I have had a car accident and the other driver does not have car insurance.  What should I do?

The aim of this article is to explore the options available to a client who finds him or herself unfortunate enough to have an accident involving another party who has no car insurance.

Through the media and by word of mouth we are hearing more often how common it is becoming for drivers to be on the road without car insurance.  Whilst the Government explores options to try and prevent this happening because the criminal law is not acting as a clear deterrent, clients and their representatives are left with little recourse until reform takes place.

With our vast experience, finding yourself in the unfortunate situation of being involved in an accident with an uninsured driver need not create a dilemma.  Where the other driver is liable, we know how to obtain the compensation you deserve.  Our first advice to all clients is to report the accident to the police and to get a police incident number.  We then explore the options available.

In summary, there are three main options:

1. To sue (take legal action) the other driver directly for compensation.
2. To pursue an application for compensation through the Motor Insurers Bureau (MIB).
3. To pursue the insurance company that insures the other car. 

1. Suing an uninsured driver directly

Generally, this is not the best strategy although it is one that the MIB may take on your behalf after they have dealt with your claim under the second option. Of course, in theory you can issue County Court proceedings against an uninsured driver directly to obtain compensation. However, there is a real and practical risk ... Does this other driver have the money and financial resource to pay you?

They may have not had the money to pay for car insurance in the first place and/or they may have stolen the car.

It is always wise to try and assess the financial status of your opponent. Practically there is little point in going to the cost and time of getting a Court Order stating that someone owes you money if in the end they don’t have the means to pay. Even if they are ‘good for the money’ at the start of a case, his or her circumstances may change by the time it comes to paying up, through say redundancy, loss of assets, or even death.  The chances of recovering the compensation can dwindle, and there is always the possibility that your opponent could simply go missing.

The practical risk must be assessed, and in more cases than not  you will be advised to pursue an action through the Motor Insurers Bureau.

2. Motor Insures Bureau (MIB)

Using the MIB’s own definition:

 “MIB was established in 1946 to compensate the victims of negligent uninsured and untraced motorists. Every insurer underwriting compulsory motor insurance is obliged, by virtue of the Road Traffic Act 1988, to be a member of MIB and to contribute to its funding.” 

• Every insurer in this country has to give money to the MIB to contribute to its existence to compensate those unfortunate to have an accident with an untraced driver or uninsured driver.
• The MIB is designated the operator of the UK Guarantee Fund. A fund that compensates victims of negligent uninsured or untraced drivers and where there is have no other form or source of compensation. 
• The fund is a fund of last resort.
• The MIB provides its compensation to the victims in accordance with agreements that it has signed with the Governments of each jurisdiction within which it operates-

• England, Scotland, and Wales 
• Northern Ireland
• Isle of Man
• Alderney
• Guernsey
• Jersey
• Sark
• Gibraltar

As long as the accident occurs within one of the above areas the MIB will investigate your claim even when the claim involves a non-resident driver.

The MIB operates two Agreements between the Government and the motor insurance industry.  The first agreement is the one we are concerned with, the Uninsured Drivers' Agreement.

Under this agreement the MIB is required to pay for unsatisfied Civil Court Judgments against identified motorists who may not have been insured as required by the Road Traffic Act 1988. In reality though the MIB will pay you compensation in the vast majority of cases without you needing to obtain a Civil Court judgment from the County Courts.  

The second agreement is the Untraced Drivers' Agreement, which is not the topic of this article.

How do you make a claim to the MIB under the uninsured driver agreement?

The MIB Claim form

The MIB claim form should be completed in full and submitted to the MIB as soon as possible to prevent any unnecessary delays later in the process. Any passengers in your car that suffered loss or injury should complete a separate formThe claim form will enable the MIB to commence their investigation. Meanwhile, it is advisable for your representative to start their own investigations from day one, to help speed up the process, which can be lengthy.We judge every case on its own merits and look to obtain in advance and attach the following documents to the MIB claim form to expedite the MIB investigation process:

• Copies of correspondence to and from the police/ police reports
• MIDIS result (a computer search on registration numbers to see if insurance exists on a car)
• DVLA correspondence
• Correspondence  and copies of telephone calls and memos with the third party driver
• Correspondence and copies of telephone calls and memos with a suspected third party insurers. Most importantly any letters confirming that the potential insurance company does not in fact insure the vehicle in question
• Copies of witness correspondence
• A schedule of your losses and expenses
• Copies of any enquiry agent/investigators reports

At colemans-ctts we have signed up to an accelerated procedure scheme with the MIB to give your case that extra chance of a more expedient solution.

There is one financial drawback to pursuing an action through the MIB because it is a fund of last resort.

