Wigley-Foster v Wilson & Anor

A compensation body’s liability is triggered when the conditions in article 6(1) of the Fourth Motor Insurance Directive, or regulations 11 and 12, are met. A later insolvency or withdrawal of the insurer’s authorisation does not extinguish an injured party’s accrued right to claim. The scheme is not a general guarantee against insurer insolvency, but that limitation does not justify reading an unstated insolvency exception into the Directive. The relevant status of the insurer is assessed by reference to the accident, when the vehicle was insured through an establishment in a member state.

The claimant, injured as a passenger in a road accident in Greece, claimed damages against the driver and the Motor Insurers’ Bureau. The vehicle was insured by a Greek undertaking which had appointed a UK claims representative. The claimant notified a claim in May 2009, but no reasoned reply was provided within three months. The insurer’s licence was revoked and its insolvency reported in February 2010. The claimant notified the MIB in October 2010.

HHJ Simon Brown QC determined the preliminary issue in favour of the MIB, holding that the Fourth Directive and the Motor Vehicles (Compulsory Insurance and Compensation Body) Regulations 2003 did not apply after insurer insolvency. The appeal concerned whether the right to claim from the compensation body survived the intervening insolvency and whether the same result followed where insolvency pre-dated presentation of the claim to the MIB.

1. The appeal was allowed. The revised preliminary issue was answered affirmatively under both paragraphs (a) and (b), subject to the driver’s liability being established under Greek law.
2. Article 6(1) of the Fourth Directive creates a right to present a claim to the compensation body where the insurer or claims representative has failed to provide a reasoned reply within three months. That right accrued from the beginning of September 2009, before the Greek insurer became insolvent. Regulations 11 and 12 implement the Directive in materially corresponding terms.
3. The scheme is not a guarantee or compensation arrangement protecting policyholders or claimants against insurer insolvency. Csonka v Magyar Allam confirms that the earlier Directives require compulsory insurance and compensation in specified cases, but do not establish a general insolvency guarantee. There was no reason to doubt that reasoning applied to the Fourth Directive, which is silent on insolvency.
4. That limited purpose did not imply an exception extinguishing a right already triggered under article 6(1), nor did it prevent the right arising where the insurer was already insolvent. The MIB’s proposed qualification would add a substantial condition nowhere expressed and unnecessary for the Directive to operate according to its terms.
5. The relevant official authorisation was assessed at the time of the accident. Articles 1(1) and 1(2) refer to vehicles insured through an establishment in a member state, while article 5(3) and (4) requires information to remain available for seven years after the accident. It would be irrational for the compensation right to end merely because authorisation was later withdrawn.
6. Insolvency does not necessarily prevent claims from being addressed or paid, since an insurer may be in an orderly run-off and claims may be met in whole or in part. The decision in Grilc v Slovensko zavarovalno zdruzenje GIZ did not establish the MIB’s proposed insolvency qualification.

Sir Robin Jacob and Lady Justice Gloster agreed with Lord Justice David Richards.

• High Court of Justice, Queen’s Bench Division, Birmingham District Registry: HHJ Simon Brown QC determined the preliminary issue in favour of the MIB, holding that the Directive and the 2003 Regulations did not provide compensation where the insurer had become insolvent.
• Court of Appeal (Civil Division): The appeal was allowed and the revised preliminary issue was answered affirmatively under both limbs (a) and (b).