Delaney sets a new motor insurance route

A unanimous Court of Appeal decision on the extent of motor insurance liability has far-reaching repercussions for road users and insurers, a leading solicitor has claimed.

In Delaney v Secretary of State for Transport [2015] EWCA Civ 172, the Court held the secretary of state failed to properly implement the Second European Directive on Motor Insurance (84/5/EEC). The case will force the government to rewrite both Motor Insurance Bureau (MIB) agreements that deal with uninsured and untraced drivers, according to solicitor and motor insurance specialist Nicholas Bevan.

Bevan says the government already has to amend the Road Traffic Act 1988 and the European Communities (Rights Against Insurers) Regulations 2002 as the result of an earlier case, Damijan Vnuk v Zavarovalnica Triglav C-162/13.

“Vnuk and Delaney are a double-whammy for the government that will lead to a comprehensive rewrite of our national provision of third party motor insurance law,” he says.

Sean Delaney suffered serious injuries in a crash caused by the driver of the car in which he was a passenger. A large quantity of cannabis was found in their possession. The driver’s insurance cover was declared void because he had failed to declare his drug dependency. The MIB was also able to avoid liability under the Uninsured Drivers Agreement 1999, because the passenger knew the vehicle was being used in the furtherance of crime.

Bevan highlights the fact Lord Justice Richards refers in his judgment to Ruiz Bernaldez C-129/94, where the European Court of Justice ruled back in 1996 that Member States do not have a discretion to add additional exclusions of liability to those permitted under the Motor Insurance Directives.

This is interesting, he says, because a subsequent Court of Appeal case, EUI v Bristol Alliance Partnership [2012] EWCA Civ 1267 held that Bernaldez was not of general application. While EUI is not mentioned in the judgment, Bevan says: “ Delaney confirms the grave doubts that some commentators have had that EUI was incorrectly decided.”