Insurers sought to avoid liability in a case where a car passenger was in a vehicle that had been unlawfully taken. Section 151 of the Road Traffic Act 1988 requires insurers to satisfy judgments obtained against drivers arising out of a use of motor vehicle where the judgement related to a liability, which was required to be covered by a policy of insurance.

Section 151 (4) provides for an exception where the liability is an excluded liability. The purpose of this is to relieve insurers from their duty to satisfy judgments obtained against uninsured drivers by their passengers if the passengers knew or had reason to believe that the vehicle had been stolen or unlawfully taken.

In this case, Mr Justice Keith held that insurers did not have to prove that the injured passenger actually believed the vehicle had been stolen or unlawfully taken, but that he had enough information to give him good reasons for believing it had, if he had applied his mind. Shutting ones eyes to the obvious was not an argument open to the claimant. In the circumstances the claimant had reason to believe that the van had been unlawfully taken. The insurers were therefore not required to indemnify the first defendant in respect of any judgment obtained by the claimant.

McMinn -v- McMinn. Queens Bench Division, 11 April 2006, Times Law Reports.

Another attempt to withdraw admission defeated

The defendants, via their insurers, admitted liability on 6 December 2004. We issued a claim form on 8 February 2006 and relied on the admission of liability. Six months after making the admission, the defendants stated that their admission had been made in error and that they were disputing liability. The error, they said, was made by the insurer being misadvised that the claimant was a passenger and not the driver of the relevant vehicle. By their defence they referred to the mistaken belief of the defendant’s insurers and sought to withdraw the pre-litigation admission.

There was no formal application by the defendants to resile from the admission contained in the 6 December 2004 letter.

The Defendants submitted that no such application was necessary in the light of Sowerby -v- Charlton and submitted that CPR 14.1 (5), which allows parties to amend or withdraw admission, relates only to admission within a statement of case and does not concern pre-action admissions. However the defendants’ submission was contrary to their own witness statement, which said: “The Defendants seek permission to resile from the earlier admission of liability.”

District Judge Price in the Central London County Court said that the court has regard for the pre-action protocol that identifies that there is a presumption that the defendant will be bound by his admission. The court is entitled to take a view that, where a letter of claim is properly drafted and sent, there is a presumption that a defendant will be bound by such an admission and an admission will stand unless there are good and clear reasons to rebut it.

Although the defendants said they made a mistake, the letter of claim was absolutely clear, the defendants had every opportunity to investigate and they did not appear to have done so. The court was also entitled to take into account that there would be an element of prejudice and that the claimant had made no more enquiries into liability.

The claimant had substantiated the application and the defence should be struck out and judgment entered in the claimant’s favour.

Randoll -v- London Borough of Croydon, 10 May 2006.