BYRNE V MOTOR INSURERS BUREAU

[2007] EWHC 1268 (QB), Queen’s Bench Division, Commercial Court, Mr Justice Flaux, 5 June 2007

Insurance (motor) – Motor Insurers Bureau Untraced Drivers Agreement – Victim injured aged three – MIB Agreement containing three-year time bar – Action not brought for thirteen years – Whether three-year time bar consistent with Second Motor Insurance Directive – Whether Agreement to be construed to comply with Directive – Whether Directive enforceable against MIB – Whether UK Government liable in damages – Council Directive 84/5/EC

This was a trial of preliminary issues on assumed facts, B, at the time aged three, was injured by a hit and run driver in June 1993. No claim was made against the Motor Insurers Bureau under the Untraced Drivers Agreement 1972 until 2001. The claim was rejected by reason of the three-year time limit for claims under the Agreement. B claimed that had the claim been in tort against an identified driver the three-year limitation period would not have started to run until he reached his 18th birthday in 2007, and that the UK had failed to implement the EC’s Second Motor Insurance Directive, Council Directive 84/5/EEC, in that there was no equivalent treatment of persons injured by traced and untraced drivers. Flaux J held that: (1) there had been a failure by the UK to implement the Directive in this regard; (2) the 1972 Agreement was not to be construed in accordance with the Directive, because it was a private agreement between Government and the MIB; (3) the Directive could not be enforced directly against the MIB because it was not an “emanation of the state”; and (4) it was possible that the UK Government faced liability in damages under the Francovich principle for failing to implement the Directive, in that there had been a serious breach of it, but the conditions for such an action would have to be determined at the full trial.