HC Deb 05 March 1965 vol 707 cc1814-24

Motion made, and Question proposed, That this House do now adjourn.—[Mr. George Rogers.]

4.19 p.m.

Mr. David Weitzman (Stoke Newington and Hackney, North)

I am grateful for the opportunity of raising the subject of this Adjournment debate. The Preamble to the Road Traffic Act, 1930, describes it, inter alia, as An Act to make provision for … the protection of third parties against risks arising out of the use of motor vehicles …". The provisions of the Act did not live up to the terms of the Preamble, because what it did was to provide that if any person used a motor vehicle on the road without its being covered by a policy of insurance against third party risk he, or anyone whom he permitted to use it, was guilty of a criminal offence.

This impliedly meant that the driver of a vehicle must be insured against third party risks. There remained, however, certain important gaps. The motorist might impecunious. The insurers might be immune because the policy was improperly obtained, or the use of the vehicle might be outside the scope of its cover, and so on, so that the third party victims might suffer injuries and get no compensation at all.

To deal with this, an agreement was made by the Minister of Transport with the Motor Insurers Bureau on 17th June, 1946. The Motor Insurers Bureau was an organisation incorporated at the instance of insurers transacting compulsory motor insurance. The objects of the agreement were described by the then Minister of Transport in answer to a Question, as set out in column 1868 of HANSARD of 12th November, 1945.

The Minister referred to the recommendations made by the Felix Cassel Committee and said: It will be recollected that the Committee recommended the establishment by insurers of a central fund from which to compensate third party victims of road accidents caused by motor vehicles, in cases where the motorist concerned has failed in his statutory obligation to insure, or where the policy is inoperative for some reason, such as breach of its conditions. These cases are comparatively rare, but they constitute a class of hardship for which, in accordance with the principle underlying compulsory insurance, a remedy should be found. Legislation to give effect to the scheme proposed by the Committee would be somewhat complicated, and I am glad to say that the insurers have made proposals for a voluntary scheme on similar lines which I am satisfied will achieve the same purpose. They are entering into agreement with me to set up an insurers' association as a corporate body, and to keep it supplied with funds, and this body will undertake to pay any amount awarded by the courts to a third party in respect of any liability required to be covered by the provisions of the Road Traffic Acts relating to compulsory insurance, where the judgment is not satisfied. This means in effect that where, owing to the absence of effective insurance, the victim cannot get compensation from a negligent motorist, he will be able to get it from the insurers' association. The association will be set up within six months, and details of the scheme will be published. The Minister then added: I should say that the Cassel Committee did not find it possible to deal with the case of a third party injured by the motorist who cannot be traced. In such a case no claim can be established against anyone, and the Committee considered that the grant of rights against the proposed fund would be calculated to lead to such abuses as to render such a course totally unsuitable. The Government cannot dissent from this view, and accordingly the agreement does not cover such cases, but I am glad to say that the insurers have informed me that they do not intend to exclude it entirely from their purview, and where there is reasonable certainty that a motor vehicle was involved and, but for unidentifiability, a claim might lie, they will give sympathetic consideration to the making of an ex gratia payment to the victim."—[OFFICIAL REPORT, 12th November, 1945; Vol. 415, c. 1868–9.] That agreement clearly intended to provide that, if a victim could not get compensation from a negligent motorist, he would get it from the Bureau, and it was coupled with an undertaking that, where there was reasonable certainty that a motor vehicle was involved and that, but for it being unidentified, a claim would lie, the Bureau would give sympathetic consideration to the making of an ex gratia payment.

My case here is, first, that the agreement with the Bureau does not fulfil the promise of the Minister. Second, that the Bureau in its interpretation and fulfilment of the agreement does not give effect to the undertaking to give sympathetic treatment to cases where the driver is unidentified. As the agreement does not do these things, my case is that it should be revised.

I draw attention to Notes 2 and 6 of the Agreement. Note 2 says specifically that: If damages are awarded by a court in respect of death or personal injury arising out of the use of a motor vehicle on a road in circumstances where the liability is required to be covered by insurance under the Road Traffic Acts and such damages, or any part of them, remain unpaid seven days after the judgment becomes enforceable, the Bureau will pay the unrecovered amount … Note 6 states: The liability of the Bureau does not extend to the compensation of any person who may suffer personal damage resulting from the use on a road of a vehicle, the owner or driver of which cannot be traced. The Bureau will not, however, necessarily refuse to act in these cases. Where, in its view, there is reasonable certainty that a motor vehicle was involved and that except for the fact that the vehicle, owner or driver cannot be traced, a claim would lie, the Bureau will give sympathetic consideration to the making of an ex gratia payment to the victim, or his dependants. In a recent case, that of Adams and Andrews, a girl of 16 years of age was a passenger in a car and received very terrible injuries, as a result of which she was reduced, so far as her mentality was concerned, permanently to the intelligence of a child. She brought an action against the driver of the vehicle in which she was a passenger. The judge found that the driver was blameless and that the accident was due to the negligence of an unidentified motor cyclist. He assessed the damages at £15,000.

