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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Tiffney v. Flynn & Anor [2007] ScotCS CSOH_149 (21 August 2007)
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Cite as: [2007] ScotCS CSOH_149, [2007] CSOH 149
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OUTER HOUSE, COURT OF SESSION [2007] CSOH 149 |
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PD1181/03 |
OPINION OF LORD KINCLAVEN in the cause ANNE LOUISE TIFFNEY (A.P.) Pursuer; against (FIRST) SEAN FLYNN (A.P.) and (SECOND) MOTOR INSURERS BUREAU Defenders: ญญญญญญญญญญญญญญญญญ________________ |
Pursuer:
Ellis QC, Primrose; Balfour &
Manson. LLP
First Defender: Forsyth;
Second Defenders:
Introduction
[3] The pursuer is the mother of the late Paul Michael Ross ("the deceased").
[4] She sues as an individual seeking damages in respect of her son's death.
[7] The second defenders are the Motor Insurers Bureau (the "MIB").
[8] In this action, the pursuer seeks:-
(1) decree for payment of damages by the first defender, and
(2) decree for declarator.
[9] The conclusion for declarator is in the following terms:-
"2. For declarator that, in terms of the Agreement between the second defenders and the Secretary of State for the Environment, Transport and the Regions dated 13th August, 1999, the second defenders are liable to satisfy any decree pronounced against the first defender in the event of such decree or part thereof becoming an unsatisfied judgment as defined by the said Agreement."
[10] The case came before me by way of a proof before answer restricted to the question of liability.
[15] I also heard evidence from Roger Snook of the MIB which I will also outline below.
[16] I was subsequently addressed by counsel in relation to the English case of Louise Jestina Phillips (as representative of the estate of Neville Britton Phillips deceased) v Mohammed Rafiq and Motor Insurers Bureau which is reported at [2006] EWHC 1461 (QB) and, on appeal, at [2007] EWCA Civ 74 ("the case of Phillips").
[22] I agree with the conclusions of the Court
of Appeal in
[23] I am not satisfied that Phillips can be distinguished.
[24] I was not persuaded by any of the additional arguments presented on behalf of the MIB before me.
[26] I shall continue the cause on the question of expenses.
[27] I shall also put the case out "By Order" in respect of further procedure.
The Motor Insurers Bureau ("the MIB")
[29] Those matters were outlined by Lord Nicholls
of
"6. At the end of the war the insurers set up the Motor Insurers' Bureau, which for brevity I will refer to as 'MIB'. MIB is a company incorporated under the Companies Acts. Its primary object is to satisfy judgments in respect of any liability required to be covered by contracts of insurance under the Road Traffic Acts. Its members comprise all insurers who are for the time being transacting compulsory motor vehicle insurance in this country. MIB is funded by levies payable by its members. The amount of the levy is based on the premium income of the members. Ultimately, therefore, the funds of MIB come from the pockets of law abiding motorists who have complied with their statutory insurance obligations.
7. The
obligations of MIB are not to be found in an Act of Parliament. Instead, they are the subject of agreement
with the appropriate minister. The first
agreement was made on
"The Road Traffic Act 1930 made it compulsory for motor vehicles to
be insured against third party risks yet the Act gave no protection to those
third parties where the negligent motorist had failed to comply with his
statutory obligation to insure. That lacuna was filled in 1946 by motor
insurers setting up the M.I.B. to satisfy judgments where the use of the
vehicle should have been covered by contracts of insurance under the Road
Traffic Acts. All motor insurers are
members of the Bureau. The Bureau's
funds are obtained from levies charged upon insurers and so come from the
premiums which are charged by those insurers to members of the public. The obligations of the M.I.B. arise from
agreements made with the Minister of Transport, now the Secretary of State for
the Environment, Transport and the Regions. Agreements were made in 1946, 1971, 1972, on
[31] I turn now to the pleadings.
The Pleadings in the present case
[32] The pleadings are contained in the Closed Record No 36 of Process.
[37] In Article 6 of Condescendence the pursuer avers, inter alia (at page 16B-E):-
"... the second defenders are not entitled to rely upon Clause 6.1(e) of the Uninsured Drivers Agreement to avoid liability to satisfy any judgment pronounced in the present proceedings. In terms of the Uninsured Drivers' Agreement the claimant is the pursuer. The terms of said Agreement are clear and unambiguous. There is no provision therein which entitles the second defenders to rely upon the alleged knowledge of the deceased person in respect of the insurance arrangements for a vehicle in order to avoid liability for a claim made by a relative of the deceased against the driver of such a vehicle. Had the defenders wished to enable themselves to rely upon the alleged knowledge of a deceased person in such circumstances a Clause to that effect could have been inserted into the Agreement. The knowledge of the deceased is irrelevant in the context of the present claim. The second defenders are obliged to satisfy any judgments pronounced against the first defender in the present proceedings."
[38] In Answer 6 the second defenders (the MIB) aver inter alia (at page 18A-19E):-
"... insofar as the pursuer directs this action against the second defenders, her ability to do so turns on the terms of the Uninsured Driver's Agreement. In terms of Clause 6.1(e) thereof, the second defenders are not liable to satisfy any judgment where, at the time of the accident, the claimant was allowing himself to be carried on a vehicle at a time when he knew or ought to have known that the vehicle was being used without there being in force in relation to its use a contract of insurance as would comply with the Road Traffic Acts .... In the circumstances, at the time of the accident with which the present action is concerned the deceased was allowing himself to be carried on a vehicle at a time when he knew or ought to have known that the vehicle was being used without there being in force in relation to its use a contract of insurance as would comply with the Road Traffic Acts .... The Uninsured Driver's Agreement defines 'claimant' as meaning 'unless the context otherwise requires ... a person who had commenced or who proposes to commence relative proceedings and has made an application under this Agreement in respect thereof'. In the context of a fatal claim, such as this, that meaning makes no sense. Accordingly, in the context of a fatal claim the word 'claimant' as used in Clauses 6.1 and 6.2 of the Uninsured Drivers' Agreement means the person in respect of whose injury and death the action is brought, viz the deceased. In any event, the pursuer's claim to damages can be no higher than that which would have been held by the deceased, had he survived. If the deceased had survived and sought payment from the second defenders they would have been able to rely on Clause 6.1(e). In the same way, the second defenders are entitled to rely on the same Clause with regard to an action based upon the death of the deceased. Accordingly, the second defenders are not liable to satisfy any judgment pronounced against the first defender in the present action."
The Joint Minute for the Parties
"1. That the pursuer is the mother of the
late Paul Michael Ross ('the deceased') who was born on
2. That the deceased died as a result of
injuries received in a road traffic accident ('the accident') on
3. That at the time of the accident the deceased was a rear seat passenger in a BMW 325 motor car registration number E715 NFS ('the vehicle') driven by the first defender.
