UK motor insurance policies cover the driver, not the vehicle, and disputes can arise if multiple insurers bear potential liability following an accident. In resolving one such disagreement, the High Court gave guidance that will prove invaluable in resolving many others in the future.
The case concerned an accident in which a car left the road and hit a tree. One occupant died; another suffered catastrophic injuries and had launched a claim for millions of pounds in compensation. A third passenger was the owner of the car and was insured to drive it. However, a fourth person was in fact at the wheel. He owned his own vehicle and had the benefit of an insurance policy that covered him to drive other cars (DOC cover). In those circumstances, an issue arose as to whether the car owner’s or the driver’s insurers were liable for the accident.
The Court noted that, on the face of it, the driver’s DOC cover rendered his insurers liable. They, however, argued that they were entitled to refuse cover on the basis that the driver had failed to comply with a condition of his policy that required him to report the accident and cooperate with the investigation. He had for a long time denied being the driver at all, but was subsequently convicted of causing death by careless driving whilst over the drink-drive limit.
In dismissing those arguments, however, the Court found that the driver’s insurers were prevented by Section 148(5) of the Road Traffic Act 1988 from avoiding liability on the ground that the driver had failed to cooperate after the accident. The former’s strained and tendentious arguments that that provision did not apply would, if accepted, lead to an absurd result and defeat its purpose. The driver’s insurers bore a straightforward contractual obligation to bear the relevant losses.