Indemnity

RTA, Conflict with EU Second Motor Directive: Wilkinson v Fitzgerald and Churchill Insurance Company Ltd – High Court (2009)

The claimant was a passenger in his own car who had permitted the first defendant to drive it even though he knew he had been drinking and had no insurance. The first defendant lost control of the car and it crashed causing the claimant to suffer serious injuries.

The vehicle insurers accepted that they must indemnify the driver in compliance with section 151 (5) of the Road Traffic Act 1988 but because the claimant had permitted the use of his car they also argued that they were entitled to recover from him any monies paid in compensation,  by virtue of section 151 (8). Since the person claiming compensation was also the person who the insurers would recover the money from, this would effectively deprive him of any compensation for his injuries.

The claimant argued that this conflicted with long standing EU policy aimed at ensuring that victims of road traffic accidents were compensated whether or not the driver responsible was insured. The court dealt with this as a preliminary issue and found that the insurers were not entitled to recover their money. Section 151 (8) of the RTA could not be applied to contravene article 2 of Directive 84/5 (the "second motor directive").

Comment: the circumstances of the accident (i.e. a young man on a night out permitting a drunken friend to drive) are not particularly unusual and similar claims may be brought in future on the basis of this judgment. The defendants have been given leave to appeal.

Liability

Criminal Conduct, Public Policy: Gray v Thames Trains and Network Rail Infrastructure Ltd - House of Lords (2009)

The claimant was a passenger on a train involved in the Ladbroke Grove rail crash. He escaped with only minor physical injuries but the horrific events he witnessed led to him suffering severe post traumatic stress disorder. The claimant subsequently stabbed a stranger to death and was convicted of manslaughter. He escaped a murder charge by reason of diminished responsibility and was detained in hospital with an indefinite restriction order.

The claimant brought an action seeking damages for loss of earnings, general damages and an indemnity against any claims from his victim's dependents. The defendants successfully argued that the principle of ex turpi causa non oritur actio (i.e. there can be no compensation for the consequences of the claimant's own illegal act) applied to the claim for general damages relating to the manslaughter and for the loss of earnings after that event.

On appeal however the Court of Appeal allowed the claim for loss of earnings after the manslaughter, holding that the loss stemmed from the psychiatric injury caused by the claimant's negligence and that the claimant would have suffered a loss of earnings whether or not he had committed manslaughter. The defendants had not proved that the chain of causation was broken and the doctrine of ex turpi causa did not apply (see August 2008 bulletin).

The defendants made a further appeal to the House of Lords who unanimously rejected the Court of Appeals findings. The doctrine of ex turpi causa applied both in a narrow and a broad sense.