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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] WLR 6298, [2019] EWCA Civ 909, [2019] Lloyd's Rep IR 390, [2019] 3 All ER 1064, [2020] RTR 3, [2019] PIQR P19, [2019] 1 WLR 6298 |
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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 |
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B e f o r e :
LORD JUSTICE FLAUX
and
SIR STEPHEN RICHARDS
____________________
| MOTOR INSURERS' BUREAU |
Appellant |
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| - and - |
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MICHAEL  LEWIS (A protected party, by his litigation friend JANET LEWIS) | 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
MIB") appeals with the permission of the judge against the Order of Soole J dated 14 September 2018 on the trial of preliminary issues by which, so far as relevant to the appeal, the judge determined that EU Directive 2009/103/EC ("the 2009 Directive") relating to compulsory motor insurance had direct effect against the MIB as an emanation of the state, so that the MIB was liable to indemnify the respondent claimant (to whom I will refer as "the claimant") in respect of the injury he suffered in the incident described below.
MIB being the second defendant and the Secretary of State for Transport the third defendant) was a local farmer. He erroneously assumed that the claimant had been up to no good in the vicinity of his farm premises. He pursued the claimant and his friends, driving a 4x4 Nissan Terrano, which was not insured. He drove the vehicle along a public road before accessing a public footpath along which the claimant and his friends had walked, driving down an embankment on which one of the footpaths was situated, through a barbed wire fence, into a field. He drove across the field around a marshy area and then into collision with the claimant, causing him serious injury. At the appeal hearing, we were informed that Mr Tindale was subsequently prosecuted for causing grievous bodily harm with intent contrary to section 18 of the Offences against the Person Act 1861, but acquitted at trial.
MIB did not dispute that Mr Tindale was liable for the accident, but contended that it had no contingent liability to the claimant pursuant to the Uninsured Drivers Agreement ("UDA") 1999 because the accident and injuries were not caused by or arising out of the use of the vehicle on a road or other public place under section 145 of the Road Traffic Act 1988 (hereafter "the RTA").
(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.
VI of the RTA, as amended by The Motor Vehicles (Compulsory Insurance) Regulations 2000, provide, so far as material, as follows:
"143 (1) Subject to the provisions of this Part of this Act – (a) a person must not use a motor
145 (1) In order to comply with the requirements of this Part of this Act, a policy of insurance 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
vehicles owned by central or local government, police cars and ambulances and the like, where the relevant public bodies can self-insure, although in practice many such bodies do take out third party insurance with an authorised insurer.
MIB. The insurers' obligation to fund the MIB is provided by the MIB Articles of Association, which include that an insurer ceases to be a member if it fails to pay the requisite annual levy. The MIB has since 1946 compensated the victims of uninsured drivers under successive Uninsured Drivers Agreements ("UDAs") with the relevant Minister (now the Secretary of State) for Transport. There have been equivalent agreements in respect of untraced drivers since 1969.
MIB and the Secretary of State is dated 13 August 1999. The terms relevant to the issues in the present case are set out by the judge at [13] to [15] of the judgment. At [16] the judge also notes that the first object of the MIB in the Objects Clause of its Articles of Association is: "To provide a safety net for innocent victims of identified and uninsured drivers to satisfy…any liability required to be covered by contracts of insurance or security under Part VI of the [RTA] or by any other statute, statutory instrument, rule, regulation, order, directive or similar measure introduced by any competent authority or at common law or by custom."
vehicles dating back to Council Directive 72/166/EEC. The 2009 Directive provides so far as relevant as follows:
"CHAPTER 1
GENERAL PROVISIONS
Article 3
Compulsory insurance of
Each Member State shall, subject to Article 5, take all appropriate measures to ensure that civil liability in respect of the use of
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.
The insurance referred to in the first paragraph shall cover compulsorily both damage to property and personal injuries.
