The exclusion of uninsured driver claims where criminal activity is involved – Delaney v The Secretary of State for Transport  EWHC 1785
As all personal injury practitioners will be aware, the Motor Insurers Bureau deals with claims made by those injured in road traffic accidents where the driver at fault is uninsured. The Uninsured Drivers Agreement governs such claims. The recent case of Delaney concerned whether clause 6(3)(e)(iii) of the Agreement, which excludes liability if the Claimant knew the vehicle was being used in the course or furtherance of crime, was itself in breach of EU Law. It was held by Mr. Justice Jay that it was in breach of the relevant EU Law and thus the Secretary of State for Transport was obliged to compensate Mr. Delaney directly.
The Claimant, Mr. Delaney was very seriously injured in a road traffic accident, caused by the negligence of the driver of the vehicle in which he was a passenger. The emergency services attended at the scene and discovered a large quantity of cannabis hidden in Mr. Delaney’s jacket, and a further quantity in the driver’s sock. The trial Judge in the first action found that the Claimant and driver had been involved in a criminal enterprise to supply cannabis. Further, whilst the driver had an insurance policy, it was subsequently voided for non-disclosure, and thus for the purposes of the claim was an uninsured driver.
Mr. Delaney originally brought proceedings (the first action) against the driver, Mr. Pickett, and his insurance company, relying upon the Uninsured Drivers Agreement. The trial Judge dismissed the claim on the basis of clause 6(3)(e)(iii) and alternatively the common law doctrine of ‘ex turpi causa’ (no claim may arise from the Claimant’s own illegal act). The Court of Appeal, allowed the appeal on the ex turpi causa point, noting that the Claimant’s injuries had not been caused by the criminal activity, but had merely provided the setting for it. However, they upheld the trial Judges’ decision that the facts fell within clause 6(3)(e)(iii) of the Agreement, and thus the claim was dismissed.
Mr. Delaney then brought a second action, the subject of the decision of Mr. Justice Jay, against the Secretary of State for Transport, claiming that clause 6(3)(e)(iii) was in breach of European Law, and in particular various Directives which oblige the UK to have in place a scheme to compensate those injured by uninsured drivers.
It was held that those Directives did not allow the UK to exclude liability where the injured person had been involved in a criminal enterprise at the time of the accident, and thus the relevant clause was unlawful. Accordingly, the Secretary of State for Transport (being responsible for the Agreement) was obliged to compensate Mr. Delaney directly for his injuries and losses. As the Judge himself put it:
“Many readers may be wondering how it comes about that a drug-dealer is entitled to compensation against Her Majesty’s Government in circumstances where he was injured during the course of a criminal joint enterprise. The understandable reaction might be: there must be some rule of public policy, reflecting public revulsion, which bars such a claim. The short answer is that there is not.”
Not surprisingly the case has generated a considerable amount of media attention and to date the Secretary of State is reported to be ‘considering’ whether to appeal. Given the nature of the ruling, there is no doubt considerable political pressure to do so. However, if the ruling stands, either the Agreement will have to be amended to delete the offending clause, or the Secretary of State will face further claims to directly compensate those injured in such accidents where liability under the Agreement is thus excluded.
It is important to remember that the Agreement, at clause 6(3)(e)(ii)2, also excludes liability where the injured person knew, or was willfully blind (on the caselaw) to the fact the vehicle was uninsured. That particular exclusion is expressly allowed by the relevant EU Directive, and may cover a wide variety of situations where a Claimant is injured in a road traffic accident whilst engage in a criminal enterprise. However, on the facts, Mr. Justice Jay held that Mr. Delaney did not have that requisite state of knowledge. The Judge also rejected a rather technical argument advanced by the Defendant, that as there had been an insurance policy in force at the time of the accident, albeit one which was subsequently voided, the UK’s obligations under the various Directives concerning uninsured drivers did not apply.
On the face of matters the proportion of uninsured driver claims currently caught by the (now unlawful) exclusion clause 6(3)(e)(iii) is likely to be relatively small. However, the case is of wider importance insofar as it demonstrates the willingness of the Courts to strike down parts of the Agreement which are not in compliance with the relevant EU Law, and to oblige the Government to directly compensate those caught by such exclusions.
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(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,
(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,
(iii) the vehicle was being used in the course or furtherance of a crime, or
(iv) the vehicle was being used as a means of escape from, or avoidance of, lawful apprehension.