The recent decision of the Court of Appeal in the case of Cameron v Hussain and Liverpool Victoria Insurance Company [2017] EWCA Civ 366 made me chuckle, as I was originally instructed in the case to advise and argue the point.
Here is a copy of my Skeleton Argument for the original appeal, from as long ago as 2014 2014 07 25 Cameron(B) Armstrong Sol Skeleton Argument of Appellant 297670 (amm). How quickly the years pass.
Regrettably, a clash of professional commitments meant that I could not attend to argue either the original application or the appeal before HH Judge Parker in Liverpool, and it was inherited by Mr Williams QC who in colloquial terms “played a blinder” and achieved such sterling success in the Court of Appeal.
The arguments as I recollect were ones I originally devised for another case which found its way in some shape or fashion to the Mercantile Court in Birmingham, some years previously.
A successful application to amend the title of the Defendant to bring a claim against John Doe, led to the insurance company on the other side instructing Leading Counsel to provide an opinion and promptly settling the case.
The effect of Cameron now is to ensure that the victim of a tortfeasor is able to obtain judgment against the tortfeasor in a road traffic accident case by describing the tortfeasor instead of having to provide his name, for the purposes of bringing a claim. The broad effect of the judgment will be to emphasise the advantage of this course of action for the innocent victim, rather than having to pursue the residual remedy of a claim under the Untraced Drivers Agreement.
The issues in the case were summarised by Gloster LJ in these terms:
1.The issues in this case may be summarised as follows:
(I) whether it is possible to obtain a judgment in respect of a claim for damages against a defendant identified only by description (“an unnamed defendant”), in the context of a motor claim against an unidentified hit-and-run driver, where the vehicle was identified and an insurance policy had been effected in respect of such vehicle in the name of either a non-existent person or someone who was not traceable;
(II) whether an insurer would be liable to satisfy any unsatisfied judgment against such an unnamed defendant under section 151 of the Road Traffic Act 1988 (“the 1988 Act”);
(III) whether the judges below were right to refuse to allow the claimant permission to amend her claim form and particulars of claim so as to substitute, for the named first defendant, a defendant identified only by the following description:
‘The person unknown driving vehicle registration number Y598 SPS who collided with vehicle registration number KG03 ZIZ on 26th May 2013.’
The facts of the case need to be set out with some care and were summarised by the Court of Appeal as follows:
2. On 26 May 2013 there was a collision between the claimant in the action, Miss Bianca Cameron (“the appellant”), driving her Ford Fiesta, registration number KG03 ZJZ, and another motorist, driving a Nissan Micra, registration number Y598 SPS, on Torres Road in Leeds. That driver went on to hit another vehicle, but did not stop. However, the vehicle registration number of the Nissan was taken down by a passing taxi driver. As a result of the accident, the appellant suffered modest personal injuries as did the passengers in her car. In addition, her own car was written off and she incurred charges for the hire of a replacement car. The total value of the appellant’s claim (which excludes any claim by her passengers) is estimated at between £10,000 and £15,000.
3. The Nissan was ascertained by the police to be registered to a Mr Naveed Hussain as registered keeper, who is currently the first defendant in the action (“the first defendant”). The first defendant did not co-operate with police enquiries into the accident, and on 19 November 2013 he was convicted of the offence of failing to give information about the identity of a driver by the Calderdale Justices.
4. The Nissan was also discovered to be the subject of a policy of motor insurance (“the policy”) written by Liverpool Victoria Insurance Co Limited, the second defendant and respondent to the appeal (“the respondent”). The respondent filed evidence in the lower court stating that its insured was a Mr Nissar Bahadur of Hinkley, Leicestershire – a person whom it now believes to be fictitious, such that the policy was obtained by fraud. The first defendant (i.e. the registered keeper) was not himself insured to drive the Nissan.
5. In January 2014 the appellant issued proceedings claiming damages against the first defendant, because at that time she believed him to be the other driver involved in the collision. In March 2014, the appellant amended the proceedings to add the respondent as second defendant and to seek a declaration against it pursuant to section 151 of the Act to the effect that it was obliged to satisfy any unsatisfied judgment against the first defendant.
