England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		26th February 2007

1. MR JUSTICE COLLINS: This is an appeal by way of case stated by Mr Mangal Singh, who was convicted of two offences before the Solihull Magistrates' Court on 14th June 2006. The two charges were, first, plying for hire contrary to section 45 of the Town Police Clauses Act 1847 and, second, driving without insurance contrary to section 143 of the Road Traffic Act 1988.
2. The circumstances that gave rise to the offences can be stated very briefly and, indeed, the facts were not in dispute. Two Trading Standards officers of the Solihull District Council were on duty in the town centre on the evening of 22nd July 2005. They approached the driver of a private hire vehicle parked in a lay-by and asked to be taken to a restaurant which was about a 15-minute drive away. That driver refused to take them. Indeed, it would, I suspect, have been contrary to the terms of the licence that he had to act as a private hire vehicle and probably also to the terms of whatever insurance policy he held for him to have done so. At this moment, the appellant arrived in the lay-by in a motorcar which was displaying a sign "A2B Radio Cars" and there was a private hire plate with the relevant number and his name fixed to the rear of the vehicle. One of the officers approached him and asked him to drive the two of them to the same restaurant. There was a moment's hesitation but, because the appellant appeared either not to understand or to pick up the name of where they wanted to go, the request was repeated and the appellant nodded in agreement and both men got into the car. They arrived at their destination some 15 minutes or so later and paid the fare, whereupon two licensing officers took over and filled in a pro forma, the effect of which was, as appeared on the face of the form:

"You have just picked up two Council Enforcement Officers who have not pre-booked the journey through a Private Hire Operator. You have committed the Offences of Plying for Hire and driving without Public Hire Insurance. I must caution you now. You do not have to say anything, but it may harm your defence if you do not mention when questioned, something which you later rely on in court. Anything you do say may be given in evidence. Do wish to say anything?"

The answer recorded is, "I'm sorry, I'm very sorry sir."

3. The appellant had a policy of insurance with Tradex Insurance Company Limited, which was valid at the relevant time. It contained, as limitations as to use:

"Social Domestic and Pleasure purposes and Use for the business of the policyholder including the carriage of passengers for hire or reward."

There was then an exclusion in these terms:

"Excluding use for racing, competitions, rallies or trials, public hire, commercial travelling or any purpose in connection with the motor trade."

The appellant had been caught by what has been described as a sting operation, whereby officials of the Council were testing whether the conditions of the private hire licence which the appellant had were being complied with.

4. The appellant was convicted of the offence under the 1847 Act. Indeed, he clearly had no defence to it, and that is not in issue before me. However, he disputed the charge of driving without insurance on the basis that a decision of the European Court of Justice, which constituted three relevant European directives, meant that the offence could not have been committed because the insurers would have been obliged to compensate any innocent victim injured by the use of the vehicle.
5. It is accepted by Mr Gibbons on behalf of the appellant that, so far as the domestic legislation is concerned, that is to say the 1988 Act, there would be no defence to the charge. It is only because of the decision by the European Court and the existence of the directives that any defence can be established. The Divisional Court has very recently decided in Telford and Wrekin v Tanveer Ahmed and others [2006] EWHC 1748 (Admin) that, indeed, there was no defence to this particular charge in similar circumstances. That case in fact involved a number of taxi drivers who had been allegedly driving in breach of the conditions of their licences within Telford and Wrekin and in that case the District Judge had dismissed informations. It was a slightly curious situation because, having dismissed them and having been asked to state a case, he then indicated that he was satisfied that he had it wrong and that his decision should indeed be overturned, as in due course it was. But the European angle was not referred to in that case and so Mr Gibbons submits that it was decided per incuriam and, indeed, if the directives and the decision of the European Court of Justice, to which I will refer, had the effect which he submits, then the failure of the Divisional Court in the Telford case to have regard to them would indeed mean that the decision was per incuriam on the classic principles that apply.
6. Section 143 of the 1988 Act, so far as material, provides:

"(1) Subject to the provisions of this Part of this Act—

(a) a person must not use a motor vehicle on a road [or other public place] unless there is in force in relation to the use of the vehicle by that person such a policy of insurance or such a security in respect of third party risks as complies with the requirements of this Part of this Act...

(2) If a person acts in contravention of subsection (1) above he is guilty of an offence."

Section 145 sets out the requirements in relation to policies that govern insurance:

"(1) In order to comply with the requirements of this Part of this Act, a policy of insurance must satisfy the following conditions...

(3) Subject to subsection (4) below, the policy—

(a) must insure such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person or damage to property caused by, or arising out of, the use of the vehicle on a road [or other public place] in Great Britain, and

[(aa) must in the case of a vehicle normally based in the territory of another member State, insure him or them in respect of any civil liability which may be incurred by him or them as a result of an event related to the use of the vehicle in Great Britain if, -

(i) according to the law of that territory, he or they would be required to be insured in respect of a civil liability which would arise under that law as a result of that event if the place where the vehicle was used when the event occurred were in that territory, and

(ii) the cover required by that law would be higher than that required by paragraph (a) above...]"

