Liability For Unnamed Drivers

21 Jun 2017

In the case of Cameron v Hussain and LV 2017 the Court of Appeal handed down a key decision in relation to the naming of parties in court proceedings.

The case involved a road traffic collision between an unknown driver and the claimant. The claimant commenced court proceedings against the owner of the vehicle initially, believing him to have been the driver at the time of the accident. The claimant then added the insurer to proceedings as second defendant and sought to obtain a declaration that they satisfy any unsatisfied judgment against the first defendant. It transpired that the first defendant was not driving the vehicle at the time of the collision and the policy of insurance with Liverpool Victoria was opened fraudulently, with the name of the policyholder being untraceable.

The owner failed to provide any information on the driver and was subsequently convicted of failing to provide information in relation to the accident. He played no part in ongoing proceedings. Crucially, the insurer did not apply for a declaration under s152(2) of the Road Traffic Act 1988 that the fraudulent policy was invalid from inception. As such, any judgment obtained would need to be satisfied under s151[1].

The insurer responded with a defence stating that the owner was not insured to drive the vehicle under the policy and, as the claimant could not identify the actual driver, they were not bound to satisfy a judgment.

At first instance an application was made by the insurer for summary judgment. A cross-application was made by the claimant to substitute the first defendant for the unnamed driver, to be identified by a description of the vehicles, location and date of the accident. The claimant’s application was dismissed at first instance and then on appeal to the High Court with summary judgment being awarded.

In the Court of Appeal the claimant argued that it was within the Civil Procedure Rules that proceedings could be commenced against an unnamed driver and judgment be obtained against that unnamed driver. They argued that the test of whether the party could be unnamed was whether it was necessary and efficacious to obtain justice. They heavily referenced the case of Bloomsbury Publishing Group v News Group Newspapers[2] to support the assertion that the defendant need not be named.

In response, the defendant submitted that the CPR allowed for certain exceptions but that these were narrow and, in general, the rules indicated that the parties should be named in proceedings. In addition the aim of s151 RTA 1988 was that the driver be named. It was also submitted that the Motor Insurer’s Bureau (MIB) Untraced Driver’s Agreement (UTDA) was put in place for this exact situation and the claimant should forward their claim to the MIB.

By a majority of 2:1 the Court of Appeal found in favour of the claimant. It was concluded that the CPR allowed for the claimant to bring proceedings against an unnamed driver to be identified by the description. The judgment in Bloomsbury was heavily referenced. The decision in that case reviewed the wording of CPR r7A PD4.1(3) which says that statements of case ‘should’ provide the full name of the parties[3], it was concluded in that case that this meant the full name was not a requirement but more of an indication[4]. The test was then whether it was just and proportionate to allow the case to proceed against an unnamed party or whether relief should be granted from that course.

Gloster LJ and Lloyd Jones LJ rejected the submission of the defendant and concluded that the fact that an alternative remedy – under the UTDA – existed did not prevent the court from allowing an unnamed party to be included in proceedings. It appeared to be agreed by the court that the claimant’s view of the remedies under the UTDA as inferior was a relevant factor[5].

The Court appeared to stress that the relative bargaining positions of the insurer and injured party were also relevant. Gloster LJ at paragraph 46 states ‘It is for insurers to stipulate the conditions which they require to be satisfied by a proposed insured to establish identity before insurers issue a policy’. Furthermore, ‘If they do not as a matter of practice…seek declarations that they are entitled to avoid policies in the event of fraudulent non-disclosure or misrepresentation, that is a matter for their own commercial choice’[6]. Lloyd Jones LJ echoes this at paragraph 88; ‘The intention of Parliament in enacting section 151 was that a motor insurer should compensate any parties injured by a vehicle that it insures’ and ‘…this policy and liabilities which result from it, are simply the obligations which motor insurers must accept as the price for writing motor business in the United Kingdom’[7].

In his dissenting judgment Sir Ross Cranston emphasised that, although there were exceptions to the general rule that parties should be named in proceedings, these should be interpreted narrowly. At paragraphs 94-95 he says ‘There are a number of situations spelt out in the rules permitting unnamed parties’ ‘these limited exceptions in the rules indicate to me that the underlying premise of the CPR is that parties should be named and that to move away from the named parties outside the gateways they provide needs substantial justification’[8]. He concludes that the intention behind the RTA 1988 is that the defendant be named. The insurer has a right of recourse against their own insured under s151(8) the requirement being that that insured be named. In addition, ‘…under the 1988 Act and its predecessors, it is the driver who must be insured, not the vehicle…that suggests that identity is important within the legislative framework’[9]. He expresses the view that the general flavour of the rules indicates that a party should be named, he states that it ‘…seems to be consistent with the principle of open justice, as well as a means of enabling defendants to know about proceedings and to put their case in response’[10]. He suggests that amending the rules places the insurer in a worse position in terms of investigating the claim and preventing fraud[11].

Furthermore, he indicated that a more strict test should be applied than that proposed by the claimant in considering whether to allow an unnamed party. At paragraph 105 he outlines what he believes the test should be; firstly, there is no injustice to the unnamed persons involved and, secondly, ‘…that there be a real potential for injustice to a claimant should such proceedings not be permitted’[12]. In this case he proposed that the first part of the test was satisfied but he did not see any injustice to the claimant should the amendment not be allowed[13]. He concluded that the existence of the UTDA meant that the claimant had access to a remedy preventing injustice. He held that although the costs recoverable under the scheme may well be less than could be recovered in usual litigation there was no assertion that damages recoverable were any less[14]. In terms of the costs he found that it made sense that costs were less as the MIB undertook the bulk of the investigation into the claim. In conclusion he stated that ‘In my view the differences with the MIB scheme are no basis for the contention that the judge should have allowed the amendment’[15].

Gloster and Lloyd Jones LJ both sought to narrow this approach. Both were quick to show that the facts of this case are unique[16]. This perhaps indicates that allowing an unnamed person to be shown on proceedings is going to be restricted to these types of cases; one eye is obviously on the flood gates argument. It is possible that in the intervening period insurers will be putting stricter tests in place upon inception of policies.  Decisions on whether to make applications under s152(2) to avoid policies are likely to happen on a wider scale. There was no dispute between the parties that the insurer was entitled to seek a declaration to void the policy which would have removed any liability to satisfy a judgment. Claimants currently looking at pursuing claims within the UTDA may well revisit the opportunity to approach insurers and issue proceedings against an unnamed driver in order to have cases dealt with more swiftly and recover more by way of costs.

The Respondent is understood to be in the process of preparing an appeal to the Supreme Court.

It would seem sensible where proceedings are brought against an unnamed party, that these be stayed pending the outcome of a potential appeal. It is unclear how the courts would deal with cases of an unnamed defendant with an outstanding appeal.

[1] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited [2017] EWCA Civ 366 paragraph 38 iii

[2] Bloomsbury Publishing Group Limited v News Group Newspapers [2003] EWHC 1206 Ch

[3] Civil Procedure Rules Rule 7A Practice Direction 4 1.3

[4] Bloomsbury Publishing Group Limited v News Group Newspapers paragraph 19

[5] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraphs 57 and 83-84

[6] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 46

[7] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 88

[8] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraphs 94-95

[9] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 112

[10] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 93

[11] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 93

[12] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 105

[13] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 106

[14] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 116

[15] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 117

[16] Bianca Cameron v Naveed Hussain and Liverpool Victoria Insurance Company Limited paragraph 86

Author

Andrew Boba

Paralegal

Insurance and Regulatory

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