There are estimated to be about 1.4 million uninsured cars in Britain and when an insured motorist driving carefully is in collision with a careless uninsured motorist it can be a real headache recovering compensation for injury and vehicle repairs.
For many years, at the behest of Europe, member states have been required to have in place a scheme to compensate the victims of uninsured motorists. In Engand and Wales there are two such schemes; The Uninsured Drivers Agreement 1999 covering the identified but uninsured motorist and another scheme covering the untraced motorist.
This article concerns the former scheme. Both schemes are administered by the Motor Insurers Bureau (the MIB) which is a fund paid into by motor insurers.
The 1999 agreement was abhorrent in that it contains a significant number of traps for the unwary but also a number of exclusions of liability whereby the MIB could escape from having to pay compensation.
This is relevant both where there is simply a car on a road without any insurance at all where its driver is then involved in an accident which he causes and also where a motorist takes out a policy after he has made false statements to his insurer and he then causes an accident.
In the former circumstances it is a straight claim on the MIB scheme but in the latter circumstances, the insurer who issued the policy will still have to deal with the claim but can do so then as an agent of the MIB. In other words it can take advantage of the get – outs and escape tunnels in the MIB Uninsured Drivers Agreement which arguably has more holes in it than a sieve.
The facts of the case were that Mr Delaney and Mr Pickett were travelling at high speed in a borrowed sports car driven by Mr Pickett. It was insured by its owner who made no reference to the fact that Pickett would be driving it when he took out the policy. The car was involved in an accident. When the emergency services attended, a large amount of drugs were found on the the men, that is, a large bag of cannabis stuffed into Delaney’s jacket and a smaller amount was stuffed into Pickett’s sock.
Picket was sent down for dangerous driving and possession of drugs.
Delaney sued Pickett and the insuers for his injuries. The insurers claimed that when the policy was taken out they were not made aware Pickett’s long-standing drug habit and should have been told of his addiction.They were thus able to avoid the policy and deal with the claim as agents of the MIB under the MIB agreement.
They argued that the vehicle was being used to deal in drugs and this was criminal activity and thus clause 6(1) (e) (iii) of the MIB scheme applied. ( This clause excluded liability of the MIB where the vehicle which caused the accident was being used for criminal purposes). The court agreed and Delaney lost.
Delaney appealed and lost again.
He tried a third time, this time bringing proceedings against the Secretary of State for Transport for failing to properly implement European Motor Vehicle Insurance Directive. The relevant European Directive only allowed one exception – that of an injured passenger who knew the vehicle was uninsured at the time.
The Court held that the Government was liable to pay taxpayers funds to Delanay for setting up a scheme which tried to bring in unlawful exclusions of liability.
It cannot be said that the Government would have been ignorant of their limited scope for excluding liability so in collusion with the insurance industry they must have taken the decided to refuse to fully implement the relevant European Motor Vehicle Insurance Directive thus making the Government liable to pay compensation.
