A car passenger could not claim under the MIB agreement if he was injured as a passenger whilst in possession of cannabis with intent to supply

Delaney v Pickett and Tradewise Insurance Services Limited [2011] EWCA CIV 1532

The Claimant was a passenger in a vehicle driven by P which was involved in a serious accident caused by P's negligence.  When rescued from his car P was found to have sufficient cannabis to make 170 cigarettes stuffed down his sock while the Claimant had a package sufficient to make 1200 cigarettes under his jacket.  The Claimant was seriously injured and brought proceedings against P.  Tradewise were P's insurers but had avoided his policy.

The Claimant argued that P had simply taken him out for a drive in his new car.  This argument was rejected by the judge who found that the Claimant and P were in possession of the cannabis with intent to supply.

At first instance the judge found that the Claimant's claim had arisen ex turpi causa and therefore failed.  Tradewise argued that its liability to meet the Claimant's claim against P under the MIB agreement was excluded under Clause 6(1)(e)(iii) on the basis that the Claimant had known that the vehicle was being used in the course or furtherance of a crime.

On appeal the Court of Appeal found that the judge at first instance had been wrong about the ex turpi causa defence.  The damage suffered by the Claimant had not been caused by his or P's criminal activity but rather by P's negligent driving.  The illegal acts were therefore incidental and the Claimant was entitled to recover his loss from P.

The Claimant went on to argue that the definition of "crime" in the directive should be read as being restricted to "serious crime".  The Court held that to be excluded under the directive the use of the vehicle did not have to constitute an ingredient of the offence nor could Clause 6 be read as being restricted to "serious crime" (which this was in any event) as that would leave the clause of little practical purpose.

This would mean that a situation where one of the occupants had in possession a small amount of cannabis or, say, the driver had been over the drunk drive limit may not allow an exclusion under the MIB Agreement but the crime did not have to be inherently "serious" nor did the use of the vehicle have to be integral to the crime itself.