10.1 The compulsory insurance regime under the Road Traffic Acts protects the innocent third party from the inability to pay of a driver who incurs liability by causing him death or personal injuries. The third party victim is protected by imposing an obligation on all drivers to insure against third party liability under sanction of the criminal law, and also by conferring on a third party victim a right of direct action against the driver’s insurers. A motorist, however, may be uninsured because he never took out insurance but also the claim may be against an uninsured motorist if, for instance, the insurance contract is avoided by the insurer before the accident took place for misrepresentation of a material fact. There used to be a gap in the case of accidents the drivers of which were either uninsured or untraced. The RTA 1930 gave no protection to third parties injured in motor vehicle accidents where there was no insurance cover.1 The lack of a fund to which the victims of uninsured drivers can apply had been drawn attention by judiciary.2 The report that first discussed compensation for damages caused by uninsured and untraced drivers was produced in 1937.3 In 1937 a committee under the chairmanship of Sir Felix Cassel recommended that, in cases of failure to insure as required, an injured third party who had obtained a judgment against the person responsible should be able to recover from a central fund.4 The fund should be set up and financed by insurers licensed to transact compulsory motor vehicle insurance business.5