Motor Insurers' Bureau v Lewis

Articles 3 and 10 of Directive 2009/103/EC require a member state to secure compulsory motor insurance, and a compensatory backstop, for civil liability arising from the use of motor vehicles on private land. Those obligations are unconditional and sufficiently precise to have direct effect.

A state which has designated a compensation body has fully exercised any relevant discretion. It cannot avoid the obligation by characterising the omission as an absence, rather than a breakdown, of the insurance scheme. A private-law body charged with that public task, and given statutory powers beyond ordinary private relations, is an emanation of the state against which the directly effective obligation may be enforced.

The claimant was seriously injured when an uninsured driver deliberately drove a Nissan Terrano across private land and collided with him. The domestic compulsory-insurance regime in Part VI of the Road Traffic Act 1988 required insurance for use on a road or other public place, and did not cover the incident.

On preliminary issues, Soole J held that the domestic provision could not be read down, but that Article 3 of Directive 2009/103/EC had direct effect and that the Motor Insurers’ Bureau was an emanation of the state. The MIB appealed from that decision, [2018] EWHC 2376 (QB).

The central issue was whether the MIB was liable under the directly effective motor-insurance obligations where the United Kingdom had not provided compulsory insurance for vehicle use on private land.

1. Appeal dismissed unanimously. The court upheld the judge’s conclusion that the MIB had to compensate the claimant. The unchallenged conclusion that the domestic legislation could not be read down to remove its road-or-public-place limitation remained undisturbed.

2. Article 3 of Directive 2009/103/EC requires compulsory insurance for civil liability arising from the use of motor vehicles on private land as well as on roads and in public places. In light of the CJEU authorities, that obligation was sufficiently precise. It was also unconditional: the United Kingdom had already exercised any relevant implementation discretion by designating the MIB as its compensation body.

3. Article 10 is co-extensive with Article 3 and is likewise capable of direct effect. The Article 10 body must remedy the state’s failure to secure the insurance required by Article 3. The proposed distinction between a defective scheme which has broken down and a complete omission from the domestic scheme was artificial. The latter also creates the gap in victim protection which the Directives seek to prevent.

4. Csonka did not assist the MIB. It concerned insurer insolvency, for which the Directives imposed no obligation to establish a compensation scheme. Nor did Juliana confine Article 10 to circumstances in which domestic legislation itself imposed an insurance requirement; its reference to the insurance obligation was to the Directive obligation.

5. Applying Farrell v Whitty (No. 2), the MIB was an emanation of the state. It performed the public-interest task inherent in Article 10 and possessed special statutory powers because authorised motor insurers were required to be MIB members and to fund it. Its liability arose from the directly effective Directive, not from a domestic-law obligation limited by the Road Traffic Act 1988. A possible contribution claim against the Department for Transport did not answer the claimant’s claim.

• Court of Appeal (Civil Division) — dismissed the MIB’s appeal and affirmed that it was liable as an emanation of the state: [2019] EWCA Civ 909.
• High Court, Queen’s Bench Division — Soole J determined the preliminary issues in the claimant’s favour on direct effect and emanation of the state: [2018] EWHC 2376 (QB).