6. In May 2014 the respondent filed a defence denying its liability to satisfy any judgment against the first defendant. This was on the grounds: (a) that the first defendant was not covered to drive the Nissan under the terms of the policy; and (b) that the claimant was unable to prove the identity of the driver at the time of the accident.
7. On 4 June 2014 the respondent issued an application for summary judgment on the basis of the arguments in its defence.
8. On 19 June 2014 the appellant made a cross-application for permission to amend her claim form and the particulars of claim so as to substitute, for the first defendant, a defendant identified only by the description set out in paragraph 1(iii) above.
9. On 16 July 2014 District Judge Wright dismissed the appellant’s application to substitute the name of the first defendant for the description set out above and granted summary judgment against the appellant on the respondent’s application.
10. On 13 January 2015 HHJ Parker (“the judge”) dismissed an appeal by the appellant against that decision. By the time of that hearing it was common ground that the first defendant was not the driver of the vehicle on the relevant date.
By a majority in the Court of Appeal, Gloster and Lloyd-Jones LJJ allowed the appeal and overturned the decision of the County Court judge. Gloster LJ’s judgment provided as follows:
40. In my judgment, in a case such as the present, the court can and should, in accordance with principle, exercise its procedural powers to permit an amendment of the claim form (and the consequent amendment to the particulars of claim) to allow a claimant to substitute an unnamed defendant driver, identified by reference to the specific vehicle which he or she was driving at a specific time and place, and consequently to enable a judgment to be obtained against such a defendant, which an identified insurer is required to satisfy pursuant to the provisions of section 151 of the 1988 Act. My reasons are set out below.
Statutory policy of Part VI of the 1988 Act
41. I start my analysis from the basic proposition that the policy of the regime imposed by Part VI of the 1988 Act makes clear that, where a policy of insurance is in place in respect of a vehicle, the insurer must, where it has received statutory notice (under section 152 of the 1988 Act) of the issue of third party proceedings, generally meet liabilities to a third party victim irrespective of whether the policy covers the driver/tortfeasor, and irrespective of the identity of the tortfeasor. That is so unless the insurer can show that it was either off-cover (because the policy has been cancelled) or that it should never have been on-cover (because the policy was procured by non-disclosure or misrepresentation) and, in both the latter cases, that it has also taken rapid and formal steps to demonstrate those matters.
42. That policy is wholly consistent with common sense. If an insurer agrees to effect an insurance policy in respect of a specific vehicle and receives a premium in respect of accepting that risk, then prima facie, at least, and subject to any right to avoid the policy, the insurer, having received the economic benefit, should bear the economic risk as to the following matters: the existence or non-existence of the insured or named drivers; the fact that such persons may allow uninsured persons to drive the vehicle; and the fact that, because the vehicle is on the road, it may be driven unlawfully by persons without the consent of the insured. After all, the insurer, and only the insurer, is in a position to evaluate that risk; it, and it alone, makes the business decision as to whether to accept the risk, and to allow the particular vehicle to be driven with the benefit of an insurance policy in the name, or purportedly in the name, of a particular insured. The insurer enters the market knowing of the risk that, under the provisions of section 151, it may well be held liable to satisfy judgments against third-party tortfeasors, who have driven the insured vehicle negligently, notwithstanding that the latter may not be insured under the terms of the policy.
