payment
of
any compensation.
However, MemberStates
may exclude the payment
of
compensation by that body in respect
of
persons who voluntarily entered the vehicle which caused the damage or injury when the body can prove that they knew it was uninsured.
MemberStates
may limit or exclude the payment
of
compensation by that body in the event
of
damage to property by an unidentified vehicle.
They may also authorize, in the caseof
damage to property caused by an insured vehicle an excess
of
not more than 500 ECU for which the victim may be responsible.
Furthermore, each MemberState
shall apply its laws, regulations and administrative provisions to the payment
of
compensation by this body, without prejudice to any other practice which is more favourable to the victim."
"Each MemberState
shall take the necessary measures to ensure that any statutory provision or any contractual clause contained in an insurance policy issued in accordance with Article 3(1)
of
[the First Directive], which excludes from insurance the use or driving
of
vehicles by:
- persons who do not have express or implied authorisation thereto, or
- persons who do not hold a licence permitting them to drive the vehicle concerned, or
- persons who are in breachof
the statutory technical requirements concerning the condition and safety
of
the vehicle concerned,
shall, for the purposesof
Article 3(1)
of
[the First Directive], be deemed to be void in respect
of
claims by third parties who have been victims
of
an accident.
However the provision or clause referred to in the first indent may be invoked against persons who voluntarily entered the vehicle which caused the damage or injury, when the insurer can prove that they knew the vehicle was stolen."
"Without prejudice to the second subparagraphof
Article 2(1)
of
[the Second Directive], the insurance referred to in Article 3(1)
of
[the First Directive] shall cover liability for personal injuries to all passengers, other than the driver, arising out
of
the use
of
a vehicle."
The case-law on the directives
"13. The preambles to the directives show that their aim is firstly to ensure the free movementof
vehicles normally based on Community territory and
of
persons travelling in those vehicles, and secondly
of
guaranteeing that the victims
of
accidents caused by those vehicles receive comparable treatment irrespective
of
where in the Community the accident has occurred.
14. For that purpose the First Directive … established a system based on the presumption that vehicles normally based on Community territory are covered by insurance. Article 3(1|)of
the First Directive thus provides ….
15. The original versionof
that article left it to the Member
States
, however, to determine the damage covered and the terms and conditions
of
compulsory insurance.
16. In order to reduce the disparities which continued to exist between the lawsof
the Member
States
with respect to the extent
of
the obligation
of
insurance cover … Article 1
of
the Second Directive required compulsory cover, as regards civil liability, for both damage to property and personal injuries, up to specified sums. Article 1
of
the Third Directive extended that obligation to cover for personal injuries to passengers other than the driver.
17. Article 1(4)of
the Second Directive also improved the protection
of
victims by requiring the Member
States
to set up or authorise bodies responsible for providing compensation for damage to property or personal injuries caused by unidentified or uninsured vehicles.
18. In viewof
the aim
of
ensuring protection, stated repeatedly in the directives, Article 3(1)
of
the First Directive, as developed and supplemented by the Second and Third Directives, must be interpreted as meaning that compulsory motor insurance must enable third-party victims
of
accidents caused by vehicles to be compensated for all the damage to property and injuries sustained by them, up to the amounts fixed in Article 1(2)
of
the Second Directive.
19. Any other interpretation would have the effectof
allowing Member
States
to limit payment
of
compensation to third-party victims
of
a road-traffic accident to certain types
of
damage, thus bringing about disparities in the treatment
of
victims depending on where the accident occurred, which is precisely what the directives are intended to avoid. Article 3(1)
of
the First Directive would then be deprived
of
its effectiveness.
20. That being so, Article 3(1)of
the First Directive precludes an insurer from being able to rely on statutory provisions or contractual clauses to refuse to compensate third-party victims
of
an accident caused by the insured vehicle."
"24. Consequently, the directives create the legal framework for ensuring that persons injured by a motor vehicle, wherever registered in the Community, can be certainof
compensation. The guarantee
of
compensation for damage caused by vehicles normally based in another Member
State
, which the national insurers' bureau
of
the host country must assume, and the creation
of
a body which must provide compensation for damage to property or personal injuries caused by an unidentified or uninsured vehicle [footnote reference to Article 1(4)
of
the Second Directive] are both part
of
that context."
