Churchill Insurance Company Ltd v Wilkinson & Ors

Under the domestic construction of section 151(8) of the Road Traffic Act 1988, an insurer required by section 151(4) to compensate an injured passenger may recover from an insured person who permitted an uninsured driver to use the vehicle. The provision must, however, be read consistently with Community law so far as domestic interpretive methods permit. The court considered that Article 12(1) of Directive 2009/103/EC gives passengers broad protection and that the exclusions in Article 13(1) are not exhaustive. It rejected an absolute approach to conforming interpretation and referred the Community-law questions for determination. A policy clause reserving recovery creates no independent right beyond section 151(8).

These conjoined appeals concerned injured passengers who were insured to drive the relevant vehicles but had permitted uninsured drivers to drive them. One appeal arose from a preliminary ruling by Blair J in the Manchester District Registry, Queen’s Bench Division, in case 7MA91096. The other arose from the Walsall County Court in case 7B126175.

The first-instance decisions reached opposite conclusions on whether the insurer could recover compensation from the insured passenger under section 151(8) of the Road Traffic Act 1988. The central issues were the effect of Community motor insurance law on that provision, the scope of conforming interpretation, and whether any contractual recovery clause operated independently.

The Court of Appeal did not finally determine the merits of either appeal. It held that the Community-law questions should be referred to the Court of Justice before the domestic construction of section 151(8) was finally addressed.

1. Domestic construction. Sections 151(4) and 151(8) had to be read together. As a matter of English law, an insurer liable to compensate an injured passenger could recover from an insured person who had caused or permitted the vehicle to be used by an uninsured driver. The effect was to exclude that insured passenger from the benefit of the insurance. The construction of permission in Lloyd-Wolper v Moore [2004] 1 WLR 2350 meant that permission did not cease merely because the person giving it believed, in good faith, that the driver was insured.
2. Conforming interpretation. The domestic court had to construe legislation as far as possible to fulfil Community obligations, applying interpretive methods recognised by domestic law. The court rejected the suggestion that this was an absolute obligation to disregard any inconsistent national provision. If the required result could not be achieved by interpretation, the remedy lay in proceedings against the Member State, as recognised in Francovich and others [1991] ECR 1-5357 and discussed in Joined Cases C-378/07 to C-380/07 Angelidaki.
3. Passenger protection. The court considered that Article 12(1) of Directive 2009/103/EC had a wide meaning and that the permitted exclusions in Article 13(1) were not exhaustive. The reasoning in Ruiz Bernaldez [1996] ECR 1-1847 and Candolin [2005] ECR 1-5745 supported treating an insured person injured as a passenger as a passenger for these purposes.
4. Outstanding distinction. Knowledge that a driver was intoxicated could be relevant through contributory negligence in assessing civil liability. The court could not see how knowledge that a driver was uninsured could produce the same result under English law. The difference between the RTA insurers’ position and the MIB scheme created sufficient uncertainty to justify a reference.
5. Policy clause. A clause reserving a right to recover payments required by law reserved no independent right. Any recovery depended on the true interpretation and operation of section 151(8).

• Court of Appeal (Civil Division): On 19 May 2010, the court heard the conjoined appeals and agreed that the Community-law questions should be referred to the Court of Justice before final determination.
• Manchester District Registry, Queen’s Bench Division: On 11 June 2009, Blair J gave judgment in favour of Benjamin Wilkinson.
• Walsall County Court: On 3 June 2009, the county court judge held that the insurer could recover from Tracey Evans and denied compensation from Equity Claims Limited.