…
CHAPTER 3
MINIMUM AMOUNTS COVERED BY COMPULSORY INSURANCE
Article 9
Minimum amounts
1. Without prejudice to any higher guarantees which Member States may prescribe, each Member State shall require the insurance 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 per
CHAPTER 4
COMPENSATION FOR DAMAGE CAUSED BY AN UNIDENTIFIED
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 the insurance obligation for damage to property or personal injuries caused by an unidentified
…
CHAPTER 5
SPECIAL CATEGORIES OF
Article 12
Special categories of
1. Without prejudice to the second subparagraph of Article 13(1), the insurance 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
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 the insurance referred to in Article 3, shall not be excluded from insurance in respect of their personal injuries by
3. The insurance 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
This Article shall be without prejudice either to civil liability or to the quantum of damages."
vehicle, but also provides for notification to the Commission.
The judgment below
vehicle on a road or other public place before he entered the field. His use of the road before deliberately entering the field was: "no more than a merely fortuitous concomitant of the accident and in no way a contributing factor" ([41] of the judgment). The judge went on to conclude at [42] to [59] that section 145(3) could not be read down to comply with the jurisprudence of the CJEU[1] by excising the limitation to a "road or other public place" as this would go against the grain and thrust of the legislation, would raise policy ramifications which were not for the Court and would necessarily impose retrospective criminal liability under section 143. His approach was approved by the Supreme Court in UK Insurance v Holden [2019] UKSC 16; [2019] 2 WLR 1015: see per Lord Hodge JSC at [40]. There is no Respondents' Notice seeking to challenge the judge's conclusions on the first issue, so that it does not need to be considered further.
v Whitty (No. 1) (Case C-356/05) [2007] 2 CMLR 1250 at [37]: "it has been consistently held that a provision in a directive has direct effect if it appears, as far as its subject matter is concerned, to be unconditional and sufficiently precise." As the judge said this reflected long-established authority, notably Becker v Finanzamt Münster-Innenstadt (Case 8/81) [1982] ECR 53 and Comitato di Coordinamento v Regione Lombardia (Case C-236/92) which he cited. He also noted at [64] that in the judicial review proceedings in R (RoadPeace Ltd) v Secretary of State for Transport [2017] EWHC 2725 (Admin); [2018] 1 WLR 1293 the Secretary of State and the MIB had accepted that Article 3 of the 2009 Directive had direct effect between the individual and the State or its emanation, whilst disputing that the MIB was an emanation of the State: see [94] of the judgment of Ouseley J. No such concession was made in these proceedings.
vehicles on private land. This was implicit in Vnuk v Zavarovalnica Triglav dd (Case C-162/13) [2016] RTR 10 and explicit in later authorities.
MIB as to the "measures" which the State could decide to take in implementing a compulsory insurance regime rendering Article 3 expressly conditional. He concluded that, unlike in Comitato di Coordinamento, the core obligation of the State under Article 3 was not conditional, it was not a mere objective or framework but a result to be achieved.
v Whitty No. 2 (Case C-413/15) [2018] QB 1179 (a case concerned with the status and obligations of the Motor Insurers' Bureau of Ireland ("MIBI"), a materially identical organisation to the MIB): "…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…"
victim in Article 9 of the 2009 Directive. In relation to Mr Mercer QC's submission that there was a third necessary ingredient of direct effect, that the relevant Directive must define rights which individuals are able to assert against the State, the judge accepted that requirement but concluded that Article 3 clearly did define those rights for the reasons he had already given.
MIB was an emanation of the State. He noted that, on existing domestic authority, the MIB was not an emanation of the State by reference to my judgment in Byrne v MIB [2007] EWHC 1268 (QB); [2009] QB 66, following what I regarded as the persuasive reasoning to that effect of Hobhouse LJ in Mighell v Reading [1999] Lloyd's Rep IR 30. In Byrne I determined that, under European law, an entity would only be an emanation of the State if it satisfied three conditions laid down by the CJEU in Foster v British Gas plc (Case C-188/89] [1991] 1 QB 405.
v Whitty No 1 had referred that case back to the High Court of Ireland and Birmingham J found the MIBI was an emanation of the Irish State. As the judge said, that case went on appeal to the Supreme Court of Ireland which made a further reference to the CJEU. In Farrell v Whitty No 2 the first question for the Court was whether the elements of the test in Foster were conjunctive or disjunctive. The CJEU had noted at [24] and following, the tension between [18] of Foster and [20] of the same judgment, on which I had relied in Byrne. The judge noted at [109] of his judgment that, at [26] to [28], the CJEU concluded that [20] of Foster must be read in the light of [18], with the consequence that the conditions were not conjunctive.
