Defendant insurance lawyers have praised yesterday’s Supreme Court ruling that the victim of an unidentified hit-and-run driver cannot sue an unknown driver and the vehicle’s insurer.
But a claimant solicitor has argued that innocent claimants could lose out as a result.
The Supreme Court overturned the Court of Appeal’s decision in Cameron v Hussain & LV=, which it was said had led to an increased number of claims issued against persons unknown, in place of going through the MIB untraced drivers process, with an increase in costs as a result.
Martin Milliner, general insurance claims director at LV=, said common sense had prevailed by allowing the company’s appeal.
“Although the case in question was a low value motor claim, the claimant’s arguments sought to drive a coach and horses through UK law.
If this blatant attack on the MIB untraced drivers agreement had been successful, then it would have created a ‘fraudsters’ charter’ that could have been abused by criminals for a safe passage through the judicial system.
“Even at this stage it’s unclear why this case got so far, when the claimant could have utilised the mechanisms already in place to recoup losses after a unknown driver incident. We can only speculate as to why.
“The concept that insurers could have been liable to satisfy judgments against unidentified defendants, without an opportunity to investigate the claim, could have had grave consequences for the industry and its customers.”
Damian Ward, a partner and director of counter fraud at Keoghs, which acted for LV=, added: “I am enormously pleased that LV= took the decision to challenge the Court of Appeal’s decision and that what would have presented as an open goal to fraudsters has been instead determined as a rejection of the challenge to the existing compensation framework for victims of untraced drivers in RTA cases, and of the UK’s failure to lawfully implement the Sixth EC Motor Insurance Directive.”
Will Balfry, a member of the Forum of Insurance Lawyers’ motor sector focus team, said the “stack” of claims stayed pending the outcome of the appeal would now have to be discontinued unless further evidence has come to light identifying the driver.
Mark Walsh, a partner at Kennedys, added: “It is now abundantly clear that the issuing and service of proceedings by the claimant is simply not permitted in circumstances where the existence of the proceedings could never be brought to the attention of the defendant, and that substituted service on the defendant insurer is not an effective solution.”
Fellow Kennedys Partner Ian Davies said: “We have returned to the established approach and insurers’ systems and processes should not need to be amended. The claimant fraternity will follow their previous approach, leading to certainty in the market which, as we approach the whiplash reform and Brexit, is to be welcomed.”
Rachel di Clemente, director of legal services for claimant firm Minster Law, said that while the clarity was welcome, and the court’s reasoning “understandable”, injured people may be disadvantaged as a result.
“The decision… favours insurers over the claimant, in this case the innocent non-fault driver. This is because the insurer benefits from the vehicle owner’s decision to refuse to answer a simple question: ‘Who was driving your car?’
“We remain concerned, therefore, that the innocent party will be unable to recover damages directly from an insurer, even though the vehicle was insured and the owner of that vehicle was aware of the driver’s identity, but refused to share that information.
“As a consequence, the innocent party will have to seek redress via the MIB, which lengthens the process, creates less control of their claim, and risks their damages being impacted by the MIB’s cap on damages, or less advantageous funding terms from solicitors, so reducing their eventual damages.”