Colley v Shuker & Ors

Where national legislation leaves a road-traffic victim without compensation because an insurer can avoid liability on grounds incompatible with the Motor Insurance Directive, the Article 10 compensation body must provide the necessary protection. The phrase “a vehicle for which the insurance obligation provided for in Article 3 has not been satisfied” extends beyond vehicles for which no policy exists. It includes an insured vehicle where national law creates a breakdown in the compulsory insurance scheme. A claimant may enforce Articles 3, 10 and 12 directly against the MIB as an emanation of the State. The Article 10(2) exclusion concerns knowledge that the vehicle was uninsured, not merely knowledge that the driver was uninsured.

The claimant suffered catastrophic injuries as a passenger in a vehicle driven by an uninsured driver. A policy existed for the vehicle, but the insurer obtained a declaration under section 152(2) of the Road Traffic Act 1988, as then in force, avoiding liability for the claimant’s judgment against the driver. The claimant’s claim against the private insurer had been struck out, while a claim against the Secretary of State was stayed.

The preliminary issues were whether Articles 3, 10 and 12 of Directive 2009/103/EC entitled the claimant to compensation from the MIB, and whether the MIB could rely on Article 10(2) because the claimant knew that the driver was uninsured.

1. Issue 1 allowed. The MIB was an emanation of the State and the relevant provisions of Directive 2009/103/EC had direct effect against it. The obligations under Articles 3 and 10 were co-extensive. The MIB’s task included remedying a failure by the United Kingdom to implement fully the compulsory insurance regime.
2. The Article 10(1) expression “a vehicle for which the insurance obligation provided for in Article 3 has not been satisfied” was not confined to an uninsured vehicle. It included a vehicle covered by a policy where national legislation allowed the insurer to avoid liability, leaving the victim without a remedy. The old form of section 152(2) of the Road Traffic Act 1988 created such a breakdown. The claimant could therefore enforce his directly effective rights against the MIB.
3. The court followed the reasoning in Lewis v Tindale and Delaney v Secretary of State for Transport. The narrower reading based on Csonka v Magyar Allam and Fidelidade-Companhia de Seguros SA v Caisse Suisse was rejected. Those authorities did not establish that Article 10 was limited to cases where no insurance policy had ever existed.
4. Issue 2 dismissed. Article 10(2) referred to knowledge that the vehicle was uninsured. Knowledge that the driver was uninsured was different. The vehicle was insured when the claimant entered it and when the accident occurred. The claimant could not therefore have known that it was uninsured.
5. The MIB was not entitled to rely on the Article 10(2) exclusion. A reference to the CJEU was unnecessary because the existing jurisprudence made the answer sufficiently clear.

The judgment was a first-instance determination of preliminary issues in the High Court. The claim against the insurer had previously been struck out by O’Farrell J in an order dated 5 March 2019, reported at [2020] RTR 13. The claim against the Secretary of State was stayed pending determination of these issues.