R&S PILLING (T/A PHOENIX ENGINEERING) V UK INSURANCE LTD

[2019] UKSC 16, Supreme Court, Lady Hale, President, Lord Wilson, Lord Hodge, Lady Arden and Lord Kitchen, 27 March 2019

Insurance (Motor) – Whether liability was caused by or arising out of the use of a vehicle on a road or in a public place – Effect of certificate of insurance – Road Traffic Act 1988, section 145

On Saturday 12 June 2010, TH, a mechanical fitter employed by Phoenix, obtained permission from Phoenix to use its loading bay to carry out some work on his car which had failed its MOT the previous day. TH intended to weld some plates onto the underside of the car where there was corrosion. In the course of the welding work sparks ignited flammable material in the car. The fire caught hold and caused substantial damage to premises belonging to Phoenix and also to neighbouring premises. Phoenix's property insurers, AXA, paid the property damage claims and brought a subrogation action against TH. The claim was meaningful only if TH's motor liability insurers, UK Insurance, were liable under the policy, and AXA had undertaken to limit its recovery against TH to sums for which he received an indemnity from UK Insurance. UK Insurance thus sought a declaration that it was not liable. The policy provided that "We will cover you for your legal responsibility if you have an accident in your vehicle and: you kill or injure someone; you damage their property; or you damage their vehicle". The certificate of insurance, signed by the insurers' chief executive, stated that he certified that the policy "satisfies the requirements of the relevant law applicable in Great Britain". Section 145 of the Road Traffic Act 1988 provided that it was compulsory to insure "in respect of any liability which may be incurred by him ... in respect of the death of or bodily injury to any person or damage to property caused by, or arising out of, the use of the vehicle on a road or other public place in Great Britain".