"45. It should, first, be emphasised again that the premise on which the question is based is a most unlikely one. Under the system established by the directive, a defence as against the person who has suffered harm appears to be conceivable only if it can be proved that he was himself guiltyof
misconduct. That tends to be indicated, for example, by the second subparagraph
of
Article 2(1)
of
[the Second Directive], which
states
:
'However, the provision or clause referred to in the first indent may be invoked against persons who voluntarily entered the vehicle which caused the damage or injury when the insurer can prove that they knew the vehicle was stolen.'
46. Apart from those highly exceptional casesof
the victim's own blameworthy conduct, it must be assumed that there is a need to ensure that there are no gaps in the duty to compensate the victim. That principle can be seen to be the guiding principle
of
the directives. To that effect, the national guarantee body must be regarded as covering accident victims who would otherwise be unprotected. The reason for requiring such a body to be established is the concern to protect victims.
…
51. … Only if, for whatever reason, [the victim] has no claim for compensation against the insurer, would the 'body' have to pay compensation in the interestof
the extensive protection
of
victims. Furthermore, the Member
States
are free to extend the competence
of
the body by statute, provided complete protection is ensured for victims."
"18. In viewof
the aim
of
protecting victims, the Court has held that Art.3(1)
of
the First Directive precludes an insurer from relying on statutory provisions or contractual clauses in order to refuse to compensate third-party victims
of
an accident caused by the insured vehicle.
19. The court has also held that the first subparagraphof
Art.2(1)
of
the Second Directive simply repeats that obligation with respect to provisions or clauses in a policy excluding from insurance the use or driving
of
vehicles in particular cases ….
20. By wayof
derogation from that obligation, the second subparagraph
of
Art.2(1) provides that certain persons may be excluded from compensation by the insurer, having regard to the situation they have themselves brought about (persons entering a vehicle which they know to have been stolen).
21. However, as it is a provision which establishes a derogation from a general rule, the second subparagraphof
Art.2(1)
of
the Second Directive must be interpreted strictly.
22. As the Advocate General rightly stated, at point 42of
his Opinion, any other interpretation would allow Member
States
to limit payment
of
compensation to third-party victims
of
road accident to certain circumstances, which is precisely what the directives are intended to avoid.
23. It follows that the second subparagraphof
Art.2(1)
of
the Second Directive must be interpreted as meaning that a statutory provision or a contractual clause in an insurance policy which excludes the use or driving
of
vehicles from the insurance may be relied on against third parties who are victims
of
a road accident only where the insurer can prove that the persons who voluntarily entered the vehicle which caused the injury knew that it was stolen."
"27. The MemberStates
must exercise their powers in compliance with Community law and, in particular, with Art.3(1)
of
the First Directive, Art.2(1)
of
the Second Directive and Art.1
of
the Third Directive, whose aim is to ensure that compulsory motor vehicle insurance allows all passengers who are victims
of
an accident caused by a motor vehicle to be compensated for the injury or loss they have suffered."
"42. … This exception must be interpreted narrowly and as being exhaustive since it forms a departure from the general rule. Any other interpretation would have the effectof
allowing Member
States
to limit payment
of
compensation to third-party victims
of
a road accident to certain types
of
damage, thus bringing about the disparities in the treatment
of
victims depending on where the accident occurred, which is precisely what the directives are intended to avoid."
"27. In addition, Community legislation expressly lays down exceptions to the obligation to protect victimsof
accidents. Those exceptions are referred to in the third sub-paragraph
of
Art.1(4) and in Art. 2(1)
of
the Second Directive.
28. However, the Community legislature did not provide any derogation with respect to a separate categoryof
persons who may be victims
of
a road traffic accident, namely those who were on board a part
of
the vehicle which is not designed for their carriage and equipped for that purpose. That being so, those persons cannot be excluded from the concept
of
'passenger' and, accordingly, from the insurance cover which the Community legislation guarantees.
29. Given that, first, the right to derogate from the obligation to protect accident victims is defined and circumscribed by Community law and, secondly, the realisationof
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."
"29. The importance attached by the EU legislature to the protectionof
victims moved it to supplement those arrangements by requiring Member
States
, under art.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 art.1(1)
of
the Second Directive, which refers to art.3(1)
of
the First Directive, has not been satisfied. In order to alleviate the financial burden to be borne by that body, Member
States
were free to exclude the payment
of
compensation by it in certain cases or to provide for excesses.
30. The paymentof
compensation by such a body was therefore considered to be a measure
of
last resort, envisaged only for cases in which the vehicle that caused the injury or damage is uninsured or unidentified or has not satisfied the insurance requirements referred to in art.3(1)
of
the First Directive ….
