Insurer Must Pay Missing Driver Claim

When a person has an accident involving a car and a claim results, it is usually dealt with by the insurer of the driver concerned. If the driver is not insured or is untraced, a procedure exists to ensure a claim can still go ahead, only in this case the Motor Insurers’ Bureau (MIB) is responsible for settling the claim. The MIB is funded collectively by the country’s motor insurers. Claims met by the MIB under the ‘Untraced Drivers Agreement’ are normally paid out in rather smaller amounts than are usual where claims are settled by insurers.

In a recent case, the Court of Appeal dealt with the circumstances in which the driver of a car that was involved in a crash could not be traced, but the car was identified. After the accident occurred, one car stopped but the other did not. The driver who stopped noted the vehicle registration number of the other car. A claim was made against the insurer of the owner of the other car but when it was proved that he was not the driver at the time of the accident, the decision was taken to continue to claim against the insurer, not against the MIB.

The insurer fought the claim as it wanted it to be met by the MIB, not out of its own funds. The legal question was whether a person could sue and obtain an order against an ‘unknown person’ in such circumstances.

The Court of Appeal decided that it could.

On the face of it, this would seem to be a victory for anyone injured in similar circumstances. However, an appeal to the Supreme Court is likely, particularly as the Court of Appeal’s decision was by a majority of the bench. There are cost implications for insurers with regard to fees as well as the claims themselves and, if the decision ‘sticks’, the end result may well be higher motor insurance premiums.

This decision could open the door for claimants to obtain higher settlements in similar cases, by claiming against the insurer rather than the MIB.