Motor Insurers' Bureau v Lewis

The Court of Appeal dismissed the Motor Insurers' Bureau's appeal and upheld Soole J's order that Directive 2009/103/EC (the 2009 Directive) has direct effect so as to require the MIB to indemnify the claimant. The court applied the established test for direct effect (unconditional and sufficiently precise), concluding that Article 3 (compulsory insurance) and the co‑extensive Article 10 (compensation body) satisfy that test. The court further held that, for the purposes of the Directive, the MIB is an emanation of the State because the United Kingdom had delegated the Article 10 task to it and it possesses special powers under domestic law (notably provisions of the Road Traffic Act 1988 and the statutory nexus to authorised insurers). The earlier domestic issue whether the liability fell within section 145(3) RTA (use on a road or other public place) was treated as resolved at first instance and was not challenged on appeal.

Background and facts:

• On 9 June 2013 the claimant was seriously injured when an uninsured 4x4 driven by Mr Tindale left a public road, entered private land and struck him. Mr Tindale was debarred from defending the claim and liability of the driver was not disputed.
• The Motor Insurers' Bureau (MIB) resisted indemnifying the claimant under the Uninsured Drivers Agreement (UDA) 1999 on the basis that the injury did not arise out of the use of the vehicle on a road or other public place within the meaning of section 145 RTA 1988.

Procedural posture and relief sought: The High Court (Soole J) tried three preliminary issues: (1) whether any judgment against the driver was a liability required to be insured under Part VI of the Road Traffic Act 1988; (2) if not, whether the MIB was otherwise obliged to satisfy such judgment pursuant to Directive 2009/103/EC; and (3) whether the Directive's provisions had direct effect against the MIB. The claimant sought an indemnity from the MIB. The MIB appealed to the Court of Appeal with permission.

Issues framed by the Court of Appeal:

• whether Article 3 of the 2009 Directive is unconditional and sufficiently precise to have direct effect;
• whether Article 10 is co‑extensive and also of direct effect;
• whether the MIB is an emanation of the State for the purpose of enforcing those Directive rights against it;
• interaction between the domestic scheme (Road Traffic Act provisions and the UDA) and the Directive.

Reasoning and conclusions: The court accepted the High Court's determination that the claimant's injuries did not arise out of use on a road or other public place and that this point was not pursued on appeal. Applying the Becker/Foster direct effect framework, the court held Article 3 to be unconditional and sufficiently precise (in light of CJEU authority including Vnuk and subsequent case‑law). Article 10 was held to be co‑extensive and also capable of direct effect. On emanation the court followed the Grand Chamber's reasoning in Farrell v Whitty (No 2): the MIB performs a task in the public interest delegated by the State and possesses special powers (membership and funding links through authorised insurer rules in the RTA), so it is an emanation of the State for the Article 10 task. The MIB's arguments invoking discretion, Francovich/Wagner Miret and distinctions between 'breakdown' and 'no system' were rejected. The appeal was dismissed and the MIB remains liable to indemnify the claimant.

Subsidiary points: The court observed that any fiscal or contribution issues between the MIB and the State/insurers are matters of domestic allocation and do not negate the MIB's obligation when treated as an emanation of the State. The court noted that the first‑instance ruling on section 145 was not challenged.

The appeal is dismissed. The Court of Appeal agreed with the judge below that Article 3 of Directive 2009/103/EC (and, being co‑extensive, Article 10) is unconditional and sufficiently precise to have direct effect, and that the MIB is an emanation of the State for the delegated Article 10 task; accordingly the MIB is liable to indemnify the claimant despite the absence of a domestic compulsory insurance requirement for the particular off‑road use under section 145 RTA 1988.

Appeal from the High Court of Justice, Queen's Bench Division, Birmingham District Registry (Soole J) [2018] EWHC 2376 (QB). Permission to appeal was granted from that order and the matter was heard by the Court of Appeal (Civil Division), resulting in this judgment [2019] EWCA Civ 909.