ROAD TRAFFIC — Third party insurance — Driving uninsured — Driver using vehicle without owner’s permission — Accident occurring causing serious injury to passenger — Whether passenger knowing or having good reason to believe that vehicle unlawfully taken — Whether insurers entitled to repudiate liability to indemnify driver — Road Traffic Act 1988, s 151(4)

McMinn v McMinn and another [2006] EWHC 827 (QB)

QBD: Keith J: 11 April 2006

To establish that a liability was an excluded liability under s 151(4) of the Road Traffic Act 1988 an insurer had to prove that if an injured passenger did not know that a vehicle had been stolen or unlawfully taken, he did have the information which would have afforded him good reasons for believing that the vehicle had been stolen or unlawfully taken had he applied his mind to the topic.

Keith J so held in the Queen’s Bench Division when making a declaration on a preliminary issue in a claim for damages for personal injuries brought by the claimant, Andrew McMinn, a patient suing by his litigation friend Alison McMinn, against the defendants, (1) Iain McMinn and (2) Aioi Insurance Co of Europe Ltd.

KEITH J said that the claimant was seriously injured in a road traffic accident. He was the passenger in a van driven by the first defendant, his younger brother. The claimant claimed that the accident was caused by his brother’s negligence. His brother did not have the owner’s permission to drive the van and the preliminary issue was whether the insurers were entitled to repudiate any liability to indemnify the first defendant for such damage as he might be ordered to pay for the claimant’s injuries. S 151 of the Road Traffic Act 1988 required insurers to satisfy judgments obtained against drivers arising out of their use of a motor vehicle where the judgment related to a liability which was required to be covered by a policy of insurance under s 145 of the 1988 Act. S 151 applied where the vehicle was being driven by uninsured drivers as well as insured ones, subject to s 151(4) which provided for an exception where the liability was an excluded liability. The purpose of that exception was to relieve insurers from their duty to satisfy judgments obtained against uninsured drivers by their passengers if the passenger knew or had reason to believe that the vehicle had been stolen or unlawfully taken. Insurers would avoid liability if they proved that the injured passenger had reason to believe that the vehicle had been stolen or unlawfully taken. Insurers did not have to prove that the injured passenger actually believed that the vehicle had been stolen or unlawfully taken but that he had the information which would have afforded him good reasons for believing it had he applied his mind to the topic. Shutting one’s eyes to the obvious was therefore enough, provided that it would indeed have been obvious to the injured passenger if he had thought about it. The words “stolen or unlawfully taken” in s 151(4) of the 1988 Act could only refer to the corresponding criminal offences in the Theft Act 1968. In the circumstances, the claimant had reason to believe that the van had been unlawfully taken. The first defendant’s liability for the claimant’s injuries was an excluded liability within the meaning of s 151(4) of the 1988 Act and the insurers were not required to indemnify the first defendant in respect of any judgment obtained against him by the claimant.

Appearances: Nicholas Braslavsky QC and Harold Halliday (Farnworth Shaw, Burnley) for the claimant; Adrian Palmer QC (Berrymans Lace Mawer) for the insurers.

Reported by: Ben Urdang, barrister