Phillips v Rafiq & Anor

Clause 6.1(e) of the 1999 Uninsured Drivers’ Agreement must be construed according to its language, read in its factual and commercial context. The expression claimant ordinarily means the person bringing or proposing to bring proceedings. In a Fatal Accidents Act 1976 claim, that person is the dependant, not the deceased passenger. The 1999 Agreement therefore did not exclude the dependant’s claim merely because the deceased passenger knew, or ought to have known, that the vehicle was uninsured. Clear wording used by sophisticated parties should not be rewritten to avoid an anomaly or possible policy concern unless the background compels a different meaning.

The Motor Insurers’ Bureau appealed against a declaration made by His Honour Judge Richard Seymour, sitting as an additional judge of the Queen’s Bench Division, on 11 May 2006. The declaration held that the Bureau was liable under clause 6.1(e) of the 1999 Uninsured Drivers’ Agreement to satisfy any judgment obtained by Mrs Phillips under the Fatal Accidents Act 1976.

Mr Phillips died while travelling as a passenger in an uninsured vehicle. He knew, or ought to have known, that the vehicle was uninsured. Mrs Phillips brought a claim for herself and the deceased’s dependants, but made no claim on behalf of the estate. The central issue was whether the deceased’s knowledge prevented the dependants, as the actual claimants, from obtaining satisfaction from the Bureau.

The appeal was dismissed. Ward LJ gave the leading judgment, with Latham LJ and Charles J agreeing.

1. The 1999 Agreement had to be construed by ascertaining the meaning conveyed to a reasonable person with the relevant background and purpose in mind. The contextual approach described in I.C.S. Ltd v West Bromwich B.S. [1998] A.C. 896 and R (Westminster City Council) v National Asylum Support Service [2002] UKHL 38 did not require the court to disregard clear contractual language. The parties were the Secretary of State and the Bureau, both of whom had substantial expertise in the scheme.
2. The definition of claimant ordinarily referred to the person who had commenced, or proposed to commence, relevant proceedings and had made an application under the Agreement. In this case Mrs Phillips was the claimant. Substituting the deceased for that word would not work consistently for both surviving injured passengers and dependants’ claims, and would require wholesale rewriting of clause 6.1(e).
3. A claim under the Fatal Accidents Act 1976 was separate and distinct from a cause of action surviving for the estate under the Law Reform (Miscellaneous Provisions) Act 1934. Its derivative character did not determine the proper construction of the Agreement.
4. The 1988 Agreement clearly excluded a claim of this type by referring to the person suffering death. The 1999 Agreement used materially different wording and referred instead to the claimant. The earlier wording could not be treated as continuing to have the same effect merely because the result under the 1999 Agreement might appear anomalous.
5. The second Council Directive permitted limited exclusions but did not require this particular exclusion. The guidance notes could illuminate the purpose of the scheme but could not override the operative wording of the Agreement. The background did not compel the conclusion that the parties had used language meaning something different from its clear literal meaning.

• Court of Appeal (Civil Division): On 13 February 2007, the court dismissed the Motor Insurers’ Bureau’s appeal and upheld the declaration under [2007] EWCA Civ 74.
• Queen’s Bench Division: On 11 May 2006, His Honour Judge Richard Seymour, sitting as an additional judge of the Queen’s Bench Division, declared that the Bureau was liable under the 1999 Agreement.