Cameron v LV - Claimants not entitled to bring claims against unknown drivers

• United Kingdom

• Personal injury claims litigation - Claims e-briefing

21-02-2019

The Supreme Court has handed down the awaited Judgment in the case of Cameron v LV.  The decision will be welcomed by insurers as it confirms that a claimant is not entitled to bring a claim against an unknown driver. The Supreme Court’s decision reverses the decision of the Court of Appeal. The Supreme Court held it would not be possible to bring the proceedings to the attention of the unknown driver as he could not be identified and service could not be effected or correctly dispensed with.

The Background

The claimant was involved in a road accident. The third party who was driving a Nissan Micra did not stop at the scene of the accident and was not identified. Following the accident, the claimant was able to trace the registered keeper of the Nissan Micra and an insurer (LV) who insured the vehicle. The claimant commenced proceedings against both the registered keeper of the vehicle and the insurer LV. The claimant had believed the registered keeper to have been the driver, but this belief was found to be incorrect.

LV denied liability. The policy of insurance did not cover the registered keeper and the claimant had failed to identify the driver. LV were unable to trace their insured and had concluded that he was a fictitious character. Therefore, LV resolved that the policy was fraudulent. LV applied to the Court for summary Judgment. In response, the claimant applied to substitute the name of the registered keeper in the proceedings to “the person unknown driving vehicle registration Y598 SPS who collided with vehicle…”   That application was refused at first instance with the result that the claimant’s only recourse would be to submit a claim under the Motor Insurers Bureau Untraced Drivers Agreement (UTDA). Submitting a claim under the UTDA would result in only limited costs being recovered by the claimant. Further subrogated claims are not met under UTDA. The High Court upheld this decision on appeal.

The Court of Appeal

The claimant subsequently appealed to the Court of Appeal (COA).

Surprisingly, the COA upheld the first two decisions and found in favour of the claimant. In doing so, they extended insurers liability to injured claimants under S151 of the Road Traffic Act 1988 to cases where the identity of the driver is not known irrespective of whether the policy in respect of an identified vehicle covered the driver.

In these circumstances, if an insurer were to avoid liability then they would have to show that they were off-cover or alternatively, that they should never have been on-cover, by seeking a declaration under S152 (2) of the Road Traffic Act 1988 avoiding the policy. The decision of the COA completely altered the landscape. Claimants would be permitted to amend their Claim Form to substitute as defendant an unnamed driver and they would only need to identify the vehicle driven at a specific place and time.

The Supreme Court

LV appealed to the Supreme Court.

In a decision which will be a relief for insurers, the Supreme Court unanimously upheld LV’s appeal. The Court said that it was not satisfied that service on a unnamed defendent was possible. Also, it was inappropriate to dispense with service of the Claim Form (CPR 6.16) as the unknown defendant had not evaded service. The Court held that a person cannot be said to evade service unless, at a minimum, he actually knows that proceedings have been or are likely to be brought against him. The Court was not persuaded to deny the unknown defendant an opportunity to be heard simply because it thinks it improbable that he would take advantage of it. The Court also dismissed the claimant’s argument that allowing LV’s appeal would be inconsistent with the Motor Insurance Directive.

Conclusion

The decision of the Supreme Court is a pleasing outcome for insurers. Had the decision of the COA been upheld by the Supreme Court, insurers would have found themselves exposed to a significant costs increase as it would have provided claimants with a route to claim against insurers directly in respect of unknown drivers.  The decision of the Supreme Court returns us to the pre May 2017 landscape where claimants will have to make a claim under the UTDA to the Motor Insurers Bureau which are limited both in scope and costs.