43. As Mr Williams submitted, the policy of imposing third party liabilities on the insurer of a vehicle irrespective of its obligations to its insured has stood since the Road Traffic Act 1934. The mischief to which that legislation was directed was stated by Goddard LJ in Zurich Insurance Co Ltd v Morrison [1942] 2 KB 53 (CA), 61:
“Part II of the Road Traffic Act 1934 was passed to remedy a state of affairs that became apparent soon after the principle of compulsory insurance against third party risks had been established…. That… would naturally have led the public… to believe that if thereafter they were, through no fault of their own, injured or killed by a motor car they or their dependants would be certain of recovering damages, even though the wrong-doer was an impecunious person. How wrong they were quickly appeared. Insurance was left in the hands of companies and underwriters who had imposed what terms and conditions they chose. Nor was there any standard form of policy, and any company… could hedge round the policies with so many warranties and conditions that no one advising an injured person could say with certainty whether… there was a prospect of recovering against the insurers … It is not surprising therefore… that… Parliament interfered, and… they took steps towards remedying a position which to a great extent nullified the protection that compulsory insurance was intended to afford. Generally speaking, [the legislation] was designed to prevent conditions in policies from defeating the rights of third parties, but insurers were still allowed to repudiate policies obtained by misrepresentation or non-disclosure of material facts.”
Likewise, in In Hardy v MIB [1964] 2 QB 745 (CA), 769-770, Diplock LJ stated (in relation to the equivalent provisions of the Road Traffic Act 1960):
“The whole purpose of this Part of the Act is for the protection of the persons who sustain injury caused by the wrongful acts of other persons who use vehicles on a road, and it was no part of the policy of the Act that the assured’s rights to enforce his own contract against the insurers should constitute the sole measure of the third parties’ rights against the insurers… .”
44. Thus the effect of the statutory regime is clear. Like its predecessors, the 1988 Act gives insurers rights of recourse against the insured or other culpable third party where they must pay out without contractual obligation to do so. For example, section 151(8) provides that an insurer may recover its outlay from an uninsured user of the vehicle, or from the insured if he permitted the user. Nevertheless, in accordance with the policy explained by Goddard LJ in the Zurich case, whether this right of recourse proves to be useful is a risk which falls on the insurer. In many cases, the right will be nugatory, because the actual tortfeasor will be a man of straw (e.g. cases where the driver was a thief). In particular, insurers may well routinely have to meet judgments obtained against defendant drivers who, although their identity is known at the date the proceedings were instituted by the victim, can no longer be traced by the time judgment is obtained. An example given by Mr Williams was the case of a visiting foreign worker who, although originally identified, some time after the relevant accident returned home to a foreign country and could no longer be found. In such circumstances, no defence is afforded to the insurer; Indeed, if proceedings are yet to be issued, the usual procedure is that the claimant obtains an order for alternative service on such a defendant by serving the insurer itself; see for example the practice suggested in Murfin v Ashbridge [1941] 1 All ER 231 (CA), 235 and in Gurtner v Circuit [1968] 2 QB 587 at 596G 597D in relation to substituted service on an insurer in relation to a named and identified, but untraceable, defendant. It was common ground between Mr Williams and Mr Worthington that this was the normal practice in relation to an order for service by alternative means: Blackstone’s Civil Practice 2017, §15.19; Zuckerman on Civil Procedure (3rd ed), §5.122.
45. Accordingly, as Mr Williams submitted, insurers will commonly have to meet judgments under section 151 where they have no hope of enforcing against the culpable party, or even of finding the culpable party. Insurers will defend and control the defence of such proceedings whether the culpable party has been served with them, or knows anything about them. Indeed the insurers may well have been served with the proceedings in lieu of the culpable party.
46. In such circumstances I am not impressed by Mr Worthington’s arguments that to permit a judgment to be entered against an unknown defendant driver in circumstances such as the present, where the vehicle, the insurer and the purported name of the insured can all be identified, will open the floodgates to a raft of fraudulent claims against insurers. It is for insurers to stipulate the conditions which they require to be satisfied by a proposed insured to establish identity before insurers issue a policy. If they do not, as a matter of practice, whether because of administrative difficulties or otherwise, seek declarations that they are entitled to avoid policies in the event of fraudulent non-disclosure or misrepresentation, that is a matter of their own commercial choice. Moreover, Mr Worthington was not able to articulate, other than in the most vague and general terms, the type of problems which he said might arise.
