Delaney v Secretary of State for Transport [2015]

09 Mar 2015

This morning (9 March 2015) the Court of Appeal (CA) unanimously upheld Mr Justice Jay’s decision, in June 2014, that the UK had failed to properly implement the EU Motor Insurance Directives, because an exclusion from compensation had been made where a vehicle was being used in furtherance of a crime. Consequently, Delaney (who was seriously injured in the accident in question in 2006) should recover what are known in EU law as Francovich damages from the UK Government.

This outcome applies despite his being involved, jointly along with the negligent driver who caused his injuries, in transporting large amounts of cannabis at the time of the accident.

The CA’s decision today creates a further headache for the Department for Transport (DfT), in addition to having to ensure that UK motor insurance legislation is rendered compatible with the EU Directives in the light of the European Court of Justice’s (ECJ) decision last September, in Vnuk v Zavarovalnica, about the breadth of the EU compulsory insurance obligation.

Delaney - the facts

Delaney was injured in an accident in 2006 and hence the early individual Motor Insurance Directives, rather than the Codified Directive in 2009, were engaged. Nothing turns on this. It is mentioned simply to explain the reference in the decision to the individual Directives. Giving the judgment of the Court of Appeal, Richards LJ noted that the core provision was Article 1(4) of the second MID:

“Each Member State shall set up or authorize a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation has not been satisfied ...”

Delaney’s main argument was that a particular clause in Motor Insurers Bureau (MIB) Uninsured Drivers’ Agreement 1999 was (i) incompatible with this requirement and hence in breach of EU law and (ii) that such breach was sufficiently serious to give a right to damages. He had succeeded at first instance before Jay J. [Clause 6(1)(e)(iii) of the 1999 MIB agreement bars compensation where the claimant knew or ought to have known that “the vehicle was being used in the course of or in furtherance of a crime.”]

The Court of Appeal unanimously dismissed the DfT’s appeal. Richards LJ gave its judgment and, on the first point, he found that on a natural reading of article 1(4), above, the only permitted exclusions from it are those in the article itself, ie: (a) knowledge that the vehicle was uninsured, (b) restrictions on property damage caused by untraced vehicles and (c) a property damage excess of up to €500. He added - the italics are his - that “there is nothing in the text of the article to suggest that other exclusions are permitted.”

He held that the DfT’s counter-argument, based on recitals to the Directive, was “weak in the extreme ... reads far too much into the recitals ... [and] runs counter to the aim of protecting victims which is stated repeatedly in the directives and suffuses the reasoning of the Court of Justice in the case-law ... To allow Member States to introduce exclusions additional to those specified would clearly undermine that aim.”

On the second point - does the breach give rise to liability? - he agreed with the judge that it did.

The relevant test had three elements:

  1. that the law infringed was intended to confer individual rights,
  2. that the breach was sufficiently serious and that there was a direct causal link between the breach, and
  3. the damage suffered by the injured party.

The first and third elements were not in dispute between the parties. The Court was satisfied that the judge had directed himself properly as to the seriousness of the breach. It agreed with his conclusion that it was.

The DfT’s appeal was therefore dismissed and the Court refused leave to appeal to the Supreme Court. The DfT would have to apply directly to the Supreme Court, should it wish to pursue matters further.

Conclusion

An interesting footnote to the case is that Delaney himself had sought the permission of the Supreme Court after his civil claim had been dismissed in 2011 by the Court of Appeal (of which Richards LJ was part). Refusing permission in 2012, the Supreme Court gave its reasons as being that his application did “not raise an arguable point of law of general public importance which ought to be considered by the Supreme Court in the light of the judge’s findings of fact with which this Court cannot interfere and the plain wording of clause 6(1)(e) of the Agreement.”

A full copy of the judgment can be downloaded here.

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Alistair Kinley

Alistair Kinley

Director of Policy & Government Affairs,
London


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