The Untraced Drivers Agreement 2003

The Motor Insurers Bureau Untraced Drivers Agreement 2003, and its predecessors, has generated a good deal of complex litigation. The general scheme of the agreement is that the victim of an untraced driver can bring a claim for damages against the MIB, which must investigate the claim and then award damages as if the action had been brought in the courts. The administrative nature of this procedure has given rise to a series of complaints about its operation. The most recent, Carswell v Secretary of State for Transport and the Motor Insurers Bureau [2010] EWHC 3230 (QB), concerned three matters: the fact that the MIB is not independent of the insurance industry; the cap on the recovery of legal costs; and the apparent absence of any right of appeal against MIB procedural irregularities.

Carswell: the facts

Jim Carswell was run over and killed by a hit and run driver while he was crossing a road in October 2005. A claim was brought against the Motor Insurers Bureau by his widow, the claimant, under the Untraced Drivers Agreement 2003. On 9 March 2008 the claimant accepted an offer of £250,000, which represented a 40% deduction for contributory negligence (in that Mr Carswell had consumed alcohol and had crossed the road when the traffic lights were against him). In addition, the MIB paid 2% of the sum awarded by way of the cost of obtaining legal advice, in accordance with cl 10 of, and the schedule to, the 2003 Agreement: those provisions fix the MIB’s contribution to costs at 2% of any award exceeding £150,000. The costs award meant that the claimant had a shortfall in her costs of £13,023.75 plus VAT. In the present action she sought to recover that sum from the Secretary of State, asserting that the MIB did not comply with the EU motor insurance directives.