'Use’ of a vehicle – an opportunity missed?

The Supreme Court has just delivered its long awaited judgment in R & S Pilling t/a Phoenix Engineering v UK Insurance Ltd [2019] UKSC 16.

The Supreme Court has just delivered its long awaited judgment in R & S Pilling t/a Phoenix Engineering  v UK Insurance Ltd [2019] UKSC 16.

In Pilling, a Mr Holden, a mechanical fitter employed by R & S Pilling, owned a car which failed its MOT because of corrosion to its underside. The employer allowed Holden to use the loading bay in its premises to carry out the repair work necessary to enable it to pass its MOT. This work involved welding some plates onto the underside of the car to deal with the corrosion.

The judgment (para 3) sets out what then occurred:

“Holden disconnected his car battery to make sure there were no live circuits. He then used a fork-lift truck to lift the car onto the driver’s side to gain access to the underside of the vehicle. He first used a grinder to prepare the underside for welding and then welded a plate under the driver’s side. He then re-connected the battery, started the car and moved it round the other way before again disconnecting the battery, and lifting it up to expose the underside on the passenger’s side of the vehicle. He started welding but then stood up to answer a phone call. When he did so, he saw flames inside the car: sparks from the welding had ignited flammable material inside the car, including the seat covers. As the fire spread, it set alight some rubber mats which were lying close to the car. The fire then took hold in the employer’s premises and in adjoining premises and caused substantial damage before it was put out.”

The employer was indemnified by its insurer who then claimed recovery, by way of subrogation, from Holden’s  motor insurers, UKI. UKI argued (inter alia) that it was not liable under its policy as the accident was not ‘caused by or arose from the use of a motor vehicle on a road or other public place’ as required by Section 145 of the Road Traffic Act 1988.

For many years, UK courts have wrestled with what constitutes use and what falls within the above wording of Section 145. Some decisions have adopted a wide interpretation, whilst others have been more restricted. The case which has concerned insurers most has been the Court of Appeal judgment in Dunthorne v Bentley [1999] Lloyd’s Rep 560, where it was held that an accident which arose where a motorist, having run out of petrol and parked her car at the side of the road, had crossed the road to seek help from a colleague shortly afterwards and caused an accident in so doing, was an event which had arisen out of her use of the car on the road. Many commentators have suggested that this type of scenario is too far removed from the use of the vehicle such that it could not be said to have arisen from such use.

One also has to consider the impact of EU law when construing the word ‘use’. The 2009 Motor Insurance Directive (2009/103/EC) requires the ‘use’ of vehicles to be compulsorily insured (Art 3).

In Vnuk v Zavarovalnica Triglav dd (Case C-162/13) [2016] RTR 10, the CJEU held that ‘use’ means all uses consistent with the normal functioning of a vehicle and that this can extend to use on private land. This was subsequently clarified by the CJEU in Rodrigues de Andrade v Salvador (Case C-514/16) to mean all uses consistent with the normal functioning of the vehicle ‘as a means of transport’.

It has been suggested that the CJEU interpretation could arguably be more restricted than the 1988 Act’s reference to ‘caused by or arising out of the use of’ a vehicle.

The Supreme Court had the chance to review this background and hopefully provide some clarity both on what constituted ‘use’ and as to the interplay between national and EU law, but the opportunity has perhaps been missed because the Supreme Court was dealing with private parties who could rely upon the construction of  national law rather than EU law requirements which could not be made to fit with the 1988 Act (principally that the 1988 Act does not apply to private land cases whereas EU law is not so restricted) through the application of a Marleasing construction. That said, EU law remains relevant in terms of the above principles to be derived from the Vnuk and Andrade cases.

The Supreme Court held that, for a claim to be ‘caused by or arise out of the use of’ a motor vehicle, there must be “a reasonable limit to the length of the relevant causal chain” (para 43). Although “close to the line”, Lord Hodge (giving the unanimous judgment of the court) could not say that Dunthorne was wrongly decided. “The trial judge was entitled to conclude that Mrs Bentley had crossed the road and so caused the accident while she was seeking help from a colleague to continue her journey, shortly after she had run out of petrol and had parked her car at the side of the road. The judge was entitled to conclude that the accident had arisen out of her use of the car on the road…..It is not apparent to me that the outcome of that borderline case was wrong, having regard to the close connection in time, place and circumstance between the use of the car on the road and the accident” (para 44).

