Queen’s Bench Division

Published June 15, 2007

Byrne v Motor Insurers’ Bureau and Another

Before Mr Justice Flaux Judgment June 5, 2007

Failure by the United Kingdom to comply with the Second European Directive on motor insurance rendered it liable in damages.

Because the three-year time limit for bringing a claim under the Untraced Drivers Agreement 1972 between the Motor Insurers’ Bureau and the Secretary of State for Transport was not compliant with Community law, the UK was in breach of its Community obligations.

Mr Justice Flaux so held, inter alia, in the Queen’s Bench Division in a reserved judgment in a trial of preliminary issues which arose in litigation consequent upon a hit-and-run incident alleged by the claimant, Ben Byrne, a minor, by his litigation friend Julie Byrne, to have occurred in 1993.

The MIB having in 2001 refused the claim for compensation under the 1972 Agreement as being out of time, the claimant commenced proceedings against the bureau and also against the secretary of state for damages for breach of statutory duty in failing properly to implement article 1(4) of Council Directive 84/5/EEC (OJ 1984 L8/17).

Clause 1(1)(f) of the 1972 Agreement imposed a time limit for the bringing of a claim of three years from the date of the event giving rise to the death or injury.

Mr Nicholas Paines, QC and Mr Josh Holmes for the claimant; Mr Dermod O’Brien, QC and Mr Fergus Randolph for the MIB; Mr Jonathan Crow, QC, Miss Jemima Stratford and Mr David Barr for the secretary of state.

MR JUSTICE FLAUX said that in Evans v Secretary of State for the Environment, Transport and the Regions (Case C-63/01)( The Times December 9, 2003; [2004] RTR 534) the European Court of Justice ruled that the protection provided by the national scheme under article 1(4) of the Directive in respect of the victims of uninsured or untraced drivers had to be equivalent to and as effective as the protection available under the national legal system to victims of insured drivers.

The MIB procedure did not provide protection equivalent to or as effective as the protection provided by the common law in respect of insured drivers because of the disparity, in terms of the time bar for any claim, between clause 1(1)(f) of the 1972 Agreement and the relevant provisions of the Limitation Act 1980.

The Directive was capable of having direct effect. Although the MIB performed a public service, it was not under the control of the state and did not have special powers. Accordingly, the bureau was not an emanation of the state and the claimant had no right of direct action against the bureau for breach of the Directive.

On whether the claimant had a claim for damages against the secretary of state, the failure to amend clause 1(1)(f) of the 1972 Agreement to bring it into line with the 1980 Act and hence comply with article 1(4) of the Directive was not attributable to confusion or misunderstanding but was attributable to an inexcusable lack of thoroughness.

In the context of the obligations of the member state to ensure compliance with a Council Directive, the fact that no one checked the existing agreement for compliance with Directive 84/5/EEC was an serious breach of the United Kingdom’s Community law obligations.

Applying the test laid down in Brasserie du Pêcheur SA v Federal Republic of Germany; R v Secretary of State for Transport, Ex parte Factor-tame Ltd (No 4) (Joined Cases C-46/93 and C-48/93) ( The Times March 7, 1996; [1996] QB 404), that breach by the United Kingdom was sufficiently serious to expose it to a claim for damages.

Solicitors: Pinto Potts LLP, Aldershot; Greenwoods, Bloomsbury; Treasury Solicitor.

Times Recommends

• The best legal yarns this Christmas
• Legal school 'earned £1m by exploiting bar course'
• Axe may fall on 5,000 more City lawyers