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MIB – exclusions

The High Court has recently held that the Motor Insurers Bureau is an ‘emanation of the state’ under the EU Insurance Directives.

This means the MIB has a wide responsibility to indemnify those injured by uninsured drivers.

The claimant was walking on private land when he was struck by an uninsured 4x4 vehicle. He obtained judgment against the driver but the MIB denied responsibility on the basis that it was private land. This is one of the exclusions that the MIB applies, and which has long been argued is not compatible with the Insurance Directives. The judge held that the MIB was ‘an emanation of the state’ and thus bound by the Insurance Directives (which therefore meant a liability to indemnify the claimant, at least up to the minimum cover of €1m).

A comment from Thompsons says: ‘arguably, this decision rips up the MIB Agreements, or at least a lot of their exclusions for not paying out. Technically, the Directives only permit one real exclusion (ie knowingly entering a stolen vehicle), and there is an argument that every other exclusion the MIB relies on (that a standard defendant couldn’t rely on in a normal civil case) will be a breach of the EU principle of “equivalence”. Thus a claimant will just need to plead reliance on the Directive to get around that. This opens up civil litigation in untraced claims. But, left undecided is the level of compensation the MIB must indemnify under a claim made under the Directive. The Directive sets a minimum of €1m. It is therefore unknown whether recovery will be limited to that amount. Anyone pursuing on the claimant’s side should plead “equivalence” again’.

Lewis v Tindale [2018] EWHC 2376 (QB) (this case report is available in full at www.bailii.org).

 

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