Law of Compulsory Motor Vehicle, The

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CHAPTER 10 Motor Insurers’ Bureau

The Motor Insurers’ Bureau Agreements

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 10.2 In order to fill the gap in providing compensation for injuries caused by uninsured motorists, the insurers transacting compulsory motor vehicle insurance business in Great Britain, acting in agreement with the Minister of Transport, formed

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a company,6 the Motor Insurers’ Bureau (MIB), to assume liability to satisfy judgments of these kinds.7 10.3 The MIB’s obligation applies only where either the motorist failed to comply with his statutory obligation to insure or the motorist is never traced. However, in these cases the role of the MIB under the relevant Agreements8 is not to guarantee but to provide a safety net for innocent victims of identified but uninsured or untraced drivers. In other words the MIB’s obligation to satisfy traffic accident victims’ claims is not absolute but is subject to exceptions where the MIB has either no liability9 or there is a limitation to its liability.10 Additionally, there are pre-conditions to the MIB’s liability which the claimant must first comply with.11 The MIB will aim to compensate innocent victims of negligent unidentified drivers fairly and promptly and will be open and honest in dealing with all claimants. It may perform all or part of its obligations through agents appointed on its behalf.12 The MIB is also responsible for operating the “Green Card” system in the UK. 10.4 Where an insurer becomes insolvent, any ongoing claim will typically be dealt with under the provisions of the Financial Services Compensation Scheme, but, if, for whatever reason, a judgment is not satisfied under that Scheme, the MIB will meet the judgment and then look to recover its outlay from the Scheme. The MIB will, however, expect that every reasonable effort must first be made to pursue the claim through the Scheme, this reflecting the MIB’s status as a safety net. 10.5 Every insurer underwriting compulsory motor insurance is obliged, by virtue of the Road Traffic Act 1998, to be a member of the MIB13 and to contribute to its funding. The MIB is funded by the levies paid by its members based on the premium that they received.14 10.6 Claims against the MIB for losses caused either by uninsured or untraced drivers are not uncommon. The MIB has revealed that thousands of people are breaking the law by driving other people’s cars without insurance, resulting in over 3,000 vehicles being seized between July 2016 and June 2018.15 In 2017 the MIB concluded 17,700 applications by victims of untraced drivers.16

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Uninsured Drivers Agreement

10.7 The obligations of the MIB are not to be found in an Act of Parliament but in the MIB Agreements with the appropriate minister.17 The first Agreement was made on 17 June 1946, between the Minister of Transport and the MIB with the objective of satisfying judgments against uninsured motorists in respect of a liability which is the subject of a compulsory insurance obligation under the Road Traffic Acts. That Agreement was replaced by an Agreement which operated in respect of accidents occurring on or after 1 March 1971 which in turn was replaced by a new Agreement to operate in respect of accidents occurring on or after 1 December 1972. The Agreement was subject to further replacements in 1988 and 1999 with a Supplementary Agreement in 2008. The current Agreement was made in July 2015 and was brought into force on 1 August 2015. A Supplementary Agreement of January 2017 came into force on 1 March 2017 in relation to accidents occurring on or after that date.

Untraced Drivers Agreement

10.8 The MIB also paid compensation on an ex gratia basis to persons injured in motor accidents in cases where the driver could not be traced, a practice that was placed on a formal footing by the first Untraced Drivers Agreement dated 21 April 1969.18 This Agreement was replaced by a new Agreement which operated in respect of accidents occurring on or after 1 December 1972. This Second Agreement was added to by a Supplemental Agreement dated 7 December 1977 which operated in respect of accidents occurring on or after 3 January 1978. The Agreement was subject to further replacements in 1996 and then in 2003 with Supplementary Agreements of 2008, 2011, 2013 and 2015. The current Untraced Drivers Agreement came into force on 1 March 2017 replacing the 2003 Agreement and applying in relation to accidents occurring on or after that date.

