Background facts and original judgment
The claim arose as a result of an incident in June 2013. The claimant, who was walking on private land in Lincolnshire, was struck by a vehicle being driven by Mr Tindale, who was of the view that the claimant had been "up to no good" in the vicinity of Mr Tindale's farm. Mr Tindale had pursued the claimant in his 4x4 along a public road, before accessing a public footpath, then driving down an embankment on which one of the footpaths was situated, through a barbed wire fence and into a field, which was private land. He then drove across the field around a marshy area where he collided with the claimant causing him serious injury. Mr Tindale's liability in respect of injury caused to the claimant was unsurprisingly not in issue.
The claimant issued proceedings against Mr Tindale and the MIB, and a preliminary issue hearing was listed to determine three issues:
Whether any judgment the claimant obtained against Mr Tindale was a liability which was required to be insured against pursuant to Part VI of the Road Traffic Act 1988 ("the Act");
If not, whether the MIB was otherwise obliged to satisfy such judgment pursuant to the 2009 Motor Insurance Directive ("the Directive"); and
Whether the provisions of the Directive had 'direct effect' against the MIB in the circumstances of the claim.
In relation to the first issue, Soole J, who heard the case in the High Court (see DWF update), held that the claimant's injuries were not caused by, and did not arise out of Mr Tindale's use of the vehicle on a road or other public place before he entered the field. The judge considered the second and third issues together and answered both in the affirmative. He concluded that the obligation on the state in Article 3 of the Directive (to ensure civil liability for the use of vehicles is covered by compulsory insurance) was unconditional and sufficiently precise, and that this extended to the use of vehicles on private land, in accordance with the Vnuk decision. The judge further concluded that Article 3 had 'direct effect', as did Article 10 of the Directive (the obligation on a state to authorise a compensation paying body for untraced and uninsured drivers) and that the MIB was an emanation of the state (following the CJEU's decision in Farrell v Whitty No 2), against which obligations provided for in the Directive could be enforced as if it were the state.
Basis of appeal
The MIB sought to appeal the decision of the High Court on the basis that
in order to have direct effect, the provisions in directives are required to be unconditional and sufficiently precise; the obligation within Article 3 of the Directive is conditional, in that the obligation was not to compensate victims of motor accidents, but to provide a system of insurance, which allowed a discretion as to how that was to be achieved, and in relation to private land, that obligation had not been implemented by the UK; and that
the MIB's purpose was limited to compensate victims of uninsured / untraced drivers under the provisions of the Road Traffic Act (i.e. not on private land), and the entirety of the provisions of Articles 3 and 10 of the Directive could not be enforced directly against it.
Flaux LJ, delivering the lead judgment with which the other justices agreed, held that:
The UK has failed to fulfil its obligation under Article 3 that civil liability for incidents involving motor vehicles occurring on private land is the subject of a scheme of compulsory motor insurance, following Vnuk, Andrade and Torreiro, and as a result has failed to fulfil its co-extensive obligation under Article 10 in establishing a compensating body.
Article 3 of the Directive was unconditional and sufficiently precise and that, given that it is co-extensive with Article 10, both have direct effect. The CJEU decision in Farrell v Whitty No 2 provided that the MIB was required to remedy any defects in interpretation;
Any discretion the UK retained in respect of implementing Article 10 had been exercised by the establishment of the MIB to carry out its obligations under the Directive;
In relation to the task delegated to it under Article 10, the MIB is considered to be an emanation of the state, and so the failure to properly implement the Directive can be enforced against it.
Article 10 which states:
"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 vehicle or a vehicle for which the insurance obligation provided for in Article 3 has not been satisfied"
was interpreted to the effect that the MIB was required to remedy the shortfalls in the Road Traffic Act and compensate for damage to the extent provided by Article 3, as interpreted and clarified by the CJEU. The MIB's role was therefore held to go beyond that delegated to it contractually by the UK government.
The court's decision once again highlights the conflict between the compulsory insurance regime created by the Directive as interpreted by the CJEU and the compulsory regime imposed by the Road Traffic Act. The decision means that the MIB can be called upon to fill any gaps in the regime in Britain and is likely to extend beyond incidents involving vehicles on private land.
The decision so far as it relates to the improper implementation of the Road Traffic Act confirms what has already been determined and conceded by the UK government.
The Court of Appeal's judgment has the potential to place enormous financial and administrative pressure on the MIB, some of which in turn will be passed to the UK government, but which is likely to be reflected in increased insurance premiums. The MIB has already sought contribution from the UK government.
The MIB has applied to the Supreme Court for permission to appeal the decision in relation to the scope of its obligations to meet the entirety of Article 10. In the interim, the decision will add further momentum to the review and reform of the Road Traffic Act 1988 and the approach to be taken post Brexit.