IN THE BIRMINGHAM COUNTY COURT No 3BM90173
Civil Justice Centre
19th September 2014
B e t w e e n:
JADE KIERA WIGLEY-FOSTER
- v -
NATASHA WILSON AND THE MIB
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MR CHAPMAN appeared on behalf of the Claimant
MS KINSLER appeared on behalf of the Defendants
Ex Tempore JUDGMENT
Friday 19th September 2014
JADE KIERA WIGLEY-FOSTER – v – NATASHA WILSON AND THE MIB
1. JUDGE SIMON BROWN: This is a claim for personal injuries by an English domicile relating to road traffic accident in Greece as long ago as 29th/30th August in 2008. The relevant insurers, Commercial Value Insurance SA, are Greek but now insolvent. Therefore, prima facie, the Greek Auxiliary Fund is liable to compensate under Greek Law.
2. However, the claimant brought a claim on 21st June 2013 against Natasha Wilson and also against the Motor Insurers Bureau on the grounds founded upon regulations 11, 12 and/or 13 of the Motor Vehicles Compulsory Insurance Regulations 2003. In it, she claims there has been default or a failure on the part of the insurers or their representatives to respond to claims or to provide any reasoned response to it and therefore the Defendants are liable to her for breach of regulations.
3. The defendants, by their defence of 4th October 2013, denied liability. One of the key elements was that they denied they were liable under these regulations because it did not cover the situation here where the default was the insolvency of the Greek insurance company, where there was a scheme in Greece for that to be covered and the MIB was not liable under the regulations to compensate on the grounds of insolvency.
4. The matter proceeded in this court before District Judge Griffiths who, upon hearing both counsel for the parties, allocated the matter to the multi-track but ordered that the following issue be tried as a preliminary issue: whether the MIB is liable to compensate the claimant under the Motor Vehicles Compulsory Insurance Regulations 2003.
5. The claimant, in essence, makes the beguilingly simple submission that the regulations are the precedent to liability and that there has been a default so that the regulations 11, 12 and/or 13 have come into play and, therefore, the answer to the question is yes. The defendants submit that that is too facile a view of it and that construction of the regulations is not as would be appropriate in, say, contractual situations as it used to be in Prenn v Simmons where you look just merely at the words themselves. You have to look at the regulations in their context and this is a European context in which they are borne out of a directive; the Fourth Directive being the most relevant one here. On this particular point the defendant points to jurisprudence about this particular issue of interpretation which is extremely helpful; the court needs to consider the literal, historical, contextual and teleological interpretation as the interpretive exercise. Lord Mance is quoted upon this in the very helpful skeleton argument that has been provided by Ms Kinsler. In the Bloomsbury International Ltd v Sea Fish Industry authority case in the Supreme Court he said:
“In matters of statutory construction the statutory purpose
and the general scheme by which it is to be put into effect
are of central importance. In this area, as in the area of
contractual construction, the notion of words having a
natural meaning is not always very helpful,”
and he quotes Lord Hoffmann in the Charter Reinsurance v Fagan case back in 1997:
“And certainly not as a starting point before identifying
the legislative purpose and scheme.”
6. Therefore, this is not such a simple preliminary issue exercise as perhaps envisaged by the District Judge. However, I have been most expertly taken through the legal material by both learned counsel in this case. They have helpfully guided me at very short notice through quite a minefield of Regulations, Directives, Travaux Preparatoires, Recitals, English and European case law against a factual background of Greek insolvency. Accordingly, doing the best that I can to see the way through this mass of jurisprudential material and in order to determine the preliminary issue in accordance with the overriding objective, I come to a clear conclusion in relative short form on this preliminary issue on an extempore basis.
7. We need to start with the regulations themselves. It is apparent from the face of the statutory instrument that they have been brought into being because of the Fourth Directive which says in the explanatory note, “These regulations give effect to Articles 5, 6 and 7 of the Fourth Motor Insurance Directive.” There are a number of important parts but a key one is number 10, where the MIB is approved as the compensation body for the United Kingdom for the purposes of the Fourth Motor Insurance Directive and then there are 11, 12 and 13. 11 is the entitlement to compensation where the insurer is identified and there are various clauses or parts which have to be ticked off and it says that the injured party may make a claim for compensation if he has not commenced legal proceedings against the insurer of the vehicle, the use of which has caused the accident either of the conditions set out in paragraph 3 is fulfilled. That is a permissive matter of making a claim. The conditions here are that the injured party has claimed compensation with the insurer of the vehicle or the insurer’s claims representative and neither the insurer nor the claims representative has provided a ‘reasoned reply’ to the claim within the period of three months after the date it was made. Here it is the claimant’s contention that there has been a default as far as that is concerned. Then B, that the insurer has failed to appoint a claims representative in the United Kingdom and the injured party has not claimed compensation directly from that insurer.
