Byrne v Motor Insurers’ Bureau and another [2007] EWHC 1268 (QB), [2007] All ER (D) 03 (Jun)
Queen’s Bench Division
Flaux J
5 June 2007
The Motor Insurers’ Bureau (MIB) procedure relied on by the UK as implementing the Second Directive on motor insurance (Council Directive (EEC) 84/5) (the Directive) should be subject to a limitation period no less favourable than that which applies to the commencement of proceedings by minors for personal injury in tort against a traced driver; it is possible that the Secretary of State’s failure to implement the Directive properly may give rise to a claim in damages.
Nicholas Paines QC and Josh Holmes (instructed by Pinto Potts LLP) for the claimant.
Dermod O’Brien QC and Fergus Randolph (instructed by Greenwoods) for the MIB.
Jonathan Crow QC, Jemima Stratford and David Barr (instructed by the Treasury Solicitor) for the Secretary of State.
The presumed facts were that the claimant, born in 1989, was injured by a car in June 1993 when crossing the road near his home. The driver did not stop and was never traced. At the time his parents did not obtain legal advice. The MIB and the Secretary of State for Transport had entered into a formal Untraced Drivers Agreement in 1969, updated in 1972 (the agreement). It provided for application to be made by victims of untraced drivers to the MIB which, following an investigation, might award damages in a like manner as a court would have done in a successful action against the driver. Clause 1(1)(f) of the agreement provided for a three year time limit. In the instant case, no application was made until October 2001.
It was rejected by the MIB on the ground that the time limit had expired. The claimant by his parents issued proceedings alleging that the agreement had to be interpreted in accordance with Community law (in particular Art 1(4) of the Directive); alternatively for breach of statutory duty arising out of Community law directly applicable to the MIB. As a further alternative, the claimant sought damages against the Secretary of State for failure to implement Art 1(4) properly. Preliminary issues were heard as to (i) whether the making of a claim under the measures implementing Art 1(4) of the Second Directive had to be subject to a limitation period no less favourable than that which applied to proceedings in tort against a traced driver; (ii) whether the agreement could be construed so as to comply with the requirements of the Second Directive; (iii) whether the Second Directive had direct effect as against the MIB; and (iv) whether, in principle, there was a sufficiently serious breach of the UK’s obligations under art 1(4) of the Second Directive so as to give rise, in principle, to a claim for damages.
FLAUX J:
Article 1(4) provided:
“… each member state shall apply its laws, regulations and administrative provisions to the payment of compensation … without prejudice to any other practice which is more favourable to the victim.”
His Lordship accepted that the MIB procedure did not provide protection equivalent to or as effective as the protection provided by the English common law in respect of insured drivers, because of the disparity in terms of time bar for any “claim” between cl 1(1)(f) of the agreement and the relevant provisions of the Limitation Act 1980 (LA 1980). He concluded that the MIB procedure relied upon by the UK as implementing the Directive should be subject to a limitation period no less favourable than that which applied to the commencement of proceedings by minors for personal injury in tort against a traced driver, namely LA 1980, s 28.
He turned to the second preliminary issue. He considered Evans v Secretary of State for the Environment (Case C-63/01) [2005] All ER (EC) 763 and Mighell v Reading [1999] 1 Lloyd’s Rep IR 30. He held that the European principle of conforming interpretation could not apply to the untraced drivers agreement, since Evans had not overruled Mighell’s ruling on the non-application of the principle of conforming interpretation to the agreement.
In relation to the third issue, it was accepted by the claimant that he would have to satisfy two criteria before any breach of the Directive was directly enforceable against the MIB by the claimant: (i) that the Directive was capable of having direct effect in that the provision relied upon was “unconditional and sufficiently precise”, the prescribed period for implementation had passed and the Directive had not been correctly implemented by the Member State; and (ii) that even if the Directive was capable of having direct effect, the MIB was an emanation of the state within the meaning of that concept as a matter of Community law.
His Lordship considered, inter alia, Foster v British Gas [1990] 3 All ER 897 and Riksskatteverket v Gharehveran [2001] All ER (D) 245 (Oct) and Griffin v South West Water [1995] IRLR 15. He held that although the Directive was capable, in principle, of having direct effect, the MIB was not an emanation of the state such that the Directive could not be enforced directly against it. Notwithstanding that it performed a public service under the untraced drivers agreement, the MIB was not under the control of the state nor did it have special powers for that purpose beyond those that resulted from the normal rules applicable in relations between individuals.
It followed that the claimant had no remedy against the MIB.
In relation to the fourth issue, however, his Lordship ruled that the UK was in sufficiently serious breach of the terms of the Second Directive so as to give rise, in principle, to a claim for damages. The failure to amend cl 1(1)(f) of the untraced drivers agreement to bring it into line with LA 1980 and hence comply with Art 1(4) of the Directive was not attributable to confusion or to misunderstanding, but to an inexcusable lack of thoroughness. That was compounded by the fact that, notwithstanding that the European Court of Justice had in the Evans case indicated that the untraced drivers agreement did not comply with the Directive in certain respects, it seemed that the Secretary of State had not checked the entire agreement to ensure compliance.
In the context of the trial of preliminary issues, however, his Lordship would say nothing about whether the claimant would in fact be able to recover such damages from the Secretary of State.