4. That the accident was caused by fault and negligence on the part of the first defender.
5. That at the time of the accident the deceased was wearing a seat belt.
6. That No. 29/1 of Process is a copy
of the Agreement between The Secretary of State for the Environment, Transport
and the Regions and the second defenders dated
7. That at the time of the accident the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part VI of the Road Traffic Act 1988.
8. That at the time of the accident the deceased was voluntarily allowing himself to be carried in the vehicle and at all material times knew or ought to have known - within the meaning of Clause 6.1(e)(ii) of the Agreement - that the vehicle was being used without there being in force in relation to its use a contract of insurance as would comply with Part VI of the Road Traffic Act 1988.
8A. That had the deceased been injured (and) survived the accident, and had he raised an action against the first defender in respect of personal injuries sustained by him therein, the second defenders would not, as a result of the knowledge referred to in paragraph 8 above and the exception contained in Clause 6.1(e)(ii) of the Agreement, have been obliged to satisfy any unsatisfied judgment obtained in any such action.
9. That unless Clause 6.1(e)(ii) of the Agreement applies to the present claim made by the pursuer, the second defenders will be obliged in terms of the Agreement to satisfy any unsatisfied judgment obtained by the pursuer against the first defender in this action.
10. The first defender and the second defenders no longer maintain any argument of contributory negligence on the part of the deceased.
11. The defenders no longer maintain any argument that the deceased was involved in a joint criminal enterprise at the time of the accident or that the vehicle was being used in the course or furtherance of a crime at the time of the accident and do not maintain any argument based thereon or on the maxim ex turpi causa non oritur actio.
12. That No. 29/2 of Process is a copy of the
agreement dated
13. That No. 29/3 of Process is a copy of the
agreement dated
14. That No. 29/4 of Process is a copy of the
agreement dated
15. That the Civil Procedure Rules applicable to England and Wales ('the CPR') were introduced by Statutory Instrument SI 1998/3132 and came into effect on 26 April 1999.
16. That prior to the coming into effect of
the CPR, persons pursuing a claim in
17. That
since the coming into effect of the CPR, persons pursuing a claim in
18. That copies of all productions are to be treated as principals."
Productions
29/1 Agreement dated
29/2 Agreement dated
29/3 Agreement dated
29/4 Agreement dated
29/5 Second Council Directive 84/5/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles, and
29/6 Third Council Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles.
The Uninsured Drivers Agreements and the
EC Directives
The 1999 Agreement (No. 29/1 of Process)
[46] Clause 1 of the 1999 Agreement relates to "Interpretation" and provides "General Definitions".
[47] In particular, Clause 1 provides, inter alia:-
"1. In this Agreement, unless the context otherwise requires, the following expressions have the following meanings - ...
'claimant' means a person who has commenced or who proposes to commence relevant proceedings and has made an application under this Agreement in respect thereof;
'contracts of insurance' means a policy of insurance or a security covering a relevant liability; ...
'relevant liability' means a liability in respect of which a contract of insurance must be in force to comply with Part VI of the 1988 Act [that is, the Road Traffic Act 1988];
'relevant proceedings' means proceedings in respect of a relevant liability ...;
'unsatisfied judgment' means a judgment or order (by whatever name called) in respect of a relevant liability which has not been satisfied in full within seven days from the date upon which the claimant became entitled to enforce it."
[48] Clause 5 relates to the "MIB's obligation to satisfy compensation claims".
[49] Clause 5 provides as follows:-
"5.1 Subject to clauses 6 to 17, if a claimant has obtained against any person in a Court in Great Britain a judgment which is an unsatisfied judgment then MIB will pay the relevant sum to, or to the satisfaction of, the claimant or will cause the same to be so paid.
5.2 Paragraph (1) applies whether or not the person liable to satisfy the judgment is in fact covered by a contract of insurance and whatever may be the cause of his failure to satisfy the judgment."
[50] Clause 6 relates to "Exceptions to Agreement".
[51] In particular, Clause 6 provides inter alia:-
"6.1 Clause 5 does not apply in the case of an application made in respect of a claim of any of the following descriptions ...
(c) a claim by, or for the benefit of, a person ("the beneficiary") other than the person suffering death, injury or other damage which is made either -
(i) in respect of a cause of action or a judgment which has been assigned to the beneficiary, or
(ii) pursuant to a right of subrogation or contractual or other right belonging to the beneficiary; ...
(e) a claim which is made in respect of a relevant liability described in paragraph (2) by a claimant who, at the time of the use giving rise to the relevant liability was voluntarily allowing himself to be carried in the vehicle and, either before the commencement of his journey in the vehicle or after such commencement if he could reasonably be expected to have alighted from it, knew or ought to have known that -
(i) the vehicle had been stolen or unlawfully taken, (or)
(ii) the vehicle was being used without there being in force in relation to its use such a contract of insurance as would comply with Part VI of the 1988 Act, ...
6.2 The relevant liability referred to in paragraph (1)(e) is a liability incurred by the owner or registered keeper or a person using the vehicle in which the claimant was being carried.
6.3 The burden of proving that the claimant knew or ought to have known of any matter set out in paragraph (1)(e) shall be on the MIB ...
6.4 Knowledge which the claimant has or ought to have for the purposes of paragraph (1)(e) includes knowledge of matters which he could reasonably be expected to have been aware of had he not been under the self-induced influence of drink or drugs.
6.5 For the purposes of this clause - ...
(b) references to a person being carried in a vehicle include references to his being carried upon, entering, getting on to and alighting from the vehicle, ..."
[53] The words "the claimant" appear in various clauses of the 1999 Agreement including:-
Clause 7.2 - in relation to signing an application;
Clause 9.1 - in relation to giving notice of relevant proceedings;
Clause 10.2 - in relation to giving notice of service of proceedings;
Clause 12.1 - in relation to giving notice of intention to apply for judgment; and
Clause 15.1 - in relation to assignment of judgment and undertakings.
[54] Clause 17.1 relates to "Compensation received from other sources" and provides inter alia that:-
"17.1 Where a claimant has received compensation from - ...
(b) an insurer under an insurance agreement or arrangement, or
(c) any other source, in respect of the death, bodily injury or other damage to which the relevant proceedings relate and such compensation has not been taken into account in the calculation of the relevant sum, MIB may deduct from the relevant sum ... an amount equal to that compensation."
