The Supreme Court has today handed down its judgment in the case of Cameron (Respondent ) v Liverpool Victoria Insurance Co Ltd (Appellant) [2019] UKSC 6. In a unanimous decision, it was held that an unidentified driver cannot be sued, irrespective of whether there is a policy of insurance on the vehicle being driven. "Hit and run" drivers notoriously inflict disproportionately more serious injuries, which lead to higher value claims. The claimant's recourse in these circumstances is against the Motor Insurers' Bureau, not the insurer.

Background to the Case: Bianca Cameron v Naveed Hussain & Liverpool Victoria Insurance Co Ltd

In May 2013, the Claimant was driving in Leeds when a Nissan Micra collided with her vehicle. The driver of the Nissan did not stop and drove away, but a passing taxi driver noted its registration number. The total value of the claimant's claim (including injury, vehicle damage and hire charges) was limited to £15,000.

The police identified that the Nissan was registered to a Mr Naveed Hussain. He failed to cooperate with the police's enquiries and was subsequently convicted of failing to provide information about the identity of a driver. The Nissan was insured under a policy issued by Liverpool Victoria Insurance Co Ltd (LV) to a Mr Nissar Bahadur. He is believed to be fictitious and the policy obtained fraudulently.

Proceedings were originally issued against Mr Naveed Hussain as he was believed to be the driver. The claimant then amended proceedings to add LV as a second defendant, in order to seek a declaration that it was obliged to satisfy any unsatisfied judgment against the first defendant, pursuant to section 151 of the Road Traffic Act 1988. LV denied liability on the basis that the first defendant was not covered to drive the Nissan and that the claimant could not prove the identity of the other driver.

LV sought summary judgment against the claimant. The claimant then cross-applied to substitute in place of the first defendant "The person unknown driving vehicle registration number Y598 SPS who collided with vehicle registration number KG03 ZIZ on 26th May 2013."

The District Judge refused the claimant's application and granted summary judgment for LV, a decision upheld on appeal by HHJ Parker. The claimant appealed to the Court of Appeal.

In the Court of Appeal

The Court of Appeal identified three issues that needed to be considered:

i) whether it is possible to obtain a judgment in respect of a claim for damages against a defendant identified only by description ("an unnamed defendant"), in the context of a motor claim against an unidentified hit-and-run driver, where the vehicle was identified and an insurance policy had been effected in respect of such vehicle in the name of a non-existent person or untraceable person;

ii) whether an insurer would be liable to satisfy any unsatisfied judgment against such an unnamed defendant under section 151 of the Road Traffic Act 1988 ("the 1988 Act");

iii) whether the judges were right to refuse to allow the claimant permission to amend her claim form and particulars of claim so as to substitute, for the named first defendant, a defendant identified only by the following description: 'The person unknown driving vehicle registration number Y598 SPS who collided with vehicle registration number KG03 ZIZ on 26th May 2013.'

By a majority decision (Sir Ross Cranston dissenting), the Court of Appeal allowed the appeal holding that:

i) A judgment for damages could be obtained against an unnamed driver. There was no reason in principle why, in appropriate cases, it should not be permissible under the CPR for a claimant to bring proceedings against an unnamed defendant, suitably identified by an appropriate description.

ii) An insurer's s.151 liability in relation to an insurance policy covering a specific vehicle and named insured did not depend on whether the driver could be identified by name.

iii) The availability of a remedy under the (MIB’s Untraced Drivers’ Agreement) did not preclude the motorist from pursuing an unnamed defendant. The motorist had a substantive right to a judgment for damages against the driver and a statutory right to payment by the insurer if the judgment was not satisfied.

The Defendant appealed to the Supreme Court.

The Supreme Court's decision

The Supreme Court unanimously allowed the appeal, the judgment being given by Lord Sumption.

The Court identified that under the Civil Procedure Rules "The general rule remains that proceedings may not be brought against unnamed parties" and considered the very limited exceptions to this rule. The Court then drew a distinction between cases where anonymous defendants are identifiable but whose names are not known and those (such as most hit and run drivers) who are not only anonymous, but cannot be identified.