EU Directives

10.9 The influence of the European law on the MIB Agreements has been inevitable.19 As referred to in the main purpose of the Second Directive, Directive 84/5/EEC, was to improve guarantees of compensation for victims of motor accidents by ensuring a minimum level of protection for them throughout the Community. The intention was “to entitle victims of damage or injury caused by unidentified or insufficiently

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insured vehicles to protection equivalent to, and as effective as, that available to persons injured by identified and insured vehicles.”20 10.10 Second Directive therefore required Member States to put in place provisions for the protection of those injured by uninsured or untraced drivers of motor vehicles. The sixth recital to the Second Directive drew attention to the need for making provision for a body to guarantee that the victim will not remain without compensation where the vehicle which caused the accident is uninsured or unidentified. Article 1(4) of the Directive therefore imposed an obligation on Member States to set up or authorise a body with the task of providing compensation to the victims of unidentified or uninsured drivers, ie in the case of the insurance obligation not being satisfied. Article 1(4) of the Directive permitted the victim to make a direct claim against the relevant body. The compensation body’s liability to provide compensation should at least be up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied.21 However, Member States were allowed to limit or exclude the payment of compensation by that body in the event of damage to property by an unidentified vehicle. 10.11 The Third Directive also improved the position of a victim in the case of an uninsured driver in that the compensation body referred to in Art 1(4) of the Second Directive was not permitted to require that the victim, if he is to be compensated, should establish that the party liable (uninsured driver) is unable or refuses to pay.22 Where a dispute arises as to whether the compensation body or the civil liability insurer is responsible to compensate the traffic accident victim’s loss, the Third Directive required the Member States to take the appropriate measures so that one of these parties is designated to be responsible in the first instance for paying compensation to the victim without delay.23 Article 4 retained the right of recourse by the body who paid for the loss to the other either for the whole (in case the other body should have paid) or part (in case the other body is responsible in part). 10.12 As referred to in , First Directive Article 4 allowed some derogations from compulsory insurance requirements with respect to certain vehicles belong to public or private persons and vehicles with certain plates. The Fifth Directive provided that the Member States shall ensure that for the former a compensation system is in operation and for the latter, with respect to vehicles with certain plates, that are treated in the same way as vehicles for which the insurance obligation provided for in Article 3(1) has not been satisfied.24 The compensation body of the Member State in which the accident has taken place shall then have a claim against the guarantee fund provided for in Article 1(4) of Directive 84/5/EEC in the Member State where the vehicle is normally based.25 10.13 Article 2(4) of the Fifth Directive amended the Second Directive in respect of the property damage caused by an unidentified vehicle that each Member State shall set up or authorise a body with the task of providing compensation, at least up to the

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limits of the insurance obligation for damage to property or personal injuries caused by an unidentified vehicle or a vehicle for which the insurance obligation provided for in paragraph 1 has not been satisfied. Member States may limit or exclude the payment of compensation by the body in the event of damage to property by an unidentified vehicle.26 However, where the body has paid compensation for significant personal injuries to any victim of the same accident in which damage to property was caused by an unidentified vehicle, Member States may not exclude the payment of compensation for damage to property on the basis that the vehicle is not identified. Nevertheless, Member States may provide for an excess of not more than EUR 500 for which the victim of such damage to property may be responsible.27 10.14 The provisions with regards to the compensation body responsible for satisfying third party victims’ claims in the case of uninsured or untraced drivers were carried to the Consolidated Directive Article 10 from the previous relevant Directives. Similar to the provisions available before, the compensation body should be responsible for covering at least up to the limits of the insurance obligation for damage to property or personal injuries caused by an unidentified or uninsured vehicle. The victim is permitted to apply directly to the body for compensation who is allowed to exclude liability in respect of persons who voluntarily entered the vehicle which caused the damage or injury when the body can prove that they knew it was uninsured. Moreover, Member States may limit or exclude the payment of compensation by the body in the event of damage to property by an unidentified vehicle. This is nevertheless subject to a case where compensation is paid for significant personal injuries and damage to property caused by an unidentified vehicle. In such circumstances Member States are allowed to provide for an excess not more than EUR 500 to be borne by the victim of such damage to property but they are not permitted to exclude the payment of compensation for damage to property on the basis that the vehicle is unidentified. 10.15 The Consolidated Directive also retained the rule that in the case of having a dispute between the insurer and the compensation body as to who is liable to meet the victim’s claim the Member States shall take the appropriate measures so that one of those parties is designated to be responsible in the first instance for paying compensation to the victim without delay.28 Once it is ultimately decided that the other party should have paid all or part of the compensation, that other party shall reimburse accordingly the party which has paid. 10.16 It is worth noting that under the schemes established by the Second and Fourth Directives (now Consolidated Directive) the duties imposed on the compensation body cannot be regarded as the implementation of a guarantee scheme in respect of insurance against civil liability relating to the use of motor vehicles.29 The scheme was designed to be a measure of last resort, envisaged only for specific, clearly identified sets of circumstances in the Directives.30 One important aspect of why this classification is significant is covered below under “Insurer’s Insolvency.”

