The Motor Insurers' Bureau (MIB) is petitioning the government to tighten up guidelines on who is eligible to obtain compensation in an accident involving an uninsured driver.
It wants dependants of a passenger killed while travelling with a driver they knew to be uninsured barred from making a claim from the MIB.
This follows a ruling by the Court of Appeal this week which said a dependant was eligible to claim.
The MIB had appealed a High Court decision ordering it to pay compensation to Louise Philips, whose husband Neville died after his friend fell asleep at the wheel of a car on the M25. The driver was uninsured.
Louise Philips' lawyers successfully argued that the Uninsured Drivers Agreement (1999) did not prevent her from claiming compensation.
The lawyers, Field Fisher Waterhouse, said that the exclusion for claimants who knew they were being driven by an uninsured driver was limited to the passenger not dependants.
Field Fisher Waterhouse said the decision could cost the MIB millions of pounds. But the MIB downplayed the significance of the ruling saying it would have a "relatively small impact" because it was limited to a specific scenario.
An MIB spokesman said there were "no more than a dozen" similar cases each year.
Trevor Harrison, technical manager at the MIB, said: "The MIB, in conjunction with the Department of Transport, will seek to have the wording amended at the earliest available opportunity."
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