Caselaw Review: Philips v Rafiq & MIB : Deceased client can claim against MIB even though he knew driver was uninsured

The Issues: Mr Rafiq was driving the Claimant’s uninsured car, in which the Claimant was travelling as a front seat passenger. Mr Rafiq lost control of the vehicle and crashed into the central reservation of the M25, overturning the vehicle. The Claimant suffered such serious injuries that he died in hospital later that day, and the claim was brought by his dependants. The question before the Court, was whether the MIB were exempt from paying the claim on the basis that had the Claimant survived the accident he would not have been able to recover damages from the MIB, on the basis that he allowed himself to be carried in a car which he knew, or ought to have known, was being used without proper insurance being in force (6.1(e) of the Uninsured Drivers’ Agreement).Held: Although Mr Rafiq had a policy of motor insurance which covered his own vehicle, this did not cover his use of the Claimant’s car. There was a finding of fact at first instance that the Claimant knew or ought to have known that he was being carried in a car which was uninsured. There was no appeal against this finding of fact.Clause 6.1(e) of the Uninsured Drivers’ Agreement provides the following exception to the MIB’s obligation to satisfy a compensation claim:

"Clause 5 [obliging the M.I.B to satisfy any judgment against the driver] does not apply in the case of an application made in respect of a claim of any of the following descriptions …

(e) a claim which is made in respect of a relevant liability described in paragraph (2) [it being common ground that this is such a relevant liability] 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) …

(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, …"

On considering the previous 1988 Agreement compared to the 1999 Agreement, the Court concluded that because the earlier Agreement had clearly excluded a claim of this type, but the 1999 Agreement had not, a reasonable man could only conclude that the 1999 Agreement meant to allow a dependent’s claim in such circumstances (para 25). The Agreement was between the Secretary of State and the MIB and the teams who drafted the Agreement must have had a high level of knowledge and expertise of the working of the scheme in the past and therefore must have intended to remove the exclusion to compensate dependents in this way.

The Court of Appeal upheld the first instance Court’s decision that the Claimant dependents should be compensated by the MIB.

Comment: This decision resulted in the MIB making a petition to the Government to change the law and amend the Uninsured Driver’s Agreement wording. Lawyers for Ms Philips said that the ruling would cost the MIB millions of pounds but the MIB played down the significance saying that there was only going to be a handful of cases where the "loophole” would apply. But the MIB was clearly concerned, evidenced by its contact with the Ministry of Transport.