The two cases of Churchill Insurance Co Ltd v Benjamin Wilkinson (by his father & litigation friend Steven Wilkinson) and Tracey Evans v Equity Claims Ltd [2010] EWCA Civ 556 were heard together by the Court of Appeal. They were both appeals from judgments which had relied on opposing interpretations of section 151(8) of the RTA. The facts were strikingly similar: the persons injured were travelling in or on vehicles which they were insured to drive, but the negligent driver of the vehicles was uninsured, and was driving with their permission. In Wilkinson, permission was given with the knowledge that the driver was uninsured, and the first instance judge found that insurers could not recover the compensation paid to him; in Evans, permission was given without any thought to whether the driver was insured, but the judge found that insurers could reclaim the compensation from her.
S.151(8) provides that where an insurer becomes liable to pay in respect of a liability of a person who is not insured by a policy, it is entitled to recover from a person who is insured by the policy and who caused or permitted the use of the vehicle which gave rise to the liability. The Court of Appeal held that under English law, the effect of s.151(8) was to exclude from the benefit of insurance a passenger in these circumstances. However, it queried whether such an exclusion was void and unenforceable under Community law, and also whether s.151(8) could be interpreted so as not to breach Community law. The Court referred to Article 12 of Directive 2009/103/EC which seems to preclude excluding from compensation a passenger who was insured under the policy. However, it was not clear whether that was still the case even when the insurer could prove that the insured passenger knew the driver was uninsured. It was also unclear whether knowledge of the driver being uninsured or belief that he was insured would be relevant to the insurer’s right of recovery in these circumstances.
The questions referred to the Court of Justice were whether s.151(8) in its present form complies with Community Law and/or whether with some amendment or reinterpretation as to the degree of the insured’s knowledge might lead it to comply. We will report on any further developments when they arise.