Currently, UK residents involved in Road Traffic Accidents ('RTAs') with at-fault uninsured drivers are entitled to compensation if the accident takes place in the European Union ('EU'). Following the end of the Brexit transition period, at 11pm on 31 December 2020, entitlement to compensation may depend on the existence of reciprocal agreements and the national laws of EU member states.

Drivers in the UK, with certain limited exceptions, must have third party motor insurance . Third party insurance covers: injury to a passenger or person in another car; damage to another person's car; and, damage to another person's property.

If the driver at fault in a Road Traffic Accident is uninsured, compensation can be sought from the Motor Insurers' Bureau (the 'MIB') - a Compensation Body established in 1946 which has taken on the remit of compensating victims of accidents in accordance with EU law .

RTAs in the UK

If an RTA involving an at-fault uninsured driver has occurred in the UK, the individual who has suffered a loss ('the claimant') can claim using the Uninsured Drivers Scheme. The Scheme is funded by levies charged on insurers and from premiums charged to motorists.

After fault on the part of the uninsured driver has been established, and the other terms of the Agreement have been met, the claimant has a right to compensation from the MIB. Where the MIB settles a claim, it can attempt to recover its outlay from the uninsured driver.

RTAs in an EU country

Current position

Until the end of the transition period, currently scheduled for 31 December 2020, the EU legislative framework continues to apply to the UK as if it were a Member State. Under the EU Motor Directives, UK residents involved in RTAs within the EU involving an uninsured driver can pursue the MIB. The MIB acts on behalf of its foreign counterpart as an EU 'Compensation Body'. If the UK resident successfully recovers against the MIB, the MIB will pursue the foreign Guarantee Fund or Compensation Body for the sum recovered.

Compensation after the Brexit transition period

The Motor Vehicles (Compulsory Insurance) (Amendment etc.) (EU Exit) Regulations 2019 will come into force at the end of the transition period . The Regulations will remove the right of UK residents injured by uninsured drivers in an EU Member State to bring an action in the UK and to compensation from the MIB.

In preparation for this, the MIB has negotiated Bilateral Protection of Visitors Agreements with most European Union member states. Under these agreements, the MIB and the foreign Compensation Body both commit to continuing compensation for victims of accidents involving uninsured drivers in their own country. An up-to-date list of reciprocal agreements can be found here. Claims will need to be brought in the country where the RTA occurred, but claimants will benefit from the MIB's assistance.

Where a reciprocal agreement is not in place, a UK-resident claimant's entitlement to recover against an EU member state's Compensation Body will depend on the law of that member state. Claims will need to be brought in the country where the accident occurred and entitlement to compensation will be assessed under the law of that country. The Guarantee Funds of 10 countries (including Italy) that have not signed reciprocal agreements have confirmed that they will continue to compensate UK-resident victims. Claimants may require foreign legal advice.

Concern remains about EU member states that have not signed reciprocal agreements and whose national law states that the Compensation Body shall only pay compensation to domestic residents and residents of EU countries. Notably, the French and Romanian Guarantee Funds have not signed a reciprocal agreement or confirmed that they will continue to compensate UK-resident victims of uninsured drivers. Consequently, UK residents involved in RTAs with uninsured drivers in France or Romania may not be entitled to compensation from, respectively, the French or Romanian Guarantee Funds.

The impact on UK resident claimants

Until the end of the transition period, UK residents involved in RTAs with at-fault uninsured drivers in the UK or EU will continue to have a right to claim against the MIB for compensation. After transition, foreign procedural law and the terms of any reciprocal agreement will need to be considered for claims arising out of RTAs in EU member states.