[56] In the preamble to the guidance notes (at the top of page 11) it is stated inter alia:-
"The following notes are for the guidance of anyone who may have a claim on the Motor Insurers' Bureau under this Agreement and their legal advisers. They are not part of the Agreement, their purpose being to deal in ordinary language with the situations which most readily occur. They are not in any way a substitute for reading and applying the terms of this or any other relevant Agreement. At the request of the Secretary of State, these notes have been revised with effect from 15th April 2002 and in their revised form have been agreed and approved by MIB, the Law Society of England and Wales, the Law Society of Scotland, the Motor Accident Solicitors' Society and the Association of Personal Injury Lawyers. Any application made under the Agreement after this date (unless proceedings have already been issued) will be handled by MIB in accordance with these notes.
Where proceedings have been issued in
[57] Paragraph 1.1 of the guidance notes states:-
"The role of MIB under this Agreement is to provide a safety net for innocent victims of drivers who have been identified but are uninsured. MIB's funds for this purpose are obtained from levies charged upon insurers and so come from the premiums which are charged by those insurers to members of the public."
[58] Paragraph 3 of the guidance notes states inter alia:-
"3. Claims which MIB is not obliged to satisfy.
MIB is not liable under the Agreement in the case of the following types of claim. ...
3.6 A claim made by a passenger in a vehicle where the loss or damage has been caused by the user of that vehicle if:-
3.6.1 the use of the vehicle was not covered by a contract of insurance; and
3.6.2 the claimant knew or could be taken to have known that the vehicle was being used without insurance ... ."
The 1971 Agreement (No. 29/4 of Process)
[61] Reference was made in particular to Clause 5.(1)(c) and 6.
[62] Clause 5 related to certain "Conditions precedent to MIB's liability".
[64] Clause 6 made provision for certain "Exemptions".
The 1972 Agreement (No. 29/3 of Process)
[66] Reference was made in particular to Clause 6.(1)(c).
[67] Clause 6 related to "Exemptions" and provides inter alia that:-
"(1) MIB shall not incur any liability under Clause 2 of this Agreement in a case where -
(c) at the time of the accident the person suffering death or bodily injury in respect of which the claim is made was allowing himself to be carried in a vehicle and - ...
(ii) being the owner of or being the person using the vehicle, he was using or causing or permitting the vehicle to be used without there being in force in relation to such use a contract of insurance as would comply with Part VI of the Road Traffic Act 1972, knowing or having reason to believe that no such contract was in force."
The 1983 (Second) Directive (No. 29/5 of
Process)
[69] Reference was made in particularly the preambles and Article 1.4.
[70] One of the preambles (on page 2 of No 29/5 of Process) recites inter alia:
"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 ... whereas, however, Member States should be given the possibility of applying certain limited exclusions as regards the payment of compensation by that body ..."
[71] Another preamble (on page 2) recites:-
"Whereas the members of the family of the insured person, driver or any other person liable should be afforded protection comparable to that of other third parties, in any event in respect of their personal injuries;"
[72] Article 1.4 (on page 3) provides inter alia:
"Each Member State shall set up or authorise a body with the task of providing compensation, at least up to the limits of the insurance obligation for damage to property or personal injuries caused by ... a vehicle for which the insurance obligation ... has not been satisfied. ...
However, Member States may 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."
The 1988 Agreement (No. 29/2 of Process)
[74] Reference was made in particular to Clauses 5.1, 6.1, and 6.2.
[75] Clause 5.1 of the 1988 relates to "Conditions Precedent to MIB's liability".
Clause 5.1 (b) - in relation to furnishing the MIB with information,
Clause 5.1(c) - in relation to demanding information, and
Clause 5.1(d) - in relation to taking steps to obtain judgments against all the persons liable.
[77] Clause 6 of the 1988 Agreement relates to "Exceptions" and provides inter alia:-
"6.1 M.I.B. shall not incur any liability under clause 2 of this Agreement in a case where: ...
(d) the claim is in respect of damage to property which consist of damage to a motor vehicle or losses arising therefrom if at the time of the use giving rise to the damage to the motor vehicle there was not in force in relation to the use of that vehicle when the damage to it was sustained such a policy of insurance as is required by Part VI of the Road Traffic Act 1972 and the person or persons claiming in respect of the loss or damage either knew or ought to have know that that was the case;
(e) at the time of the use which gave rise to the liability the person suffering death or bodily injury or damage to property was allowing himself to be carried in or upon the vehicle and either before the commencement of his journey in the vehicle or after such commencement he could reasonably be expected to have alighted from the vehicle he -
(i) knew
or ought to have known that the vehicle had been stolen or unlawfully taken, or
(ii) knew or ought to have known
that the vehicle was being used without there being in force in relation to its
use such a contract of insurance as would comply with Part VI of the Road
Traffic Act 1972.
6.2 The exceptions specified in sub-paragraph (1)(e) of this Clause shall apply only in a case where the judgment in respect of which the claim against MIB is made was obtained in respect of a relevant liability incurred by the owner or a person using the vehicle in which the person who suffered death or bodily injury or sustained damage to property was being carried."
The 1990 (Third) Directive (No. 29/6 of
Process)
[79] Brief reference was made to the preambles (on page 2 of No 29/6).
[80] One of the preambles recites:-
"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".
[81] I turn now to mention the authorities cited.
Authorities
[82] The pursuer's authorities included:-
1. Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 particularly Lord Hoffman at page 912F - 913F.
2. Prenn v Simmonds [1971] 1 WLR 1381.
3. Bank
of
4. The Howgate Shopping Centre Ltd v Catercraft Services Ltd 2004 SLT 231, Lord Macfadyen, particularly at pages 238H-L, 241H-K, and 244A-C (paragraphs [24], [34], [35], and [43]).
5. Bank of Credit and Commerce International SA v Ali and others [2002] 1 AC 251, particularly Lord Clyde at pages 281G - 282C (paragraph 78).
6. Mackie's Executrix v AB 2000 Ltd, 2004 SLT 14, particularly at pages 143I-J, and 143K-L (paragraphs [6] and [7]).
7. The Law Reform (Contributory Negligence) Act 1945 (8 & 9 Geo. 6, c. 28), particularly sections 1(1), and 1(4), and
8. Donaldson v Hays Distribution Services Ltd 2005 SC 523, particularly at page 535 - 536 (paragraphs [29] - [30]).
[83] The second defenders' authorities included:-
1. White v White and another [2001] 1 WLR 481, particularly Lord Nicholls of Birkenhead at pages 484G- 485F, 486G-H, 487E-G, and 488C-F (paragraphs 10-12, 17, 20 and 23).
2. Mannai Investment Co. Ltd. v Eagle Star Life Assurance Co. Ltd. [1997] AC 749, particularly Lord Steyn at page 767G-H, 771A-C, and 772H and Lord Hoffman at page 774C-H, 775C-F and 779F-H and Lord Clyde at 782C-D.