8. So, it appears from the face of the words themselves, before we move to the context of it, that it is effectively a procedural default that this is being contemplated rather than inability or insolvency. There is certainly no reference to insolvency here in the statutory instrument. At 12 it then deals again with procedure i.e. the mechanism of what should happen and the consequences of it. In other words, it is very much a prescriptive procedural guide. which is prescriptive. Paragraph 13 then deals with the situation which is even worse as far as tracing is concerned; where vehicle or insurer is not identified. Although paragraph 13 has been pleaded in this case, it has not been pressed by the claimant during the course of argument and indeed it is difficult to see how it could be pressed on the facts of the vehicle and insurer actually being identified, although it has not been formally abandoned. It is helpful though, because looking at the matter in the whole overall context, we are dealing here with the difficulties that someone in England has in pursuing a claim where the insurers abroad do not respond or cannot be identified. It is quite a different situation from where the identified insurer is insolvent. If these regulations were to cover insolvency one would have expected that to have been expressly stated; it has not. In my judgment, that is very strong guide support of the Defendant’s that the answer to the preliminary issue question is no.
9. There is some further guidance which has been drawn to my attention about the situation of insolvency as far as insurance is concerned. There are three cases drawn to my attention that are helpful, They have been argued upon in some considerable depth. The first one, which is the opinion of the Advocate General, and the judgment in the Tsonka case observations which are very powerful indeed. In the judgment the questions of objectives and insolvency are dealt with. I read out these two paragraphs which I think are helpful in looking at the context that the Directives and the regulations should be looked at. In paragraph 22 it says:
“The national court asked in essence whether Article 3
of the First Directive is to be interpreted as including
among the obligations which it imposes on Member
States that of establishing a body to ensure that
compensation is provided to victims of road accident
situations where, although the person responsible for
the damage had taken out insurance covering their civil
liability in respect of the use of vehicles, the insurer has
viz, the insolvency situation as here.
“According to the court settled case law in interpreting
a provision in European law it is necessary to consider
not only its wording but the context in which that
provision arises and the objectives pursued by the rules
of what it is part.”
Here, I add that the objectives of the Fourth Directive appears to be dealing with are systemic procedural defaults.
10. In paragraph 30 there is a further helpful reference:
“The payment of compensation by such a party was
therefore considered to be a measure of last resort
envisaged only for cases in which the vehicle that caused
the damage is uninsured or unidentified or has not
satisfied the insurance requirements referred to in Article 3
of the First Directive.” Emphasis added.
In paragraph 31, again picking out some of the key passages, this is said:
“A restriction is explained by the fact that Article 3(1)
of the Directive, as has been pointed out in paragraph
28 above, requires each Member State, subject to the
derogations allowed under Article 4 of that Directive
to ensure that every owner or keeper of a vehicle normally
based in its territory takes out a policy with an
insurance company for the purpose of covering up to
the limits established by European law his civil liability
arising as a result of that vehicle. Viewed in that light,
the very fact that the damage has been caused by an
uninsured vehicle attests to a breakdown in the system
which the Member State was required to establish and
justifies the payment of compensation by the national
body providing compensation. It follows from the
foregoing, contrary to the line of argument put forward
by the applicants in the main proceedings, the payment
of compensation by such a national body as provided for
under the First and Second Directives cannot be regarded
as the implementation of a guarantee scheme in respect
of insurance against civil liability relating to the use of
motor vehicles; rather, it is intended to take effect only
in specific, clearly identified sets of circumstances.” Emphasis added.
Paragraph 33 goes on:
“The insolvency of an insurer does not constitute a case
which can be identified as one of those sets of circumstances.
In such a case the insurance obligation has been satisfied.” Emphasis added.
In this case the vehicle was insured but the insurer subsequently went into insolvency so it is a situation which is quite clearly envisaged under these particular paragraphs of this judgment.
11. The opinion of the Advocate General is also instructive where he says in his paragraph 31:
“The measure adopted in 1983 clearly shows that the
legislature did not see Article 3 as a general clause
requiring Member States to set up a guarantee mechanism.”
It goes on in paragraph 34:
“The situation in which the person responsible for the
damage did take out an insurance policy but with an
insolvent insurer is quite different. Essentially the case
before the referring court highlights the fundamental
difference between, on the one hand, the general rules
governing motor insurance against civil liability in respect
of the use of vehicles as progressively harmonised at
European Union level and, on the other hand, the rules
under which civil liability is guaranteed which, to my
mind, have largely yet to be developed.”
He goes on to say:
“I find it difficult to agree with an interpretation of Article
3 along the lines argued for by the applicants in the
main provisions. That provision requires the Member
States to take all appropriate measures to ensure that
civil liability is covered by insurance not to take all
appropriate measures to guarantee the civil liability
covered by the insurance.”
12. In the instant case, there has been coverage by an insurance firm, there is a scheme in Greece whereby the insolvency of that insurer will be guaranteed but it does not go so far, and indeed, there is no regulation or Directive that obliges the MIB to sign up (and indeed they have not) to any guarantee in those circumstances. In my judgment, the dicta cited from the above European case is case is the second strongly supportive indication that that the defendants are correct in their submissions.