• The MIB excess - a drawback

Due to the special nature of the MIB as a fund of last resort they are entitled to deduct £300 from each Claimant claim. However, this sum of £300 is limited to claims that are not personal injury related. To give examples non-injury items include but are not exhausted to;

• Insurance policy excess
• Vehicle repairs (if you have third party fire and theft cover)
• Damaged goods or other property in the car

The excess is only deducted from the whole claim not per each item claimed. Therefore; if the insurance excess was say £200 and the damaged car radio was £200 the total would be £400, accordingly the MIB will discharge a cheque for £100 the difference between £400 and £300.

Injury related items of claim do not have the £300 excess applied to them. Examples of injury related losses include:-

• Compensation for the injury itself 
• Painkillers
• Loss of earnings arising from the injury, 
• Treatment costs  
• Travel to medical appointments.

What happens when the MIB receive the completed claim form?

The MIB should acknowledge your claim form within 21 days and complete their investigation process no longer than 3 months later, and in circumstances involving a foreign driver (where the insurers are based abroad) the time period is doubled.

However, in reality that period is rarely adhered to because cases can be complicated and time-consuming for the MIB. In addition the MIB has a heavy workload and limited resources. At Colemans-ctts we use this time productively and aim to get you medically assessed by obtaining a medical report and depending on your prognosis to be in a position to value and settle your claim by the time MIB investigations are finalised should they accept your claim.

The MIB investigation can also quite involved with liaison between the MIB and the police. Finally, the MIB wish to be 100% sure that a policy of insurance does not exist somewhere else that will pay you compensation rather than from the MIB limited fund. The fund is remember, one of last resort.

3. There is an insurance policy on the car driven but not in the drivers name?

There will be circumstances where the other party driver is uninsured and it transpires that the vehicle they were driving is associated with a policy of insurance and that very policy of insurance may have to deal with your case and pay you compensation.

Legislation known as The Road Traffic Act 1998 provides guidance. Section 151 states in a case whereby a judgement is obtained relating to liability and requiring cover by a policy of insurance ( personal injury or death caused by the use of a vehicle on a road or other public place) and that liability is covered by the terms of a policy, and judgement is obtained against the person insured under the policy or it is a liability which would be covered if the policy insured all persons, then the insurer has a duty to satisfy (pay) such a judgement.

In brief the main considerations are whether:-

1. A person is insured to drive under the terms of the insurance policy on the car;
   Or
2. Whether the driver is an identified person as defined by Section 152 of the Road Traffic Act 1998

In the first situation, an insurer may be able to avoid paying (satisfying) a claim where the policy excludes the use of the vehicle in certain circumstances e.g business use. For the second circumstance there is less possibility of an insurer of the car avoiding a claim.

As an endnote, here are some practical examples of the way the Act works in practice. We can evaluate your exact circumstances to help decide on your best option.

1. A husband borrows his wifes’ car to go shopping at the local supermarket, The husband is uninsured but his wife insurance covers her for social and domestic use. The wife’s insurers will have to satisfy a judgment per s 151(2)(b) Road Traffic Act 1988. We can pursue the wifes insurers on your behalf.
   
2. An identified uninsured thief drives a stolen vehicle insured in the name of  Mr Smith to use for social and domestic use. Mr Smith’s insurers will have to still satisfy judgment as the act of thieving is considered as social and domestic use. Surprising but true.
   
3. Mr Jones uses his car for employment as a taxi but only has social and domestic use insurance cover. The MIB would meet this claim as Mr Jones insurers would not have to satisfy any judgement as their liability would not be covered. However, the MIB / insurer may agree that the insurer still deal with the matter on behalf of MIB under the terms of what has been known as Article 75, the Domestic Regulations Agreement as an involved insurer.
   
4. Another identified uninsured thief (not many are insured!) but this time does not even have a driving licence drives Mr Smith’s car. Mr Smith’s policy of insurance excludes people diving without a full driving licence. Mr Smith’s  insurer would still have to satisfy the claim because s 151(3) RTA 1988 states that such provision has no effect to exclude.
   
5. Mr Smith has had his insurance policy cancelled prior to the accident. The MIB will have to deal if the insurer can prove that it has accorded s 152(1) (c) RTA 88 by either, before the accident recovering the insurance certificate from Mr Smith, or that Mr Smith had  made a statutory declaration that he lost or had destroyed the certificate, OR if AFTER the accident but within 14 days of the cancellation of the policy, the insurer recovered the insurance certificate from Mr Smith or obtained a statutory declaration, or within 14 days of the cancellation the insurer has commenced proceedings against Mr Smith on the basis they have not surrendered their policy.
   
6. An identified uninsured thief steals Mr Jones’ car, drives through a fence of a secured private compound and runs over a Claimant. Mr Jones insurers and the MIB will not have deal with the claim. Reason being because the accident did not occur on a road or other public place where insurance is required.

Should you wish to discuss the information contained in this article further, or have questions relating to this area of law, please contact Margaret Crausby