The Rule of Meaningful Degree

When a motor insurer downgrades its status to Article 75 Insurer, it is effectively stepping into the shoes of the MIB and acting as its agent under their Articles of Association. By doing so, that motor insurer gains the benefits of the Uninsured Drivers’ Agreement 2015 and is able to rely upon the ‘rule of meaningful degree’. This is because the MIB is a fund of last resort and, therefore, has no obligation to deal with a claimant’s claim if another driver was partially to blame for the road traffic incident. As such, the MIB has no obligation to pay a judgment if there is liability on another driver (tortfeasor) whose insurer has ‘Contractual’ or ‘RTA’ Insurer status under the Road Traffic Act 1988. This means that an Article 75 Insurer will also have no obligation as its liability is essentially an MIB liability.

Put simply, if it can be shown that another vehicle or vehicles contributed towards the incident (and their motor insurers were acting as either Contractual or RTA Insurers), then they will be held liable to deal with the claimant’s claim in full, while the Article 75 Insurer will avoid liability even if their vehicle’s driver was mainly at fault for the collision. This can also be referred to as the ‘1% rule’.

When dealing with such cases it is important to make third-party representatives aware of any rule of meaningful degree arguments at an early stage and to disclose any supporting liability evidence to ensure that the claim is redirected. Dashcam footage, police reports and independent eye-witness testimony can all be useful aids when investigating liability, especially in concertina collisions.