33. As regards the determinationof
the actual circumstances in which the insurance obligation laid down in art.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 EU 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 had 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 art.3(1)
of
the First Directive has not been satisfied, that is to say, a vehicle in respect
of
which no insurance policy exists ….
34. It follows from the foregoing that … the paymentof
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
of
insurance 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."
"28. … The paymentof
compensation by that body was not intended to be automatic – being confined to two sets
of
circumstances – and the legislature had to some extent sought to limit the financial burden likely to be represented by the payment
of
compensation by that body, leaving it open to the Member
States
to implement more favourable measures relating specifically to the conditions governing the payment
of
compensation by that body.
29. Consequently, if it can be inferred from art.1of
[the Second Directive] that the appropriate measures referred to in art.3
of
[the First Directive] include the setting up
of
a body 'with the task
of
providing compensation … for damage to property or personal injuries', it follows that the payment
of
compensation by that body was expressly limited to damage 'caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied', without prejudice to the right
of
the Member
States
'to regard compensation by that body as subsidiary or non-subsidiary."
"34. The situation in which the person responsible for the damage did take out an insurance policy, but with an insolvent insurer, is quite different. Essentially, the case before the referring court highlights the fundamental difference between, on the one hand, the general rules governing insurance against civil liability in respectof
the use
of
motor vehicles as progressively harmonised at EU level and, on the other hand, the rules under which civil liability insurance is guaranteed, which, to mind, have largely yet to be developed.
35. In those circumstances, I find it difficult to agree with an interpretationof
art.3
of
[the First Directive] along the lines argued for by the applicants in the main proceedings. That provision requires the Member
States
to 'take all appropriate measures to ensure that civil liability … is covered by insurance', not to take all appropriate measures to guarantee the civil liability covered by insurance ….
…
44. Lastly, I should also like to emphasise the important difference that exists, in my view, between a vehicle in respectof
which the insurance obligation as described in art.3
of
[the First Directive] has not been satisfied and a vehicle insured with an insolvent insurer. After all, a vehicle for which the insurance obligation has not been satisfied is an uninsured vehicle. A vehicle which was insured with an insolvent insurer has satisfied the obligation to secure insurance against civil liability in respect
of
the use
of
vehicles. The risk cover is genuine but the compensation is delayed by the financial situation
of
the insurer."
The first issue: whether clause 6.1(e)(iii) is incompatible with the directives
The judgment of
Jay J
"Candolin is instructive in at least two ways. In my view, this was the first occasion on which the ECJ made crystal clear that exclusion clauses relating to the conductof
the victim, as opposed to that
of
the insured, could not be relied on beyond the extent expressly mandated by the Directive. To my mind, the Advocate General had said almost as much in Ruiz Bernaldez, although there the conduct
of
the victim was simply not in issue. I have also examined what the ECJ said at paragraphs 20 and 21
of
its Judgment in that case. Putting public policy considerations to one side, I would add that it is not possible to discern any reason based on logic or principle for treating exclusion clauses relating to the conduct
of
the victim differently from those relating to the conduct
of
the insured: if the Directives are to be interpreted as imposing strict constraints in relation to the latter, that must apply equally to the former. Secondly, although the Defendant may be entitled to point out that Candolin does not bear on Article 1.4
of
the Second Council Directive, the reason for that must be plain and obvious: no issue under that provision arises if the insurer is unable to avoid liability. However, if, by dint
of
some vagary
of
domestic law, an insurer is entitled to avoid liability and Article 1.4 comes into play, the logic
of
Candolin must surely be that the ability
of
the national body to avoid paying the victim is constrained to exactly the same extent."
"What we also see in Farrell is the takingof
the final short step – the express application
of
the comprehensive code principle to Article 1.4 cases – left untaken in Candolin."
"An Article 1.4 compliant regime does not have to guarantee the satisfactionof
the insurance obligation in some general way: the national body is not a long-stop to meet the obligations
of
insolvent insurers. The guarantee which Article 1.4 mandates is limited to cases where there is no insurance policy in existence at all.
In my judgment, Csonka has no relevance to the situation where an insurer seeks to avoid liability to the victim, either on the basisof
misrepresentation or non-disclosure by the insured, or on the basis
of
some misconduct by the victim which is not expressly catered for in the exceptions to the Directive …."
"64. My reviewof
the ECJ jurisprudence has already provided a clear and conclusive answer to this: see Ruiz Bernaldez, Candolin and Farrell.
