From time to time, points of indemnity cover under section 145 of the Road Traffic Act 1988 arise in very hard cases.
One such recent case is that of Carroll v QBE Insurance and others  EWHC 153 (QB). The facts are as follows:
1. The Claimant, Neil Carroll, suffered catastrophic head injuries in the early hours of Sunday 19 August 2012 as he was making his way home after a night out with friends in the centre of Liverpool. He had been drinking and shortly before 3am hailed a black cab to take him to his home in Huyton. The taxi driver did not take him home. Rather, he stole the Claimant’s debit card and PIN and, having done so, left the Claimant in the Old Swan area of Liverpool, to find his own way home. The Claimant was some three miles short of his destination.
2. It was in these circumstances that the Claimant, without any money on him, continued home on foot and, at the same time, his girlfriend set out to find him in her car. She did not find him and, whilst pausing on the walk home, the Claimant fell off the barrier of a motorway bridge into the car park below and was severely injured. The Claimant was discovered at around 8am and taken to hospital. He is now 31 years old, remains severely brain injured and requires 24-hour care.
It is apparent that the claim was a very valuable one, and the claimant sued a number of parties:
3. The First Defendant, Michael Taylor, was the taxi driver (“the taxi driver”). He pleaded guilty to theft and received a custodial sentence in May 2013.
4. The Second Defendant, Michael Doyle, was the owner of the taxi, which had vehicle registration number WV52 CUO (“the taxi”). The taxi was hired from him by the taxi driver.
5. The Fourth Defendant, QBE Insurance (Europe) Ltd (“the insurer”), issued a policy and certificate of insurance to the Second Defendant in respect of the use of the taxi for “social, domestic and pleasure purposes, for the insured’s business and for the purpose of hire and reward”, which provided no more than the minimum compulsory scope required under the Road Traffic Act 1988 (“the RTA”) in respect of third party injury claims. This cover extended to the taxi driver. The policy was in force in August 2012. The relevant parts of the policy are set out in more detail at paragraphs 31 to 34 below.
The claimant’s case at trial for compensation was as follows:
6. The Claimant alleges a direct right of action against the insurer in respect of claims in negligence under the European Communities (Rights against Insurers) Regulations 2002. The basis for this claim is that “for the purposes of section 145 of [the RTA], the [bodily injury] arose out of the use of the taxi on the road” (para. 3 of the particulars of claim). The insurer maintains that the Claimant does not have any claim against it under the RTA or under the terms of the policy of insurance.
The case came on for trial on preliminary issues:
7. The preliminary issues I have to decide are to determine whether the insurer is liable in respect of the Claimant’s injuries under section 145(3)(a) of the RTA or the policy of insurance.
10. The preliminary issues were simplified by agreement into two questions, namely:
Question 1: Did the Claimant’s injuries arise out of the use of the taxi on a road or other public place within the meaning section 145(3)(a) of the RTA?
Question 2: Given the basis for the Court’s finding on the first question and, in particular, the relevance or otherwise of the First Defendant’s deliberate criminal acts, does the insurance policy issued by insurer to the Second Defendant respond to the Claimant’s claims in tort against the First and Second Defendants if those claims in tort are proved?
The judge very early in her judgment gave a clear answer that the claimant’s claim must fail.
13. On the facts of this case the clear conclusion I have reached is that the answer to each of these questions is “No”. The claim against the Fourth Defendant must therefore be dismissed.
The reason that it failed hinged upon a correct understanding and application of section 145 of the Road Traffic Act 1988.
36. The first question gives rise to two issues, namely: (1) was there a use of the taxi on a road or public place; and (2) did the Claimant’s injuries arise out of that use? (see Dunthorne v Bentley  RTR 428, CA at 430F, per Rose LJ).
37. Issue (1) was not in dispute. This is because the insurer accepted that the taxi driver’s carriage of the Claimant in the taxi culminating in him driving away from the cash point on Prescot Road was a “use of the vehicle”. To deal with issue (2) I must now turn to the relevant statutory framework and law in relation to section 145(3)(a) of the RTA.