Although Lord Sumption stated that "This appeal is primarily concerned with the issue of amendment of the claim form. It is not directly concerned with its service…", it was clearly a factor which weighed heavily in the deliberations of the Court:

21. In my opinion, subject to any statutory provision to the contrary, it is an essential requirement for any form of alternative service that the mode of service should be such as can reasonably be expected to bring the proceedings to the attention of the defendant.

The court then went on to consider and reject the argument that there was some sort of statutory policy in favour of allowing motorists to sue insurers direct in respect of unidentified drivers, as would be implicit from the Court of Appeal judgment. Paragraphs 22 to 24 are particularly important and worth setting out in full:

22. In the first place, the Road Traffic Act scheme is expressly based on the principle that as a general rule there is no direct liability on the insurer, except for its liability to meet a judgment against the motorist once it has been obtained. To that extent, Parliament’s intention that the victims of negligent motorists should be compensated by the insurer is qualified. No doubt Parliament assumed, when qualifying it in this way, that other arrangements would be made which would fill the compensation gap, as indeed they have been. But those arrangements involve the provision of compensation not by the insurer but by the Motor Insurers’ Bureau. The availability of compensation from the Bureau makes it unnecessary to suppose that some way must be found of making the insurer liable for the underlying wrong when his liability is limited by statute to satisfying judgments.

23. Secondly, ordinary service on the insurer would not constitute service on the driver, unless the insurer had contractual authority to accept service on the driver’s behalf or to appoint solicitors to do so. Such provisions are common in liability policies. I am prepared to assume that the policy in this case conferred such authority on the insurer, although we have not been shown it. But it could only have conferred authority on behalf of the policy-holder (if he existed), and it is agreed that the driver of the Micra was not the policy holder. Given its contingent liability under section 151 of the Road Traffic Act 1988, the insurer no doubt has a sufficient interest to have itself joined to the proceedings in its own right, if it wishes to be. That would authorise the insurer to make submissions in its own interest, including submissions to the effect that the driver was not liable. But it would not authorise it to conduct the defence on the driver’s behalf. The driver, if sued in these proceedings, is entitled to be heard in his own right.

24. Thirdly, it is plain that alternative service on the insurer could not be expected to reach the driver of the Micra. It would be tantamount to no service at all, and should not therefore have been ordered unless the circumstances were such that it would be appropriate to dispense with service altogether.

Despite arguments having been made that allowing the appeal would be inconsistent with the Sixth Motor Insurance Directive, Lord Sumption gave this short shrift and considered that no point on the Directive arose.

Implications of the Supreme Court's decision

The unanimous decision of the Supreme Court to allow the appeal will be received with relief by insurers. Insurers will no longer be required to deal with claims against unidentified drivers of insured vehicles. Essentially, we have returned to the pre-May 2017 landscape.

The Court has confirmed that a claim against a driver who cannot be identified should be brought against the MIB, pursuant to the Untraced Drivers' Agreement. Claimants injured in these circumstances are therefore not left without a remedy. Whilst subrogated claims are not payable by the MIB and only limited legal costs are recoverable, this will not directly affect claimants' rights to compensation.

Attention was drawn in the Court of Appeal to the risk of "opening the floodgates" and the greater potential for fraud if proceedings are permitted against an unnamed driver. Whilst this is not a feature of the Supreme Court judgment, it follows that the decision has closed the avenue for fraud to be exploited in this area, especially in the context of credit hire or credit repair claims.

There will, inevitably, be a number of cases that were issued against the "unknown driver" in the post-Court of Appeal period that were being litigated and that cannot now successfully progress. These cases should now be withdrawn or struck out. Whether the claimant is able to proceed instead against the MIB will depend very much on the type of claim, whether it is still in time and the other requirements of the Untraced Drivers’ Agreement.

The Supreme Court clearly understood that claims under that Agreement are more limited in scope and involve very limited recovery of legal costs. As they acknowledged, the MIB’s role in handling such claims is entirely consistent with the Motor Directives.