Byrne (A Minor) v The Motor Insurers Bureau & Anor

A compensation scheme implementing article 1(4) of Directive 84/5/EEC must give victims of unidentified vehicles protection equivalent to, and as effective as, that available to victims of identified and insured vehicles. Equivalence does not require identical procedures, but material differences must not place a distinct group at a substantial disadvantage.

A fixed three-year limit which failed to suspend time during a claimant’s minority was less favourable than the limitation regime governing personal injury proceedings. The state’s failure to correct that defect after authoritative guidance constituted a sufficiently serious breach capable of giving rise to damages under the Francovich principle.

A minor sought compensation from the Motor Insurers Bureau following an alleged hit-and-run accident. His claim under the Untraced Drivers Agreement 1972 was rejected because it had been submitted more than three years after the accident. Unlike the Limitation Act 1980, the Agreement did not suspend the limitation period during minority.

Flaux J declared that the scheme’s limitation period was incompatible with the Community principle of equivalence and that the United Kingdom’s failure properly to implement article 1(4) of Directive 84/5/EEC was sufficiently serious to found state liability. The Motor Insurers Bureau and the Secretary of State appealed. The issues were whether the scheme provided less favourable limitation protection and, if so, whether the breach could support Francovich damages.

1. The appeals were dismissed unanimously. The Untraced Drivers Agreement had to provide protection equivalent to, and as effective as, that available to persons injured by identified and insured drivers. The judgment in Evans established that the appropriate comparison was with the remedies available under the domestic system for insured drivers. The contractual structure chosen by the United Kingdom to discharge its Community obligation could not redefine or narrow that obligation.

2. Equivalence did not require identical procedures. The competing procedures should ordinarily be considered as a whole, including the practical advantages of the Motor Insurers Bureau scheme. Nevertheless, a specific procedural rule still required separate examination where it could affect substantive rights. The scheme’s speed, economy and investigative arrangements could not compensate a minor for being wholly prevented from invoking it.

3. Clause 1(1)(f) of the Agreement imposed an unextendable three-year limit. By contrast, section 28 of the Limitation Act 1980 suspended the limitation period for a minor bringing personal injury proceedings against an identified driver. The scheme therefore placed minors at a clear and distinct disadvantage. Its limitation rules were required to be no less favourable than those governing court proceedings brought by minors.

4. State liability required a rule intended to confer individual rights, a sufficiently serious breach and a direct causal link between the breach and the loss. The Directive plainly conferred rights on individual victims. Causation and the remaining factual questions were not determined at this preliminary stage.

5. Whether a breach was sufficiently serious required a value judgment informed by the clarity and precision of the rule, the discretion left to the state, whether the error was excusable and any contribution by a Community institution. Good faith was relevant but not conclusive. Following Evans, the obligation was relatively precise, the consequences for minors were serious, and the United Kingdom had received a clear warning to compare the scheme with the regime for insured drivers. The breach was therefore sufficiently serious, although the Court placed less weight than Flaux J on the limited evidence concerning the Department’s knowledge in 1987.

1. Court of Appeal (Civil Division): The appeals by the Motor Insurers Bureau and the Secretary of State were dismissed unanimously. The declarations made by Flaux J were upheld: [2008] EWCA Civ 574.

2. Queen’s Bench Division: Flaux J declared that the Untraced Drivers Agreement required limitation protection no less favourable than that available to minors suing identified drivers, and that the United Kingdom’s breach was sufficiently serious to establish liability in principle. No neutral citation is stated in the judgment.