47. Thus, it appears to me to be entirely consistent with the policy of the 1988 Act that an identified insurer’s liability under section 151 in relation to a policy of insurance, written in respect of a specific vehicle and a specific named insured, should not depend on whether, as at the date of issue of the proceedings, or thereafter, the claimant can identify the tortfeasor driver by name.
The exercise of the court’s powers under the relevant rules of the CPR
48. It was correctly assumed by both parties that, only if judgment for damages could indeed be obtained against an unnamed defendant satisfying the relevant description, could it be a proper exercise of the court’ s powers or discretion to permit an amendment of the claim form and particulars of claim to substitute the unnamed defendant. The argument therefore appropriately focused on the issue as to whether a judgment for damages could be obtained against an unidentified party. However, Mr Worthington also argued that the existence of the appellant’s alternative remedy under the UTDA meant that the case could not be regarded as an exceptional one justifying the exercise of the court’s discretionary power to permit proceedings to continue against an unnamed defendant.
49. I reject Mr Worthington’s submission that, whether as a matter of the construction of the relevant rules or as to the circumstances in which any power conferred thereunder should be exercised, a party is unable to bring proceedings against an unnamed party, identified by a specific description, for damages, or is unable to do so in the absence of a claim for an injunction to restrain such a defendant’s conduct in the future. In my judgment, in appropriate circumstances such as the present, a claimant can do so.
50. In my judgment, the analysis of Sir Andrew Morritt V-C in Bloomsbury Publishing Group v News Group Newspapers [2003] 1 WLR 1633 is compelling and I respectfully adopt it. In that case, an injunction was granted against unknown persons who had obtained a copy of an unpublished Harry Potter Sir Andrew Morritt V-C found that the cases decided prior to the introduction of the CPR were no longer applicable. He held that under the CPR, there was no procedural bar to issuing proceedings, and obtaining orders, against persons unknown. There was no attempt to prescribe the circumstances in which parties would be permitted to do so….
51. In Brett Wilson LLP v Persons Unknown [2015] EWHC 2628 (QB), Warby J granted an injunction and damages against “Persons Unknown responsible for the operation and publication of the website [SFUK.com]”. That was in the context of a claim for defamation, under the summary disposal provisions in section 9 of the Defamation Act 1996. The court was also satisfied that the defendants, though unidentifiable, had knowledge of the proceedings: see [6]-[9], [16], [31] and [35]. No specific reference was made to the (apparent) novelty of the award of damages, in addition to an injunction.
52. Smith v Unknown Defendant Pseudonym ‘Likeicare’ [2016] EWHC 1775 (QB) was another summary determination of a claim for an injunction and damages in respect of defamation. Again there was no discrete consideration of the jurisdiction to award damages against unnamed defendants: see [11] and [18]-[22].
53. I agree with Sir Andrew Morritt V-C that there is no reason in principle why, in appropriate cases, it should not be permissible under the CPR for a claimant to bring proceedings against an unnamed defendant, suitably identified by an appropriate description. The fact that the CPR may make express provision for situations in which this can take place does not preclude orders being made against unnamed defendants in other circumstances. Likewise, I see no reason in principle, or as a matter of construction of the rules, why the ability to do so should be limited to a claim for an injunction or in relation to future relief. Although there was no express discussion of the issue as to whether it was appropriate to bring a claim for damages against an unnamed person in the defamation cases, the logic of Sir Andrew Morritt’s analysis, in my judgment, equally applies to a claim for damages. The Canadian authorities demonstrate that it is well-established that damages claims may be issued against unnamed defendants. For example, in Manson v John Doe [2013] ONSC 628 damages of $200,000 were awarded against an anonymous person waging a campaign of defamation via websites. In such a case there is every reason for such an order to be made.