65. Undaunted, Mr Kennelly urged me to adopt a different approach, having regard to the terminologyof
the subordinate clause to the sixth recital to the Second Directive. Mr Kennelly invited me to note the plural ('certain limited exclusions') and to carry out some basic arithmetic. The sole exclusion expressly mentioned in Article 1.4 which is not referred to in some other recital is the knowledge
of
no insurance exception in the second subparagraph. Specifically, property damage is dealt with in the second part
of
the subordinate clause to the sixth recital, stolen vehicles in the seventh recital, and excesses in the eighth recital. It follows that the subordinate clause to the sixth recital must be contemplating further limited exclusions. These are permissible provided that they are strictly defined.
66. I simply cannot accept that submission. The recitals do not bear this overly punctilious textual approach, nor can they be permitted to override the express provisionsof
the Directive, which must be pre-eminent. Furthermore, I accept the force
of
Mr Moser's submission that, if the Defendant were right, we could in fact have an unlimited number
of
exceptions each
of
which was tightly worded. But Mr Kennelly's greatest problem is that ECJ case law is against him."
The challenge to the judge's conclusion
i) On the natural reading
of
Article 1(4)
of
the Second Directive, the only permitted exclusions from the obligation laid down are those set out expressly in the article itself, namely that Member
States
(a) may exclude the payment
of
compensation by the national body in respect
of
persons who voluntarily entered the vehicle which caused the damage or injury when the body can prove that they knew it was uninsured, (b) may limit or exclude the payment
of
compensation by that body in the event
of
damage to property by an unidentified vehicle, and (c) may authorise, in the case
of
damage to property caused by an insured vehicle, an excess
of
not more than 500 ECU for which the victim may be responsible. There is nothing in the text
of
the article to suggest that other exclusions are permitted.
ii) Mr Kennelly's argument based on the wording
of
the recitals, to which the judge referred at paragraphs 65-66
of
his judgment, strikes me as weak in the extreme and was in my view rightly rejected by the judge. It reads far too much into the recitals to say that, because two out
of
the three exclusions listed in Article 1(4) are mentioned specifically in the recitals, the "certain limited exclusions" referred to must contemplate not only the one exclusion not so mentioned but other, unspecified exclusions as well. In any event, a reference in the recitals to "certain limited exclusions" is not a sound basis for interpreting Article 1(4) as authorising an uncertain number
of
additional exclusions, said to be "limited" but with no indication
of
what those limits are.
iii) It is a general principle
of
EU law, specifically applied in the context
of
these directives by the Court
of
Justice at paragraph 21
of
its judgment in Candolin (to take the most obvious example), that derogations from a general rule are to be strictly construed. A strict construction leaves no room in Article 1(4) for exclusions beyond those expressly listed and runs counter to the use that Mr Kennelly seeks to make
of
the reference to "certain limited exclusions" in the recitals.
iv) The construction
of
Article 1(4) contended for by Mr Kennelly also runs counter to the aim
of
protecting victims which is stated repeatedly in the directives and suffuses the reasoning
of
the Court
of
Justice in the case-law. That aim is just as valid and important in the Article 1(4) context as it is in the other contexts considered in the cases. As the Court said in Ruiz Bernaldez, at paragraphs 17-18
of
its judgment, Article 1(4) was one
of
the measures by which the aim
of
protection
of
victims was developed and supplemented. A related point concerns the aim
of
avoiding disparities
of
treatment according to where the accident occurs (see paragraph 13
of
the judgment in Ruiz Bernaldez). To allow Member
States
to introduce exclusions additional to those specified would clearly undermine that aim.
v) It is true that, in order to alleviate the financial burden on the body provided for by Article 1(4), a Member
State
is permitted "to exclude the payment
of
compensation by it in certain cases or to provide for excesses" (paragraph 29
of
the judgment in Csonka). But the extent
of
that permission is expressly defined in the article itself, and the alleviation
of
the financial burden cannot sensibly be treated as a conflicting aim that is capable
of
being weighed against the aim
of
protection
of
victims so as to justify exclusions additional to those listed.
vi) Although the cases from Ruiz Bernaldez to Farrell were concerned specifically with the obligation to provide insurance cover, not with the obligation under Article 1(4) to set up or authorise a body with the task
of
providing compensation for damage or injuries caused by unidentified or uninsured vehicles, the reasoning in them has a direct bearing on the interpretation
of
Article 1(4), for the reasons already given. I do not accept that the judge fell into error in deriving the support he did from the case-law.
