Sahin v Havard & Anor

For the direct recovery claim considered, section 151 of the Road Traffic Act 1988 required a judgment for a liability required to be insured under section 145 and covered by the policy. A person who permits another to drive without insurance may incur a Monk v Warbey liability, but permission alone is not use of the vehicle. The liability therefore fell outside the compulsory cover. An exclusion for an unauthorised driver was effective because it was not within section 148(2). The statutory scheme, together with Motor Insurers’ Bureau arrangements, met the relevant EU insurance objectives. The appeal was dismissed.

The appellant suffered property damage and replacement-vehicle losses when an unidentified driver collided with his car. He obtained a default judgment against Cassandra Havard, alleging that she had breached section 143 of the Road Traffic Act 1988 by permitting the driver to use the vehicle without insurance.

The insurer was joined as a second defendant. The appellant amended his claim to seek payment of the judgment under section 151. At trial in the Central London County Court, Her Honour Judge Baucher held that Havard’s liability was neither required to be covered under section 145 nor covered by the policy, and dismissed the claim. The appeal concerned both issues.

1. Appeal dismissed. The insurer was not required to satisfy the default judgment against Ms Havard.
2. Section 151(2) required the liability underlying the judgment, on the route relied upon, both to be a liability required to be covered under section 145 and to be covered in fact by the policy. Ms Havard’s liability arose because she permitted Mr X to drive without insurance. It was a Monk v Warbey liability: see [1935] 1 KB 75.
3. Permission alone was not use of the vehicle. Section 143(1)(b) drew a material distinction between using a vehicle and causing or permitting another person to use it. Applying the control, management and operation principles identified in O’Mahony v Joliffe, [1999] Lloyds 1R 321, Ms Havard did not use the vehicle for section 145 purposes. Bretton v Hancock, [2005] EWCA Civ 404, [2006] PIQR P1, and Vnuk v Triglav, Case C-162/13, did not alter that conclusion.
4. The Second Motor Directive did not require section 145 to be construed in isolation from the United Kingdom’s Motor Insurers’ Bureau arrangements. The statutory scheme and those arrangements satisfied the Directive’s aims and spirit. As alternative reasoning, the court stated that a conforming construction could not conflict with the grain or a cardinal feature of the legislation, or create practical consequences which the court could not evaluate.
5. The policy covered liability of the insured and persons driving or using the vehicle with the insured’s permission. Mr X had no such permission. The exclusion for liability incurred while the vehicle was driven by an unauthorised person was effective because it was not one of the matters listed in section 148(2). The appellant therefore failed on both statutory and policy coverage.
6. The respondent was to pay the appellant’s costs of the security-for-costs application, summarily assessed. Subject to that, the appellant was to pay the respondent’s appeal costs and the costs ordered below, subject to detailed assessment if not agreed.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously by Longmore LJ, Kitchin LJ and Floyd LJ. [2016] EWCA Civ 1202.
2. Central London County Court: Her Honour Judge Baucher held that the liability was neither required to be covered under section 145 of the Road Traffic Act 1988 nor covered by the insurance policy, and dismissed the claim.