Appeal Judgment: Cameron v Hussain and LV=
On 23rd May 2017, the Court of Appeal handed down judgment in the case of Cameron v Hussain and Liverpool Victoria. The Court of Appeal ruled two to one in favour of the claimant, judging that a claimant is able to sue, and subsequently obtain judgment against, a tortfeasor by description rather than name.
The case relates to an accident where the claimant’s stationary vehicle was struck by a Nissan insured by Liverpool Victoria (‘LV=’). The Nissan then hit another parked car before driving away without stopping. Despite this, a witness took down the registration number of the Nissan as it fled the scene.
LV=’s insured was a Mr Bahadur. However enquiries established that he was neither the owner nor registered keeper of the Nissan, the risk address was bogus, and the policy had been incepted fraudulently. The claimant therefore brought proceedings against the registered keeper of the Nissan, Mr Naveed Hussain (‘the first defendant’), and LV= (‘the second defendant’).
The registered keeper of the Nissan, Mr Hussain, refused to divulge the identity of the driver and was convicted at Calderdale Magistrates Court for failing to provide the driver’s details.
Within proceedings it was admitted by the claimant that the identity of the driver of the Nissan was unknown. LV= successfully obtained summary judgment against the claimant on the grounds that the driver of the Nissan could not be identified and therefore judgment could not be obtained against a known tortfeasor. The claimant’s cross application to amend the name of the first defendant to “the person unknown driving vehicle registration number Y598 SPS who collided with vehicle registration number KG03 ZJZ on the 26th May 2013” was also dismissed.
The claimant then appealed the dismissal of their application to amend the particulars of claim to bring the claim against ‘persons unknown…’ and the granting of the summary judgment to the second defendant.
HHJ Parker considered and dismissed this appeal on 6th February 2015, thereby upholding the summary judgment along with the dismissal of the claimant’s application to sue an unknown person.
The claimant appealed again to the Court of Appeal, stating that the provisions of the Road Traffic Act 1988 provide for the insurer of a vehicle to compensate injured parties even if that insurer has no contractual liability to indemnify the driver.
Case law has developed in injunctive relief cases where the courts have granted permission to bring proceedings against unknown persons; in the area of pre-emptive injunctions, orders have been made to prevent ‘persons unknown’ from leaking protected written material before its official publication. The claimant argued that having allowed unknown persons to be named in proceedings, a precedent was set which should permit this in the index case; thus allowing the claimant to obtain a judgment against the fault driver by describing, rather than naming them. Upon obtaining such a judgment the insurer’s statutory obligation to satisfy the unsatisfied judgment under section 151 of the Road Traffic Act 1988 was triggered.
LV=’s position was that the courts had only permitted unknown people to be named in proceedings in very limited circumstances and in injunctive relief scenarios, and that such precedent has no application within the existing legislative framework of the RTA and the MIB Untraced Drivers’ Agreements. The fundamental difference is that whoever breaches an injunction made against ‘unknown persons’ automatically identifies themselves by breaching of the injunction, whereas in the index case the tortfeasor would remain unidentified but still leave the insurer with a contingent liability under the Road Traffic Act.
It was also submitted that the MIB Untraced Drivers’ Agreements covered such eventualities and always had done. Therefore the claimant was at no prejudice as they could be compensated by the MIB (as the claimant’s passengers in fact were in this case). However the insurer was prejudiced given that they could not, in turn, recover their outlay to a genuine claimant from the fault driver as there was no identified tortfeasor to recover from.
Furthermore, it was contended that a successful appeal would have huge connotations from a fraud perspective. If parties could sue unknown individuals, fraud could be perpetrated without any ability of the insurer to identify who was allegedly driving the vehicle or its usage at the time. It would also open up various issues surrounding the fraudulent broking of vehicles and fraudulently incepted policies. Policies could be set up and claims brought against the policy without any driver being named and without the insurer having any ability to take an account from the policyholder or alleged driver.
What next for insurers?
Technically, following this decision, insurers are now liable to satisfy judgments obtained against unnamed individuals purely on the basis that they insured the vehicle.
On the instructions of LV= we have sought permission from the Court of Appeal to appeal to the Supreme Court; if that is not granted we have instructions to seek permission in the Supreme Court for permission to appeal the Court of Appeal’s decision.
The judgment of Sir Ross Cranston in the appeal is very clear and compelling, unequivocally rejecting the claimant’s appeal and arguments in response, whilst highlighting the ramifications and consequences envisaged by us.
As a result, we recommend all decisions in cases potentially affected by the appeal outcome are stayed until such time as the Supreme Court has had an opportunity to consider the merits of the appeal. At this stage we cannot give a timescale for the Supreme Court’s decision on leave to appeal, but will issue further guidance as soon as it is possible to do so.
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