v Whitty No 2 which was relevant for present purposes was, as the judge noted, whether the provisions of a Directive that are capable of having direct effect may be relied upon against the body upon which the Member State has conferred the task that is the subject of what is now Article 10 in the 2009 Directive. The judge then cited extensively from [35] to [42] of the CJEU judgment (to which I will return in more detail below) and set out the parties' rival submissions. Since those submissions essentially reflect those made to this Court, which I summarise below, I will not repeat them here.
v Whitty No 2 was to supersede my reasoning in Byrne and that of Hobhouse LJ in Mighell. The CJEU had decided that the Foster conditions were not conjunctive, so that, contrary to my conclusion at [57] of Byrne, it is not necessary to establish that the MIB is under the control of the State. It had also decided that private law bodies "such as the MIBI" may be an emanation of the State for the purpose of the obligations of the Motor Insurance Directives which have direct effect, and then held that the MIBI was an emanation of the State for the purposes of what is now Article 10, meeting the requirements of delegation and special powers.
MIBI and the MIB, so that there was good reason to reach the same conclusion. He rejected the distinction which Mr Mercer QC sought to draw between Farrell v Whitty and the present case as regards delegation of the task, that Farrell v Whitty involved a defective implementation of Article 3 whereas the present case involved no implementation at all. He concluded at [131] that in each case there had been an incomplete implementation of the obligation placed on Member states by Article 3 and, in each case, the effect of European law was to treat the designated compensation body under Article 10 as if the obligation imposed upon the State had been delegated to it in full.
MIBI and that of the MIB. The judge could see no basis to distinguish the position of Ms Farrell and that of the claimant and concluded that, in each case, the State's unimplemented obligation under the Directive must be met by its designated compensation body.
Consideration of Farrell v Whitty
v Whitty in more detail, since they are of critical importance to this appeal. Indeed, it was accepted by Mr Mercer QC that, if he could not distinguish that case as he seeks to do, the appeal must fail.
victim of a road traffic accident when she was a passenger in a van owned and driven by Mr Whitty. The van was not designed or constructed to carry passengers in the rear and she was seated on the floor, normally used to carry goods. He lost control of the vehicle, which hit a wall and she was injured. He was in fact uninsured and so she sought compensation from the MIBI under the terms of the 1988 agreement between the MIBI and the Minister for the Environment, under which the MIBI undertook to compensate victims of road accidents involving drivers who had not taken out the compulsory motor insurance required by the Road Traffic Act 1961. Under section 65(1) of that Act as amended, there was no compulsory insurance obligation in respect of civil liability to passengers travelling in a part of a vehicle, unless that part was designed and constructed with seating and accommodation for passengers. Accordingly, the MIBI refused to compensate her because the liability for the injuries she had suffered was not a liability in respect of which insurance was compulsory under the 1961 Act, so that the agreement with the Minister did not apply.
MIBI and the Minister. She obtained judgment in default against Mr Whitty. As between Ms Farrell and the MIBI/the Minister preliminary issues were agreed to be tried: (i) whether section 65(1) of the 1961 Act implemented the Motor Insurance Directives in a proper and permissible manner; (ii) if not, whether the relevant parts of the Directives were of direct effect so that Ms Farrell could rely upon them; (iii) if the answer to that question was yes, whether she could make recovery from the MIBI pursuant to the 1988 agreement.
(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 on
(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.
MIBI argued that, as there was no definition of "passenger" in the Third Directive, it was for the Member States to define which persons travelling in vehicles are to be considered passengers for the purpose of the Directive and that the Directive did not require Member States to ensure that compulsory insurance was in place in respect of personal injuries suffered by persons travelling in any part of a vehicle which had not been designed with seating accommodation.
"Given that, first, the right to derogate from the obligation to protect accident
vehicle which had not been designed with seating accommodation for passengers.
