The secretary of state for transport is guilty of a “serious breach” of EU law on uninsured drivers, the High Court has ruled – leading to a drug dealer being entitled to compensation.
Mr Justice Jay said the government did not have a wide discretion on the issue, its obligations under EU directives were “quite clear”, and the “best that may be said” is that the transport secretary decided to “run the risk”.
The case involved a drug dealer who was seriously injured after a friend crashed their Mercedes on a B road in the Midlands.
Mr Justice Jay said that the police probably did not charge Sean Delaney with drugs offences, despite the discovery of a large bag of cannabis in his jacket, because he was so seriously injured.
The court heard in Delaney v Secretary of State for Transport  EWHC 1785 (QB) that the driver of the car, Shane Pickett, was convicted for dangerous driving and possession of cannabis.
He was insured with Tradewise Insurance Services, but Tradewise was entitled to avoid the policy because the driver had failed to disclose that he suffered from diabetes, depression and was a habitual cannabis user.
This meant that the Motor Insurers’ Bureau (MIB) was potentially the insurer of last resort under the Uninsured Drivers Agreement 1999.
The Court of Appeal ruled in 2011 that the doctrine of ex turpi causa (damages cannot be claimed if they arise from an illegal act) did not apply to the case. The appeal judges also ruled that clause 6(1)(e)(iii) of the Uninsured Drivers Agreement applied.
Under the clause the MIB is not liable for personal injuries suffered by passengers where the vehicle “was being used in the course or furtherance of a crime”.
Mr Justice Jay ruled that this clause was incompatible with article 1(4) of Directive 84/5 and that the breach was “so serious” that the transport secretary must pay compensation to Mr Delaney under the Francovich principle.
However, Jay J added: “Many readers may be wondering how it comes about that a drug-dealer is entitled to compensation against Her Majesty’s Government in circumstances where he was injured during the course of a criminal joint enterprise.
“The understandable reaction might be: there must be some rule of public policy, reflecting public revulsion, which bars such a claim. The short answer is that there is not.
“The Court of Appeal held in terms that the insurer’s public policy defence failed on these facts, and that must be the end of that matter in terms of domestic law.
“The relevant European directives clearly state that there are only certain limited exceptions to liability in these circumstances, and that too must be the end of the matter as a matter of Community law.
“The law is clear, the defendant is in serious breach of it, and there must be judgment for the claimant on the issue of liability, with damages to be assessed.”