Court holds that motor insurer providing cover whilst driving other cars can't rely on the breach of a condition precedent by the insured
The first defendant was convicted of causing death by careless driving in an accident in which a passenger died (and another was severely injured). Three motor insurers had a potential liability in respect of claims arising from the accident: (1) an insurer which had issued a policy to the defendant in relation to another vehicle which included an extension covering the driving of other vehicles (this insurer was entitled to avoid its policy – see Weekly Update 16/18); (2) Insurer A, which had similarly issued a policy for another vehicle which included an extension for driving other vehicles; and (3) Insurer B, the insurer of the vehicle involved in the accident. The first defendant was not insured under the policy issued by Insurer B but Insurer B had a contingent liability because, in the absence of a contractual insurer, it would be liable to satisfy a judgment in favour of the injured passenger pursuant to the provisions of section 151 of the Road Traffic Act 1988 ("the RTA 1988").
Insurer A argued that it was not liable to indemnify the first defendant because he had breached various claims conditions precedent. However, section 148 of the RTA 1988 provides that a condition in a motor insurance policy providing that no liability shall arise "in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the policy....shall be of no effect in connection with such liabilities as are required to be covered by a policy under section 145 of this Act" (emphasis added). Section 145 in turn provides that a policy must insure a person for liability which may be incurred by him arising out of "the use of the vehicle on a road". Insurer A sought to argue that that was a reference to the vehicle insured by it, and not any vehicle which the insured happens to be driving under the driving other cars cover.
That argument was rejected by Master Davison. The policy issued by Insurer A stated that the first defendant could lawfully drive another car and be insured under the policy. Accordingly, once the first defendant started to use the car involved in the accident, that car became the car insured for the purposes of the policy and "the vehicle" under section 145. Otherwise, a driver using another car under a provision entitling it to drive other cars would be committing a criminal offence because he/she would be driving without insurance.
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