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10.17 In the United Kingdom, the UK MIB acts both as the bureau or guarantee fund contemplated by Article 1(4) of the Second Directive (Article 10 of the Sixth Directive) and, under Regulation 10 of the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003,31 as the compensation body required under Articles 6 and 7 of the Fourth Directive (now Articles 24(1) and 25(1) of the Sixth Directive).

The legal status of the MIB Agreements

10.18 The MIB is a mutual of profit-making insurance companies.32 As explained above, the obligations of the MIB are not imposed by statute, as they could have been.33 They derive from the Agreements reached between the MIB and the United Kingdom Government (through the relevant Minister of State), one relating to victims of uninsured drivers (the “Uninsured Drivers Agreement” – UDA) and the other concerned with the victims of hit and run or otherwise unidentified drivers (the “Untraced Drivers Agreement” – UTDA). Under each Agreement, the MIB is obliged to pay defined compensation in specific circumstances to the victims of motor vehicle accidents who, in fact, are not parties to these Agreements. These Agreements are, on their face, contracts between two parties for the benefit of a third person.34 Under the traditional doctrine of privity of contract before the Contracts (Rights of Third Parties) Act 1999,35 no person would have been entitled to sue the bureau on its contract with the Minister other than the Minister himself.36 It might be argued that the 1999 Act fixed this matter; however, the problem with the operation of the MIB Agreements together with the 1999 Act is that the latter requires the third party beneficiary to be identified in the contract37 whereas the UDA or UTDA practically cannot perform this: the claims are to be made by traffic accident victims who are not known at the time the Agreements are made. 10.19 The 2003 UTDA clause 31 (5) stated that the 2003 Agreement was intended by the parties to confer a benefit on applicants as non-parties. It was argued in Carswell v Secretary of State for Transport 38 and the judge approved that clause 31(5) makes expressly and abundantly clear that the 2003 Agreement is intended by the parties to confer a benefit on applicants as non-parties. Subsequently, clause 31(5) gives a clear signpost that non-party applicants are intended to have a right to sue on the contract where there is no right to appeal to an arbitrator.39 The 2017 UTDA does not contain a similar wording to that of clause 31(5) of the 2003 Agreement, but40 its clause 25 provides

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that for the purposes of the 1999 Act the UTDA may be (a) varied or rescinded without the consent of any person other than the parties hereto, and (b) determined pursuant to clause 2(3) without the consent of any such person. This may be regarded as an attempt to give formal recognition to the practical position as it has existed since the MIB was established41 that a third party can enforce the MIB Agreements.42 In any event third party victim’s claims had never been objected by the MIB for lack of contract between the MIB and the claimant.43 The claims have been processed on the basis that the intention of the Agreements is to benefit the victims of uninsured and untraced drivers.44 The method adopted by the Agreements was described as an oblique and extra-statutory way of imposing liability upon the MIB45 and so far as they are permitted by the rules, to make it work with justice to the bureau as well as to the persons for whose benefit the Minister made the contract.46 10.20 The way that the UK implemented the Second Directive through a private agreement between a private body and the relevant Ministry was challenged in Evans v Secretary of State for the Environment, Transport and the Regions.47 This was before the 2009 Directive consolidated the previous five Directives referred to in . The Court of Justice of the European Communities noted that the first subparagraph of Art 4(1) of Directive 84/5 (Second Directive) contained no provision concerning the legal status of the body or the detailed arrangements for its authorisation.48 Further, what mattered was whether the relevant body was to provide victims with the compensation guaranteed to them by the Directive and it was enabled for victims to address themselves directly to the body for such compensation. The Court was of the view that so long as the body agreement satisfied these conditions the nature of the agreement was immaterial.49

Is the MIB an emanation of the state?