However, the court found that the facts in Pilling were far removed from those in Dunthorne. Pilling “clearly falls on the wrong side of the line” (para 56). The repair work was not closely enough related to previous use of the vehicle to get to the garage, nor with an argument that the purpose of the repairs was to allow the continued legal use of the vehicle on roads in the future.

Significantly, Lord Hodge added (para 53):

“…neither English domestic case law nor the jurisprudence of the CJEU supports the view that the carrying out of significant repairs to a vehicle on private property entails the “use” of the vehicle. The English case law which interprets “use” in the RTA as “having the use of” makes good sense in the context of vehicles which have been left on a road or in a public place, where members of the public are likely to encounter them, but less sense if applied without qualification to vehicles located on private property. In ordinary language one would not speak of a person who is conducting substantial repairs to a stationary vehicle as “using” that vehicle, but the presence of a vehicle on a road or other public place while the owner was carrying out such repairs would…. fall within the mischief which section 145… addresses. EU law now requires the extension of compulsory third party insurance to vehicles on private property to cover use of the vehicles as a means of transport, a concept which can include parked vehicles. I am not persuaded that a vehicle which is on its side being repaired on private property, such as a garage, is being used “as a means of transport” as the CJEU jurisprudence requires. But it is not necessary to decide that point because …….. national legislation governs and the repair did not take place on a road or other public place.”

Commentary

The court resisted the temptation, even if strictly obiter, to give guidance on the type of factual scenarios which might or might not fall within the concept of ‘use’ either under the 1988 Act or under EU law post Vnuk and Andrade.

Post Pilling, our analysis would be to derive the following  points:

  1. A motor insurer, who is not providing an indemnity to its insured, can rely upon the provisions of the 1988 Act to avoid liability for private land cases. There would need to be an amendment to the 1988 Act to reflect the application of the compulsory insurance requirements to private land before an insurer would be liable and, even then, this would almost certainly not be retrospective in application.
  2. EU law can, however, impact the interpretation of the phrase ‘caused by or arising out of the use of’ in Section 145. Accordingly, whether a particular set of facts constitutes ‘use’ will depend upon whether the circumstances are consistent with the normal functioning of a vehicle ‘as a means of transport’.
  3. It is hard to see how repairing a vehicle as in Pilling, whether on or off road, is consistent with its normal functioning as a means of transport, but the problem remains that, whilst EU law can shape the interpretation of national law as above, national law can provide for more wide ranging cover than strictly required by EU law. The extract from para 53 above suggests that Section 145 could cover repair work done on the road, but not on private land. This seems illogical and, if the facts in Pilling arose on the road, it should still be possible to argued that, in the light of Andrade, the vehicle was not being used.
  4. It remains hard to know when the line is crossed from (a) where the accident occurs with sufficient proximity to the use of the vehicle as a means of transport (as in Dunthorne) and (b) where the use of the vehicle is too far removed to be causally related (as in Pilling). Some guidance from the court would have helped.
  5. MIB has been held to be an emanation of the UK state against whom the provisions of the 2009 Directive are directly effective (Lewis v Tindale [2018] EWHC 2376 (QB), Soole J). As such, it would be liable for private land cases and cannot benefit from any restriction under the 1988 Act. MIB is appealing Lewis, the appeal to be heard in May 2019. As it stands, MIB will look to argue that it is only liable for those cases arising from uses consistent with the normal functioning of a vehicle ‘as a means of transport’. So, for example, if a terrorist parks a vehicle at the side of the road, gets out and then remotely detonates a bomb causing widespread damage and injury, this would not be using the vehicle as means of transport.
  6. It is still necessary to look at each case upon its specific facts.
  7. Depending upon the outcome of Brexit, it may be that, in time, EU law principles will fall away and the compulsory insurance requirements in the UK will be determined solely by the application of the 1988 Act.      

If you have any further questions or would like to know more about out legal update, please contact David Holt, Partner on 0151 242 7921 or email david.holt@weightmans.com

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