3. Investors Compensation Scheme Ltd. v West Bromwich Building Society [1998] 1 WLR 896 particularly Lord Hoffman at page 912F - 913F.
4. Bank of Credit and Commerce International SA v Ali and others [2002] 1 AC 251, particularly Lord Bingham of Cornhill at page 259F-H (paragraph 8), Lord Hoffman at page 268H-269A and 269D-G (paragraphs 37 and 39) and Lord Clyde at pages 281G - 282C (paragraph 78).
5. Sirius International Insurance Co (Publ) v FAI General Insurance Ltd and others [2004] 1 WLR 3251, particularly Lord Steyn at page 3257H-3258D (paragraph 19).
6. Bank of
7. Isabella McKay v Scottish Airways Limited 1948 SC 254, particularly The Lord President (Cooper) at page 264.
8. The Road Traffic Act 1988 (c. 52) particularly sections 143(1) and (2), 145(1) and (3)(a), and 151(1), (2) and (4).
9. The
Damages (
10. Lauren Louise Sheldon v Goldstraw, MIB and Birchall, a decision of His Honour Judge Tetlow in Alrtincham Country Court, 18 May 2004 (Case No. OL306876).
[84] I was also referred in detail to the English case of Louise Jestina Phillips (as representative of the estate of Neville Britton Phillips deceased) v Mohammed Rafiq and Motor Insurers Bureau at first instance [2006] EWHC 1461 (QB) and in the Court of Appeal (Civil Division) [2007] EWCA Civ 74. See further below.
[85] Mr Dunlop also provided a reference to Jameson and another v Central Electricity Generating Board [2000] 1 AC 455.
Interpretation
[86] The issue before me is essentially one of construction of the 1999 Agreement.
[87] As outlined above, I was referred to various authorities on interpretation including passages from the speeches of Lord Hoffmann in Mannai Investment Co. Ltd v Eagle Star Assurance Co. Ltd. [1997] AC 749 and Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896.
"8.
It is common ground between
the parties that the proper approach is, of course, the enunciation of
principle expressed by Lord Hoffman in I.C.S.
Ltd v
(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.
(2) The background was famously referred to by Lord Wilberforce as the 'matrix of fact,' but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.
(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. ...
(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: (see Mannai Investments Co. Ltd. v Eagle Star Life Assurance Co. Ltd. [1997] AC 749 ).
(5) The 'rule' that words should be given their 'natural and ordinary meaning' reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in The Antaios Compania Naviera S.A. v Salen Rederierna A.B. [1985] A.C. 191, 201:
'... if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense.'
9. Our
attention was also drawn to R (
'The starting point is that language in all legal texts conveys meaning according to the circumstances in which it was used. It follows that the context must always be identified and considered before the process of construction or during it. It is therefore wrong to say that the court may only resort to evidence of the contextual scene when an ambiguity has arisen.'"
[89] Bearing in mind the various authorities listed above, I find that a helpful summary.
Statutory Provisions
[90] It might also be helpful to set out some of the statutory provisions referred to by counsel.
The Law Reform (Contributory Negligence)
Act 1945
"(1) Where any person suffers damage as the result partly of his own fault and partly of the fault of any other person or persons, a claim in respect of that damage shall not be defeated by reason of the fault of the person suffering the damage, but the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant's share in the responsibility for the damage:
Provided that--
(a) this
subsection shall not operate to defeat any defence arising under a contract;
(b) where
any contract or enactment providing for the limitation of liability is applicable to the claim, the amount of damages recoverable
by the claimant by virtue of this subsection shall not exceed the maximum limit
so applicable."
[92] Section 1(4) of the 1945 Act, as
applicable to
"(4) Where any person dies as the result partly of his own fault and partly of the fault of any other person or persons, a claim by any dependant of the first mentioned person for damages or solatium in respect of that person's death shall not be defeated by reason of his fault, but the damages or solatium recoverable shall be reduced to such extent as the court thinks just and equitable having regard to the share of the said person in the responsibility for his death."
The Damages (
[93] General reference was also made to the
Damages (
"(1) Where
a person dies in consequence of personal injuries sustained by him as a result
of an act or omission of another person, being an act or omission giving rise
to liability to pay damages to the injured person or his executor, then,
subject to the following provisions of this Act, the person liable to pay those
damages (in this section referred to as "the responsible person")
shall also be liable to pay damages in accordance with this section to any
relative of the deceased, being a relative within the meaning of Schedule 1 to this
Act. ...
(3) The
damages which the responsible person shall be liable to pay to a relative of a
deceased under this section shall (subject to the provisions of this Act) be
such as will compensate the relative for any loss of support suffered by him
since the date of the deceased's death or likely to be suffered by him as a
result of the act or omission in question, together with any reasonable expense
incurred by him in connection with the deceased's funeral.
(4) Subject
to subsection (4A), if the relative is a member of the deceased's immediate
family (within the meaning of section 10(2) of this Act) there shall be awarded, without
prejudice to any claim under subsection (3) above, such sum of damages, if any,
as the court thinks just by way of compensation for all or any of the
following--
(a) distress
and anxiety endured by the relative in contemplation of the suffering of the
deceased before his death;
(b) grief
and sorrow of the relative caused by the deceased's death;
(c) the
loss of such non-patrimonial benefit as the relative might have been expected
to derive from the deceased's society and guidance if the deceased had not
died,
and the court in making an award under
this subsection shall not be required to ascribe specifically any part of the
award to any of paragraphs (a), (b) and (c) above."
The Road Traffic Act 1988
[95] I was also referred to the Road Traffic Act 1988 (c. 52).
"(1) This
section applies where, after a certificate of insurance or certificate of
security has been delivered under section 147 of this Act to the person by whom
a policy has been effected or to whom a security has been given, a judgment to
which this subsection applies is obtained.
(2) Subsection
(1) above applies to judgments relating to a liability with respect to any
matter where liability with respect to that matter is required to be covered by
a policy of insurance under section 145 of this Act and either-
(a) it
is a liability covered by the terms of the policy or security to which the
certificate relates, and the judgment is obtained against any person who is
insured by the policy or whose liability is covered by the security, as the
case may be, or
(b) it
is a liability, other than an excluded liability, which would be so covered if
the policy insured all persons or, as the case may be, the security covered the
liability of all persons, and the judgment is obtained against any person other
than one who is insured by the policy or, as the case may be, whose liability
is covered by the security. ...
(4) In
subsection (2)(b) above 'excluded liability' means a liability in respect of
the death of, or bodily injury to, or damage to the property of any person who,
at the time of the use which gave rise to the liability, was allowing himself
to be carried in or upon the vehicle and knew or had reason to believe that the
vehicle had been stolen or unlawfully taken, not being a person who--
(a) did
not know and had no reason to believe that the vehicle had been stolen or
unlawfully taken until after the commencement of his journey, and
(b) could
not reasonably have been expected to have alighted from the vehicle.
