Akers & Ors v Motor Insurers' Bureau & Anor

The passenger exception in the Motor Insurers’ Bureau agreement is construed narrowly. A passenger does not fall within it merely because a reasonable person would have made enquiries about insurance. The exception applies where the passenger had actual knowledge that the vehicle was uninsured, or deliberately avoided confirming information which made the absence of insurance apparent.

Where uncontradicted evidence establishes that a passenger heard statements that the driver was uninsured and nevertheless accepted the lift, the court may find the necessary knowledge on the balance of probabilities. A trial judge should make the factual findings which support a conclusion on that issue.

The claimants were relatives of Graham Akers, who was killed while travelling as a passenger in a car driven negligently by Roy Thorne. Thorne was uninsured. The Motor Insurers’ Bureau (MIB) was joined because its agreement with the Secretary of State ordinarily required it to satisfy an unsatisfied judgment concerning compulsory motor insurance under Part IV of the Road Traffic Act 1972.

Guildford County Court found Thorne liable and held that the MIB was liable. Although it found contributory negligence by Mr Akers, that issue was not pursued on appeal. The MIB appealed on the ground that clause 6(1)(e) of the 1988 Agreement excluded liability because Mr Akers knew, or ought in the relevant narrow sense to have known, that the car was uninsured.

Appeal allowed unanimously. Keene LJ gave the principal judgment. Jacob J agreed, and Peter Gibson LJ also agreed while adding observations on the need for factual findings.

1. Clause 6(1)(e) of the 1988 Agreement excluded the MIB’s liability where the passenger knew, or ought to have known in the relevant sense, that the vehicle was uninsured. Applying White v White & the MIB [2001] UKHL, the phrase had to bear the narrow meaning of knowledge permitted by the Second Motor Insurance Directive. A negligent failure to ask about insurance was insufficient. The exception nevertheless applied where the passenger had actual knowledge, or deliberately closed his mind to information which made the lack of insurance apparent.

2. The county court judge had applied too stringent a standard of proof. The evidence, which he had not rejected, showed that statements about the absence of insurance were made in a close group which included Mr Akers. There was no evidence that he had not heard them. On the balance of probabilities, he knew that there was no insurance. At the least, he was aware of an insurance problem and deliberately avoided further inquiry.

3. Peter Gibson LJ added that a trial judge deciding this question should make the findings of fact which enable the conclusion on knowledge to be reached. The absence of the deceased’s evidence did not excuse the judge from making those findings.

4. The court declared that the MIB was not obliged to satisfy the judgment against Thorne or any adverse costs order below.

• Court of Appeal (Civil Division): Allowed the MIB’s appeal in [2003] EWCA Civ 18 and declared that the clause 6(1)(e) exception applied.
• Guildford County Court (Judge Bishop): On 8 March 2002, held the MIB liable to satisfy the judgment against the uninsured driver.