In the course of his judgment, the judge made considerable criticism of the Motor Insurers' Bureau, and I desire to refer to his words. He said: As it is, judgment will be entered for the defendant and a different—though still by no means satisfactory—position will, apparently, arise between the plaintiff and the Motor Insurers' Bureau. That position is as follows. Under their current agreement with the Minister of Transport they could, if they so chose, decline to accept any legal liability on the grounds that they are not responsible for damages suffered by those who have just claims against a hit-and-run driver and a motor vehicle—provided, of course, that that hit-and-run driver succeeds in finally escaping identification. Upon reading the agreement as published, it would appear that the Bureau, in law, would be entitled to sit back and pay nothing. That this view as to the position is, indeed, adopted by the Bureau is made clear in the officially issued notes of guidance reproduced in Bingham's Motor Claims Cases, 5th ed. (1964). Note No. 6 as set out on page 661 reads: 'The liability of the Bureau does not extend to the compensation of any person who may suffer personal damage resulting from the use on a road of a vehicle, the owner or driver of which cannot be traced '. Then there is reference to the words that I have read. The judge goes on: In relation to that note, it was, in an earlier edition of the above textbook, mentioned that in two such cases claims had been turned down completely and the Bureau refused to give any reasons. Whether or not they now give reasons, the Bureau's discretion seems absolute as to whether an ex gratia payment be made, and if so, how much. The above situation is as illogical as it is unjust. For in cases where the liability of a driver is under the Road Traffic Acts required to be covered by a policy of insurance, either the driver of the hit-and-run car is insured as by law required—in which case one of the member companies of the Bureau would normally have to pay any damages awarded by the court, or else he is not insured, in which case the Bureau would likewise have to pay if he had been found and judgment entered against him. That the insured person cannot recover as of right merely because he or she cannot secure a judgment as the driver has successfully evaded identification is lamentable and should not obtain; it merely provides for insurance companies as a whole a potential avenue of escape from liabilities which in principle they have accepted. He who has to go cap-in-hand for an ex gratia payment is always at a disadvantage —wholly unwarranted in this class of case. He added: No doubt in the present case such a claim will now be made against the Motor Insurers' Bureau, and I direct the solicitors to the plaintiff to report to me in two months' time what attitude has been adopted in the matter … The Bureau was approached in that case. It set itself up as a court of appeal from the judgment of the learned judge. It said that certain matters had not been put to the defendant and it refused to pay a penny to that girl. So this unfortunate girl gets nothing. I submit this is scandalous treatment by the Bureau. It should be noted that, even though the driver of the car may have been negligent in part, the Bureau will not even consider any payment unless the unidentified driver is wholly to blame, and perhaps not even then will it consider it favourably.

Recently, a memorandum was sent to the Ministry. I am sure that my hon. Friend the Joint Parliamentary Secretary is aware of its contents. It set out specifically a number of cases in which, in my submission, there was gross negligence. There was the case of a Mrs. Wood. She was injured while a passenger in a bus. The accident was caused by an unidentified motor cyclist. The Bureau refused to pay.

A Mrs. Wilce, a cyclist, was injured by a lorry which pulled out to avoid another. The Bureau refused to pay. The Bureau also refused to pay a Mr. Banfield on the ground that there was a person against whom proceedings could be brought successfully. Thereupon, Mr. Banfield's solicitors asked the Bureau for information on who this person was and the details, but the Bureau refused to give this information.

Finally, there is the case of Mr. Ware, a police constable who was knocked down by a motor car which drove on and could not be identified. So serious were his injuries that he was discharged as disabled from the police. The Bureau was asked on a number of occasions to satisfy the claim in this case. It was pressed to give a decision and ignored the letters.

This conduct by the Bureau is far removed from the words of the Minister in 1945—that where reasonable certainty existed that a motor vehicle was involved and that, but for its unidentifiability, a claim might lie, the Bureau would give sympathetic consideration.