54. As Sir Andrew Morritt V-C pointed out, the question is not simply whether a claimant can issue proceedings against a person unknown, notwithstanding the direction in the rules that a defendant “should” be named, or whether the court can permit a party to amend the claim form to substitute an unnamed defendant for a named defendant. The question also arises whether, in any particular case, the court should in the exercise of its discretion permit a claimant to amend in order to substitute an unnamed defendant, or permit such an action to proceed, so as to lead to a judgment against him. Once it is accepted that proceedings can be brought against unnamed defendants, then whether in any particular case that should occur, or whether relief should be granted against such defendants, must, it seems to me, depend on whether the overriding objective (that is to say of deciding cases justly and at proportionate cost – see CPR r1.1) would be furthered by such a course.
55. In that context also, I do not accept Mr Worthington’s submission that it is only in “exceptional” circumstances that a claimant would be permitted to join an unnamed defendant, identified only by description, or that a judgment for damages would be granted against such a defendant. Nor do I accept his suggested constraint that, if a claimant has an alternative remedy (i.e. in the present case the appellant’s remedy under the UTDA) that necessarily precludes any exercise of the court’s relevant discretion in a claimant’s favour – whether to permit a claimant to substitute an unnamed defendant or to award damages against such a defendant.
56. For these reasons I also reject Mr Worthington’s submission that the judge’s approach, as set out in paragraphs 23 and 24 of his judgment (as quoted above), was correct as a matter of law and that accordingly the exercise of the district judge’s discretion should be upheld. I see no reason why the fact that the appellant has an alternative remedy for compensation under the UTDA against the Motor Insurers Bureau should be regarded as a legitimate reason for preventing her from enforcing her undoubted substantive rights to:
a judgment for damages for negligence against the unnamed driver of the Nissan; and
in the event that such a judgment is unsatisfied, payment by the respondent as insurer of the Nissan of the amounts payable under the judgment pursuant to the provisions of section 151.
Put another way, in circumstances where the appellant has an undoubted right conferred by statute to payment by the insurer of a vehicle in the event that she obtains a judgment against its negligent driver, it cannot be just to deprive her of the remedy to give effect to that substantive right, simply by the court’s refusal to exercise a procedural power on grounds of the existence of an alternative remedy against the MIB – a remedy which she is not obliged to pursue and the exercise of which is not a precondition to her entitlement under section 151.
57. I also reject Mr Worthington’s submission and the judge’s conclusion that it would cause no injustice so far as the appellant is concerned if she were restricted to her claim to compensation under the UTDA and prevented from enforcing her rights under section 151. Apart from the point, which I have already mentioned (namely, that it is unjust for her to be deprived of a remedy to enforce her substantive right under section 151), it is clear that, for the reasons given by Mr Williams, including in particular the restriction on costs recovery, the inability to recover subrogated claims and the absence of a transparent court adjudication of her claims, a claimant in the position of the appellant might well regard a claim for compensation under the UTDA as an inferior remedy to a court action for damages and under section 151.
58. I likewise reject Mr Worthington’s submission and the judge’s conclusion that to permit an action to proceed against an unnamed defendant by reference to a specific description would cause injustice to the respondent as insurer, on the grounds that it will be unable to ascertain from the driver, or indeed its own purported insured, how the accident happened or whether there is any defence to the claim. For the reasons which I have already stated in paragraph 42 above, the respondent’s inability to ascertain the facts from the driver of a vehicle is a problem which it may often face in section 151(2)(b) situations. So far as being unable to ascertain the relevant facts from its own insured is concerned, the respondent must bear the responsibility of not having carried out appropriate checks as to the identity, or existence, of the insured prior to inception of the policy.
After the concurring judgment of Lloyd-Jones LJ, Sir Ross Cranston gave a dissenting judgment, and set out in his view, why the appeal should be dismissed.
In effect, the Court of Appeal taking a stance of general application refused to allow the insurance tail to wag the procedural dog. Once it was established that a claim in tort could be brought against persons unknown, then the decision of the majority of the Court of Appeal followed logically.
Indeed the reasoning of the majority was that their decision in any event ran with the grain of the Road Traffic Act 1988 which was concerned with the substantive rights of the tortfeasor’s victim.
An application has been made to the Court of Appeal for permission to appeal to the Supreme Court. It will be interesting to see if this case, is elevated to the Supreme Court in the months to come.