Insurers backed by Court in Supreme Court Case

20 Mar 2019

Bournemouth-based Insurance company LV= have recently been backed by the Supreme Court over when an unknown Defendant can be sued.

Details of the road traffic accident claim

The claim arose from a road traffic accident in 2013 when the Claimant’s vehicle was hit by a Nissan Micra. The driver of the Micra left the scene without stopping, however, the registration number was taken and the registered keeper of the Micra, Naveed Hussain, was traced. Mr Hussain was not the driver (or, bizarrely, the holder of the policy of insurance) and he refused to identify the driver.

The Claimant pursued proceedings against Mr Hussain, however proceedings were amended to include LV=, the insurer of the Micra. A direct right against LV= would only arise if the driver’s liability had been established in legal proceedings. LV= denied liability on the basis that there was no right to obtain Judgment against Mr Hussain, as there was no evidence that he was the driver.

In response, the Claimant made an Application to substitute for Mr Hussain a defendant identified as: “The person unknown driving vehicle registration number Y598SPS who collided with vehicle registration number KG03ZIZ on 26 May 2013”.

That Application was dismissed at first instance, but was allowed on Appeal, such that where an accident was caused by an unknown driver but an insurer could be identified, court proceedings could properly be issued against an unknown person. The Court of Appeal held that the legislation was there to ensure that the victims of negligent drivers received compensation from insurers where a policy had been issued in respect of the vehicle, regardless of who the driver was.

Is it possible to serve proceedings on an unnamed defendant?

LV= appealed to the Supreme Court. The driver of vehicle registration number Y598SPS was not only anonymous in this instance, but could not even be identified. It would therefore be impossible in principle to locate or communicate with the unknown driver. The question was then conceptually whether it would be possible to serve proceedings on an unnamed defendant.

The Supreme Court was of the view that it is a fundamental principle of justice that a person cannot be made subject to the jurisdiction of the Court without knowing about the proceedings to which they were a party. The fact of proceedings had to be brought to the defendant’s attention. In this instance, service on LV= would not constitute effective service as the proceedings could not be expected to reach the unidentified driver of the Micra. The Supreme Court felt that this would be tantamount to no service at all.

The conclusion reached by the court

The conclusion reached was that a driver who could not be identified with any particular person could not be sued under a pseudonym or description, absent proper service, and it would not be appropriate to dispense with service when it couldn’t be shown that the defendant knew of the proceedings. LV=’s Appeal was duly allowed.

It is worth stating that the Claimant in fact had an alternative right of claim against the Motor Insurance Bureau (MIB) under the 2003 Untraced Drivers Agreement which provides exactly for the circumstance she found herself in. The MIB is a company funded by all insurers authorised to write motor business in the UK and provides compensation to victims who suffer personal injury or damage caused by

i) vehicles in respect of which no policy of insurance has been issued
ii) drivers who cannot be traced.

Accordingly the MIB would have been properly placed to assume the liability and compensate the Claimant in this instance.

Bethany Blamire – Specialist Insurance and Regulatory Solicitor and Partner based at our Southampton office. Contact Bethany with your insurance concerns on 02380 820549.