The claimant, a resident of the United Kingdom, was seriously injured in Greece when the motor vehicle in which she was travelling as a passenger was involved in a collision. She made a claim for personal injury compensation against the Greek insurer of the vehicle to its UK claims representative. Since no reply was received within the three-month period after the claim was made, the claimant became entitled under article 6(1) of Parliament and Council Directive 2000/26/EC to present a claim to the Motor Insurers Bureau (“MIB”), the compensation body for the United Kingdom, in which case the MIB would be required to take action within two months of the presentation of the claim. However, before she made any such claim, the licence of the Greek insurer was revoked by the insurance regulator in Greece and the insurer entered into insolvency. When the claimant did present a claim under article 6(1), the MIB replied that since the insurer was no longer licensed, it was unable to intervene because the provisions of the Directive and the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003, which implemented the Directive into national law, did not apply in those circumstances. The claimant issued proceedings for damages for personal injury and associated losses against the driver and the MIB. On the trial of a preliminary issue, the judge determined that the MIB was not liable to compensate the claimant under the 2003 Regulations where the insurance company had ceased trading and its licence had been withdrawn by reason of insolvency.
On the claimant’s appeal—
Held, appeal allowed. Subject to the liability of the driver of the motor vehicle, the MIB was liable to compensate the claimant under regulations 11 and 12 of the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 following the insurer’s failure to provide a timeous reply to the claimant’s claim under article 6(1) of Parliament and Council Directive 2000/26/EC, even though the insurer’s licence had been revoked and the insurer had entered insolvency by the time the claimant presented a claim to the MIB. The claimant had not contested on the appeal that the arrangements established by the 2003 Regulations and the Directive were not, and were not intended to be, guarantee or compensation arrangements protecting policy holders and others against the insolvency of an insurer. But, contrary to the MIB’s submissions, it did not follow that where the obligation of the compensation body had been triggered by the occurrence of one of the specified events in article 6(1), it later ceased by reason of the subsequent insolvency of the insurer. There was no express provision to that effect nor could such a provision be implied. The MIB’s submissions in support of such an implication were to be rejected. (i) It appeared clear from the Directive as a whole that the time at which an insurance undertaking was required to have official authorisation was the time of the accident giving rise to the claim. Accordingly, a compensation body’s obligation under article 6(1) would not be brought to an end by the termination of an insurer’s authorisation. (ii) The MIB’s submissions presupposed that claims against insurers which were in an insolvency process would not be addressed or paid either in part or in full. That was a false assumption. In cases where it was not anticipated that claims would be met in full, it did not follow that those responsible for the administration of the insurance business would not deal with claims as and when they were made. (iii) Insurers might cease to be authorised to carry on new business without becoming insolvent or going into an insolvency process. For their own business reasons, an insurer might cease to be authorised and simply run-off its business. It would be very odd if that were to have the effect of terminating the rights of injured parties under article 6 of the Directive. (iv) The MIB’s submissions required reading into the Directive a substantial qualification which was nowhere expressed and which was unnecessary to enable the Directive to function in accordance with its purpose and terms (paras 22, 23, 26, 27, 38–44).
Robert Weir QC and Matthew Chapman (instructed by Irwin Mitchell LLP) for the claimant.
Hugh Mercer QC and Marie Louise Kinsler (instructed by Weightmans LLP) for the Motor Insurers Bureau.