I raised this matter with the right hon. Member for Wallasey (Mr. Marples) last July when he was Minister of Transport and received a letter from him. Referring to the judgment in the Adams case, the right hon. Gentleman said: The Judgment raises several issues of some considerable importance, and it is being very carefully studied. I understand the Bureau is also considering its implications, both in general and in particular. Clearly there will have to be joint consultations, and these will take place as quickly as possible. Nothing has happened since. I raised the matter with my right hon. Friend the Minister of Transport. There has been no decision as yet in regard to this matter. The agreement with the Bureau is thoroughly unsatisfactory. The Bureau, in cases that come under Note 6, is judge and jury in its own cause. I ask the Minister to meet the Bureau, revise the agreement and see that the terms of that agreement fulfil the letter and the spirit of the original intention.

In the case of an unidentified driver causing an accident, the making of a payment should not be discretionary to be decided by the Bureau alone. In cases of dispute, some form of arbitration might be used. The Bureau should not be able to avoid paying because someone else is partly to blame. It should not act as a court of appeal against the judgment of a court of law, as, I suggest, it did in the Adams case. Where it has information with regard to the identity of a driver, there should be an obligation upon it to disclose such information as it has so as to enable the would-be plaintiff to proceed to seek damages from that person if necessary by substituted service.

A careful inquiry into the methods and working of the Bureau is urgently called for in the interests of the public. A person injured through the negligence of another should be able to recover damages and if the machinery provided for by this agreement is inefficient and does not work it should be revised. I venture to hope that a Labour Government will act speedily in this matter.

4.35 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler)

My hon. and learned Friend the Member for Stoke Newington and Hackney, North (Mr. Weitzman) has raised a matter of considerable importance, and I am glad that he has done so as it gives me an opportunity to express the Government's view upon it. I hope that I may be forgiven if I speak at some speed, as there is a considerable amount of ground to cover and many detailed points on which I hope to give my hon. and learned Friend some satisfaction.

I can deal very quickly with the background, as my hon. and learned Friend has described in some detail how the matter arose. The point is that the 1930 Road Traffic Act made third-party insurance compulsory, but it made no provision for the compensation of third parties where the negligent motorist was uninsured. This led to the establishment of the Cassel Committee, which reported in 1937. That Committee came to the conclusion that third parties who established a claim against an uninsured motorist, or a motorist who was unable to meet the claim, should have the right established to recover from a central fund.

But it is significant to recall that the Cassel Committee—and it included both lawyers and people in the insurance world—also came to the conclusion that it would not be feasible to extend this right where the negligent motorist could not be traced. That is to say, the Committee did not think that it was possible to establish a scheme of compensation for the unfortunate victims of the co-called hit-and-run drivers.

We now come to the position in 1946, described by my hon. and learned Friend, when again there was a Labour Minister of Transport. In 1946, instead of legislation, this Agreement was established to carry out the recommendation of the Cassel Committee. It established the right to compensation where a claim against an uninsured motorist was not met, and, in the event, the insurers at that time indicated that they were prepared to consider ex gratia requests for compensation where there was a reasonable certainty that a claim for damages would lie against the driver if he could be traced. That, of course, was a step forward from the position taken by the Cassel Committee.

In the so-called Note 6 attached to the Agreement of 1946 between the Minister and the motor insurers, the Insurers accepted a moral obligation to pay in these cases. Had there not been this Note 6, and without legislation on the subject, there would, over a period of about the last 20 years, have been no form of compensation at all for the tragic victims of untraced motorists. In fact, a fairly substantial sum of money has been paid out by the Insurers' Bureau. For example, over the last five years, 1959–63, the Insurers' Bureau has paid out a total of £433,750—

Mr. Weitzman

My hon. Friend recognises, of course, that but for the moral right that the Insurers then accepted, we might have had legislation to deal with the matter.

Mr. Swingler

As my hon. and learned Friend knows, that is as may be. It is a speculative possibility. I am simply describing the facts of the position. Over this period of time, under the voluntary agreement and the acceptance simply of a moral obligation by the Insurers, the sum of £433,750 was paid out between 1959 and 1963 in ex gratia payments under Note 6 to the Agreement.

There has, however, been criticism of the way in which the Bureau has operated Note 6, and my hon. and learned Friend has this afternoon drawn attention to some aspects of the Bureau's practice and some deficiencies in the Agreement. My hon. and learned Friend has suggested that the Bureau has acted harshly in refusing applications made to it under Note 6 and, in particular, he has quoted the very tragic case of Miss Jill Adams, who failed to get compensation for the appalling injuries which she suffered in a road accident nearly six years ago.