10.21 Emanation of the state may also be expressed as “organ of the state,” “public authority” and “state authority” which are used as overlapping and synonymous terms.50 The classification of the MIB is significant for the following reasons. If the MIB is not an emanation of the state and a victim of a traffic accident is unable to recover from the MIB in circumstances in which recovery is required by the Directives, the victim will have to resort to an action in damages against the UK Government for

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failing in its duties to implement the Directives properly. The condition of the Member States’ liability in this respect is discussed in . On the other hand, if the MIB is an emanation of the state, the victim may be able to recover from the MIB for that reason and therefore does not have to claim damages against the UK Government for failing to implement the Directive. 10.22 The legal form of the body is not determinative of whether or not it is an emanation of state. However the following matters should be taken into account, that51

(i) the body has been made responsible, pursuant to a measure adopted by the State, for providing a public service;
(ii) such public service is provided under the control of the State; and
(iii) the body has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals is included among the bodies against which the provisions of a Directive capable of having direct effect may be relied upon.

10.23 Judiciary disagreed on the matter of whether the MIB’s status matches with the abovementioned conditions. Those who disagreed that the MIB is an emanation of the State were of the view that, although the MIB performs a public service with regards to the protection and compensation for victims of accidents involving uninsured or untraced drivers, it is not under the control of the State. Further, the MIB acts on its own behalf in the commercial interest of its members, not on behalf of the State or as a delegate of the State. It enters into commercial private law contracts with inter alia the Secretary of State. When seeking to implement the Second Directive in relation to uninsured and untraced drivers, the Secretary of State chose to make an Agreement with the MIB. The only capacity in which the bureau has acted is as a private law entity and the only obligations it has assumed have been private law contractual obligations. This cannot be said to be a situation where any public law relationship has come into existence.52 10.24 On the other hand, some expressly held that the MIB is an emanation of the State.53 10.25 The dispute in Farrell v Whitty 54 was referred in paragraph 10.129 onwards. It suffices here to briefly mention that in Farrell, the Motor Insurers’ Bureau of Ireland (MIBI) rejected a claim made by a victim of a traffic accident. The reason for rejecting the claim was that the domestic legislation of Ireland excluded from the benefit of the guarantee provided by compulsory insurance cover “persons travelling in any part of a vehicle which is not designed and constructed with seating accommodation for passengers.” F, at the time of the accident, was seated on the floor in the rear of the van which was neither designed nor constructed to carry passengers in the rear. In reference to the CJEU the Court ruled that such an exclusion is not permitted under the Third Motor Insurance Directive which has a direct effect so that an individual can claim the benefit derives from the Directive before a national Court. Whether such a claim could be made

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against the MIBI was not determined by the Court of Justice in Farrell v Whitty 55 who noted that the national (referring) Court did not provide sufficient information regarding the MIBI to enable them to make such a ruling. Consequently, the CJEU left it to the national Court to ascertain this matter.56 On return, the High Court in Ireland decided that the MIBI was an emanation of the state and that, consequently, the claimant had a right to obtain compensation from it. The MIBI appealed on the ground that it was not an emanation of the state and that the provisions of a Directive, even those having direct effect, which had not been transposed into national law could not be relied on against it. In the meantime, following an agreement between the parties, the claimant received compensation for her injuries, but the parties disagreed on the question of who should bear the cost. By an order dated 12 May 2015, the Supreme Court of Ireland stayed the appeal proceedings and referred to the Court of Justice for a preliminary ruling on the issue of whether provisions of the Second Directive as amended by the Third Directive, which were capable of having direct effect, could be relied upon against a private law body on which a Member State had conferred the task which was the subject of Article 1(4) of the Second Directive.57 In Farrell v Whitty 58 the CJEU held that the conditions were not conjunctive. This means that it is sufficient if (i) the Member State has delegated a task in the public interest and (ii) the delegate possesses “special powers” for that purpose. 10.26 In Lewis v Tindale 59 Soole J held, and the Court of Appeal approved60 that for the purposes of this issue there is no relevant difference between the structure of the MIBI61 and MIB.62 The judge decided that the CJEU’s ruling in Farrell v Whitty 63 is to supersede64 the reasoning in Byrne v Motor Insurers’ Bureau 65 and the observations of Hobhouse LJ in Mighell v Reading,66 both of which were mentioned above.

Is the MIB independent of its members insurers?