In this subsection the reference to a
person being carried in or upon a vehicle includes a reference to a person
entering or getting on to, or alighting from, the vehicle."
[98] I should also summarise the evidence given by Mr Snook.
The evidence of Roger Dudley Snook
[100] In overview, however, his evidence might be summarised along the following lines.
[111] In relation to "the exception" Mr Snook said (at page 8 lines 8 to 15), inter alia:-
"There was an equivalent provision in the previous agreements but the provision in the 1999 agreement is slightly wider. Specifically, it was trying to make matters clearer based on circumstances under which a victim would not be paid where they acknowledged they had been driving without insurance."
[113] The position was similar in relation to the 1972 Agreement.
"I mentioned before that there had been complaints from lawyers that the 1988 Agreement was too vague in its wording. Specifically, they referred to such matters as the giving of notice of the commencement of proceedings. Now, we thought about that. We felt there was some justice in their view. We made an approach to the then, I think it was the Department of Transport in those days, as to whether the agreement could be rewritten. ... It (the approach) would have been between 1992 and 1993."
[116] In relation to the word "claimant" Mr Snook explained (at page 10 line 23 et seq) that:-
"It was an expression that was new to this document and it was new very late in the drafting process. ... I recall that it was introduced late in (1998) by the parliamentary draftsman".
"That was the reasons why, I'm given to understand, the parliamentary draftsman introduced that term ('claimant')".
[123] There was no re-examination.
Phillips v Rafiq and MIB
[127] Counsel for the MIB submitted that Phillips was wrong and that I should not hesitate to say so.
[128] The details of that case are as follows.
The Decision of His Honour Judge Richard
Seymour in Phillips
[130] The background can be outlined as follows.
[132] At the time of purchasing the Car in 2001 Mr Phillips had arranged a temporary insurance cover note but he neglected to take steps to continue the insurance and his use of the Car was uninsured after Christmas Day 2001.
[133] As at
[134] On 27 August 2002, the day before his
death, Mr Phillips
had been in Birmingham assisting a friend, Mr Mohammed Rafiq, the first
defendant, to plaster and paint a shop belonging to members of Mr Rafiq's
family. Once the work was completed, Mr Phillips and Mr Rafiq, set off back towards
[135] That was the position when the Car crashed
on the M25 motorway near Potters Bar at about
[136] Mr Rafiq was not insured to drive the Car at the time of the accident.
[137] Mr Rafiq took no part in the action.
[138] The second defendants in the action were the MIB.
[139] It was anticipated that Mrs Phillips would in due course obtain a judgment against Mr Rafiq on the grounds that his negligence was the cause of the death of Mr Phillips.
[140] Judge Seymour explains (in paragraph 10 of his judgment) that Mrs Phillips's claims against Mr Rafiq were pursued on behalf of his estate pursuant to the provisions of Law Reform (Miscellaneous Provisions) Act 1934 and on behalf of his dependants pursuant to the provisions of Fatal Accidents Act 1976.
"For the avoidance of doubt and without prejudice to an exchange of witness statements the Second Defendant avers that:-
(a) The Deceased was the owner and registered keeper of the vehicle at the time of the accident.
(b) The Deceased had not arranged any insurance cover for the vehicle at the time of the accident.
(c) The Deceased, at the time of the accident, was voluntarily allowing himself to be carried in the vehicle when he knew or ought to have appreciated that the First Defendant was not covered by any insurance for his use of the vehicle.
In short, therefore the Deceased at the outset of the relevant journey which led ultimately to the accident, was content to allow himself to be carried in the vehicle when he knew or ought to have known it was being used without there being in force in relation to its use such a contract of insurance as would comply with Part VI of the Road Traffic Act 1988. As such, the Second Defendant accepts no liability in this case."
The MIB's submissions in Phillips
Derivative
Claim
The
construction of the word "Claimant"
The
background and context
The
EC Directives
"Member states may exclude the payment of compensation by [the MIB] in respect of persons who voluntarily entered the vehicle which caused the damage or injury when the [MIB] can prove that they knew it was uninsured."
The words emphasised ("in respect of persons" and "they") indicate that the exception is not confined to claims by passengers with knowledge of uninsured use but rather to the payment of compensation in respect of such persons. The payment of compensation to a dependant of such a passenger would, it was submitted, be the payment of compensation in respect of such a person and therefore a payment which the exception was designed to exclude.
Summary
The plaintiff's submissions in Phillips
"The background to the 1999 agreement, which must have been apparent to both contracting parties, was the Directive, which imposed obligations and allowed exceptions. Judged by that background, the common intention must have been that liability to compensate should be excluded where the injured person or the deceased person knew the driver was not insured. The context of the agreement requires the word 'Claimant' to be modified in the particular instance to read: 'Dependant of the deceased' or something to the same effect. In conclusion therefore, I rule that the preliminary issue on the presumed facts should be found in favour of the second defendant, the MIB."
The Decision of Judge Seymour in Phillips
"This was the second round of a
gladiatorial contest between Mr McKeon for the MIB and Mr Ritchie for
dependants of a deceased passenger. They
first locked horns in the Altrincham County Court on
'30. It seems to me that the basic approach to the construction of any document, in the light of the guidance of Lord Hoffmann to which I have referred, is to look at what it actually says. That must be the logical starting point. While a document must be construed against the background of the relevant circumstances in which it was made, one should not start from the position that the answer to the proper construction of the document lies in the background circumstances and that little or no account need be taken of the wording of the document. Moreover, as it seems to me, where the relevant words of a document appear on their face to have a clear and unambiguous meaning that is a powerful aid to their construction. There must be a certain weight to be attached to the consideration that the parties meant what they appear clearly to have said. In the present case the wording of the definition of the expression "claimant" is clear and is to the effect for which Mr Ritchie contended.
31. I
accept that the wording of the definition was introduced by the expression "unless
the context otherwise requires". One
would ordinarily expect that the contingency against which parties were seeking
to guard by including some such wording was a situation in which the
application of the literal definition produced absurdity or something
approaching it. Mr McKeon seemed at
one point rather to be submitting that the effect of the words was a somewhat
32. It is obviously right, in my judgment, in construing the 1999 Agreement, to have in mind that it is the successor to a number of other agreements between essentially the same parties and dealing with the same subject matter. However, that does not lead to the conclusion, in my judgment, that the parties to the 1999 Agreement wished to achieve in respect of passengers injured by uninsured drivers who had knowledge of the lack of insurance the same provision as that made in the 1988 Agreement. The obvious course to take had that been desired would have been simply to repeat the relevant provisions of the 1988 Agreement. The use of different wording shows plainly, as it seems to me, that it was not intended simply to reproduce the same effect as in the 1988 Agreement. The wording in the 1988 Agreement was clear as to the effect upon the claims of dependants. The changing of that clear wording, in my judgment, shows that, for whatever reason, the parties to the 1999 Agreement wished to make different provision. The different provision made, as it seems to me, not visiting the consequences which would have ensued for a person in the position of Mr Phillips had he been the claimant upon his dependants, is not absurd or ridiculous. There could be very sound reasons of policy for wishing to achieve exactly that result.
