Old soldiers never die

Every year it seems that I find myself arguing for or against the application of the principle of illegality in credit hire claims. The scenario is a common one. A claimant is involved in a road traffic accident. The defendant is to blame. Through diligent investigation by an insurance company or their instructed solicitors, it emerges that the claimant was driving without insurance, or driving without an MOT or had committed some other form of regulatory offence arising from his use or ownership of his motor car, not punishable by imprisonment.

The argument is then raised and run, that by application of the principle of illegality his claim to recover damages for loss of use measured by the amount of the credit hire charges that he has incurred, should be dismissed. The most recent reported case that I have seen on these arguments is a Northern Irish one, the appeal in James Morgan v Bryson Recycling Limited [2018] NIQB 12. Although not binding on the courts of England and Wales, it might be argued to be persuasive.

The issue was framed thus by the High Court judge:

[3] In a Reply to the Plaintiff’s Notice Requiring Particulars of Defence dated 10th of November 2016, the defendant accepted liability but disputed the claim for hire of a car in its entirety, or for a loss of use of his own vehicle, due to the failure on the part of the Plaintiff to have a valid MOT Test Certificate at the relevant time, namely at the date of the accident. The result of this failure was that the insurance policy of the Plaintiff provided that the contract of motor insurance did not cover claims arising from any accident, injury, loss or damage that happened while the insured car was being kept or used without the current Department of Transport Test certificate, if one was needed.

The argument was summarised as follows:

[4] The defendant relied on the doctrine of ex turpi causa non oritur damnum. It is important to point out that while illegality has the potential to provide a defence to civil claims of all sorts, and in a wide variety of circumstances, the Defendant in this case does not seek to resile per se from their liability, but rather they dispute the heading of claim that the Plaintiff is entitled to hire a car to replace a car which the plaintiff could not have driven since to do so would have constituted two criminal offences – to drive without a MOT Certificate and as a result, to drive while uninsured.

The Learned judge then went on to hold:

[8] I have listened carefully to the evidence of the Plaintiff, who gave his evidence in a straightforward manner as to why the car had not been assessed for its MOT on or before 5 February 2016, some four months before the incident. I accept that the car had been taxed and would have been insured if it had been presented for testing and had passed that test. The car was manufactured in 2005 and therefore had been subject to this test for many years – and indeed until 2016 had been successfully tested. The Plaintiff owned the car for five years, during which time testing was required and undertaken by him. He was, or should have been, like all road users of cars of a certain age, fully cognisant of the need for the car to be tested. He would, or should have been, fully cognisant of the juxtaposition between the requirement for the Certificate and his insurance cover. Indeed the Plaintiff does not dispute that he in all probability would have received a written reminder of the necessity for testing before the expiry of his then present Certificate.

[9] While the court accepts that these offences are not at the most serious end of the legal calendar, nevertheless they are not insignificant offences. One addresses the roadworthiness of car, which if not roadworthy can cause injury and even death. The requirement for insurance is recognised as important, to underwrite any indemnity for a loss incurred by other parties, and it is recognised in being part of an
offence of causing grievous bodily harm or death by dangerous driving without
insurance.

[10] In keeping with his forthright evidence, the Plaintiff does not dispute that if this incident had not occurred he would have driven the car, probably until his insurance came up for renewal in August 2016, well after the period of time for which he seeks to be compensated for the hire of an alternative car. Against that background the court has decided that he is not entitled to recovery under this head
of damages, and to that extent the appeal is granted.

There is, as far as I can tell, despite a reasonable number of cases on illegality coming before the courts of England and Wales in the last 15 years, no binding decision on the application of the principle of illegality in a credit hire context. But I suspect it is only a matter of time, before in some shape or form, an appeal on this point arises in an English or Welsh case, and will come before the High Court or Court of Appeal.

One comment

  1. I have seen cases( I cannot remember where maybe in my Bingham and Berrymans) that the fact a vehicle may not be legal by not having a current mot or tax, does not inhibit someone from raising a claim for being deprived of the benefit of the vehicle. The fact a vehicle does not have a MOT does not not mean that it is not road legal.The third party act under the road traffic act means a vehicle is always insured irrespective of whether legal or not. It does mean the Insurer may decline to compensate it’s policyholder for their own damage, but they will always have to pay for any claim for which their insured is liable. As such the vehicle is always insured. A vehicle does not have to have a mot to have a current policy of insurance, it just needs to be roadworthy. This is definitely the case with classic vehicles that are now exempt from the MOT regulations.

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