MIBI. When the matter was remitted to the High Court, Birmingham J concluded that the MIBI was an emanation of the State, taking a broader approach than I had in Byrne. On appeal from that decision, the Irish Supreme Court made a further reference to the CJEU.
view that the test was to be found in [18] of the judgment in Foster, not [20]. Having analysed the European jurisprudence, she said at [53]:
"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 of
"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 of
37 The importance attached by the EU legislature to the protection of
38 Therefore, the task that a compensation body such as
39 In that regard, it must be borne in mind that, in case of damage to property or personal injuries caused by a motor
40 As regards the
41 The provisions of a directive that are unconditional and sufficiently precise may consequently be relied upon against an organisation such as the
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 oblige insurers carrying on motor
MIBI and the MIB in relation to the question whether the organisation is an emanation of the State. In particular, if the obligation in section 78 of the Irish 1961 Act making membership of the MIBI compulsory for all motor insurers constitutes the relevant "special powers", the provisions of the RTA (particularly sections 95 and 145) cited above, requiring all authorised insurers to be members of the MIB, must have the same effect and constitute "special powers", so that the MIB is an emanation of the State.
MIB is an emanation of the State. His case, to which I now turn, is that the task delegated to the MIB is the RTA liability, not the broader obligation on the State to comply with the 2009 Directive.
The parties' submissions
Vnuk and the subsequent cases establishes clearly that the obligation under the Article covers the use of vehicles on private land as well as on the road or in a public place.
v Italian Republic (Case C-6/90) [1991] ECR I-5357, a case concerned with Directive 80/987, which is intended to guarantee employees a minimum level of protection under European law in the event of insolvency of their employer. Article 11 required the Member States to bring into force laws, regulations and administrative provisions necessary to comply with the Directive by a certain date. Italy had completely failed to fulfil that obligation. However, the CJEU decided that the provisions of the Directive were not sufficiently precise and unconditional in relation to the identity of the person liable to provide the guarantee, because the Member State was given a complete discretion under the Directive as to the organisation, operation and financing of the guarantee institutions. The provisions of the Directive thus did not identify the person liable to provide the guarantee and the State could not be held liable directly under the guarantee merely because it had not exercised its discretion.
v Fondo de Garantia (Case C-334/92) [1993] ECR I-6911, which concerned the same Directive 80/987. Spain had set up a guarantee fund before the Directive came into effect which protected certain categories of employee but not higher management staff, so the obligations under the Directive had been partially implemented. The CJEU held that higher management staff could not rely upon the Directive as having direct effect because the Directive left to the Member State whether to set up one or more guarantee institutions to protect different categories of employee (see [18] and [19] of the judgment). Mr Mercer QC submitted that there was an analogy with Article 10 of the 2009 Directive. So far as concerns motor liability insurance for accidents on private land, which were not covered by the compulsory insurance under the RTA and thus outside the MIB agreements, it would be open to the United Kingdom government to seek to comply with its obligations under Articles 3 and 10 of the Directive through some other body than the MIB or by some other means than the MIB agreements.
v Gharehveran (Case C-441/99) [2001] ECR I-7687, another case under the same Directive 80/987 upon which Mr Philip Moser QC for the claimant particularly relied, Mr Mercer QC submitted that it was distinguishable from Francovich and Wagner Miret as a case where, although the effect of the exclusion from protection under Swedish law of employees with shareholdings meant that the Directive had not been correctly implemented by Sweden, the relevant discretion had been fully exercised, as the Swedish State had designated itself as the person liable to meet claims for pay guaranteed by the Directive (see [39], [41] and [44] of the judgment).
victims of motor accidents but to provide a system of insurance, which involved a discretion as to how that was to be achieved. He submitted that driving vehicles off-road on private land was different from driving on the road or in a public place. It involved a different balance between the rights of the individual and the rights of the State, as compared with driving on the road. It could involve different types of vehicle: fork-lift trucks, tractors, ride-on lawnmowers, golf buggies and dodgems were examples Mr Mercer QC gave. It could involve a different class of conduct, for example in motor sport where there was a conscious decision to take risks.
vehicles on private land. Mr Mercer QC referred to the decision of the House of Lords in Clarke v General Accident [1998] 1 WLR 1647 that a car park was not a "road" within section 145 of the RTA, which led to the subsequent amendment to extend the section to "or other public place" in order to comply with the Motor Insurance Directives.
