Smith v Stratton & Anor

The illegality defence applies where a joint criminal enterprise foreseeably creates an unusual or increased risk of harm, that risk materialises, and the injury is caused by the criminal activity, even though the immediate act is negligent or intentional conduct by another participant. A trial judge may assess circumstantial evidence cumulatively and draw an inference where it is open on the evidence. A claimant who voluntarily rides in a vehicle knowing, or when he ought to know, that it is being used in furtherance of crime may also fall within clause 6.1(iii) of the Motor Insurers’ Bureau Agreement 1999.

The appellant was a back-seat passenger in a car driven negligently by the first respondent. He suffered a severe brain injury when the car collided with a parked vehicle while being driven away from the police. The insurers avoided the policy under section 152(2) of the Road Traffic Act 1988, leaving the Motor Insurers’ Bureau potentially liable under its Agreement concerning uninsured drivers.

The High Court found that the occupants were engaged in a joint enterprise to deal in cannabis and that the collision occurred during an attempt to evade apprehension. The appellant challenged the factual inference and the application of ex turpi causa non oritur actio and clause 6 of the Agreement.

1. Appeal dismissed. Laws LJ delivered the reasons, with which Moore-Bick LJ and Elias LJ agreed.
2. The factual challenge failed. The High Court was entitled to assess the evidence cumulatively, including the occupants’ convictions, drugs and cash found in the car, the driver’s rapid flight from the police and the hearsay account given by the driver to the MIB’s solicitor. The judge was entitled to attach weight to that statement against interest. The appellant’s failure to give evidence was not treated as an adverse inference; it meant that he had put forward no account contradicting the MIB’s evidence. The inference that he had participated in drug dealing from the car was open on the evidence.
3. The court applied the test stated in Joyce v O’Brien [2014] 1 WLR 70. Where the nature of a joint criminal enterprise makes an unusual or increased risk of harm foreseeable, and that risk materialises, an injury is caused by the claimant’s criminal act where the criminal activity created the relevant risk, even if the immediate cause was another participant’s negligent or intentional act. The car was integral to the drug dealing enterprise and provided a means of rapid escape. It was foreseeable that police interest would lead to a high-speed attempt to evade apprehension. The resulting injury was therefore caused by the criminal enterprise and was not merely incidental to it.
4. The exception in clause 6.1(iii) of the Motor Insurers’ Bureau Agreement 1999 was also engaged. The claimant had voluntarily travelled in the vehicle and, on the findings, knew or ought to have known that it was being used in furtherance of crime. The decision in Delaney v Secretary of State for Transport [2015] EWCA Civ 172 concerning the compatibility of the Agreement’s exclusion with EU motor-insurance legislation did not affect these proceedings. The issue of clause 6.1(iv) therefore required no consideration.

• Court of Appeal (Civil Division): On 8 December 2015, dismissed the appeal.
• High Court of Justice, Queen’s Bench Division: On 26 June 2014, held that the claimant’s involvement in the joint criminal enterprise engaged the illegality defence and the relevant MIB Agreement exception.