In (3)(b) there is a similar provision, as it were, the other way round, requiring that the insurance extends if someone takes his vehicle abroad from Great Britain to what is required by the law of the European state in which he uses that vehicle.

7. One then goes to section 148, which is headed "Avoidance of certain exceptions to the policies for securities". Subsection 1 provides:

"(1) Where a certificate of insurance ... has been delivered under section 147 of this Act to the person by whom a policy has been effected ... so much of the policy or security as purports to restrict -

... the insurance of the persons insured by the policy ... by reference to any of the matters mentioned in subsection (2) below shall, as respects such liabilities as are required to be covered by a policy under section 145 of this Act, be of no effect.

(2) Those matters are—

(a) the age or physical or mental condition of persons driving the vehicle

(b) the condition of the vehicle

(c) the number of persons that the vehicle carries

(d) the weight or physical characteristics of the goods that the vehicle carries

(e) the time at which or the areas within which the vehicle is used

(f) the horsepower or cylinder capacity or value of the vehicle

(g) the carrying on the vehicle of any particular apparatus, or

(h) the carrying on the vehicle of any particular means of identification other than any means of identification required to be carried by or under [the Vehicle Excise and Registration Act 1994]."

8. Subsection (5) provides for similar lack of effect of conditions providing that no liability should arise under the policy in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim, so that, for example, conditions that used to be common place in some policies that the driver should not make any admission of liability would not be of effect so far as what was required for compulsory cover was concerned.
9. Section 151 provides further exclusions of the limitation of liability. By subsection (3) it provides:

(3) In deciding for the purposes of subsection (2) above whether a liability is or would be covered by the terms of a policy ... so much of the policy ... as purports to restrict ... the insurance of the persons insured by the policy ... by reference to the holding by the driver of the vehicle of a licence authorising him to drive it shall be treated as of no effect."

10. That section was introduced to produce compliance with one of the European directives to which I shall have to refer and it is to be noted that it does not use the same language as section 148 in relation to exclusion because it simply says that a condition relating to the holding of a licence shall be treated as of no effect, whereas the other matters in 148 state that they shall be of no effect as respects such a liability as is required to be covered by a policy under section 145. Whether that makes any material difference is perhaps open to doubt.
11. The relevant directives are three in number. The first is a directive of 24th April 1972 (72/166/EEC). The purpose behind this was to abolish the need for frontier controls of compulsory insurance cover against civil liability in order to ensure that there was free movement between one state and another. It was recognised that there were disparities between the requirements of the various member states in relation to compulsory insurance and that is why section 145 contains, as I have indicated, in subsection (3), the requirements that any policy must provide similar cover to that which is required by the law in the country of another state if the driver comes here and, conversely, that, if a driver in this country goes to another state, he will be covered in accordance with the compulsory requirements of that state.
12. That directive in 1972 abolished the checks on green cards between member states in pursuance of the necessary free movement but I should refer to one of the recitals, the second, which provides:

"Whereas such a guarantee agreement presupposes that all Community motor vehicles travelling in Community territory are covered by insurance; whereas the national law of each Member State should, therefore, provide for the compulsory insurance of vehicles against civil liability, the insurance to be valid throughout Community territory; whereas such national law may nevertheless provide for exemptions for certain persons and for certain types of vehicles."

And then Article 3 of the directive provides:

"1. Each Member State shall, subject to Article 4, take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance. The extent of the liability covered and the terms and conditions of the cover shall be determined on the basis of these measures.

2. Each Member State shall take all appropriate measures to ensure that the contract of insurance also covers:

- according to the law in force in other Member States, any loss or injury which is caused in the territory of those States;

- any loss or injury suffered by nationals of Member States during a direct journey between two territories in which the Treaty establishing the European Economic Community is in force, if there is no national insurers' bureau responsible for the territory which is being crossed; in that case, the loss or injury shall be covered in accordance with the internal laws on compulsory insurance in force in the Member State in whose territory the vehicle is normally based."

That directive, which is reflected in the terms in section 145, clearly recognises that individual member states may have different provisions relating to compulsory insurance but the purpose of the directive is to ensure, notwithstanding any differences, that there will be no barrier to free movement between one state and another.

13. The second directive is 84/5/EEC. That records, in the third recital:

"Whereas, however, major disparities continue to exist between the laws of the different Member States concerning the extent of this obligation [that is an obligation arising under Article 3 of the first directive] of insurance cover; whereas these disparities have a direct effect upon the establishment and the operation of the common market;"

Then the fifth recital:

"Whereas it is necessary to make provision for a body to guarantee that the victim will not remain without compensation where the vehicle which caused the accident is uninsured or unidentified;"

And then the sixth recital:

"Whereas it is in the interest of victims that the effects of certain exclusion clauses be limited to the relationship between the insurer and the person responsible for the accident; whereas, however, in the case of vehicles stolen or obtained by violence, Member States may specify that compensation will be payable by the above mentioned body;"

14. Article 1 of that directive provides for the setting up of a body for the purpose of providing compensation in circumstances where the damage to the third party, whether personal injuries or other damage, is caused by an unidentified vehicle or a vehicle for which the insurance obligations provided for in Article 3(1) of the earlier directive have not been satisfied. In this country, that body has existed since 1946 in the form of the Motor Insurers' Bureau, so there is nothing to be done to comply with the requirements of Article 1(4) of this directive. 1(5) provides that:

"The victim may in any event apply directly to the body which, on the basis of information provided at its request by the victim, shall be obliged to give him a reasoned reply regarding the payment of any compensation.

