Motor Insurers’ Bureau v Lewis  EWCA Civ 909
Court of Appeal (Henderson LJ, Flaux LJ and Sir Stephen Richards); 5th June 2019
The Motor Insurers’ Bureau (“MIB”) appealed against the decision of Soole J that the EU Motor Insurance Directive (Directive 2009/103/EC) had direct effect against the MIB as an emanation of the state such that the MIB was liable to indemnify the respondent claimant for an injury suffered when he was struck by an uninsured motor vehicle on private land (see here).
The MIB denied contingent liability pursuant to the Uninsured Drivers Agreement (“UDA”) as the accident and injuries were not caused by or arising out of the use of the vehicle on a road or other public place under s.145 of the Road Traffic Act 1988 (“the RTA liability”). The MIB did not dispute in the appeal that it is an emanation of the state. Rather, it argued:
(1) That the relevant Articles 3 and 10 of the 2009 Directive lacked the necessary direct effect since they were not unconditional, requiring the Member State to exercise a discretion to delegate the relevant contingent liability to a “body”; the MIB claimed not to be that body for these purposes, so that that discretion had yet to be exercised
(2) That the MIB’s function as emanation of the state was limited, under the UDA, to the RTA liability and did not include the broader obligation on the UK state to comply with the 2009 Directive.
Dismissing the appeal, the Court of Appeal found:
(1) As accepted by Flaux J in Byrne v MIB  QB 66, the relevant discretion has been fully used by the designation of the MIB as the compensation body. As AG Sharpston said in Farrell v Whitty (No 2)  QB 1179, this is “precisely the type of right” for which the UK has already conferred residual liability upon the MIB. There is thus no question of the Article 3 and 10 obligations being conditional and accordingly they have direct effect, which is also what, properly understood, the CJEU said in Farrell.
(2) The UK government has failed in its EU law obligation, as identified by the CJEU in Vnuk  RTR 10, to ensure that civil liability in respect of the use of motor vehicles on private land is the subject of a scheme of compulsory motor insurance, as well as in its co-extensive obligation to assign responsibility for that liability to the compensation body, just as the Irish government failed in Farrell. The broad terms of the CJEU’s Farrell judgment show that the compensation body is intended to protect and compensate victims by remedying the failure of the Member State to fulfil its obligation. Like the Irish MIB (“MIBI”) in Farrell, the MIB possesses special powers under the RTA and accordingly, like the MIBI, is an emanation of the state against which the relevant directly effective obligation can be enforced by the claimant. On the basis that the MIB is an emanation of the state, it is no answer to its liability to compensate the claimant that this liability has only arisen through the fault of the UK government.
Philip Moser QC represented the successful respondent.
The full text of the judgment is here.