Moreover, he criticised the activities of the Bureau in refusing to give its reasons for either refusing or granting applications for ex gratia payments. I must emphasise that the payments made by the Bureau under Note 6 are, of course, ex gratia and that the Bureau has no legal obligation to make them. However, I am assured by the Bureau that payments are made entirely on the ordinary principle of awards for damages. The only fact which the Bureau regards as tending to reduce the amount of the award is the degree of negligence, if any, of the injured parties in the case.

In the Ministry we do not see details of all these cases, although some cases are drawn to our attention. We have had no evidence, from our examination of the cases to which our attention has been drawn, to suggest that the Bureau has conducted its inquiries other than with considerable care and a proper sense of responsibility in relation to the moral obligation which it undertook in Note 6 to the 1946 agreement.

I am sure that this is the spirit in which the Bureau is approaching the task today and, indeed, in which it considered the very difficult and in some ways unique case of Miss Adams. In that case the Bureau made very thorough inquiries which led it to the view that the judge did not have all the relevant facts before him in the case.

As my hon. and learned Friend will appreciate, the Bureau was not itself a party to the proceedings in the Adams v. Andrews case, nor in any way represented at those proceedings. So it cannot be regarded as bound by the findings of the judge—any more than any citizen is bound by findings of the court in proceedings in which the citizen is not a party—and, in these circumstances, the Bureau felt entitled to decide, on the facts before it, that Miss Adams' claim would not lie against the unidentified motor cyclist and that, therefore, Note 6 did not apply in her case. Nevertheless, I am sure that what has been said by my hon. and learned Friend will be studied most carefully by the Bureau. There has been a change in its practice, to which I will refer shortly, and this could, perhaps, have a bearing on the case of Miss Adams.

I turn to the second main criticism; that the actions of the Bureau in operating Note 6 are not open to public scrutiny and that there is no form of appeal. The point is that, whether or not justice is done, it is certainly not seen to be done by the public at large. We recognise that this is a very real problem and that we must seek ways and means of overcoming it to the advantage of all concerned.

It may well be that a solution to this problem will have to be found through legislative changes. Indeed, the Government have to consider many proposals made to them to deal with the victims of many kinds of accidents. This is a possibility which we cannot dismiss, though there are all kinds of difficulties to be faced when dealing with untraced or untraceable drivers. In any case, we believe that progress must be made without recourse to legislation.

First, we are now discussing with the Bureau the possibility of reasons being stated in cases where it does not make payments under Note 6 and, secondly, the possibility of instituting some machinery of appeal. In addition, I should mention another point which is being covered in our discussions. It relates to the Bureau's attitude in cases under Note 6 where, in addition to an untraced driver, there is a known defendant driver against whom legal action can be taken, as in the case of Miss Adams.

From time to time cases have arisen where the remedy in law against the known defendant driver has been proved to be valueless because the law did not require his liability to the injured party to be covered by insurance, the injured party being a passenger in the driver's vehicle. It has already emerged from our discussions that in these cases the Bureau is now prepared to consider the payment of compensation to the injured party to the extent of the responsibility of the untraced driver.

In making such awards, the Bureau will determine the relative degrees of negligence of the known and unknown drivers in the same way as it now apportions negligence in a case where an injured pedestrian and an untraced motorist have both contributed to an accident. It will, however, no longer be an automatic requirement that legal proceedings for damages should be taken against the known defendant, although I understand that there will still be cases when the Bureau will feel that this requirement can reasonably be stipulated.

Discussions on these matters between my Department and the Bureau are still in progress. On this basis, I hope that my hon. and learned Friend, who, I know, is interested in the making of legislative changes and establishing these things in the law of the land, will, nevertheless, feel confident that we can make considerable progress to overcome these criticisms in our negotiations with the Bureau and that what I have now said and the assurances which I have just given are tokens of that fact.

The number of accidents which occur on the roads is simply appalling. We have a colossal task in the Ministry of Transport in dealing with this problem. In the second place, we recognise a responsibility for giving relief to the victims of accidents and establishing an obligation for relieving their hardship. It is in that spirit that we are now engaged in discussions with the Motor Insurers' Bureau arising from the experience of the past 20 years and the application of the principles that my hon. and learned Friend has described. We are confident that, within a short time, we shall be able to make a further announcement of progress rising from those discussions.

Question put and agreed to.

Adjourned accordingly at thirteen minutes to Five o'clock.