Further European questions on the compulsory motor insurance regime

Several recent developments which are likely to affect the ultimate policy outcome for motor insurance law in the UK should be noted, namely the ongoing REFIT legislative process and the recent cases BTA Baltic Insurance and Cameron v Hussain.

First is to recap that the European Parliament’s draft report takes a very different view on clarifying the ‘scope’ of motor insurance in the REFIT review to that of the Commission, as reported in this post earlier in the month.

Second is a further decision of the CJEU on the scope of the regime, bringing passenger use formally within the Motor Insurance Directive (MID). The incident at the heart of the claim – BTA Baltic Insurance, C-648/17 – was a very minor property damage-only accident in the car park of a Latvian supermarket. The passenger door had been opened after the car was parked and it scratched a neighbouring parked car. The cost of the damage was barely a few hundred Euros but that did not prevent the case, more than ten years post-accident, from reaching the CJEU. The question referred to was whether the MID should “be interpreted as meaning that the concept of ‘use of vehicles’ covers a situation such as that in the main proceedings, that is to say, a situation in which damage to the property of a third party is caused by use of the vehicle by a passenger?” Given the consistent expansionist approach of the court (evidenced consistently since Vnuk v Zararovalnica, now over four years ago) it may come as no surprise that this was answered positively. The court was content to find that “the fact that the accident at issue in the main proceedings was not caused by an act of the driver of the first vehicle but by that of a passenger does not, in itself, preclude the use of that vehicle at that time from falling within the scope of its function as a means of transport and, therefore, within the scope of the concept of ‘use of vehicles’ within the meaning of [the MID].” It seems likely that any policy response to this decision might be subsumed within next year’s negotiations between the European institutions over REFIT.

Finally and closer to home is Cameron v Hussain & LV, heard by the Supreme Court this week (details may be found here). The insurer’s appeal argues (i) that the court should not exercise such discretion as it may have to allow the claimant to sue an unidentified driver of an identified and insured vehicle (which, if allowed, would trigger the insurer’s obligation under the RTA to satisfy any judgment obtained) and (ii) that the claimant’s proper remedy in these circumstances is to proceed under the MIB Untraced Drivers Agreement. The claimant raised a range of European-level arguments in response – including circumstances in which a vehicle should actually be treated as uninsured – that, on the face of it, did not appear to impress the Justices greatly when the case was heard on Wednesday this week. While it is clearly unadvisable to place any great deal of reliance on the mood of the hearing, the insurer’s arguments appeared a good deal pithier (to me at least) and were grounded on a straightforward approach to the CPR and the RTA. Their point in essence was that issuing a claim for damages requires good service of those proceedings on a wrongdoer, something which is impossible if the driver is unidentified. It therefore followed that the correct approach is to follow the scheme of the Untraced Agreement. Although we would not expect a decision much before Easter 2019, we are keeping the case under close review.


Alistair Kinley, Director of Policy & Government Affairs, BLM

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