The following is an opinion piece written by Damian Ward (pictured), partner, Keoghs. The views expressed within the article are not necessarily those of Insurance Business.
Much has already been written about the landmark decision in Cameron v Hussain & LV=, handed down by the Supreme Court on February 20. Some of what has been written is an accurate review of the legal position, and some is somewhat wide of the mark. What none of the commentaries have done, however, is to explore the human angle of this case which has rumbled on for the last five years or so.
Back in 2013, Bianca Cameron, a soldier, was driving her Ford car on Torre Road in Leeds when a Nissan car collided with her car. The driver of the Nissan then fled the scene and has never been identified. Nonetheless, an apparently impecunious Miss Cameron went on to hire a replacement vehicle from Direct Accident Management Limited and in due course sought to bring a claim for damages against Liverpool Victoria Insurance Company, on the basis that the Nissan was showing as ‘insured’ by them on the Motor Insurer’s Database. The registered keeper of the Nissan, one Naveed Hussain, was convicted in his absence by the Calderdale Magistrates Court for failing to provide the details of the driver of the Nissan.
Miss Cameron then started proceedings in the County Court for damages against Mr Hussain and LV=. That claim comprised:
- Car hire on credit of £7,838.40
- Recovery & storage costs of £2,077.20
- Miscellaneous expenses of £50
- The pre- accident value of the Ford at £1,400
- Damages for pain and suffering at an approximate value of £2,500
- Legal costs of circa £10,000
Those proceedings were, on the facts, doomed to failure. The rebuttable presumption in Barnard v Sully that the owner (in real terms the registered keeper) is liable for the negligence of an unidentified driver of their car was rejected as the registered keeper himself failed to identify the actual driver.
Faced with an application to strike out the claim, and admitting that she indeed could not identify the driver of the car which collided with hers, the route that Miss Cameron should have taken was to discontinue her claim and lodge an application for damages with the MIB under the Untraced Drivers Agreement. Instead, she applied for permission to amend her claim to permit her to bring the claim against an ‘unknown driver’ in place of the registered keeper of the Nissan. The question is, why?
Under the terms of the Untraced Drivers Agreement, a claimant cannot recover losses which are insured elsewhere. In this case, that was her vehicle damage. The reason for this is simple: The MIB is a fund of last resort; the fund is contributed by all insurers who underwrite motor business in the UK. A claim which is covered by a driver’s own insurance should not be met from such a fund. Indeed the majority of insurers protect their own policyholder’s claims record and no claims discount in such situations, recognising that the claim is not the fault of their customer.
It follows that substantial claims for credit hire would also not be recoverable: in the ordinary course of events, the owner of a car damaged at the hands of an untraced driver would claim under their own insurance policy and either have their car repaired (normally with the provision of a courtesy car provided by the insurer’s repair network) or be sent funds to replace their car. No credit hire would be necessary and thus would not be recoverable from MIB.
Furthermore, solicitor’s costs are not paid, beyond a modest contribution, under the terms of the Untraced Drivers Agreement. Again, the reason is simple: MIB undertake the enquiries necessary to establish and validate the claim, including where necessary, an interview of the victim of the untraced driver. There is no need for that person to incur legal costs, beyond perhaps completing and submitting the form and being advised on the terms of an offer from MIB. In the event that there is a dispute about the MIB’s decision, there is a tried and tested process to challenge it. None of this involves legal costs to anything like the extent allowed for in civil proceedings in the courts.
In Cameron, therefore, the claim which LV= was being asked to meet was in the order of 10 times what would have fallen to MIB. Miss Cameron, had she gone to her own insurer for her car damage claim, and submitted her injury claim to MIB, would have been in precisely the same situation in either case, as she would not personally have benefited from the additional claims originally brought. That money would have gone as profit to the hire company, recovery and storage agent, and her legal advisors. One can only speculate why Miss Cameron elected to act as she did, especially considering that her claim for injuries has still not been presented to the MIB, some six years after her accident.
Closing down this attempt to drive a coach and horses through the existing and well- proven framework for compensating the victims of untraced drivers is therefore important for the ordinary, law-abiding driver. There are more than 15,000 applications to the MIB each year for compensation from the victims of untraced drivers. In many of these cases, the vehicle at fault appears on the MID: had this attempt by Miss Cameron succeeded, it would have increased by 10-fold, in a typical case such as this (and doubtless in some cases by much more) the overall cost of such cases to insurers, albeit directly rather than through the levy to MIB. That cost would inevitably have been passed to the motorist in increased premiums, all for the benefit not of the victim, but of credit hire companies and legal advisors.
Challenging the Court of Appeal’s decision was also important to protect ordinary motorists from fraud. The unique role of the MIB and the terms of the Untraced Drivers Agreement means that before compensation is paid, there is a rigorous process of validation: that would have been lost to insurers, as claimants pursuing claims in the courts would be legally represented, and not obliged to cooperate with the compensating insurer to anything like the extent required under the Untraced Drivers Agreement..
As such, the unanimous decision of the Supreme Court is not only a victory for insurers who face fraudulent claims on a daily basis, but also for the motorist’s pocket.