Motor vehicle insurance: use by uninsured drivers

Under the Road Traffic Act 1988 it is compulsory for a person using a vehicle in the UK to be insured against liability to third parties. In the event that loss or injury is inflicted on a third party, there are various statutory mechanisms whereby the third party can bring proceedings against the assured’s insurers. An issue that is still largely unresolved is the extent to which policy exclusions can be relied upon by an insurer in third-party proceedings.

In Allen v Mohammed , a decision of HHJ Tindal in Birmingham County Court, dated 12 September 2016, it has been held that a third party has a direct action against a motor insurer where the accident is the fault of an unidentified third party driving the vehicle with the consent of the assured even though the policy excludes liability in those circumstances. That conclusion, however, was subsequently undermined by the Court of Appeal in Sahin v Havard and Another [2016] EWCA Civ 1202, which proceeded on an entirely different footing. The two cases are considered in what follows.