Churchill Insurance Company Limited v Benjamin Wilkinson (by his father and litigation friend Steven Wilkinson) [2010] EWCA Civ 556
Churchill Insurance Company Limited v Benjamin Wilkinson (by his father and litigation friend Steven Wilkinson) [2010] EWCA Civ 556
19 May 2010
Facts
Benjamin Wilkinson’s parents bought him a motor vehicle in October 2004 and he was insured as a named driver on a policy of insurance taken out by his mother. On 23 November 2005 he allowed a friend, Mr Fitzgerald, to drive the vehicle, notwithstanding that he had been drinking (unlike the claimant). Mr Fitzgerald lost control of the vehicle and Benjamin Wilkinson suffered severe injuries in the collision that occurred with an oncoming vehicle. Mr Fitzgerald was convicted of driving without insurance (amongst other convictions) and for the purposes of this preliminary issue it was accepted that Benjamin Wilkinson knew that Mr Fitzgerald was not insured to drive the vehicle.
Benjamin Wilkinson brought a claim against Churchill Insurance Company Limited in accordance with S151(4) Road Traffic Act 1988 as “RTA insurer”. Churchill defended the claim on the basis that S151(8) RTA 1988 entitled it to recover any sums paid out to the claimant from its insured. Since Benjamin Wilkinson was an insured, Churchill were entitled to reclaim any money it paid out to him as an injured passenger.
At first instance Blair J. found for Benjamin Wilkinson and Churchill appealed to the Court of Appeal. In the case of Tracey Evans v Equity Claims Ltd, HHJ Godfrey sitting in the Wallsall county court came to the opposite conclusion and found for Equity. The cases were conjoined before the Court of Appeal.
Held
Waller LJ reviewed the construction of the relevant provisions of section 151. He accepted the defendant’s argument that these provisions gave damages to the claimant as a passenger in a tortfeasor’s motor car but then took those damages away again from the claimant as insured in order to reimburse the insurer’s non-contractual outlay.
He did not accept the defendant’s argument that these were two separate actions. Instead he concluded that, “the effect of section 151(8) as a matter of English law must be to exclude from the benefit of insurance a passenger who is the insured but has given permission to an uninsured driver to drive.” He noted that the MIB uninsured driver’s agreement specifically excludes claims in such circumstances.
The impact of Community Law on the provisions of section 151 is considered at some length. There have been Council Directives in this area since 1972 and the RTA 1988 is meant to give effect to these Directives (which have now been codified into Directive 2009/103/EC).
The Directives recognise only limited exceptions to the aim of enabling victims of road traffic accidents to be compensated. The lack of authority to drive or the lack of a licence to do so will not entitle an insurer to avoid compensation. But it will not be required to do so when the claimant entered the vehicle knowing that the vehicle was stolen or obtained by violence.
The question for the court was whether the effect, as described by Waller J. of the giving and taking away of damages to an insured passenger was to create another exclusion to the aim of the Directive such that it came within Article 13 of that Directive?
A review of the case law, in particular the Advocate General’s opinion in Ruiz Bernaldez, and the decision in Candolin¸ highlighted the interpretation of the Directive in the context of passengers entering cars where they knew the driver was intoxicated. In such situation, the passenger’s relationship to the RTA insurer was only to be viewed as a victim, not as an insured.
Waller LJ points out that there are 2 points of difference between the current appeals and the European cases. The first is that a claimant could potentially have his blameworthiness reflected in a finding of contributory negligent where the driver is intoxicated. There is no obvious way of finding the claimant causatively negligent where the driver is simply uninsured. The second is that the MIB is entitled to exclude claims where the claim was aware the driver was uninsured. Why would Community Law suggest that the position should be any different in respect of RTA insurers?
The Court ultimately decided to refer the case to the European Court of Justice for the answer to whether section 151(8) complies with Community Law and/or whether it may do so with some amendment or reinterpretation (if required).
Comment
The claimant here was on a night out with friends. It is far from uncommon that the choice of driver later in the evening may be influenced by alcohol. As such the outcome of this case will have a bearing on a number of future claims where an accident occurs and unfortunately, as here, the effects can be severe.