33. I accept the submission of Mr Ritchie that it is irrelevant to the proper construction of the 1999 Agreement that the necessary basis for a claim under Fatal Accidents Act 1976 s.1 is that the deceased, had he lived, would have had a claim. So far as the 1999 Agreement is concerned, the sole issue is whether the actual claimant, Mrs Phillips, satisfies the requirements of the 1999 Agreement, properly construed, which need to be met before she is entitled to have her judgment, assuming she gets one, against Mr Rafiq satisfied by MIB. In my judgment, for the reasons which I have given, she does.
34. For the reasons submitted by Mr Ritchie I find that the provisions of Article 1(4) of the Second Motor Insurance Directive are also irrelevant to the proper construction of the 1999 Agreement. Those provisions do not require any exception at all to be made under a scheme like that established by the 1999 Agreement. They simply prescribe the greatest extent of the permitted exception.'"
[157] However, the MIB appealed against the decision of Judge Seymour.
[158] I turn now to the decision of the Court of Appeal.
The Decision of the Court of Appeal in Phillips
[159] The Decision of the Court of Appeal (Civil
Division) in the case of Phillips is
reported at [2007] EWCA Civ 74.
[160] The Appeal was
heard before The Rt Hon. Lord Justice Ward, The Rt Hon. Lord Justice Latham and
The Hon Mr Justice Charles.
[161] Lord Justice Ward gave the following introduction in paragraph 1 of the judgment:-
"The
issue in this appeal is this: is the appellant, the Motor Insurers' Bureau ('M.I.B')
liable upon the proper construction of the Uninsured Drivers Agreement of 1999
to satisfy any judgment obtained against the first defendant in this action
brought by Mrs Louise Phillips, the widow of the late
Neville Phillips, on her behalf and on behalf of his
dependents, for damages under the Fatal Accidents Act 1976 in circumstances where the deceased was killed
in a road traffic accident and where he knew that he was being carried as a
passenger in the vehicle concerned when it was being used without there being
in force in relation to its use such a contract of insurance as would comply
with Part VI of the Road Traffic Act 1988. This
is the M.I.B's appeal against the declaration made on
"12. We were referred to White v White [2001] 2 A.E.R. 43 where the House of Lords had to interpret the exclusion clause in the 1988 Agreement in the light of this Directive. I do not gain much assistance from this authority. The factual issue was quite different: in essence the issue was whether the passenger knew or ought to have known that the driver of the vehicle was not insured if he was merely careless or negligent, giving no thought to the question of insurance even though an ordinary prudent passenger, in his position and with his knowledge, would have made enquiries. ...
Whilst, therefore, the Directive is obviously part of the relevant background, this aspect of it and the decision in White v White hardly throws much light on the controversy we have to resolve."
[164] Lord Justice Ward continued (at paragraph 13 - and again I summarise) as follows:-
"13. More to the point are the terms of the 1988 Agreement and the extent to which the 1999 Agreement differs from it. I must, therefore, examine those differences, though not exhaustively. These are the major points:
(1) The 1988 Agreement defines 'contract of insurance', 'insurer', and 'relevant liability' in terms not dissimilar to the definitions contained in the 1999 Agreement. What is significant about clause 1 is that the 1999 Agreement expands the number of definitions and, importantly, defines 'claimant' as I have already set out. Mr Worthington Q.C. who appears for the appellant, though he did not appear below, emphasises that in the 1999 Agreement the definitions apply 'unless the context otherwise requires'. He submits 'claimant' is used in the procedural sense, that is to say a party to a proceedings. I agree. That is borne out by the 'Notes for the guidance of victims of road traffic accidents' annexed to the Agreement and expressed to be 'some notes on its scope and purpose'. ...
(2) The language of clause 2 of the 1988 Agreement - 'Satisfaction of claims by M.I.B.' - and clause 5 of the 1999 Agreement - 'M.I.B's obligation to satisfy compensation claims' is different but the effect is the same. This recites the basic obligation undertaken by the M.I.B. to satisfy any judgment obtained against a person whose use of the vehicle was not insured.
(3) This case concerns the exceptions to the Agreement and here the difference is marked and, therefore, important. Clause 6.1 of the 1988 Agreement is in these terms (quoted by Lord Justice Ward - and summarised above).
(4) Compare that with Clause 6 of the 1999 Agreement (quoted by Lord Justice Ward - and summarised above). ... The crucial differences in the language of clause 6.1(e) of the two Agreements will need to be considered further.
(5) Both Agreements contain conditions precedent to the M.I.B's liability. They are not in the same terms but the differences do not appear to me to be material. Clause 9 of the 1999 Agreement requires notice of the relevant proceedings to be given and clause 10 requires notice of the service of the proceedings to be given. Clause 11 requires a further notice to be given of, for example the filing of a defence. Clause 12 requires notice to be given of an intention to apply for judgment. These are new. Previously information had to be given if it was sought: now the requirements are elevated to conditions precedent.
(6) The notes for the guidance of victims include these observations (Lord Justice Ward quotes from paragraph 1.1 and paragraph 3 of the guidance notes which have already been set out above):
"15. Relying on Lord Steyn's opinion set out above, Mr Worthington submits that the judge erred in starting his consideration with the literal meaning and in not first having regard to the background to assist in establishing the true meaning. He submits he erred in requiring some absurdity or ambiguity to be shown before resorting to a contextual, purposive construction. In my view it would be unfair to the judge to uphold that criticism. This was an ex tempore judgment and as such should not be subjected to close textual analysis. Read as a whole I am quite satisfied that the judge plainly did take account of the relevant background and purpose of this Agreement. In any event, it seems to me that, since permission to appeal has been granted, we must now decide for ourselves. After all interpretation is a question of law or, perhaps more accurately given the need to construe the agreement against the relevant background, a question of mixed law and fact. As the facts are not in dispute, we are as well equipped to construe the Agreement as the learned judge was.
16. The background to any scheme for the compensation of the victims of uninsured drivers must include the range of victims objectively likely to be within the contemplation of the contracting parties. Victims of motor accidents may be those who suffer damage to their property, many of course are those who are injured and sadly, some are killed. Victims will necessarily include not only those who survive but also their dependents who suffer the loss of income derived from the deceased. All of these victims would reasonably be within the contemplation of the contracting parties.