MIB liable in a case such as the present would be that the MIB became a primary compensator, when the essence of the Article 10 scheme was the setting up of a body which was to have a residual function, which only arose if there was a compulsory insurance obligation. Mr Mercer QC sought to distinguish Farrell v Whitty on the basis that, in that case, Mr Whitty was required to have a contract of insurance covering his vehicle on the road where the accident occurred, but did not have a contract, whereas in the present case, Mr Tindale was not required to have a contract of insurance covering his vehicle when he was driving it on private land.
v Magyar Allam (Case C-409/11) [2014] 1 CMLR 14. In that case, the applicants had effected compulsory motor insurance with an insurance company which had become insolvent in circumstances where the applicants were liable in respect of accidents which occurred before the date of insolvency. They sued the Hungarian State claiming it had incorrectly transposed the First Directive into Hungarian law. By not taking measures to ensure that they were paid compensation by a body responsible for providing compensation when an insurer was insolvent, the State was in breach of its obligations under Article 3, thus incurring liability itself.
vehicle or a vehicle for which the insurance obligation under the Directive has not been satisfied. At [30] the Court said that the payment of compensation by such a body was thus a measure of last resort. At [31]-[32] the Court continued:
"31 As regards the determination of the actual circumstances in which the insurance 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
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 of insurance against civil liability relating to the use of motor
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.
v Juliana (Case C-80/17) [2018] 1 WLR 5798, where Mrs Juliana had stopped driving due to a medical condition. She left her car immobilised in her yard and uninsured. Her son made the car work, drove it and lost control of the vehicle, killing himself and his two passengers. The national compensation body paid compensation which it sought to recover from Mrs Juliana, who argued that she had been under no obligation to insure the vehicle. The national court sought a preliminary ruling from the CJEU as to whether there was an obligation to insure in these circumstances.
vehicle was registered and capable of being driven, albeit immobilised on private land, it was a "vehicle" within Article 1 and did not cease to be subject to the insurance obligation under Article 3. The Court rejected the argument advanced by the UK Government, amongst others, that Article 3 could be given a narrow interpretation because the compensation body provided for in what is now Article 10 could pay compensation in such circumstances. The Court referred to Csonka in saying that the payment of compensation by such a body was designed to be a measure of last resort, not a guarantee scheme in respect of insurance. Mr Mercer QC relied upon [46] of the judgment which states:
"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 identified
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.
v Whitty was inconsistent with that approach. The first judgment in that case was concerned only with whether what is now Article 12.1 of the 2009 Directive was of direct effect. Just because Article 12.1 was of direct effect, it did not follow that Article 3 was of direct effect, where the relevant part of the obligation on the Member State, to ensure that compulsory insurance was in place for vehicles used on private land, had not been implemented. In relation to Farrell v Whitty (No 2), Mr Mercer QC submitted that it was to be distinguished from the present case. In particular, it was a case where the Member state had implemented compulsory insurance. Mr Whitty was under an obligation to have such insurance to drive his van on the road, but did not have it. Since the Irish government had delegated the Article 10 responsibility to the MIBI, it would have had to provide compensation, for example if he had hit a pedestrian. Furthermore, the case was one where the Article 10 obligation on the MIBI was being funded by the motor insurers who benefited from the general obligation to have compulsory insurance. That was not the case with use of vehicles on private land.
MIB acknowledged, unless Farrell v Whitty could be distinguished, the appeal must fail. He submitted that that case could not be distinguished. In both cases, the circumstances fell outside the compulsory insurance scheme enacted by the national legislation, which was accordingly defective. The Irish 1961 Act did not impose any obligation to insure in respect of passengers in unseated parts of a vehicle. Likewise, the RTA did not impose any obligation to insure in respect of the use of vehicles on private land. In both cases, the Motor Insurance Directives required a compulsory insurance scheme to be in place in those circumstances.
v Whitty (No 1) was concerned with the direct effect of what is now Article 12, that provision expressly referred to Article 3, so that it was implicit in the decision that Article 3 also had direct effect and, since Article 3 and Article 10 were co-extensive, Article 10 likewise had direct effect. In relation to the argument of Mr Mercer QC that Article 3 remained conditional because the UK government retained a discretion as to whether to set up a separate body to compensate victims of accidents caused by uninsured vehicles on private land and his reliance in that context on Francovich and Wagner Miret, Mr Moser QC pointed out that the same argument had been advanced by the MIB in Byrne and rejected by me at [54]-[56] of my judgment in that case. In particular, at [56] I had accepted the argument for the claimant that the relevant discretion under what is now Article 10 had been fully used by the designation of the MIB as the compensation body.
