Supreme Court extinguishes insurers’ liability for untraced drivers

20 Feb 2019

The Supreme Court has today determined that unidentified drivers cannot properly be sued under a pseudonym or description, not least because of the obstacle of effectively serving legal proceedings. In so holding, the Court implicitly approved the separation of statutory and non-statutory routes to compensation for domestic victims of road traffic accidents, confirming the qualified nature of insurers’ liability: “[22] … 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.

Our publication, produced following the Court of Appeal’s judgment of May 2017, details the full facts of the case and may be accessed here. In summary, Ms. Cameron’s vehicle was involved in a collision with an unknown hit-and-run driver in May 2013, albeit the offending vehicle had been identified by its registration number and a policy of insurance traced, which had been issued by LV= to a non-existent policyholder.

The Court of Appeal held that it was possible for a claimant to issue proceedings – and to obtain judgment – against an unidentified driver by describing them in proceedings as ‘the person unknown driving vehicle [registration number X] who collided with vehicle [registration number Y] on [date]’. Whilst ordinarily futile for claimants to obtain judgments against unidentified defendants, the Court of Appeal’s majority decision effectively paved the way for victims of hit-and-run accidents to trigger a motor insurer’s statutory obligation to satisfy judgments – pursuant to section 151 of the Road Traffic Act 1988 (RTA 1988) – rather than make claims for compensation to the Motor Insurers’ Bureau (MIB) under the terms of its Untraced Drivers’ Agreements (the latter would have excluded any obligation to satisfy the Claimant’s claim for hire charges on the basis of clause 5(1)(g)(ii) of the 2003 Agreement).

The decision of the Supreme Court

The Supreme Court was persuaded that – as a straightforward matter of civil procedure – it was simply not possible to serve legal proceedings that could be brought to the attention of an unnamed and unidentifiable driver. In making its principal findings, the Court found it necessary to distinguish between two classes of case where defendants were anonymous; it being possible to locate, communicate with and effectively serve only the first class: On the one hand, (i) anonymous defendants who were identifiable, e.g. squatters unlawfully trespassing at known sites, and (ii) anonymous defendants who would generally never be capable of being identified, e.g. hit-and-run drivers.

Critically, the fundamental principles of natural justice instructed that proceedings must be brought to the attention of defendants. Porter v Freudenberg [1915] 1 KB 857 gave effect to a basic principle of natural justice which had been the foundation of English litigation procedure for centuries, and still is. The Supreme Court was critical of the approach taken by Gloster LJ in the Court of Appeal, who appeared to have had no regard to these principles in ordering alternative service of the insurer in the present case.

The Court held at [16] that “… one does not… identify an unknown person simply by referring to something that he has done in the past. “The person unknown driving vehicle registration number Y598 SPS who collided with vehicle registration number KG03 ZJZ on 26 May 2013”, does not identify anyone… The impossibility of service in such a case is due not just to the fact that the defendant cannot be found but to the fact that it is not known who the defendant is.

Whilst not unusual for motor insurers to accept service of proceedings on behalf of drivers where contractually required to indemnify them, the Rules governing ‘alternative service’ required evidence – at [9] of 6A PD – of “why… the document is/was likely to reach the person to be served (i.e. the at-fault driver)” before being subjected to a court’s jurisdiction, per Barton v Wright Hassall LLP [2018] UKSC 12.

Accordingly, the concession made by LV= before the Court of Appeal, and relied upon by Gloster LJ at [39], was effectively neutered, i.e. “if indeed a judgment were obtained against the unnamed defendant under the intended description, such a judgment would fall within the definition in section 151(2) [of the Road Traffic Act 1988]… and would be a judgment… which, accordingly, the respondent [insurer] would be liable to satisfy…

Instead, if it was not possible to effectively serve legal proceedings – because they were unlikely to reach the person to be served – then it was not possible to obtain a judgment against an untraced party ascertaining their liability, which could trigger an insurer’s statutory obligation to satisfy it.

Finally, the Supreme Court gave short-shrift to the Claimant’s late arguments concerning compliance with the European motor insurance regime, holding that the Claimant was not actually trying to assert a direct right against an insurer, but rather a right to sue a wrongdoer without identifying them or observing rules of court designed to ensure that s/he is aware of the proceedings: “Nothing in the Directive requires the United Kingdom to recognise a right of that kind… The Bureau’s coverage… unquestionably extends to this case”.

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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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Kerris Dale

Kerris Dale

Partner, head of motor practice group and head of office,

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