Motor insurance: what does “stolen” actually mean?

The single permitted exclusion from the scope of compulsory insurance set out in the Motor Insurance Directive 2009/103 is in respect of claims made by “persons who voluntarily entered the vehicle which caused the damage or injury, when the insurer can prove that they knew the vehicle was stolen” (article 13.1).The Road Traffic Act 1998, however, enacts the exclusion in slightly different language, referring to claims by passengers “knew or had reason to believe that the vehicle had been stolen or unlawfully taken” (section 151(4)).

Greenway & Rocks v Parrish, Covea & MIB involves passengers injured in a car that was unlawfully taken – but not “stolen” (as defined in the Theft Act) – and the point at issue is whether the wider language in the RTA is compatible with the Directive, something which will turn on the proper interpretation of the meaning of “stolen” in the Directive. In a decision in March this year, in which judgment was published recently, Spencer J reversed Master McCloud’s decision and allowed the insurer’s application on appeal for four experts from other jurisdictions to give evidence on how article 13 has been implemented (which is materially different from considering other language versions of the Directive).

There may be room for some debate about whether this approach, which in broad terms characterises the meaning of the Directive as a point of foreign law and therefore to be treated as a question of fact, would be regarded as academically correct. The opposing view would be that the question of interpretation of the Directive must be a task for the judge even if he or she is unable, because of the departure from, to secure assistance on the point by referring it to the Court of Justice (CJEU).

Both arguments are captured in these passages from Master McCloud’s decision: “It seems to me that as a matter of constitutional law in this country, after the Brexit period, the transition period, it will be a matter of law for the UK courts to construe domestic law, and that domestic law incorporates the treaties and the directives that we have signed up to during our period in the EU … I am not persuaded at the moment one need treat EU law as a foreign species of law … I am not persuaded that expert evidence of foreign law is reasonably required in this case. Rather I regard it as a question of law for the British judge, possibly assisted by translations of other states’ implementing laws [and] it would be for the UK court to carry out the exercise the CJEU might have carried out.”

As already noted, Spencer J reversed the Master’s decision to refuse expert evidence. In his view, the court required more than translations to help with the question before it: “What is needed is an explanation to the court of how the word is used and interpreted in the particular member state in order to inform the court as to the potential correct interpretation of the word in the Directive … in end the court will use not just the language but also the wider purposive concepts which lie behind the Directive.”

That said, he made it clear that fully analysing all 27 EU Member States’ approaches “would make litigation of this kind quite unmanageable”, having referred earlier in his judgment to “the nightmare” possibility of being faced with multiple translations of the Directive. He was therefore prepared to allow the appeal’s request for four experts, which he accepted was proportionate given the serious injuries involved in the underlying claims.

Despite this being a procedural decision, it may offer some insight into the approach English courts may adopt when required to interpret EU-derived domestic law after the end of the implementation period and without the option of making a reference to the CJEU. The real substance of the case – whether the effect of section 151(4) of the Road Traffic Act 1988 constitutes a failure by the United Kingdom government to implement Directive 2009/103 – will now move forward to a trial which will be informed by the expert evidence for which permission was given.

Alistair Kinley at BLM
Alistair Kinley, Director of Policy and Government Affairs at BLM

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