Vehicle insurers could be liable under the Road Traffic Act 1988 to satisfy a judgment obtained against an unnamed driver following a Court of Appeal decision this week. Michelle Reilly reviews the case of Cameron -v- Hussain (1) Liverpool Victoria Insurance Company (2)  EWCA Civ 366 and considers what it means for insurers and the Motor Insurers Bureau.
The claimant was injured in a hit-and-run road traffic collision. She was able to identify the vehicle but could not identify the driver. The vehicle was covered under a policy of insurance which covered a named individual, but not the registered keeper. The claimant initially pursued a claim against the registered keeper. However once it became clear that the registered keeper had not been driving the vehicle, the claimant added the vehicle’s insurer to proceedings as second defendant on the basis that it was obliged to satisfy any outstanding judgment under Section 151 of the Road Traffic Act (RTA) 1988.
The insurer denied liability as the policy did not cover the first defendant and the actual driver was unidentified. The insurers argued that section 151 did not apply and that the claimant should pursue the Motor Insurers Bureau (MIB) under the Untraced Drivers Agreement (UTDA) instead. The claimant sought permission to amend her claim to remove the registered keeper as first defendant and replace them with ‘the person unknown driving vehicle [registration number] who collided with vehicle [registration number] on [date of accident]’. The judge dismissed her application and granted summary judgment in favour of the second defendant insurers.
The issues before the Court of Appeal were:
- Did section 151 only apply when the driver could be named?
- In what circumstances can proceedings be issued against unnamed parties?
- Was the remedy available against the MIB under the UTDA sufficient to preclude the claimant from pursuing the unnamed driver?
It was held that an insurer’s statutory liability under section 151 does not depend on whether the driver is named. So long as there was a policy in place, and subject to notice, then the insurer is required to meet liabilities to third party victims with a right of recovery against the insured and/or at-fault driver.
Section 151 operates to compel a covering insurer to satisfy judgment obtained against the driver of the vehicle. It does not matter whether the driver is named, so long as they can be suitably identified by an appropriate description. The circumstances in which such a course is appropriate are not limited to the specific situations cited in the civil procedure rules, nor do they need to be exceptional. The question is whether such a course would further the overriding objective. In this case, it was deemed appropriate to allow the claimant to proceed against the unnamed but suitably identified driver.
The alternative right of recovery against the MIB did not preclude the claimant from pursuing the insurers under section 151. The claimant had a right to follow the section 151 route and was not obliged to pursue an arguably lesser remedy under the UTDA which is intended to be a last resort in any event. It was deemed that there would be no injustice to the insurers who accepted the potential risk when they accepted the vehicle.
Following this decision, a claimant will have the option to either pursue a claim against the MIB under the UTDA, or to pursue the relevant insurer under section 151. In almost all cases, the claimant will have a better remedy under section 151 and, as a result, insurers can expect to see more unnamed driver claims directed to them. The claimant will need to provide an appropriate description to suitably identify the driver and vehicle although, as in this case, it is likely that a date, time and vehicle registration will be sufficient. An insurer will need to look at indemnity and cover under the policy if it wishes to contest its liability under section 151.
This decision comes at a time of uncertainty for motor insurers given the issues raised in the case of Vnuk. While the Ministry of Justice is currently considering responses to a consultation on how best to extend the scope of compulsory motor insurance to comply with the decision in Vnuk, it is clear that insurers are already facing a potential increase in risk. It remains to be seen if the recently amended MIB agreements will be updated to incorporate these changes.