McCall v Poulton & Ors

The Court of Appeal dismissed the appellant's challenge to the county court judge's decision to refer questions to the European Court of Justice. The key legal issues were (i) whether the Marleasing principle requiring national measures to be interpreted in the light of a directive applies to a private Uninsured Drivers Agreement entered into to discharge the United Kingdom's obligations under Council Directive 84/5/EEC (Article 1.4), and (ii) whether Article 1.4 or the Directive has direct effect against the Motor Insurers' Bureau by virtue of the Bureau being an emanation of the State.

The court held that both issues raise difficult and potentially dispositive points of European law (including authorities such as Marleasing, Evans and Pfeiffer) and that it would be of substantial assistance to have the ECJ's view. Consequently a reference was appropriate so that the ECJ could clarify (a) the scope of the Marleasing principle as applied to contracts concluded to implement a directive, and (b) the criteria and application of the 'emanation of the State' test to a body such as the MIB.

Background and facts.

• The claimant, Mr McCall, was an innocent victim of a road accident caused by Mr Poulton. He hired a replacement vehicle from Helphire under credit terms and obtained post-accident cover from Angel Assistance limiting cover to legal costs and Helphire's hire charges in the event they were irrecoverable.
• The driver was uninsured. Angel paid Helphire the hire charges and was subrogated to any recovery from the tortfeasor. The Motor Insurers' Bureau (MIB) compensated the claimant for personal injury and other losses but refused to pay the hire charges, invoking two exclusions in the Uninsured Drivers Agreement: clause 6(1)(c) (excluding claims made for the benefit of a person other than the injured party pursuant to subrogation or contractual rights) and clause 17(1) (permitting deduction where compensation had been received from an insurer or other source).

Procedural posture. The county court (His Honour Judge Mitchell) considered it necessary to refer questions to the European Court of Justice and made an order accordingly; he granted permission to appeal. The matter came before the Court of Appeal to determine afresh whether a reference was necessary to enable the national court to give judgment.

Issues framed by the court.

1. Whether the Marleasing principle (interpretation of national measures in the light of directives) applies to a private Uninsured Drivers Agreement adopted to fulfil a Member State's obligations under Directive 84/5/EEC;
2. Whether Article 1.4 of Directive 84/5/EEC is directly effective and, if so, whether it may be relied upon against the MIB because the MIB is an emanation of the State; and
3. Whether it is necessary and appropriate to refer those questions to the ECJ at this stage.

Reasoning and outcome. The court reviewed conflicting authorities at domestic and European level, notably White v White (House of Lords) and ECJ decisions including Evans and Pfeiffer, and considered decisions on emanation such as Foster, Byrne and Farrell. The Court of Appeal found that the questions are genuinely arguable, of general importance and potentially dispositive in other pending or future claims. Given the conflicting authorities and the utility of authoritative ECJ guidance on both the scope of the Marleasing principle as applied to agreements relied upon to implement a directive and the proper approach to the 'emanation of the State' issue, the court concluded a reference to the ECJ was appropriate. The appeal was dismissed and the judge's referral order was to stand.

Appeal dismissed. The Court of Appeal concluded that the questions whether the Marleasing principle applies to the Uninsured Drivers Agreement and whether Article 1.4 of Council Directive 84/5/EEC is directly effective against the MIB as an emanation of the State are difficult, potentially dispositive and of general importance, and it would be of material assistance to obtain preliminary rulings from the European Court of Justice on those questions.

Appeal from Canterbury County Court (His Honour Judge Mitchell) where the judge had ordered certain questions to be referred to the European Court of Justice and granted permission to appeal. The appeal was heard in the Court of Appeal (Civil Division) and dismissed with the reference to the ECJ to stand. Neutral citation: [2008] EWCA Civ 1263.