17. This claim for loss of income after the death of the deceased was brought by Mrs Phillips for herself and for the dependents under the Fatal Accidents Act 1976. S. 1 provides as follows:
'(1) If death is caused by any wrongful act, neglect or default which is such as would (if death had not ensued) have entitled the person injured to maintain an action and recover damages in respect thereof, the person who would have been liable if death had not ensued shall be liable to an action for damages, notwithstanding the death of the person injured.
(2) Subject to section 1A(2) below, every such action shall be for the benefit of the dependents of the person ('the deceased') whose death has been so caused.'
This statutory provision makes it clear that the claim of the dependents is separate and distinct from the claim which survives for the benefit of the estate pursuant to the Law Reform (Miscellaneous Provisions) Act 1934 which is in these terms:
'(1) Subject to the provisions of this section, on the death of any person after the commencement of this Act all causes of action ... vested in him shall survive ... for the benefit of his estate.'
This distinction is well known and must have been in the minds of the draughtsmen of the M.I.B. Agreement. The Fatal Accidents Act itself does not deal with enforcement or satisfaction of any judgment obtained under it and the Act cannot, therefore, have much more bearing on the proper meaning to be given to clause 6.1(e).
18. The second Council Directive (84/5/EEC) is, as I have mentioned, also obviously relevant. The Agreement must be assumed to have been drafted in a way which is compliant with the Directive. One can, therefore, fairly say that the main purpose of the Agreement if it is to accord with the preamble must be 'to guarantee that the victim will not remain without compensation'. But certain limited exclusions as regards the payment of compensation are permitted. The Directive is vague as to who the victim is but, in my view correctly, it was not argued that the derivative claim under the Fatal Accidents Act of dependants who suffer loss as the result of the death of a passenger in an uninsured motor car was outside the underlying purpose of the Directive. Rather, and again in my view correctly, the common ground before us was that the exclusion of such a derivative claim is permissible when the passenger has the knowledge referred to in the relevant power of exclusion in the Directive, namely:
'However, Member States may 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.'
But the ability to exclude both a claim by such a passenger, and his dependents, as was done in the 1988 Agreement, does not in my view indicate whether that power has been exercised again by the 1999 Agreement.
19. The 1988 Agreement is obviously relevant to the background to the construction of the 1999 Agreement. The material terms of the 1988 Agreement admit of no difficulty in construction. Had it still applied to this claim, then the claimant would not have been able to obtain satisfaction from the M.I.B. because under clause 6.1(e) of that Agreement 'the person suffering death', the late Mr Phillips, 'was allowing himself to be carried in or upon the vehicle' knowing its use was uninsured. The language is plain and the meaning is obvious. Yet the stark fact is that that formula was not adopted in 1999.
20. Mr Worthington's comparative analysis of the 1988 and 1999 Agreements draws attention to the expansion of the conditions precedent in 1999 to justify the submission that, objectively considered, the 1999 Agreement was tighter than the 1988 Agreement and was certainly not more 'liberal'. That may be and probably is so. But that cannot explain why the language in clause 6.1(e) is so utterly different. It is not as if the draughtsman had lost sight of the words in the 1988 version of clause 6.1(e) 'the person suffering death or bodily injury or damage to property' because similar words are used to create what was in my view correctly accepted to be a wholly different exclusion that did not apply in this case in clause 6.1(c) for the 'beneficiary'. Why, one asks rhetorically, were those words not carried forward into clause 6.1(e) in 1999 when they had such an important place in the structure of the exclusions in 1988?
21. Mr Worthington relies, of course, on the flexibility of the new definitions in 1999 because 'claimant' means the person who commences the proceedings unless the context otherwise requires. In considering what that means, another issue of construction may possibly arise in that the words 'in this Agreement, unless the context otherwise requires' may be ambiguous. The context may mean, as Mr Worthington contends it does, the context in which the Agreement is made, in other words, the whole background or the matrix of fact. It may, however, be that the relevant context is the context in the Agreement itself, in other words the context in which the word is used from time to time and place to place in the Agreement. For my part this does not seem to matter much. The word 'claimant' must of course be looked at in the context of the sentence or paragraph in the Agreement in which it is placed to see how it fits in with the Agreement read as a whole. Mr Worthington's construction seems to me in this case to amount to no more than an express reminder to apply the principles of construction set out by Lord Hoffmann. Both exercises always have to be undertaken. In the narrow context of clause 6 nothing leaps from the page which would force the reasonable reader to conclude that 'claimant' there meant something different from the meaning of 'claimant' as given in clause 1. In both exercises a significant weakness of Mr Worthington's argument is that he cannot easily supply the alternative definition for 'claimant' in respect of a claim under the Fatal Accidents Act . He suggests 'deceased'. Simply to substitute 'deceased' for 'claimant' in clause 6.1(e) in all cases would lead to the absurd result that the injured passenger who survives is not excluded from the scheme even if he had guilty knowledge. The substitution of one word for another does not work. Also that simple substitution does not work in a claim under the Fatal Accidents Act because the deceased is not the person making the claim. It follows that what Mr Worthington seeks can only be achieved by the wholesale rewriting of clause 6.1(e) if it is to cover claims by a passenger with guilty knowledge who survives and a claim under the Fatal Accidents Act on behalf of the dependents of such a passenger if he dies.
22. In a teleological construction, the search is for a clear understanding of the underlying purpose in order to give effect to it. The document itself gives some indication of where to search. It begins as follows:
Motor Insurers' Bureau
(COMPENSATION OF VICTIMS OF UNINSURED DRIVERS)
The Text of an Agreement dated
Those notes throw some light on the purpose because paragraph 1.1 tells us:
'The role of M.I.B. under this Agreement is to provide a safety net for innocent victims of drivers who have been identified but are uninsured.'
That is achieved by clause 5 but, as I have already said, it cannot serve further to elucidate who is within the contemplated range of victim. On the face of it the dependent is as much a victim as the deceased himself is.
23. Paragraph 3 of the notes is relied on by Mr Worthington. This deals with the 'claims which M.I.B. is not obliged to satisfy' and includes:
'3.6 A claim made by a passenger in a vehicle where the loss or damage has been caused by the user of the vehicle if:-
3.6.1 use of the vehicle was not covered by a contract of insurance; and
3.6.2 the claimant knew or could be taken to have known that the vehicle was being used without insurance ...'
Mr Worthington submits that the word 'passenger' in 3.6 is used synonymously with 'claimant' in 3.6.2. I see the force of the argument but I do not accept that this explanatory note can override the Agreement itself so as to lead to the substitution of 'passenger' for 'claimant' in clause 6.1(e).