MIB, the UK government had fully used the relevant discretion.
MIB was of the entirety of the obligation on the Member State under Article 10. Mr Moser QC relied upon what Advocate General Sharpston had said at [126] of her Opinion in Farrell v Whitty (No 2):
"Here, the directly effective right that Ms Farrell seeks to assert (compensation for injuries received as a passenger travelling in a motor
MIB. There was no question of the Article 3 and 10 obligations being conditional as the MIB suggested and accordingly they had direct effect.
vehicles encompassing many different types of vehicle, such as ride-on lawnmowers or dodgems, Mr Moser QC emphasised that he was only advocating that the Directive had direct effect on the facts of this case not some other hypothetical case. Here Mr Tindale had been driving the car on the road uninsured immediately prior to driving it onto the private land. It was completely artificial to suggest that the United Kingdom government would delegate the Article 10 liability in respect of a pedestrian knocked down in the field to a different compensation body than that which would have assumed the liability if Mr Tindale had swerved off the road and knocked down a pedestrian, namely the MIB.
v Whitty (No 2) at [35]-[42] which I quoted at [35] above was equally applicable to the MIB. [39] in particular was the clearest possible statement as to the scope of responsibility of the MIBI and thus of the MIB. The true import of the co-extensive nature of the obligations under Articles 3 and 10 and the true nature of the task for which the compensation body was responsible emerged from that paragraph.
v AIG Europe Ltd [2017] EUECJ C-334/16 at [24] the CJEU held that the "very concept" of Article 3 of the 2009 Directive could not be left to the discretion of the Member State "but constitutes an autonomous concept of EU law, which must, in accordance with the Court's settled case-law, be interpreted in the light, in particular, of the context of that provision and the objectives pursued by the rules of which it is part". At [25] the Court went on to emphasise that the Motor Insurance directives had the objective of guaranteeing that the victims of accidents caused by motor vehicles received comparable treatment irrespective of where in the European Union the accident occurred.
Analysis and conclusions
vehicles on private land is the subject of a scheme of compulsory motor insurance. That the government is under that obligation in respect of the use of vehicles on private land cannot be doubted in view of the judgment of the CJEU in Vnuk and the subsequent CJEU judgments in Andrade v Proença Salvador (Case C-514/16) [2018] 4 WLR 75 at [36] and Nunez Torreiro at [28] and [30]. The government has also failed to comply with its co-extensive obligation under Article 10 to assign responsibility for meeting that liability to the compensation body contemplated by that Article, just as the Irish government had failed in Farrell v Whitty.
MIB the residual liability to compensate those injured by uninsured vehicles on private land. The argument that the government retained such a discretion where it had failed to transpose all its EU law obligations under the Directive correctly into national law was run in Byrne by reference to Francovich and Wagner Miret and rejected by me at [56] of my judgment. I concluded that the relevant discretion had been fully used in circumstances where the UK had chosen to designate the MIB as the body through which it sought to implement the Motor Insurance Directives. That conclusion was not challenged on appeal. I see no reason to reach a different conclusion in the present case.
MIB. I am strengthened in that conclusion by the analysis of the Advocate General in Farrell v Whitty (No 2) particularly at [126] and by the judgment of the CJEU in Nunez Torreiro, which recognises that compliance with Article 3 is not a matter for the discretion of the Member State.
MIB, Article 3 of the 2009 Directive is unconditional and precise, so that it is capable of having direct effect. Since it is common ground that Article 3 and Article 10 are co-extensive, it must follow that Article 10 is also capable of having direct effect. I also agree with Mr Moser QC that, although the conclusion of the CJEU in [41]-[42] of Farrell v Whitty (No 2) is expressed in a somewhat abstract way, the Court was saying that these Articles were sufficiently unconditional and precise to be of direct effect.
