RoadPeace v Secretary of State for Transport

Compulsory motor insurance legislation may lawfully limit the users or uses insured, provided that victims of genuinely uninsured or unidentified drivers retain the protection required by the Sixth Directive through the compensation arrangements. The Directive does not necessarily require every possible use of a motor vehicle to be insured.

Vnuk v Zavarovalnica Triglav D.D. widened the concept of vehicle use to include use consistent with a vehicle’s normal function on private land. The domestic legislation and agreements nevertheless required amendment to address that wider scope. The appropriate immediate remedy for loss caused by inadequate implementation was generally a claim for Francovich damages. The court declined to rewrite or set aside the legislation or agreements, but contemplated declaratory relief and possible directions concerning a timetable for amendment.

RoadPeace, a road-safety charity, challenged provisions of the Road Traffic Act 1988, the Third Parties (Rights Against Insurers) Act 2010, the European Communities (Rights Against Insurers) Regulations 2002, and the Motor Insurers’ Bureau’s uninsured and untraced drivers’ agreements.

The challenge concerned limitations on compulsory insurance, the effect of Vnuk v Zavarovalnica Triglav D.D., direct claims against insurers, safeguards for minors and protected parties, police-reporting conditions, the threshold for significant personal injury, and the former terrorism exclusion. The central questions were whether the domestic scheme complied with Directive 2009/103/EC and, if not, what remedy was appropriate.

The claim was dismissed except that the court concluded that declarations should be made concerning the incompatibility arising from Vnuk v Zavarovalnica Triglav D.D. and the territorial limitation in the definition of accident. Further written submissions were invited on the terms of the declarations and whether a timetable for legislative action was required.

1. Limitations and exclusions. The court rejected the argument that the Directive required every possible use of a motor vehicle to be covered by compulsory insurance. Restrictions such as social, domestic and pleasure use, and exclusions relating to deliberate damage or road rage, could be treated as defining uninsured use. The reasoning in EUI v Bristol Alliance Ltd Partnership and Sahin v Havard was persuasive. The MIB arrangements remained capable of protecting victims of genuinely uninsured use.
2. Direct claims and insurer defences. Regulation 3(2) of the 2002 Regulations, section 153(3) of the 1988 Act and section 2(4) of the 2010 Act did not create a conflict with the Directive. They placed direct proceedings on the same footing as claims against the insured. The court accepted, however, that section 152(2) was no longer compatible with EU law, although that issue was outside the pleaded challenge and required no remedy in these proceedings.
3. Effect of Vnuk. The judgment widened the compulsory-insurance obligation beyond use on roads or public places. The court declined to supply a Marleasing interpretation because the scope of the judgment remained uncertain and the proposed rewriting would remove fundamental features of the statutory scheme and create significant practical and criminal-law consequences.
4. Other challenges. The earlier UtDA provisions concerning minors and protected parties, police reporting and significant personal injury did not offend the principles of equivalence or effectiveness. The former terrorism exclusion was accepted as incompatible, or potentially so, but any resulting loss could be addressed through Francovich damages. Retrospective legislation and setting aside the agreements were inappropriate remedies.

The judgment is a first-instance decision of the High Court (Administrative Court). It refers to earlier authorities and to the Motor Insurers’ Bureau arrangements, but no lower-court decision in the present proceedings is stated.