Wilkinson v Fitzgerald and Churchill Insurance Company Limited

On 11 June 2009 the Honourable Mr Justice Blair ruled that, contrary to what may have been established practice, an insurance company cannot recover under Section 151 Road Traffic Act 1988 (or otherwise) from an injured policyholder compensation paid by way of an indemnity to that policyholder as a consequence of the negligent driving of an uninsured driver of the policyholder's vehicle even where the policyholder gave permission to the uninsured driver to drive his vehicle knowing that the driver was not covered by that policy.

The Honourable Mr Justice Blair ruled that to invoke Section 151 in such manner would be in breach of the EC first and second Motor Directives which seek to guarantee compensation to victims of road traffic accidents save in exceptional circumstances broadly limited to the theft of that vehicle.


The Claimant (W) was the named driver of a Peugeot 306 which had been bought for him by his parents. W's mother was the policyholder. On 23 November 2005 W drove his two friends to McDonalds in Macclesfield and, in circumstances not entirely clear, permitted one of the passengers (F) to drive the Peugeot away from McDonalds.

F was employed by a large garage which involved his driving vehicles as part of his employment. W believed that F was insured to drive W's car through F's employment.

An accident was caused through the negligent driving of F and in which W received a severe head injury. On advice, W commenced Court proceedings against F and sought an indemnity from Churchill (C) the insurers of his parents' vehicle. C maintained that it would not provide an indemnity and primarily invoked Section 151(8) Road Traffic Act 1988:-

"Where an insurer becomes liable under this section to pay an amount in respect of a liability of a person who is not insured by a policy .............. he is entitled to recover the amount from that person or from any person who:-

(a) is insured by the policy ............. by the terms of which the liability would be covered if the policy insured all persons ..........; and

(b) caused or permitted the use of the vehicle which gave rise to the liability".


  • 1. This was not a Motor Insurers' Bureau case because there was, at the time of the accident, a policy of effective insurance which covered the vehicle.
  • 2. There does not seem to have been any previous cases which have decided this point even though the circumstances do not seem unusual.
  • 3. If C's submissions had been accepted an odd effect is that W would have been less well protected by having effective insurance cover for his vehicle than if there had been none because, in that event, he could have relied upon the MIB Uninsured Agreement and claimed compensation on the basis that he reasonably believed F was insured under F's own policy. It was common between parties that W's belief, or the reasonableness of it, was not relevant to the issue of recoupment under Section 151.
  • 4. This is an example of domestic legislation being interpreted in such a way as to give effect to EC Directives even though by so doing was to give the wording other than its natural meaning. The Honourable Mr Justice Blair accepted that the words "recover from any person who is insured by the policy" in Section 151(8) should be interpreted as meaning a person "not being a person entitled to the benefit of a judgment to which this section refers". However, he did not think it necessary to imply specific words into the section.


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