Supreme Court rules against MIB in landmark legal action

The Supreme Court has ruled against the Motor Insurers’ Bureau (MIB) this month, upholding that the organisation is liable to pay compensation to an individual who was run down by an uninsured vehicle on private land.

The case, MIB v Lewis, originates from an incident in June 2013, where a man - Mr Lewis - was pursued and run down in a field by an uninsured vehicle driven by a local farmer.

As a result of this collision, Lewis received a spinal cord injury, which has left him tetraplegic and with permanent brain damage, reducing his life expectancy. The driver, Mr Tindale, did not have the funds to meet the claim for damages, so the MIB then became involved.

However, the MIB stated that it did not have liability to compensate Lewis because the accident occurred on private land, which meant it was not considered a “relevant liability” under the Uninsured Drivers Agreement 1999.

Ruling decision

Despite a High Court ruling dictating that the MIB is, in fact, liable for accidents involving uninsured vehicles on private land, the organisation progressed the case to the Court of Appeal.

In June 2019, the Court of Appeal unanimously upheld the High Court decision, citing that Articles 3 and 10 of the Sixth European Union (EU) Motor Insurance Directive could be relied upon by individuals as having a direct effect against the MIB, as an emanation of the State.

The MIB next sought to appeal to the Supreme Court, despite the Court of Appeal refusing this permission; the organisation additionally asked for the case to be referred to the Court of Justice of the European Union (CJEU).

It argued that although the aforementioned Article 3 required member states to impose a compulsory insurance regime on the use of vehicles, including their use on private land, this is not unconditional and therefore lacks direct effect – the MIB said that member states are afforded discretion as to how the system of compulsory insurance operates, enabling different regimes for vehicles use on roads versus use in other circumstances.

Furthermore, the MIB stated that Article 10, which requires member states to set up or authorise a body to provide compensation to victims of uninsured vehicles, had not been fully implemented in the UK.

It said that the MIB’s remit only provided compensation to victims of uninsured vehicles within the limits of the Road Traffic Accident Act 1988, meaning when accidents took place on a road or in a public place.

The MIB declared that since compensating victims of uninsured vehicles on private land had not been delegated to the organisation, it could not be held liable.

Paying up

On 13 February 2020, the Supreme Court upheld the previous decisions made by the High Court and Court of Appeal. The court, therefore, refused MIB permission to appeal these initial rulings and found that it would not be necessary to request a decision from the CJEU.

The court agreed that the MIB’s grounds of appeal did not raise an arguable point of law, as the CJEU had repeatedly made clear that Motor Insurance Directives were designed to ensure the protection of victims of motor accidents.

David Knifton QC, acting for the respondent, said: “I am delighted that the Supreme Court has decisively rejected the MIB’s attempts to deny compensation to Mr Lewis.

“The European Court has consistently endeavoured to ensure that innocent victims of motor vehicle accidents have a right to compensation, either from an insurer or from a body such as the MIB.

“Despite Brexit, the Directive rights recognised in previous CJEU decisions would have remained available in UK domestic law, but the decision of the Supreme Court lays to rest any lingering doubts there may have been.

“It is high time the government amended the Road Traffic Act to bring it into line with EU law. In the meantime, victims of accidents caused by uninsured vehicles on private land are entitled to pursue a claim for damages against the MIB.”

David Gauler, serious injury solicitor at Thompsons, Birmingham, added: “The Supreme Court’s decision is both emphatic and eminently sensible. Now it is up to the government to make sure that the rights of UK citizens established in this case are not tossed aside in the rush for Brexit.

“The government has made much of its promise that after we leave the EU no one will lose rights they previously enjoyed, so here is a chance for them to show that it isn’t going to row back on fairness. They should, as a priority, commit to amending the Road Traffic Act 1998 to consolidate the decision in Mr Lewis’s case.”

The MIB is the mechanism in the UK through which compensation is provided for victims of accidents caused by uninsured or untraced drivers; it is funded by insured drivers’ premiums.

A spokesperson at the MIB said: ”We are very disappointed not to have been granted leave to appeal this case to the Supreme Court. We strongly believe that the outcome places an unfair financial burden on ordinary motorists rather than on the users of relevant vehicles.

”We are exploring our options with regard to claims that we have a legal requirement to pay, including financial recoveries from negligent uninsured drivers. We call upon the government to urgently implement long-delayed proposals for dealing with these liabilities.”

Mark Hemsted, member of the Forum of Insurance Lawyers and Partner at Clyde & Co said: ”This decision reiterates the extension of the obligations of the MIB beyond those within the RTA and within its own Articles of Association.

”The MIB may now seek to challenge the Government into amending the Road Traffic Act. In the continued absence of any indication that the Government intends on amending the RTA, it would be unsurprising if the MIB does not make efforts to amend its Articles to reflect the changes brought about this decision.

”Lord Justice Flaux in the Court of Appeal stated that the issues brought about by this decision could be resolved ’by amendment to the RTA and/or the MIB Articles of Association’.