Byrne v The Motor Insurers Bureau and another [2008] EWCA Civ 574, [2008] All ER (D) 307 (May)
Court of Appeal, Civil Division
Waller, Keene and Carnwath LJJ
22 May 2008
The Motor Insurance Bureau (MIB) procedure relied on by the UK as implementing the Second Council Directive 84/5/EEC (the Second Directive) to provide for claims for personal injury resulting from accidents involving untraced drivers 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.
Nicholas Paine QC and Josh Holmes (instructed by Pinto Potts LLP) for the claimant.
Dermod O’Brien QC and Fergus Randolph (instructed by Greenwoods) for the bureau.
Jonathan Crow QC, Jemima Stratford and David Barr (instructed by the Treasury Solicitor) for the secretary of state.
The claimant, who was born in 1989, maintained that he had been injured in 1993 in a hit and run incident. The driver of the vehicle concerned was never traced. In 2001, the claimant applied for compensation from the first defendant bureau. Pursuant to cl 1(1)(f ) of the 1972 Untraced Drivers Agreement (the agreement) between the bureau and the second defendant secretary of state (which was intended to implement the Second Directive), such claims had to be made within three years of the date of the accident. Had the claimant been able to bring proceedings in tort, however, (that was, against a known driver), the relevant limitation period would have expired on his 21st birthday (s 28 and s 38(2) of the Limitation Act 1980). The bureau rejected the application, and the claimant brought proceedings.
Following a hearing on preliminary issues, the judge declared that: (i) on the true construction of the Second Directive, or by virtue of the community principle of equivalence, the procedure under the 1972 agreement 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 (the limitation issue); and (ii) that the UK was in “sufficiently serious breach” of its obligations under community law to give rise, in principle, to liability in damages for failure to ensure conformity with the Second Directive in that respect (the liability issue). The defendants appealed.
LORD JUSTICE CARNWATH:
His lordship considered Evans v Secretary of State for the Environment Transport and the Regions C- 63/01 [2005] All ER (EC) 763.
Paragraph 27 of that decision provided: “It is thus clear that the Community legislature’s intention was to entitle victims of damage or injury caused by unidentified or insufficiently insured vehicles to protection equivalent to, and as effective as, that available to persons injured by identified and insured vehicles.”
The argument in the instant case could be encapsulated by reference to that paragraph, which indicated that the MIB system had to provide protection “equivalent to” that provided in respect of identified and insured drivers under the court system. The defendants argued that the words “It is thus…” connoted a direct connection with the three immediately preceding paragraphs, which were concerned only with the amount of compensation. The claimants said that such a reading was too narrow. Paragraph 27 meant what it said. It was in effect a summation of the whole preceding passage, including para 22 which heralded a direct contrast with “victims of damage or injury caused by an identified vehicle”.
His lordship considered the Evans case and held that the protection provided by the national scheme had to be equivalent to and as effective as the protection available under the national legal system to victims of insured drivers.
Clause 1(1)(f ) of the agreement precluded any application made more than three years after the accident. By contrast, a claim in tort in court proceedings against an insured driver could have been brought by the claimant at any time prior to his 21st birthday in 2010, by virtue of s 28 of the Limitation Act 1980. The same would have applied to a claim against an identified but uninsured driver whose liability was covered by the agreement. Once that was accepted as the appropriate comparison, the conclusion was unavoidable that the agreement gave less favourable treatment.
The decision of the judge on the limitation issue was therefore upheld.
His lordship turned to the liability issue. The dispute concerned whether the UK’s breach had been “sufficiently serious” under the meaning in Francovich and Bonifaci v Italy: C-6/90 and C-9/90 [1992] IRLR 84.
Authoritative statement
Importance should be attached to objectively discernible factors, most importantly the judgment in the Evans case in 2003. That was an authoritative statement of the legal context in which the agreement had to be considered. Although it was specifically concerned with the issues of interest and costs, the questions formulated by the domestic court had enabled the European Court of Justice to carry out a comprehensive review of the legality of the agreement.
The judgment might have been expected to trigger a more active response from the department. On its face, para 27 of the judgment was an unambiguous statement of the need to ensure equivalence with the system for insured drivers. Had that been done, it would have signalled at the very least a serious risk of the agreement being found non-compliant in this respect. In the light of that judgment directed specifically to the UK position, the fact that other governments were also in error was not material. It should also have been clear that failure to remedy the defect would cause serious prejudice to a significant group of potential claimants. Had the warning been heeded, there was a reasonable likelihood that it would have resulted in an amendment to the agreement, and that that would have come in time to help the present claimant.
In the instant case the important points were three-fold: the relative precision of the requirement, following Evans; the serious consequences of failure to comply; and the clear warning given in Evans of the need to make the comparison. Liability in principle was therefore established.
The appeal would be dismissed.
Lords Justices Keene and Waller agreed.
