THE FOURTH AND FIFTH MOTOR INSURANCE DIRECTIVES AND ENGLISH LAW

(1)

THE FOURTH AND FIFTH MOTOR INSURANCE DIRECTIVES AND ENGLISH LAW

Philip Mead

^∗

Implementation of the Fourth Motor Insurance Directive

The Fourth Motor Insurance Directive has been implemented into English law, with effect from 19^th January 2003 by three statutory instruments: The European Communities (Rights against Insurers) Regulations 2002 (SI 2002 No. 3061); The Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003 (SI 2003 No. 37); and the Financial Services and Markets Act 2000 (Fourth Motor Insurance Directive) Regulations 2002 (SI 2002 No. 2706).

This Note describes the significant operative provisions of the first two statutory instruments.

The Rights Against Insurers Regulations

From the title, one would not know that the Regulations concerned either personal injury or road traffic accidents. Prior to the implementation of these regulations, there was no possibility in the United Kingdom to bring a direct action against an insurer for an accident which caused personal injury. It was always necessary to bring proceedings against the appropriate tortfeasor, and where necessary locate and serve proceedings on that person, unless the insurance company were able to give permission to accept service.

Under the Regulations, Regulation 3(2), provides for a cause of action direct against an insurer. The person who may bring such proceedings is the entitled party, namely a resident of a Member State or of a Contracting Party to the EEA Agreement. Non-EEA residents are not covered. The cause of action of the entitled person is a parallel cause of action in that the liability of the insurance company mirrors the extent of the cause of action in tort against the insured person (Regulation 3(1)). Any defences, therefore, available to the insured person will be available to the insurer as well. The new cause of action applies in relation to an accident on a road or other public place in the United Kingdom caused by or arising out of the use of any insured vehicle, where vehicle is defined as being based normally based in the United Kingdom (that is bearing UK

***

TAGETE n. 4 Dicembre 2003 Anno IX

1

∗ Barrister, Old Square Chambers, London. Secretary, Personal Injuries Bar Association.

Tagete n. 4-2003 Ed. Acomep

(2)

registration plates). European residents are now able to sue in England for accidents in the UK by issuing proceedings against the UK insurer. Where an accident involves non-UK vehicles, then the Claimant will need to rely upon the respective laws of the state of registration of the culpable driver (where, if necessary, pleading and proving the appropriate provisions). It is unclear from the text of the provisions whether the Regulations apply only to accidents which occur after 18^th January 2003, or to proceedings brought after 2003, or to any proceedings (subject to limitation etc).

The Information Centre and Compensation Body Regulations

The Information Centre established under the Regulations is the Motor Insurers’ Information Centre, based in Milton Keynes (Regulation 3(1)). There is an express duty on the MIIC to co- operate with every foreign information centre to enable such foreign centres to discharge their functions. There is a duty on every insurer to maintain a record of specified information and to supply such information immediately on request to the information centre (Regulation 5). There are similar duties on policy holders as well (Regulation 6).

An injured person (namely a person resident in an EEA State claiming to be entitled to compensation in respect of any loss or injury resulting from an accident caused by a vehicle (therefore including secondary victims)) may make a request for information of the MIIC where there is (i) an accident in the UK, or (ii) an accident in another Green Card State involving a UK vehicle, or (iii) the accident involves an injured person who resides in the UK (Regulation 9(2)).

Such a request must be made in writing, be received no later than 7 years after the date of the accident and contain sufficient information to identify the vehicle in respect of which the information is being sought. The information requested is the name and address of any UK or European insurer, the number of the policy, the name and address of the insurer’s claims representative in the state of residence of the injured party, and where the MIIC is satisfied of a bona fide interest, the name and address of the registered keeper of the vehicle or person having custody of the vehicle. The information centre shall provide information pursuant to Regulation 9 immediately in writing and may charge a fee of not more than £10.00.

Injured persons resident in the UK may make a claim against the compensation body (the Motor Insurer’s Bureau – the same body as for untraced and unidentified drivers) where a foreign insurer or his representatives have failed to provide a reasoned reply to the claim within the period of three months after the injured party made a claim, or where the insurer has failed to appoint a claims representative in the UK, where the injured party has not commenced proceedings against

***

2

(3)

the insurer (Regulation 11). The compensation body must notify the foreign insurer and the foreign compensation body of the claim and respond within two months of receipt of the claim. Where satisfied of the matters in respect of the claim, the compensation body must indemnify the injured person. Those matters are the liability of the tortfeasor of the foreign vehicle and the amount of the loss and damage (including interest) (Regulation 12). The compensation body ceases to act where the insurer or the claims representative makes a reasoned response.

Where it is not possible to identify the vehicle, or the insurer within two months of making the request, the compensation body shall compensate the injured party in accordance with the provisions of the Second Motor Directive as if the accident had occurred in Great Britain (Regulation 13). Regulation 14 provides for reimbursement of foreign compensation bodies where the insurer is identified, and Regulation 15 applies where the insurer is unidentified.

Comment on the Fifth Motor Insurance Directive

There are three issues in relation to the proposed Fifth directive which appear worthy of comment:

thresholds for the minimum cover for personal injuries; passenger’s knowledge of the driver’s incapacity; and the cover for pedestrians and cyclists.

There is no limit or minimum for cover in the United Kingdom. A limit of 1 000 000 EUR would represent a significant under compensation of a 19 year old who has suffered head injuries, has no loss of earning capacity and requires cost of care for the rest of his life.

There are currently restrictions in UK law in relation to passengers carried in vehicles when they knew or ought to have known of the state of intoxication of the driver; this would involve a change in the law.

There is no provision in UK law in relation to the protection of vulnerable categories of victim, such as pedestrians or cyclists. The extension of cover would not, under current civil law and the law of negligence radically alter the law of damages and the capacity of such parties to obtain redress.

***

3