Member States may, however, exclude the payment of compensation by that body in respect of persons who voluntarily entered the vehicle which caused the damage or injury when the body can prove that they knew it was uninsured."

15. Quite what the position would have been in respect of the Council employees in this case who entered the vehicle in the knowledge that it was almost certainly uninsured in the sense that it was being operated contrary to the exclusion in the insurance policy if there been an accident in which they were injured is not entirely clear. It seems, certainly under the terms of this directive, that there would be a possibility of an exclusion. However, that is perhaps by the way because, fortunately, there was no accident in the course of the driving in this case. But Article 2 of that direction provides:

"1. Each Member State shall take the necessary measures to ensure that any statutory provision or any contractual clause contained in an insurance policy issued in accordance with Article 3 (1) of Directive 72/166/EEC, which excludes from insurance the use or driving of vehicles by:

[then there are three categories]

persons who do not have express or implied authorization thereto, or

persons who do not hold a licence permitting them to drive the vehicle concerned, or

persons who are in breach of the statutory technical requirements concerning the condition and safety of the vehicle concerned.

shall, for the purposes of Article 3(1) of Directive 72/166/EEC, be deemed to be void in respect of claims by third parties who have been victims of an accident.

However the provision or clause referred to in the first indent [that is persons who do not have express or implied authorisation to drive the vehicle] may be invoked against persons who voluntarily entered the vehicle which caused the damage or injury, when the insurer can prove that they knew the vehicle was stolen."

I do not think I need to read more.

16. It is apparent that section 151(3) complies with the second indent of Article 2, paragraph 1 and, indeed, that provision was expressly included in order to comply with it. Further, the matters refered to in section 145, which are excluded in relation to insurance policies which have to comply with the Act, are sufficient to comply with the other provisions in Article 2. So all those exclusions make it plain that there is indeed compliance with that directive.
17. The Third Directive, which is directive 90/232/EEC, contains in its sixth recital this:

"Whereas there are, in particular, gaps in the compulsory insurance cover of motor vehicle passengers in certain Member States; whereas, to protect this particularly vulnerable category of potential victims, such gaps should be filled;"

Article 1 of the directive provides:

"Without prejudice to the second subparagraph of Article 2(1) of Directive 84/5/EEC, the insurance referred to in Article 3(1) of Directive 72/166/EEC shall cover liability for personal injuries to all passengers, other than the driver, arising out of the use of a vehicle.

Member States shall take the necessary measures to ensure that any statutory provision or any contractual clause contained in an insurance policy which excludes a passenger from such cover on the basis that he knew or should have known that the driver of the vehicle was under the influence of alcohol or of any other intoxicating agent at the time of an accident, shall be deemed to be void in respect of the claims of such passenger."

18. That, I should say, as far as I can see, does not of course prevent arguments being raised as to the contributory negligence of such a passenger which might reduce the compensation to which he would otherwise be entitled. What it is concerned to do is to ensure that the insurers of the driver are responsible for any claim made by the passenger notwithstanding that it is said that the passenger knew or should have known that the driver was under the influence of alcohol or of any other intoxicating agent.
19. The directives are concerned, as is apparent, with the protection of the victims of drivers. They are to ensure that there is compulsory insurance, which means that any victim is compensated, and, in the case of the Second Directive, that if the driver of the vehicle which causes the damage is either uninsured or the vehicle cannot be identified, then the victim shall have compensation and if it cannot be by the insurer, it will be by the Motor Insurers' Bureau in the case of this country or some similar body in the case of other member states. The directive is not in terms concerned with the criminal responsibility, if any, of the driver in relation to whether he has failed to comply with the compulsory insurance laws of the country in question.
20. I should turn now to the case of Ruiz Bernaldez [1996] All ER (EC) 741, a decision reached in March 1996. The headnote, which indicates the circumstances which led to the reference to the European Court, states:

"The defendant caused a road accident while driving in a state of intoxication. The Seville Criminal Court subsequently ordered him to make reparation for the damage to property which he had caused; however, on the basis of a Spanish law which excluded from cover damage caused by an intoxicated driver, it absolved the defendant's insurer from any liability to pay compensation. The Public Prosecutor appealed to the Seville Provincial Court, seeking an order declaring the insurer to be jointly liable with the defendant. The Provincial Court stayed the proceedings and referred to the Court of Justice of the European Communities for a preliminary ruling on the question whether [article 3(1) of the 1992 directive] ... was to be interpreted as meaning that a compulsory insurance contract could provide that in certain cases (in particular where the driver of the vehicle was intoxicated) the insurer was not liable to pay compensation for personal injuries and damage to property caused to third parties by the insured vehicle, or whether in such cases the compulsory insurance contract could provide only that the insurer was to have a right of recovery against the insured."

