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Churchill Insurance Co Ltd v Wilkinson: Evans v Equity Claims Ltd, Court of Appeal, 19 May 2010

26 May 2010
The issues

Compulsory road traffic insurance – permitted driver – uninsured driver – recovery from insured – whether Road Traffic Act 1988 Section 151 compatible with European law.

The facts

The same issue arose in both Appeals.

Where a person insured to drive a car is a passenger in a car which he has allowed to be driven by a non-insured driver and the passenger is injured through the negligence of the uninsured driver, then by Section 151(4) Road Traffic Act 1988 the insurer is bound to compensate the passenger. The question was whether the insurers were entitled to reclaim that compensation from the passenger as the insured under Section 151(8) or by virtue of the terms of the policy. In the Evans case, the decision went in favour of the insurers. In the Churchill case, the decision went against the insurers. In the conjoined Appeals the question was which was decision was right.

The effect of Section 151(8) RTA had to be to exclude from the benefit of insurance a passenger who was the insured but had given permission to an uninsured driver to drive. Permission, the Court of Appeal had held in Lloyd Wolper v Moore, did not cease to be permission for the purposes of the statute because in good faith the person giving it believed that the person to whom it was given was covered by the policy when in fact the person was not. The Road Traffic Act sought to give effect to the United Kingdom’s obligations under community law. In relation to the impact of community law, the question came down to this. If Section 151(8) was construed so as to exclude an injured insured person from a remedy when travelling as a passenger which he or she had permitted to be driven by an uninsured driver, would community law hold such an exclusion as void and unenforceable? If so, could Section 151(8) be interpreted so as not to breach community law? In the light of the various authorities it was appropriate to refer the question to the Court of Justice of the European Union.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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