24. Mr Worthington also submits that the contracting parties could not objectively have intended to encourage uninsured use. I cannot see that the Agreement provides any such encouragement. As it says, it provides a scheme for compensation of victims of uninsured drivers. That purpose is achieved if the dependents are seen as victims. The appellant submits it is absurd to compensate the dependents but refuse compensation to the passenger who survives badly injured with a massive claim for loss of future earnings. That may be an anomalous result but as the judge held, 'There could be very sound reasons of policy for wishing to achieve exactly that result.' We simply do not know and, looked at objectively, cannot exclude a deliberate extension of protection so as to bring dependents within the umbrella of compensation. If it was thought right to indemnify dependents, then the insurers' who entered into this Agreement must also have accepted that law abiding drivers would have to fund this additional burden.
25. Finally, it cannot be immaterial that this is not an Agreement made between two legally unsophisticated parties who were using their best but incompetent endeavours to reduce to writing an oral understanding which they had reached. This, on the contrary, is an Agreement between the Secretary of State on the one hand and the M.I.B. on the other. And so, looked at objectively, the teams who drafted this Agreement must be held to have a high level of knowledge of the working of the scheme in the past and of expertise over the subject matter of it. As Lord Hoffmann said, commonsense suggests that in those circumstances parties of that kind do not make flagrant linguistic mistakes in formal documents as important as this. The 1988 Agreement clearly excludes a claim of the kind brought in this action: the 1999 Agreement when construed literally, clearly included it. Nothing in the background would drive a reasonable man to conclude that the words mean something quite different from what they so plainly and obviously literally mean. A reasonable man could not confidently say that the purpose of this Agreement is to exclude a dependent's claim. In those circumstances, the literal meaning must prevail.
26. For those reasons I am satisfied that the judge was correct in his interpretation and in the declaration he made. I would dismiss this appeal."
[166] Lord Justice Latham agreed with Lord Justice Ward (paragraph 27).
[167] Mr Justice Charles also agreed
(paragraph 28).
The Submissions for the Parties in the
present case
Additional Arguments for the MIB
1. Absurdity
(1) a bereaved person who was ignorant of the lack of insurance - who would be entitled to recover;
(2) a bereaved person who knew of the lack of insurance but who was not in the car at the time of the accident - who would be entitled to recover; and
(3) a bereaved person who knew of the lack of insurance and who was travelling in the car at the time of the accident - who, on the pursuer's construction, would not be entitled to recover.
There was no logical basis for a distinction between the last two categories - (2) and (3). The pursuer's construction was "absurd" or at least "something has gone wrong with the language" - so submitted counsel for the MIB. Lord Justice Ward in Phillips did not take that anomaly into account and was wrong to ignore it.
2. Context and Fatal Claim
[174] The context includes the fact that this is fatal claim - and a Scottish one. In a fatal claim "claimant" means the person in respect of whose death the claim proceeds. The principle from McKay v Scottish Airways 1948 SC 254 (at 264) applies. In Scots law it has always been the case that a plea that can be taken against the deceased can be taken against a relative. The relatives can never recover unless the deceased, had he lived, could have done so. Mr Dunlop also mentioned Jameson and another v Central Electricity Generating Board [2000] 1 AC 455 as being a recent instance of the House of Lords applying that principle. The same rule applies north and south of the border but there is no mention of it in Phillips. Lord Justice Ward did not consider matters in the correct context - bearing in mind that this was a fatal claim where the McKay principle applied.
3. EC Directive
4. Mr Snook's Evidence
5. Notes for Guidance
6. Literal Construction
(1) Why would the MIB or insurance industry agree give away a valuable exemption which they had enjoyed for years and which is expressly recognised in the Second EC Directive?
(2) Why would the parties to the Agreement choose to derogate from the rule that has always been part of our law that relatives cannot recover if the deceased could not?
(3) Why would they agree to derogate on the basis of a meaningless distinction dependent on whether or not a relative was travelling in the car at the time of the accident?
[182] Why distinguish between a relative on a pavement and a relative in a car?
[183] The case of Sheldon may not have provided all the answers but it did arrive at the right result.
[185] Accordingly, declarator should be refused and the second defenders should be assoilzied.
[186] So submitted counsel for the MIB.
Discussion
[187] The issue before me
depends upon the proper construction of the 1999 MIB Agreement (Production No.
29/1).
[189] At the centre of those submissions lies the case of Louise Jestina Phillips (as representative of the estate of Neville Britton Phillips deceased) v Mohammed Rafiq and Motor Insurers Bureau which is reported firstly at [2006] EWHC 1461 (QB) and, on appeal, at [2007] EWCA Civ 74 ("the case of Phillips").
[192] I can find no material error - nor any ground for distinction.
[193] In short, I agree with the Court of Appeal.
[195] The claimant, in this context, is the pursuer - Anne Louise Tiffney.
[196] I can find nothing wrong or absurd with that conclusion.
[198] That appears from the second EC Directive (on page 2 of No 29/5).
[200] Clearly this is a fatal claim - but on the face of it, Anne Tiffney is a victim.
[201] In that regard, I agree with Lord Justice Ward (at paragraphs 18 and 22).
"However, Member States may 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".
In my opinion, the word "they" refers back to "persons who voluntarily entered the vehicle". I agree with Lord Justice Ward when he said (in paragraph 18) that:- "the ability to exclude ... a claim ... as was done in the 1988 Agreement, does not ... indicate whether that power has been exercised again by the 1999Agreement" (paragraph 18). The relevant provisions are permissive not mandatory.
[213] In summary, in paragraph 24, 25 and 26, Lord Justice Ward said inter alia:-
"(The 1999 Agreement) provides a scheme for compensation of victims of uninsured drivers. That purpose is achieved if the dependents are seen as victims. ... The 1988 Agreement clearly excludes a claim of the kind brought in this action: the 1999 Agreement when construed literally, clearly included it. Nothing in the background would drive a reasonable man to conclude that the words mean something quite different from what they so plainly and obviously literally mean. A reasonable man could not confidently say that the purpose of this Agreement is to exclude a dependent's claim. In those circumstances, the literal meaning must prevail. ... For those reasons I am satisfied that the judge was correct in his interpretation and in the declaration he made."
[217] The answer to that second question, in my view, is "Yes".
[219] I am not persuaded by the MIB's argument that the words changed in 1999 - but not the meaning.
Decision
[223] I agree with the conclusions of the Court of
Appeal in
[224] I am not satisfied that Phillips can be distinguished.
[225] I was not persuaded by any of the additional arguments presented on behalf of the MIB before me.
[227] I shall continue the cause on the question of expenses.
[228] I shall also put the case out "By Order" in respect of further procedure.