10.27 A further angle of the discussion on the legal nature of the MIB and its obligations raises the question about its reliability as to the objective nature of its decisions. 10.28 It was argued in Carswell v Secretary of State for Transport that the MIB is not independent: it comprises all motor insurers (who are companies run for profit); it is commercially interested in the outcome of any claim; and it is both investigator and the body liable to pay any award. Hickinbottom J held that the fact that the body charged with being the investigator/inquisitor is not a public body, but a private commercial body,

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is not determinative in this respect.67 Further matters that should be taken into account are that a United Kingdom motorist cannot insure but through an MIB insurer: there is no option to go outside of it.68 Any increase in the levels of payout by the MIB is more likely to affect premium rates than profitability. Consequently, the extent to which the effects of payouts on the profitability of insurance companies would impact on those involved in settling MIB claims is very uncertain.69 Hickinbottom J held that the measures built into the scheme adequately safeguard the rights of those who are the victims of untraced drivers against the MIB acting in a biased or unfair or self-serving way. The judge pointed out that the applicants are enabled to obtain legal advice in relation to both the application they make and any decision of the MIB, and at the MIB’s cost. The existing appeal procedures enable an applicant to take a decision of the MIB to an arbitrator and thence, on a point of law, onwards to the Supreme Court if appropriate.70

Where the MIB is unnecessarily involved

10.29 Victims of traffic accidents and their solicitors should avoid involving the MIB unnecessarily in their claim for the injuries suffered as a result of the accident. Otherwise the Court may order that the bureau’s costs be borne by the victim or his solicitors. The examples include where the MIB was involved by the victim’s solicitor before making reasonable enquiries to identify the defendant motorist’s insurers prior to notifying the MIB;71 where the claim falls below the deductible permitted for property claims;72 where the defendant motorist’s insurer had confirmed they were the relevant insurer for the driver of the vehicle;73 and where the MIB was notified without investigating properly whether the liability is that of falling within the MIB’s obligation to compensate the victim.74

Untraced or Uninsured Drivers Agreement

10.30 As seen below, different procedures apply to UDA and UTDA mainly because whilst in the former either the driver or the vehicle and therefore the owner and the insurer may be chased, in the latter for one reason or another the identity of the driver is unknown and so are the vehicle’s owner or insurer. The developments of the MIB Agreements over decades and the continuing expansion of the cover of the compulsory insurance regime rendered some issues which were discussed to a great extent in the past otiose. In other words, it is a more straightforward exercise today than it was in the past to determine whether the Uninsured or Untraced Drivers Agreement will apply to the victim’s claim. Previously, where the vehicle was stolen and the owner’s insurers repudiated liability, the claim was dealt with under the Untraced

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Drivers Agreement.75 Whereas today the insurer, when chased, has to cover even when the vehicle is stolen and therefore neither of the Agreements will apply. 10.31 Where the victim makes a direct claim against the insurer under section 151 of the RTA 1988 that will only be subject to the insurer’s avoidance or cancellation of the policy as discussed in . However, it will be examined below that where the insurer avoids the contract after the accident has occurred, although sections 151 and 152 76 of the RTA 1988 read literally permit the insurer to reject the third party victim’s claim, Article 75 of the Motor Insurers’ Bureau Articles of Association will still require the insurer to compensate the third party victim with no rights of recourse against the MIB.

Uninsured Drivers Agreement

Scope

10.32 The latest form of UDA applies to accidents which occur on or after 1 August 2015.77 Accidents occurring before this date will be dealt with under previous UDAs in accordance with their period of application. For example, the UDA dated 13 August 1999 continues to apply in respect of accidents occurring between 1 October 1999 and the date of operation of the 2015 Agreement, namely 1 August 2015. The RTA 1988 sections 143–145 apply to the use of a vehicle in Great Britain and the EEA, and the Uninsured Drivers Agreement is of corresponding scope. Where the owner or driver of a vehicle has not been identified (either because it is shown, on a balance of probabilities, that the named person does not exist or false particulars for the individual have been provided), the claim will be dealt with under the relevant UTDA.

