Whyatt & Ors v Powell & Anor

For the MIB exception concerning a passenger who knew or ought to have known that a vehicle was uninsured, negligence or mere failure to enquire is insufficient. The exception requires actual knowledge, or information from which the passenger realised that the driver might well be uninsured and deliberately refrained from asking questions to avoid confirmation. The court must identify the information possessed by the particular passenger and determine that state of mind. Credibility findings and suspicious circumstances may assist, but do not replace that analysis. On appeal, findings based on assumptions unsupported by evidence, or reached without addressing material direct evidence, cannot stand.

The claimants were injured as passengers in a car driven by the first defendant. The vehicle was uninsured, and the claim against the Motor Insurers’ Bureau was met with the exception in clause 6(1)(e)(ii) of the 1999 Agreement, concerning a claimant who knew or ought to have known that the vehicle lacked the insurance required by the Road Traffic Act 1988.

Following a preliminary-issues trial, the County Court found that all three claimants ought to have known of the absence of insurance. They appealed that determination and the related costs order. The central questions were whether the evidence established deliberate avoidance of knowledge, and whether the trial judge had properly addressed the evidence concerning each claimant.

1. Appeal allowed. The determination that each claimant ought to have known that the vehicle was uninsured was set aside and the issue was remitted to the County Court for rehearing and redetermination. The costs order was also set aside. The four unappealed preliminary-issue determinations stood.
2. The exception in clause 6(1)(e)(ii) was to be construed restrictively. Applying White v White & MIB [2001] UKHL 9 and Akers and others v Motor Insurers’ Bureau and another [2003] EWCA Civ 18, it covered actual knowledge and the closely analogous case where the passenger realised that the driver might well be uninsured but deliberately refrained from asking questions lest the suspicion be confirmed. Mere carelessness, negligence, or failure to make reasonable enquiries was insufficient.
3. The trial judge had to identify the information possessed by each claimant and decide whether it produced the required realisation and deliberate closing of the mind. Findings that a claimant had been untruthful, had consumed alcohol, knew the driver, or knew that he had limited means could bear on credibility, but did not themselves establish the test.
4. For the first and third claimants, the judge relied on an assumed history of driving convictions and imprisonment unsupported by evidence. For the second claimant, he failed to address direct evidence that the claimant assumed the driver was insured and relied on a statement not adopted as true. Those shortcomings made the findings unjust to uphold.
5. The proposed issues concerning qualified one-way costs shifting under CPR 44.13, 44.14 and 44.16 did not require determination because the successful appeal required the costs order to be set aside.

1. High Court (Queen’s Bench Division): allowed the appeal from the County Court’s preliminary-issue determination, set it aside, and remitted the issue for rehearing.
2. County Court at Merthyr Tydfil: found that each claimant ought to have known that the vehicle was uninsured and ordered them to pay the MIB’s costs.