The court decided that:

"The aim of [the 1972 Directive] and subsequent related directives was, first, to ensure the free movement of vehicles normally based on Community territory and their occupants and, secondly, to guarantee that victims of accidents caused by those vehicles received comparable treatment irrespective of where in the Community the accident had occurred. Article 3(1) of the directive was therefore to be interpreted as meaning that compulsory motor insurance had to enable third party victims of accidents to be compensated for all the damage to property and personal injuries sustained by them; any other interpretation would have the effect of allowing member states to limit payment of compensation to third party victims of a road traffic accident to certain types of damage, thus bringing about disparities in the treatment of victims depending on where the accident had occurred, which was what the directives were intended to avoid. It followed that article 3(1) of the directive was to be interpreted as meaning that, without prejudice to article 2(1) of Directive 84/5 which concerned the ineffectiveness of certain exclusion clauses as against victims, a compulsory insurance contract could not provide that in certain cases, in particular where the driver of the vehicle was intoxicated, the insurer was not obliged to pay compensation for damage to property and personal injuries caused to third parties by the insured vehicle. It could, however, provide that in such cases the insurer was to have a right of recovery against the insured..."

21. The reference in this case arose out of what was clearly a criminal prosecution but was ancillary to the criminal liability because, as is clear from the facts that I have recited from the headnote, the only concern here was whether the damage caused by the vehicle driven by the intoxicated driver was payable by the insurers as opposed to by him. One imagines that if it had not been payable by the insurers the unfortunate victim would have been unlikely to have received what he had lost.
22. The case was not therefore directly concerned with the criminal liability of the defendant in question and, indeed, it is not recorded what offences he was alleged to have committed, although obviously one of them would have been driving whilst under the influence of drink (whatever the relevant provisions were at the time in Spain) but it is not recorded whether he was charged in addition with any offence relating to the insurance of his vehicle. The court decided, really, in accordance with what I have read from the headnote, which was an accurate record of the decision. The court referred to Article 1(4) of the second directive, which it recorded improved the protection of victims by requiring the member states to set up or authorise bodies responsible for providing compensation for damage to property or personal injuries caused by unidentified or uninsured vehicles, but it did not further refer to that or explain why it might not have been appropriate, in the interests of the victim, to enable him to recover against such a body. The facts do not record whether such a body would have been available in Spain at the time to provide for the necessary payment. In this country, where the driver is known and there is an insurance policy but it does not cover the driving in question, the normal arrangement is that that insurer is on risk, as it were, inasmuch as it will pay what the Motor Insurers' Bureau would have to pay in the circumstances. Accordingly, there is a somewhat, it may seem, technical distinction between the insurer in question paying under the policy or the insurer in question paying because it is the responsible body by the terms of the MIB agreement. That is the position so far as our domestic law is concerned but the reality is that, in either event, any innocent victim will receive compensation and that is the what the directives are designed to ensure.
23. Going back to the decision of the court, in paragraph 18 onwards it sets out the reasons for its decision. What is said in 18 is this:

"18. In view of the aim of ensuring protection, stated repeatedly in the directives, Article 3(1) of the First Directive, as developed and supplemented by the Second and Third Directives, must be interpreted as meaning that compulsory motor insurance must enable third-party victims of accidents caused by vehicles to be compensated for all the damage to property and personal injuries sustained by them, up to the amounts fixed in Article 1(2) of the Second Directive."

[that article provided some limits of the amount of compensation that had to be provided for]

19. Any other interpretation would have the effect of allowing Member States to limit payment of compensation to third-party victims of a road-traffic accident to certain types of damage, thus bringing about disparities in the treatment of victims depending on where the accident occurred, which is precisely what the directives are intended to avoid. Article 3(1) of the First Directive would then be deprived of its effectiveness.

20. That being so, Article 3(1) of the First Directive precludes an insurer from being able to rely on statutory provisions or contractual clauses to refuse to compensate third-party victims of an accident caused by the insured vehicle.

21. In that context the first subparagraph of Article 2(1) of the Second Directive merely recalls that obligation with respect to provisions or clauses in a policy excluding from insurance the use or driving of vehicles in particular cases [and then states them]. However, by way of derogation from that obligation, the second and third subparagraphs of Article 2(1) provide that certain persons may be excluded from compensation by the insurer, having regard to the situation they have themselves brought about (persons entering a vehicle which they know to have been stolen) or to the compensation they can claim elsewhere (victims who may obtain compensation for the damage suffered from a social security body).

22. In contrast, Article 3(1) of the First Directive does not preclude statutory provisions or contractual clauses under which it is possible for the insurer to claim against the insured in certain cases.

23. That applies in particular to provisions or clauses which allow the insurer to claim against the insured with a view to recovering the sums paid to the victim of a road-traffic accident caused by an intoxicated driver.

Accordingly:

24. The answer to [the questions put] must therefore be that Article 3(1) of the First Directive is to be interpreted as meaning that, without prejudice to the provisions of Article 2(1) of the Second Directive, a compulsory insurance contract may not provide that in certain cases, in particular where the driver of the vehicle was intoxicated, the insurer is not obliged to pay compensation for the damage to property and personal injuries caused to third parties by the insured vehicle. It may, on the other hand, provide that in such cases the insurer is to have a right of recovery against the insured."

24. I am bound to say that that reasoning does not seem to me to engage with Article 1(4) of the Second Directive. The purpose, as I said, behind the directives is to ensure that innocent victims of road traffic accidents are compensated. Whether that compensation is through the insurance policy, whether or not there are exclusions, or is through a body such as the MIB, does not seem to me to be necessarily material and therefore the court need not have extended the application of Article 3 in the way that it did because, if one takes what it says in paragraph 20 in its literal way, it means that no exclusion clause in a contract of insurance would be able to be relied on in relation to an innocent victim. Thus someone who in accordance with the law of this country was driving uninsured would nonetheless have to be compensated by virtue of the policy of insurance rather than through the Motor Insurers' Bureau. Since the Directives make it clear that individual member states are not required to have identical provisions but that it is necessary to provide that no-one is prejudiced when moving from one state to another by more stringent requirements in one as opposed to the other, it is difficult to see why it is necessary, providing there is a body such as the Motor Insurers' Bureau, for the policy of insurance to cover the matter. However, that is not, in my judgment, directly material to the question whether there is to be criminal liability within the terms of domestic law.
25. The effect of the Directives in the context of criminal liability has not been the subject of any direct decision and its importance is obvious. I am informed by counsel that there are a substantial number of these cases annually whereby private hire drivers have been found to have been using their vehicles as public hire vehicles, which would be not only in contravention of the licence but also in contravention of the prohibition in the policy of insurance, similar prohibitions to that which I have already referred to in this case being in most insurance policies.
26. However, the effect of these directives has to some extent been considered by the courts. I have been referred to Cutter v Eagle Star Insurance [1998] 4 All ER 417, a decision of the House of Lords. That case was a civil claim in relation to an accident that had taken place in a car park and the issue was whether the car park was a road for the purpose of liability of the insurance company under section 151 of the Road Traffic Act 1988. Their Lordships decided that the car park was not a road but in the course of argument the question had been raised as to whether the insurers had to pay because of the European directives. The leading speech in that case, indeed the only reasoned speech, was given by Lord Clyde and, at 425 of the report, he says that he is turning to the European dimension and then towards the bottom of the page he says this:

"In the present two cases the accident occurred within Great Britain. There is no suggestion that either vehicle was travelling between any member states. I think that it may also be assumed that in each case the territory in which the vehicle was normally based was Great Britain, that is to say in accordance with the definition contained in art 1 of the First Directive, that the vehicle in each case was registered in this country. The question then arises whether these directives, or any of them, require this country to legislate in order to secure that insurance protection is available for the victims of accidents which occur in Great Britain through the use of a motor vehicle which is normally based in Great Britain where that accident did not occur on a road.

Having considered the terms of the directives I am not persuaded that any of them impose such an obligation. The basic purpose as expressed in the first preamble of the First Directive is to bring about the free movement of goods and persons with a view to the creation of a common market."

He then refers to the preambles and, over the page on 426, after citing those, he says:

"It seems to me that while in this directive it is certainly required that there be in each country an insurance against civil liability in respect of the use of motor vehicles, recognition is being paid to the fact that there may be differences in the precise cover which national laws may impose in the different member states. The First Directive was implemented by the Motor Vehicles (Compulsory Insurance) (No 2) Regulations 1973, SI 1973/2143, introducing amendments to the then recent consolidation of road traffic legislation in the Road Traffic Act 1972. One of these was the adding of the words 'in Great Britain' after the words 'on a road' in s 145(3), the forerunner of s 145(3)(a) of the 1988 Act. It also introduced what came to be s 145(3)(b) of the 1988 Act, adding the requirement that the insurance must be in respect of any liability incurred in respect of the use of a vehicle in the territory of each of the member states of the Community, excluding Great Britain and Gibraltar, according to the law on compulsory motor insurance of the state where the liability might be incurred. It seems to me that the implementing legislation was entitled to restrict the cover in respect of the use of vehicles on roads to roads in Great Britain and correct to extend the requirements so as to cover liabilities incurred in respect of the use of the vehicle in other member states according to the local law on compulsory insurance in respect of the use of the vehicle in the other member states. Thus while the restriction to the use on roads was retained for Great Britain, the possibility was recognised that there might be a different scope of the requirement for insurance in other states."

He then refers to the Second Directive and the Third Directive and continues, on page 427:

"Here again is a recognition of the possibility of difference in the precise extent of the cover between the laws of individual member states. The scope or extent of the cover required in different member states may be greater or smaller than in others, but the policy must secure that the greater cover is available in respect of those states where the greater cover is required by its domestic law. That seems to me to have been recognised in the implementation of the directive. The Third Directive was implemented so far as was considered necessary by the Motor Vehicles (Compulsory Insurance) Regulations 1992, SI 1992/3036."

And then finally, page 428, he says:

"I am not persuaded that in respect of the particular question which has arisen in the present cases the directives require that the word 'road' in s 145 should be construed as including a car park, or indeed as including any place whatsoever where a vehicle might be used. Indeed it might be that while the language of the directives is of 'the use of vehicles' it is with travel and movement between states that they are dealing and that they should be taken to be concerned simply with the use of vehicles on a road, which is the usual place for a vehicle to be used. Thus it may be that the addition of the words 'on a road' in s 145(3)(a) could be consistent with the universal intention of the directives in their application to traffic between member states. Indeed it may be noticed that art 5 of the Third Directive refers expressly to parties involved in 'a road traffic accident'. The context there is the necessity of identifying promptly the insurance company covering the liability. It would be curious if that provision was meant to exclude accidents occurring elsewhere than on roads."

27. The point that is being made there is that the individual member state, in this case Great Britain, was entitled to provide for a greater or lesser obligation in relation to compulsory insurance than other member states but the Directives would be complied with provided that, because they were about free movement, the drivers registered in, say, France would be entitled to the same protection by virtue of insurance as was required in France if that protection was greater than that required in Great Britain and that would apply vice versa.
28. These Directives were also considered by the Court of Appeal in Silverton v Goodall, a decision of 26th March of 1997. The judgment of the court in that case was given by Sir Ralph Gibson. I should say that that, as its name suggests, was a civil claim and the argument concerned whether the plaintiff could recover against the Motor Insurers' Bureau because it was said she had failed to comply with the obligations to give notice to the Motor Insurers' Bureau within the relevant time limit and the point of European law raised under the directives was an endeavour to show that. Because of the directives, and particularly because of Bernaldez, the third party victims had to be enabled to recover compensation and the insurers precluded from being able to rely on the contractual clauses to refuse to compensate third party victims of an accident caused in the member state's territory. It seems clear that the wide application of Bernaldez, which has been relied on by Mr Gibbons in this case, was raised in that case. Sir Ralph Gibson said this, on the last page, penultimate paragraph, of his judgment:

"As to the point of European law, based on Directive 72/166/EEC, and the following Directives, the plaintiff cannot, in my judgment, succeed upon it. It seems to me to be impossible to hold, according to any principle of European law to be derived from these directives, that exclusion of liability under Clause 5 could be held to be invalid against the plaintiff [clause 5 being the time clause in the MIB agreement]. The structure of our statute law under the Act of l988, together with the terms of the MIB Agreements, provide, in my judgment, laws, regulations and administrative provisions which satisfy the requirements of the Directives. I will assume for the purpose of this action, and without deciding the point, that the Directives can be construed as being of direct effect. Having regard to the history of the formation of the MIB, and of the making of the successive agreements between the Minister and the MIB, without which no doubt further legislation would have been passed, there may be something to be said for treating the MIB as an emanation of the state: see NUT v St Marys Church, CA: 16th December l996: Times Law Reports: page 726. I reject the plaintiff's case, however, on the Directives because, as Mr O'Brien submitted, the structure of law, including the terms of the MIB Agreement, are not such that there has been a failure to comply with the substance of the Directives. There is no real difficulty for a competent solicitor, or a layman who pays attention to the language of the agreement and the notes attached to it, to comply with the requirement of Clause 5(1).

29. While that does not directly apply to the criminal liability such as is in issue in this case, it does give support to the contentions of Mr Watkin on behalf of the Council that the decision in Bernaldez does not have the wide effect that is suggested but that the provisions of our law are compatible with, and indeed comply with, the requirements of the Directives. That being so, there is no reason why criminal liability should not apply in accordance with our domestic legislation under the Road Traffic Act 1988. But even if there is some possible validity in the more general argument raised by Mr Gibbons, the purpose of the Directives is clearly to provide for the protection of victims of road traffic accidents. It has nothing to do with any possible criminal liability of the drivers who do not comply with the policies of insurance which they have. Our domestic legislation prevents such policies from containing some exclusions of liability. Those provisions comply with what is required in particular in the Third Directive but go to a degree beyond that and it is in my judgment apparent that no offence under section 143 is committed in relation to a breach of one of those excluded conditions. I should say that that is a matter that is perhaps not strictly before me and so any conclusion that I reach on it is obiter. I say that because Mr Watkin drew my attention to a note of a question and answer in the Justice of the Peace and Local Government Review of October 12th 1946. The question raised there was whether a combination of the relevant provisions in the 1930 and 1934 Road Traffic Acts, which were the precursors of sections 143 and 148 of the present Road Traffic Act, meant that, if there was a prohibitive condition and the driver was driving in breach of that condition, he could be guilty of an offence of using a vehicle without the necessary insurance. The author of the answer to the question noted that the restrictions of the policy were, according to the Act, to have "no effect as respects such liabilities as were required to be covered by the policy", and went on:

"Section 12 does not in any way absolve from the liability to criminal proceedings anyone who uses a motor vehicle when there is no policy of insurance in force which in terms covers that user, but it does protect third-parties from the risk of having no remedy if, in the cases covered by the section, a vehicle is used in circumstances not covered or forbidden by the policy. It will be noted that s.12, in the last paragraph, gives the insurance company a right to recover from the person insured any sum which they pay under its provisions.

"The answer to our correspondent is that both the lad and the firm would be liable, on the facts stated, to conviction for breaches of [the relevant section] of the 1930 Act."

30. That answer makes two points, one of which in my view is correct and the other of which is not. The first is that the fact that there is a prevention of reliance on such conditions in relation to liability to compensate victims does not mean of itself that there cannot be a criminal liability under the terms of the Road Traffic Act. That, in my judgment, is correct. It then states that there will be a criminal liability when there is a use of the vehicle in breach of such a prohibited condition. That, in my judgment, is not correct. I say that because, going back to the terms of the Act, section 143 requires that there must be in force in relation to the use of the vehicle such a policy of insurance as complies with the requirements of this part of this Act and the requirements are set out, as I have indicated, in section 145, and one then sees that it must insure that such person in respect of any liability which may be incurred in respect of the death or bodily injury or damage to property to any third party. One then goes on to section 148 and one sees that the prohibited conditions do not affect such liabilities as are required to be covered by a policy under section 145. Thus our law under the Act provides that such conditions in a policy are ineffective to exclude liability in relation to compulsory insurance. Accordingly, their existence, and, it follows, the failure to comply with them, cannot mean that the individual is not insured as is required by the terms of the Act in sections 143 and 145. This would apply equally to a condition prohibited by section 151. It follows that, so far as the prohibited conditions are concerned, there would be no offence committed of using a vehicle without the necessary insurance under section 143. But the existence of the prohibited conditions shows that there may well be other conditions which are not prohibited and, as it seems to me, to use the vehicle in contravention of one of those conditions would mean that there was no insurance within the terms of the Act in section 143. Thus the criminal offence of using the vehicle without their being in force the relevant policy of insurance at the material time is made out. The fact that the victim of any accident will be compensated, whether by the insurer concerned or through the Motor Insurers' Bureau, when it is in fact the same insurer, does not affect the existence of such criminal liability. As it seems to me, there is no reason why that the domestic legislation, in the form of the 1988 Act, should not be applied as it should be in accordance with the decision of this court in the Telford case. The Directives are complied with and, indeed, the decisions of the House of Lords and the Court of Appeal to which I have referred make it plain that they are compatible with our law which properly applies the directives.
31. Mr Watkin has submitted that, if I was not persuaded that that was the position, nonetheless the Directives were not of direct effect and accordingly, for that reason too, there was no reason why the domestic law should not provide as it does and so create the necessary offences in the circumstances of a case such as this. In order to be of direct effect, in the sense that they be relied on by an individual such as the appellant, they must be shown to be unconditional, (subject to no limitation that is); their nature and extent, if there are limitations, must be exactly defined; and they must in their implementation not be subject to the adoption of any subsequent rules or regulations on the part either of the community institutions or of the member states so that, in particular, member states must not be left with any real discretion with regard to the application of the rule in question. I take that from Van Duyn v Home Office [1975] All ER 190, a decision of the European Court of Justice. In this case it is clear that the limits are not exactly defined and there is a degree of discretion left to individual member states as to what provisions they do enact in relation to the compulsory insurance of those who use motor vehicles.
32. I should add that whether the directives did have direct effect was a matter considered by the Court of Appeal in White v White and Motor Insurers Bureau [2001] 2 All ER 43. The case went to the House of Lords, where the decision of the Court of Appeal was reversed, but the House did not disapprove the decision in relation to any lack of direct effect of the Directives. The Court of Appeal decision was given on 30th September 1998.
33. It follows in my judgment that the District Judge in this case was correct in deciding that the decision of the European Court of Justice in Bernaldez did not mean that the appellant was not guilty of the offence of using a motor vehicle without insurance. The question that he asked of the court was this:

"Having convicted the Defendant, Mr Mangal Singh, a licensed private hire driver, of plying for hire contrary to section 45 of the Town Police Clauses Act 1947 on the 22nd July 2005 in Solihull was the learned District Judge correct in law in convicting the Defendant of driving without insurance contrary to Section 143 of the Road Traffic Act 1988 and rejecting the argument that the case of Ruiz Bernaldez is binding authority for the submission that the Defendant was at all material times insured for third party risks."

The answer to that question is in the affirmative. That being so, this appeal must be dismissed.

34. MR WATKIN: My Lord, can I deal with just two matters which arise in the judgment that was given? The first of those is, in summarising the facts, your Lordship referred to the defendant pleading guilty to the plying for hire offence.
35. MR JUSTICE COLLINS: I thought he had.
36. MR WATKIN: He did not.
37. MR JUSTICE COLLINS: In that case I shall say he was convicted.
38. MR WATKIN: He was convicted but there was not much of a defence.
39. MR JUSTICE COLLINS: There did not seem to be much of a defence.
40. MR WATKIN: There was not. The only other factor which I wish, if possible, to clarify is where your Lordship referred to the issue surrounding exclusions under section 143, whether in fact that has the effect that the person was insured. Was it also intended that section 151 should be included in that?
41. MR JUSTICE COLLINS: I am sorry, yes. 151, I think you conceded, because of the language there, the same argument could not really be raised because it was absolute rather than limited but, yes, clearly it is the same reason.
42. MR WATKIN: I just wanted to clarify that. My Lord, it is my application, in the light of that decision, for an order that the appellant does pay the respondent's costs of appeal. I am not in a position immediately to give the court the overall figure but it may be, after submissions that my learned friend would make about that, that if I at this stage give a ball park figure. It may not get anywhere near that ball park figure.
43. MR JUSTICE COLLINS: What is your ball park figure?
44. MR WATKIN: Our ball park figure is £4,000. I anticipate that my learned friend will have a number of submissions to make to the court.
45. MR JUSTICE COLLINS: Well, I do not think -- as there has not been a schedule, obviously, if I were minded to make an order for costs it would have to be on the basis of subject to detailed assessment if not agreed. But there is a further consideration in relation to costs: you have a representation order, do you?
46. MR GIBBONS: I do have a representation order. That does not preclude your Lordship from making an order for costs but what his means are -- he had to pay a hundred pound costs -- his means are £150 a week from driving a taxi plus his working family tax credit.
47. MR JUSTICE COLLINS: He may not have a taxi to drive.
48. MR GIBBONS: Well, that is the point. Assuming, within the next few weeks, because the local authority will serve the notice in the next few days for him to appear before the local committee, I am assuming from my practical experience that he will be suspended by the committee for a significant -- so he will basically have no means at all and when, of course, he has been suspended he loses his working family tax credit. His wife does not work. So, my Lord, this is the important point to take because not only did we have the Telford decision to be considered by this court but there is a large number of other points. I respectfully submit the appropriate order is no order for costs.
49. MR JUSTICE COLLINS: You have a representation order but that is not, I think, the same as being legally aided?
50. MR GIBBONS: No, I am legally aided.
51. MR JUSTICE COLLINS: In that case you have the protection of that order.
52. MR GIBBONS: Thank you.
53. MR JUSTICE COLLINS: Well, you do and in those circumstances -- of course, that does not preclude the making of an order for costs but it does preclude the enforcing of that order without permission.
54. MR GIBBONS: This is an important case, I would respectfully submit, where there should be no order for costs.
55. MR JUSTICE COLLINS: Mr Watkin, would you be entitled to your costs from central funds?
56. MR GIBBONS: Would your Lordship bear with me? It was a point I checked last night but I have to say --
57. MR JUSTICE COLLINS: Maybe you cannot. I should say that I would have no power to give you such an order but there are ways round that.
58. MR WATKIN: It is under the Prosecution of Offences Act and I think it is section --
59. MR JUSTICE COLLINS: It certainly would apply the other way round but I am not sure it applies to the prosecutor.
60. MR WATKIN: I have to say, because we are a public body --
61. MR JUSTICE COLLINS: I do not think you can get them out of public funds. Sorry, which was the act?
62. MR WATKIN: It is the Prosecution of Offences Act 1985 and I have marked section 19 of the Act but I am not sure I have marked it correctly. In Archbold it is paragraph 6.27.
63. MR JUSTICE COLLINS: Yes, I have the feeling that you are right. Let me just confirm. (Pause) 18 is costs against the accused. Prosecution costs is 17. Subject to subsection (2), the court may in any proceedings before a Divisional Court in respect of a summary offence order the payment out of central funds in such amount as the court considers reasonably sufficient to compensate the prosecutor. (2) No order under this section may be made in favour of a public authority. So you are down on that too.
64. Well Mr Watkin, it seems to me that in principle you are entitled to an order but it probably is not going to get you very far.
65. MR WATKIN: Well, in the circumstances I would ask for an order that --
66. MR JUSTICE COLLINS: Under the usual terms, which used to be the football pools or the lottery but I cannot remember what the precise provisions are nowdays -- but the effect is that you cannot enforce without leave and, furthermore, it has to be the subject of a detailed assessment if not agreed. Well, I think it has to be subject to a detailed assessment.
67. MR GIBBONS: It is detailed assessment.
68. MR JUSTICE COLLINS: If you want the order -- Mr Gibbons, I do not think I can decline to make the order.
69. MR GIBBONS: I am usually very pragmatic, costs follow the event, but the man has no money.
70. MR JUSTICE COLLINS: I know, but that does not mean that we do not make an order, it means that the Council will probably be ill advised to incur extra money throwing good money after bad.
71. MR WATKIN: We realise what the practical outcome of this is but nevertheless, a football pools order --
72. MR JUSTICE COLLINS: You can have it subject to the usual order about enforcing it.
73. Thank you both very much. I am sorry that I deprived you of a certain amount of work.