vii) I accept that Article 1(4) does not require the national body to provide a guarantee scheme. Csonka shows that the obligation
of
that body to pay compensation is expressly limited by the terms
of
Article 1(4) to damage or injury "caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied". In those cases, however, the payment obligation is subject only to the exclusions and limitations specified in Article 1(4). Csonka itself concerned a situation falling outside Article 1(4) and is
of
no assistance to the
Secretary of State
's argument.
viii) The present case falls within Article 1(4) rather than under the general provisions concerning insurance cover only because, fortuitously and as a result
of
particular provisions
of
national law, the driver's insurer succeeded in avoiding the policy ab initio on the ground
of
non-disclosure
of
material facts (see paragraph 2 above), which had the consequence that the vehicle fell to be treated as an uninsured vehicle. It is common ground that, if the policy had not been avoided, the insurer would not have been able to rely on any equivalent to clause 6.1(e)(iii) to defeat Mr
Delaney
's claim: such an exclusion is not permitted by Article 2(1)
of
the Second Directive. Having regard to the aims
of
the directives, it would be very surprising if such an exclusion were nonetheless available to the body provided for by Article 1(4).
The second issue: is the breach sufficiently serious to give rise to liability?
The relevant case-law
"70. The condition requiring a sufficiently serious breachof
Community law implies manifest and grave disregard by the Member
State
for the limits set on its discretion, the factors to be taken into consideration in this connection being, inter alia, the degree
of
clarity and precision
of
the rule infringed and the measure
of
discretion left by that rule to the national authorities ….
71. If, however, the MemberState
was not called upon to make any legislative choices and had only considerably reduced, or even no, discretion, the mere infringement
of
Community law may be sufficient to establish the existence
of
a sufficiently serious breach ….
72. The discretion enjoyed by the MemberState
thus constitutes an important criterion in determining whether there has been a sufficiently serious breach
of
Community law.
73. That discretion is broadly dependent on the degreeof
clarity and precision
of
the rule infringed."
"43. In the present case, article 8(1) is imprecisely worded and was reasonably capableof
bearing, as well as the construction applied to it by the court in this judgment, the interpretation given to it by the United Kingdom in good faith and on the basis
of
arguments which are not entirely devoid
of
substance …. That interpretation, which was also shared by other member
states
, was not manifestly contrary to the wording
of
the Directive or to the objective pursued by it" (emphasis added).
"20. … I have come to the conclusion that, notwithstanding the points in Mr Negassi's favour (the most strikingof
which was the total exclusion
of
the subset
of
applicants for asylum
of
which he was one), the breach was not
of
sufficient seriousness to satisfy the test. It was not deliberate. It was the result
of
a misunderstanding
of
new provisions in an area
of
recent EU concern. It was not a cynical or egregious misunderstanding. It was not confined to the
Secretary of State
. It was shared, as a matter
of
first impression, by a number
of
judges. Whilst now all is clear, I do not think that it can be said to have been self-evidently so before the conclusion
of
[the case in the Supreme Court] …."
What that decision underlines is the importance of
avoiding hindsight when asking whether a breach was sufficiently serious for the purposes
of
liability on Francovich principles.
The judgment of
Jay J
"117. I therefore conclude that the Defendant is guiltyof
a serious breach
of
Community law in circumstances where its room for manoeuvre under the Directives was closely circumscribed. It did not have a wide discretion. Its obligations under the Directives, and their relevant confines, were quite clear, and – in the absence
of
knowing the actual reason for this policy decision – the best that may be said is that the Defendant decided to run the risk, which was significant, knowing
of
its existence. I have examined all
of
Lord Clyde's factors: the majority bear on the seriousness, and some are
of
little weight in these circumstances. I conclude with little hesitation that the Defendant's breach is so serious that, subject to the final issue
of
causation, it must pay compensation to the Claimant under the Francovich principle."
The challenge to the judge's conclusion
"It seems to me that the judge, having directed herself correctly as to the multifactorial test, applied that test in a manner that is not open to material criticism ….
I am therefore satisfied that there is no basis for interfering with the judge's conclusion that the breach she had found did not amount to a manifest and grave disregardof
the United Kingdom's obligations under the directive."
To the best of
my recollection, however, the approach that the appellate court should adopt in this context was not the subject
of
any debate in that case. Nor was the point material to the outcome: I have no doubt that the decision
of
the court would have been the same if the approach now contended for by Mr Kennelly had been adopted.
Conclusion
Lord Justice Kitchin:
Lord Justice Sales: