Victims of untraced drivers: time limits

In Byrne v Motor Insurers Bureau [2008] EWCA Civ 574 the Court of Appeal has dismissed an appeal from the first instance decision of Mr Justice Flaux, [2007] EWHC 1268 (QB), deciding that the victim of a hit-and-run driver was not bound by the three-year limitation period set out in the Motor Insurers Bureau’s (MIB) Untraced Drivers Agreement 1972, on the basis that it did not comply with the EU’s Second Motor Insurance Directive, Council Directive 88/351/EEC. The decision of Flaux J, which was in respect of preliminary issues on assumed fact, was discussed in the December 2007 issue of Insurance Law Monthly.

The assumed facts

On 21 June 1993 Ben Byrne, then aged three, was injured in a hit-and-run accident while crossing a road. His parents did not obtain legal advice and thus were unaware of the possibility of a claim against the MIB under the then current Untraced Drivers Agreement 1972, which – like its successors – required the MIB to pay to the victim the sum that he would have been likely to have been awarded had the driver been identified and successfully sued. The 1972 Agreement required any claim against the MIB to be brought within three years of the incident. Because of the absence of legal advice, however, no claim was made against the MIB at that time, and indeed this possibility was not known by Ben’s parents until October 2001. A claim was duly made in December 2001, but this was rejected in reliance on the three-year time limit. The Agreement provided for arbitration in the event of a dispute as to a ruling by the MIB, but Ben’s parents did not take up that option. Instead, Ben commenced an action in March 2006 against the MIB, alleging that the 1972 Agreement should be construed consistently with art 1(4) of the EC’s Second Motor Insurance Directive, which requires compensation to be paid to the victim of a hit-and-run driver so that the time limit could not apply. In the alternative, Ben argued that the MIB could not rely upon the 1972 Agreement insofar as it was inconsistent with the Directive. If Ben could not succeed against the MIB on either of those grounds, Ben asserted that the Secretary of State had failed to implement the Directives properly and was liable in damages.