Cameron v LV Insurance – Supreme Court fends off an attack on the untraced drivers agreement

Our newsflash about the decision today sets out its procedural context and the difficulties that would be associated with allowing a claimant to issue proceedings against an untraced driver.

Another view of the judgment is that it by and large entirely validates the mechanisms of the MIB’s untraced agreement, which are found to be consistent with the relevant European Directive.

Given the uncertainty around how the UK’s post-Brexit motor insurance law may or may might not reflect the Directive – on which it is worth noting that a highly relevant ‘no-deal’ statutory instrument  is being debated today in Parliament – the decision in Cameron may mark a pause in sustained but largely unsuccessful arguments that the Road Traffic Act 1988 and the MIB agreements fail to implement the Directive properly.

The unanimous decision of the Supreme Court was given by Lord Sumption. In overturning the decision of the majority of the Court of Appeal to give discretion and permit the claimant to issue proceedings in tort against an unidentified and unidentifiable driver, he pointed out in the passages below that (i) the Directive in no way dictated such an outcome and (ii) nor was there any need to impose liability on an insurer artificially in circumstances in which Parliament had envisaged that the appropriate route to compensation would be under the untraced agreement.

[Ms Cameron’s] claim against the driver is for damages. But the right that she asserts against him on this appeal is a right to sue him without identifying him or observing rules of court designed to ensure that he is aware of the proceedings. Nothing in the Directive requires the United Kingdom to recognise a right of that kind.”

“Parliament’s intention that the victims of negligent motorists should be compensated by the insurer is qualified [as being a liability to meet a judgment against the motorist once it has been obtained]. No doubt Parliament assumed, when qualifying it in this way, that other arrangements would be made which would fill the compensation gap, as indeed they have been. But those arrangements involve the provision of compensation not by the insurer but by the Motor Insurers’ Bureau. The availability of compensation from the Bureau makes it unnecessary to suppose that some way must be found of making the insurer liable for the underlying wrong.”

The overall tally of judicial views in the case is of passing interest. Save for the majority in the Court of Appeal, eight* of the ten judges who considered it refused to allow an action against an unidentified driver (* 5 in the Supreme Court, one in the Court of Appeal, plus the judge and district judge).

Today’s decision therefore means that the strongly-worded dissenting judgment of Sir Ross Cranston in the Court of Appeal regains its full force. The final paragraph of his speech is worth reproducing in full (bold emphasis added):

“There is also the greater potential for fraud if proceedings can be taken against unnamed drivers without MIB investigation. As well there is the threat of undermining the balance between the statutory and MIB avenues for claimants to obtain redress following motor vehicle accidents. That balance and the existing arrangements may not be ideal – in other countries compulsory insurance is of the vehicle and is comprehensive in nature – but the arrangements in this jurisdiction are long standing and have Parliamentary approval. In this difficult field for policy makers it is not for the court to disturb these arrangements through sanctioning an exercise of discretion where there is no injustice to remedy.

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Authored by Alistair Kinley, director of policy and government affairs

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