Churchill Insurance -v- Wilkinson; Evans -v- Equity Insurance [2012] EWCA Civ 1166; [2012] All ER (D) 157 (Aug)

The facts of the Wilkinson case are that W, a named driver on a policy in his mother’s name, allowed his drunk friend to drive him home following which W was seriously injured as a result of the negligence of his friend.

The facts of the Evans case are that E allowed her friend to drive her motorcycle with herself as a pillion passenger. Through the negligence of the friend, E was seriously injured.

At first instance there were conflicting decisions on the question of whether the insurer of the Defendant was entitled to avoid liability under S151(8) of the Road Traffic Act which provides that:

“where an insurer becomes liable … to pay an amount in respect of a liability of a person who is not insured by a policy … he is entitled to recover the amount from that person…who is insured  [and who] caused or permitted the use of the vehicle which gave rise to that liability.”

and the European Directives the aim of which is to:

“… ensure that compulsory motor vehicle insurance against civil liability in respect of the use of motor vehicles allows all passengers who are victims of an accident caused by a motor vehicle to be compensated for the injury or loss they have suffered”.

In the Wilkinson case, the judge at first instance found against the insurers and gave judgment in favour of the Claimant. In the Evans case, the judge at first instance gave judgment in favour of the insurers and denied the Claimant compensation. The two cases, which were the subject of appeals to the Court of Appeal, were referred to the Court of Justice of the European Union for a preliminary ruling on the compatibility of section 151(8) of the Road Traffic Act 1988 and the European Directive.

The judgment from the CJEU held:

  • the right of an insurer to recover their liability under section 151(8) was unaffected by the Directives in the case of an insured driver permitting an uninsured driver to use the vehicle but suffering no injury himself;  
  • the Directives must be interpreted to preclude a Statute the effect of which is to “omit automatically” the requirement that the insurer should compensate a passenger who is a victim of a road traffic accident - even when that accident was caused by a driver not insured under the insurance policy and when the victim, who was a passenger in the vehicle at the time of the accident, was insured to drive the vehicle himself and he had given permission to the uninsured driver to drive it.

The two appeals returned to the Court of Appeal where it was held, in order to address the requirement not to “omit automatically” the entitlement of a passenger to compensation, that section 151(8)(b) of the Road Traffic Act should be treated as notionally including the words (added in bold italics) to read:

“where an insurer becomes liable … to pay an amount in respect of a liability of a person who is not insured by a policy … he is entitled to recover the amount from that person…who is insured  [and who] caused or permitted the use of the vehicle which gave rise to that liability save that where the person insured by the policy may be entitled to the benefit of any judgment to which this section refers, any recovery by the insurer in respect of that judgment must be proportionate and determined on the basis of the circumstances of the case.”  

Accordingly, the issue of blameworthiness will be determined according to proportionality and the circumstances of each case.

The conduct of the injured passenger in causing or permitting the use of the vehicle in which he was travelling is distinct from his conduct which might have contributed to the accident or injuries sustained.