Sedgefield Borough Council v Crowe & Anor

Whether a motorist is insured for the purposes of section 143 of the Road Traffic Act 1988 depends on the construction of the insurance policy and the risk it covers. A driver of a hackney carriage may remain insured despite lacking a hackney carriage driver’s licence where the policy does not clearly make that licence a condition of cover. A breach of licensing law does not automatically create criminal liability for driving without insurance. Use of the vehicle for a business-related purpose is not necessarily outside cover where the policy permits private and public hire and the evidence does not establish a prohibited use.

Sedgefield Borough Council appealed by way of case stated against the acquittals of James Crowe and Ashley Crowe by Bishop Auckland Magistrates’ Court. James Crowe had driven a hackney carriage without holding the relevant hackney carriage driver’s licence. He and Ashley Crowe were charged respectively with using, and permitting the use of, a motor vehicle without insurance.

The certificate covered private cars and licensed taxis, and permitted driving by a person driving with the policyholder’s permission, provided that person held, or had held, a licence and was not disqualified or prohibited from holding one. The magistrates found that the policy covered the use in question, which involved delivering forms to the council and checking the vehicle for a mechanical fault. The central issue was whether the absence of a hackney carriage driver’s licence, or the business purpose of the journey, necessarily meant that the vehicle was uninsured.

1. The appeal was dismissed. The magistrates could properly conclude that James Crowe was validly insured and that Ashley Crowe had not committed the permitting offence.
2. Insurance coverage was a matter of construing the policy, rather than determining the insurer’s subjective view of coverage. The approach in Borough of Telford & Wrekin v Ahmed [2006] EWHC 1748 supported that analysis.
3. The reference in the proviso to clause 5 to a person holding a licence meant, in context, a driving licence. The policy covered a variety of private and taxi vehicles and did not clearly state that a hackney carriage driver’s licence was additionally required. The alternative wording, referring to a person who had held a licence and was not disqualified or prohibited from holding or obtaining one, reinforced that construction.
4. The insurer’s letters did not determine the legal meaning of the policy, but could assist in construing its terms. The insurer’s indication that a valid taxi badge was not required was consistent with the court’s construction.
5. The fact that the vehicle was used in the course of the respondents’ business did not itself establish a prohibited use under clause 6. The magistrates were entitled to find that delivering documents directly to the council and checking the vehicle for a mechanical fault fell within the permitted use. This was materially different from the public-hire activity considered in Borough of Telford & Wrekin v Ahmed [2006] EWHC 1748.
6. Driving without a hackney carriage driver’s licence did not automatically make the driver uninsured. The court answered the stated questions by holding that a hackney carriage driver could be validly insured without that licence, and that the policy did not necessarily fail to cover the risk in those circumstances.

1. High Court (Administrative Court): The appeal by way of case stated from the acquittals by Bishop Auckland Magistrates’ Court was dismissed.