MIB that in relation to the task delegated to it under Article 10 it is to be regarded as an emanation of the State, as I have already recorded at [37] above. Its contention that the task delegated to it is limited to the RTA liability stands or falls with the attempt by Mr Mercer QC to distinguish the analysis and reasoning of the CJEU in relation to the MIBI in Farrell v Whitty (No 2). I consider that that analysis and reasoning is indistinguishable.
v Whitty (No 2), the Member State has failed "to fulfil its obligation to ensure that civil liability in respect to the use of motor vehicles…is covered by insurance". Mr Mercer QC sought to argue that because the CJEU then cited [31] of Csonka, this analysis was intended to be confined to cases where a system had been put in place but it had broken down. I reject that argument. [39] of Farrell v Whitty (No 2) is in broad general terms, not limited to cases where the failure of the Member State is partial as opposed to total. Furthermore, the fact that the UK government has failed to legislate for compulsory insurance in respect of the use of motor vehicles on private land and then specifically to delegate to the MIB the residual liability where the relevant vehicle is uninsured, can legitimately be described as a breakdown in the system put in place by the government.
v Whitty (No 2) and the present case, the effect of the failure is the same: a gap in the insurance cover compulsorily required by the domestic legislation and a corresponding gap in the protection of the victims of motor accidents, which, as is clear from all the CJEU jurisprudence, is the very mischief that the Motor Insurance Directives are designed to avoid. The suggested distinction between the use of a motor vehicle on a road or other public place and the use of a motor vehicle on private land is, at least on the facts of the present case, a wholly artificial one, given that immediately before he drove his car onto the private land, Mr Tindale was driving it uninsured on the public road. The distinction is also inimical to the CJEU jurisprudence, which in my judgment does not support any part of Mr Mercer QC's argument.
v Secretary of State for Transport [2015] EWCA Civ 172; [2015] 1 WLR 5177 at [33]. Nothing in the CJEU judgment has any impact on the issues for determination in the present appeal.
"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 the
victims of motor accidents, by requiring Member states to ensure that motor insurance is compulsory, so that the victims are compensated by the insurer or, in cases where the obligation to insure the vehicle has not been satisfied, by the compensation body to which that task has been delegated under Article 10. In my judgment, the last sentence of [46] is sufficiently widely phrased to encompass both the case where the State has not fully implemented its insurance obligation under Article 3 of the 2009 Directive (as in the present case) and the case where, although the State has implemented the obligation, the driver or owner of the vehicle has not taken out the compulsory insurance required.
v Whitty (No 2) that the compensation body is intended to protect and compensate victims by remedying the failure of the Member State to fulfil its obligation under Article 3 to ensure that civil liability in respect of the use of motor vehicles is covered by insurance. As the CJEU jurisprudence makes clear, that obligation includes the use of vehicles on private land.
MIB, albeit a private law body, has had conferred on it by the UK government the task under Article 10, which as [39] of Farrell v Whitty (No 2) makes clear, includes remedying the failure of the government to institute in full a compulsory insurance regime, in the present case in respect of the use of vehicles on private land. As the CJEU held in [42] of Farrell v Whitty (No 2), it is inherent in that task that it is in the public interest. Like the MIBI, the MIB possesses special powers by virtue of the provisions of the RTA which oblige all authorised motor insurers to be members of the MIB and to contribute to its funding. The short answer to Mr Mercer QC's point that the MIB levy does not oblige insurers providing off-road cover to contribute to the levy is that any issue can be addressed by amendment to the RTA and/or the MIB Articles of Association, but, in any event, that point does not provide an arguable point of distinction between the present case and Farrell v Whitty (No 2).
MIBI, the MIB is an emanation of the State against which Article 10 of the 2009 Directive can be enforced by the claimant, as it has direct effect. In my judgment, this does not have the effect of making the MIB a primary compensator as Mr Mercer QC contended. The MIB may well have rights of contribution over against the Department of Transport. Indeed, we were informed by Mr Moser QC that the MIB has issued a Contribution Notice against the Department in the present proceedings. In any event, on the basis that the MIB is an emanation of the State, it is no answer to its liability to compensate the claimant that this liability has only arisen through the fault of the UK government: see [62]-[63] of Konle v Austrian Republic (Case C-302/97) [1999] ECR I-3099.
MIB. In my judgment, Mr Moser QC was correct that the answer is the 2009 Directive as applied against the MIB as an emanation of the State and it is no answer to say that the source of the obligation cannot be found in national law. That simply replicates the fallacious argument of the MIB that its obligation to compensate is limited by the RTA liability.
MIB must be dismissed.
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]