Relevant liability

10.33 Relevant liability plays a crucial role in determining the scope of the claims that may be brought against the MIB. Under UDA 2015 a “relevant liability” means a liability in respect of which a contract of insurance must be in force to comply with Part VI of the 1988 Act. Namely, in order to constitute a “relevant liability” within the meaning of the UDA, the judgment which has been obtained against the defendant motorist must have been a judgment payable in respect of a liability incurred by him for damages for personal injury “caused by, or arising out of, the use of” the vehicle on the road or a public place. 10.34 It has also been confirmed by the CJEU that the scope of obligatory intervention of the compensation body referred to in Article 1(4) of the Second Directive is, as regards the damage or injuries caused by an identified vehicle, coextensive with the scope of the general insurance obligation laid down in Article 3(1) of the First Directive.78 The obligatory intervention of that body in such a situation cannot therefore

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extend to situations in which the vehicle involved in an accident was not covered by the insurance obligation.79 10.35 This liability does not include the loss suffered by the actual driver himself. In Cooper v Motor Insurers’ Bureau,80 which was also referred to in , with respect to section 143 of the RTA1972 (now section 143 of the RTA 1988), C claimed against the MIB because the defendant K was unable to satisfy the judgment against him. The relevant accident took place when C was road testing the motorcycle that belonged to K. During the course of that test the brakes failed and C collided with a motor car on the highway. Having suffered very severe injuries C claimed against the MIB to recover the judgment that was obtained against uninsured K, but the claim against the MIB was rejected because the obligation to insure and therefore obligation to be covered by the MIB in the absence of insurance excluded the losses suffered by the driver himself. As a result, in Cooper the only liability which fell to be covered under section 143(1) and sections 145(3)(a) was C’s liability to others. Since K’s liability to C was not that of which fell to be covered by the statute, the MIB was under no obligation to satisfy the judgment against K in this case. 10.36 As again referred to in , it appears in Hardy v Motor Insurers’ Bureau that the relevant liability is interpreted broadly in conjunction with the wording of section 145 of the RTA 1988.

Unsatisfied judgment

10.37 The MIB’s obligation under the UDA 2015 is strictly only to satisfy a judgment obtained by the claimant in respect of a “relevant liability” which is not met by the offending driver within seven days.81 However, where it is appropriate to avoid unnecessary expense and delay, the MIB may seek to settle the claim before a formal judgment is obtained and ask the claimant to assign his rights to pursue the driver so that the MIB may attempt to recover its outlay.82

Authorities excluded

10.38 Local authorities, the National Health Service, the police and the Ministry of Defence are some of the public bodies that will meet claims arising from the use of vehicles in their ownership or possession and do not need to have insurance cover.83 As such, the MIB is not liable for any judgment arising out of the use of such vehicles. However, if it can be shown that the vehicle in question is in fact covered by insurance the MIB’s obligation arises if the insurer does not satisfy the judgment.84

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Other sources of recovery

10.39 In circumstances where there is an insurer to cover the loss in place of the MIB, then that insurer should deal with the claim leaving the MIB to satisfy any uninsured losses. 10.40 Clause 6(1) stipulates that subject to paragraph 2, the MIB is not liable for any claim, or any part of a claim, in respect of which the claimant has received, or is entitled to receive or demand, payment or indemnity from any other person (including an insurer), not being the Criminal Injuries Compensation Authority or its successor. For instance, if the claimant has his own comprehensive policy cover which would meet the cost of repair, the claimant should address the claim to the insurer. If the insurer denies liability, for instance, because the claimant did not satisfy the policy conditions, the MIB will not be obliged to compensate the loss which was refused by the insurer for that reason. The same rule applies, for instance, where the claimant’s loss is insured by a private medical insurer or any other insurance backed part of the claim or where some other person pays the claimant and seeks to recover in the claimant’s name. 10.41 However, clause 6(2) provides that the MIB will remain liable in respect of claims for:

(1) the reimbursement of employers’ payments to cover a claimant’s absence from work unless the employer is insured for that loss, and
(2) legal costs where the claimant is backed by legal expenses insurance.

10.42 Clause 6 is not intended to be used to enable the MIB to deduct proceeds received or receivable from a personal accident or life policy taken out by the claimant prior to the accident to provide benefits in the event of injury or death occurring. That type of policy is designed to provide the claimant with an additional benefit, and the MIB will not take it into account when paying compensation following an accident.85

The 2017 Supplementary Agreement

10.43 The 2015 Agreement clause 7(1) used to exclude

any claim, or any part of a claim, in respect of damage to a motor vehicle, or losses arising therefrom, where at the time when the damage to it was sustained- (a) there was no contract of insurance in force in relation to that use of the vehicle; and (b) the claimant either knew or had reason to believe that that was the case.

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