The MIB has today published a new Untraced Drivers Agreement and a supplemental Uninsured Drivers Agreement signed on 10 January 2017. As is typical of new MIB agreements they are not retrospective and will apply to accidents occurring on or after 1 March 2017. The earlier agreements will continue to apply to accidents occurring prior to that date.
Importantly the effects of Vnuk (the EU requirement to insure and provide compensation for the normal use of a motor vehicle wherever it is being used) have not been addressed. This is the subject of a current consultation by the Department for Transport. MIB’s liability to satisfy judgments continues to apply only where compulsory insurance is required by the RTA 1988. Victims of accidents where the RTA 1988 insurance obligation does not apply but where under the Motor Directive insurance ‘should have been in place’ to comply with the Vnuk judgment will still have to consider Francovich claims against the DfT.
Changes to the Untraced Drivers Agreement
Many of the changes are cosmetic preserving the well-recognised role of MIB in untraced driver cases. Substantive changes appear to be:
- The use of an MIB claim form is now compulsory (10(2) of 2017 Agreement);
- The requirement to report to police now only applies where requested to do so by MIB (10(4) of 2017 Agreement). As the requirement to report now only arises once requested to do so by MIB this should prevent the ‘reporting requirement’ providing any difficulty in untraced driver claims;
- MIB will still only pay property damage claims arising out of the use of an unidentified vehicle above the excess where a claim for significant personal injury arising from the same event has been paid but the definition of significant personal injury has been changed (7(2) of 2017 Agreement) and now requires death, 2 nights of hospital in-patient treatment (previously 4 days) or 3 sessions of hospital out-patient treatment (not previously covered). This is a significant reduction in the ‘significant personal injury’ threshold in such cases;
- Where a claim is brought by dependants or the estate of a deceased person the knowledge for determining whether a claim can be refused on the basis that the vehicle was known to have been stolen or was known to being used without insurance is now the knowledge of the deceased, avoiding the ‘unintended’ result of Phillips v Rafiq & MIB in untraced driver cases (8(4) of 2017 Agreement);
- The terrorism exclusion is removed;
- The exclusion of vehicle damage claims where the damaged vehicle was uninsured is removed. MIB are clearly unhappy about this particular amendment: https://mib.org.uk/media-centre/news/2017/january/new-untraced-drivers-agreement-and-supplementary-uninsured-drivers-agreement/;
- A new scale of costs (21 of 2017 Agreement) which appears to reduce costs payable for claims up to £48,000 but increases costs where more than £48,000 compensation is paid;
- MIB can no longer ask for a lower award where there is an appeal against the original award;
- Wider provisions are made for the costs of arbitration with the Claimant now clearly able to recover reasonable costs of appeal and arbitration subject to caps in fast-track value cases (22 of 2017 Agreement);
- Awards to children and protected parties will now be subject to approval by an arbitrator in all cases (clause 14).
Changes to the Uninsured Drivers Agreement
The changes to the Uninsured Drivers Agreement involve some wording changes bringing the current Agreement in line with the new Untraced Drivers Agreement. Substantial changes include the deletion of clause 7 (which excluded liability for damage to a vehicle which was also uninsured) and clause 9 (which excluded terrorism from the scope of events covered).
The near future
The DfT is currently consulting on the appropriate action to take in light of the ECJ judgment in Vnuk. It is clear that either the Motor Directive will have to be amended to reverse the effect of Vnuk or substantial change will be required to the RTA 1988 and the scope of compulsory insurance for ‘vehicles’ in the UK. Whether anything will happen before Brexit and whether Brexit will relieve the UK of having to comply with the Motor Directive will become clearer over the next two years.
The Court of Appeal will deliver judgment imminently in a case which was argued before Christmas where the Claimant has pursued the unidentified driver of an ‘insured’ car in an attempt to obtain a judgment which the insurer will have to satisfy under s.151 of the RTA 1988. If the Claimant is successful this will result in a seismic shift in such cases with Claimants likely to seek to pursue unidentified drivers of insured vehicles in the courts rather than under the Untraced Drivers Agreement in order to benefit from the higher recoverable costs.
The new Untraced Drivers Agreement and the supplemental Uninsured Drivers Agreement are available at:
https://mib.org.uk/media/350342/2017-untraced-drivers-agreements-england-scotland-and-wales.pdf