13. A second case is also instructive. Recently the case of Delaney came before the High Court and although not dealing with quite the same issues as before me, Jay J makes it clear that there is an important distinction between the situation of insolvency and procedural default under the relevant regulations.
14. However, to my mind, the most helpful and authoritative case law exposition, is the exemplary exposition by Moore-Bick LJ who lucidly explains this difficult area of the law, and the interface of European law via directives where the directives are being ‘copied in’ by way of regulations or statutory instruments into our regulatory law. In paragraph 21 of Jacobs v Motor Insurer’s Bureau, he says this:
“The scheme of the compensation arrangements
established by the Fourth Directive appears clearly from
Articles 6 and 7,”
and I add here to which I will have to look at,
“in essence the compensation bodies are intended to
provide a safety net which will be called upon only in
rare cases where the tort feasor is unidentified or
uninsured or where for some reason the insurer fails to
respond to a claim within the prescriptive time.”
He is there referring to the very Articles 11, 12 and 13, that are being relied upon here by the claimant and in that sentence quite clearly says that they are going to be rare cases and they are particular cases where the tort feasor is unidentified or uninsured or where for some reason the insurer fails to respond and those are Articles 11 and 12.
“Even then, however, the compensation bodies do not
ultimately bear the burden of the claim because the body
that has paid the compensation to an injured party has the
right to obtain reimbursement from the corresponding body
in the state where the insurer is established.”
15. So in those circumstances the MIB would stand in place to pay but they would get reimbursement from the Greek body who would then have rights against the insurer under the rules of subrogation but that is a situation which only appertains in the situation which is envisaged by the Fourth Directive and the mirroring regulations. It does not put the MIB in the frame to add another body where they have to recover from the Greek body, their counterparts in Greece.
“Or has a claim against one of the guarantee funds. The
scheme appears to proceed on the assumption that the
existence of the driver’s liability and the determination
of the amount of compensation payable to the injured
party will be governed by the same principles at all stages
of the process but the Fourth Directive does not go so far
as to provide ... such questions are to be determined by
reference to the law of the country in which the
16. In paragraph 23 he deals with submissions which are made by the parties.
“Mr Layton submitted that the right of an injured person
to make a claim against the compensation body derives
from the 2003 regulations themselves. That, in my view,
is correct. The Fourth Directive obliges Member States to
put in place legislation to achieve the effects for which
it provides. In the absence of the 2003 regulations there
would be no compensation body and no right for an
insured person to recover compensation from it. It is
for Member States how to achieve that end and they
are entitled as they wish to put in place legislation
which goes beyond the minimum requirements,
providing its effect does not conflict with the object
of the Fourth Directive. When interpreting the 2003
regulations, however, it must be borne in mind that
the scheme established by the Fourth Directive provides
that liabilities imposed on the compensation body in the
state where the injured person resides will be passed
back, usually to the driver’s insurer by way of the
compensation body in the State where the insurer is
established. In the case of an uninsured driver or
unidentified vehicle to the relevant guaranteed fund.
The guaranteed fund might have recourse against
the driver himself under local law. The central
concept behind the scheme, therefore, is to provide
the claimant with easy access to a defendant in his
own country while ensuring that the liability ultimately
comes to rests with the person or body with whom it
ought to reside.” Emphasis added.
17. Here, Moore Bick LJ makes it perfectly plain that this is a procedural facility rather than one which seeks to add some substantive claim where a guarantee fund or body funds somebody else’s insolvency and the insolvency of a Greek insurer. No document has been produced before me where the MIB has agreed to fund or guarantee insolvent insurers whether here or abroad. In my judgment, this is very powerful case law that indicate strongly that the submissions made by the defendants are correct.
18. Finally, the relevant Articles which Moore Bick LJ referred; Article 6 which refers to compensation bodies. It is a detailed document and it refers to each Member State shall establish or approve a compensation body and it then provides the mechanism where people may present claims. It then describes in subsection 2 the compensation which has compensated the injured party in his Member State of residence shall be entitled to reclaim reimbursement of the sum by way of compensation from the compensation body in the Member State of the insurance undertakings establishment which has issued the policy. So there is a mechanism here for recovering in the event of Articles 11, 12 or 13. It then goes on:
“The latter body shall then be subrogated to the injured
party in his rights against the person who caused the
accident or his insurance undertaking insofar as
the compensation body in the Member State of
residence of the injured party has caused compensation
for the loss or injuries suffered.”
19. So it is dealing with mechanisms and defaults across Europe where, needless to say, different practices occur. There is nothing in any of these regulations that have been drawn to my attention nor in the case law which indicates that the MIB have been put in the position of guaranteeing against insolvency. Again, in my judgment this very strong support of the defendants’ submissions.
20. In my judgment, after due consideration of all the detailed submissions made before me, the clear answer to this preliminary issue/question is “No.”