As the Motor Insurers Bureau are undertaking ever increasing measures to identify and deter those who drive their vehicles without insurance, and with the punitive measures in the criminal courts being potentially an unlimited fine and six points for driving uninsured, and a £1,000 fine for driving without an MOT, it seems that in the last 12 months the civil courts have also taken a stance to demonstrate that road users who do not insure and/or MOT their vehicles should be brought to task.
In the civil arena, the law has a clear doctrine which confirms that if a person knowingly engages in an illegal activity then they may not profit from the same. The doctrine of ex turpi causa non oritur actio was applied as far back as 1775 when the judgment in Holman v Johnson confirmed that “…no court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act.”
That doctrine was first reportedly utilised in the credit hire arena in the 2008 matter of Agheampong v Allied Manufacturing (London) Limited, when a claimant who was driving without insurance at the time of his road traffic accident, and found by the court to have in all probability continued to drive without insurance but for the accident, was denied the right to recover his claim for credit hire charges on grounds of public policy.
However, a 2016 contractual dispute involving insider trading, which resulted in ex turpi arguments as to whether the contract could be enforced, had a knock on effect on the strength of illegality arguments in all spheres and resulted in a dip in case successes where credit hire claims failed due to the claimants’ vehicles illegal use pre-accident. Patel v Mirza established a list of criteria which the court were to consider when looking to apply the ex turpi doctrine including how seriously illegal to public policy the conduct was, how central to the matter the conduct was, whether the party knew or intended the conduct, and how serious a sanction denying the party their right to enforce would be. Applied to non-fault road traffic accidents it was generally argued that where the absence of insurance/MOT had not in any way contributed to the accident and the claimant has acted unintentionally, then it was too prejudicial to not award the claimant hire charges for which he was financially liable.
However, more recently, the High Court in Northern Ireland shifted the focus back to whether it was right and moral to allow someone who used their vehicle illegally to be entitled to recover loss of use (in the form of hire charges) following a non-fault road traffic accident. On 31 January 2018 they delivered judgement in the matter of Morgan v Bryson Recycling Limited.
The defendant appealed against the finding of Belfast County Court which had awarded the claimant £2250.40 in damages. The claimant had been involved in a road traffic accident on 9 June 2016 and the defendant had accepted liability for the accident. The claimant was seeking to recover the costs of vehicle damage, storage and hire following the accident. The defendant disputed the hire claim on the basis that the claimant had been using his vehicle for four months without it having a valid MOT. In the absence of an MOT the vehicle also had no valid insurance cover.
The defendant relied on the doctrine of ex turpi causa non oritur damnum. They disputed that the claimant was entitled to recover the cost of hiring a replacement vehicle when he was using his car at the time of the accident and was committing two criminal offences: driving without an valid MOT and driving without insurance. The claimant contended that the doctrine of ex turpi did not apply as liability for the accident was conceded. The claimant’s evidence was that the car had undergone MOTs from manufacture until 2016 (and for five years of that time he had owned the vehicle).
The appeal court concluded that the claimant was aware of his obligations regarding an MOT and should have been aware of the position as to insurance in the absence of an MOT. Although the offences were not the most serious, they were not insignificant. The need for insurance underwrites an indemnity for loss and injuries. The claimant would have continued to use the vehicle without an MOT/insurance until his insurance renewal. The appeal was granted and no award made for hire.
Not only has Morgan tipped the balance back to suggest that illegal road users ought not to recover loss of use or credit hire charges, but despite being persuasive only within the jurisdiction of England and Wales it appears that courts are already minded to apply the same.
Therefore in a recent Cambridge County Court matter of Parkinson v Dowling (2019) a claimant who had been driving without an MOT for four months prior to a road traffic accident was also denied the recovery of credit hire. The claimant’s evidence was that he had merely forgotten to arrange an MOT and he therefore continued to seek loss of use in the form of hire charges, with his need to hire prevaricated on the requirement of transportation for his children. He adduced no evidence of when he would have identified and remedied the absence of an MOT.
Despite the claimant’s position, Deputy District Judge Rogers rejected the claim. In addition to relying heavily on Morgan the judge also commented that if the hire was awarded then, in fact, the claimant would have been put in a better position than he had been in before the accident, i.e. when he only had a car that was not legal to drive because it did not have an MOT. To award the hire would therefore be contrary to the fundamental principle of restitution in tort law.
Originally written for and published in Forum of Insurance Lawyers update.