39. Section 145 of the RTA, which falls within Part VI, sets out the conditions which the policy of insurance must satisfy. It provides, so far as relevant:
(1) In order to comply with the requirements of this Part of this Act, a policy of insurance must satisfy the following conditions.
(2) The policy must be issued by an authorised insurer.
(3) Subject to subsection (4) below, the policy – (a) must insure such person, persons or classes of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person or damage to property caused by, or arising out of, the use of the vehicle on a road or other public place in Great Britain; …
(4) The policy shall not, by virtue of subsection (3)(a) above, be required
– (a) to cover liability in respect of death, arising out of and in the course of his
employment, of a person in the employment of a person insured by the policy
or of bodily injury sustained by such a person arising out of and in the course
of his employment, or …
(f) to cover any contractual liability.”
The question of “the use of the vehicle on the road” of a vehicle predicating a liability to make payment (or not) is a very old concept in road traffic law. It can be found in many antecedent statutes, has spread across the commonwealth as a concept and also finds itself embodied in part 45 CPR, as one of the criteria for determining whether a claim is a road traffic accident for the purposes of various species of fixed costs.
The court directed itself by reference to authority including the well known case of Dunthorne and the more recent case of Pilling. At the heart of the relevant principles is the very old concept of the distinction between causa sine qua non and causa causans: also known as the background cause, and the effective or immediate cause. The former will not suffice to establish causation whereas the latter will. This reflects in turn the position that in a sense, everything is caused by everything, but in order to fairly affix someone with a legal liability, a narrower approach to causation must be undertaken.
43. The key legal principles which apply to the facts of this case are derived from Dunthorne v Bentley  RTR 428, CA, which explains what “arising out of the use of the vehicle on a road” means in the context of the RTA. The decision of the Court of Appeal in Dunthorne v Bentley was recently approved by the Supreme Court in Pilling. Nevertheless, the Claimant maintained that, although the words “arising out of the use of the vehicle on the road” are ordinary English words, and should be read as such, the court will adopt a “liberal” approach to the interpretation of these words in the context of the RTA. The Claimant’s Counsel, Mr Melton QC, took me to a number of other English and Commonwealth authorities in support of these submissions, which are also referred to below.
Turning to consider the Pilling decision, Tipples J observed:
54. Most recently the statutory phrase “arising out of the use of the vehicle” in section 145(3)(a) of the RTA has been considered by the Supreme Court in Pilling.
55. The motorist’s insurers in that case argued, amongst other things, that Dunthorne v Bentley was wrongly decided. This argument was rejected. The judgment of the Supreme Court was given by Lord Hodge JSC (with all other Supreme Court Justices agreeing) and at paragraphs  and  he said this:
“ Mr Eklund QC, who appeared for UKI, submitted that Dunthorne v Bentley  RTR 428 was wrongly decided. I would not so hold. The case did not turn on a point of law but on the application of the law to a particular set of facts. The Court of Appeal held in that case that 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. Mr Dunthorne’s claim was close to the line, as Hutchinson LJ recognised, but 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.
 In summary, section 145(3) of the RTA must be interpreted as mandating third party motor insurance against liability in respect of death or bodily injury of a person or damage to property which is caused by or arising out of the use of the vehicle on the road or other public place. The relevant use occurs where a person uses or has the use of a vehicle on a road or public place, including where he or she parks an immobilised vehicle in such a place (as the English case law requires), and the relevant damage has to have arisen out of that use.” (underlining added)
56. It is therefore clear from Pilling that Dunthorne v Bentley was (i) a borderline case, (ii) Mr Dunthorne’s claim was close to the line, but (iii) Mr Dunthorne’s claim was on the right side of the line as the case was correctly decided, and his claim succeeded. This, of course, means that although each case will turn on its own facts, the facts ofDunthorne v Bentley are likely to be instructive as to which side of the line other cases, including this one, will fall.
Having considered the law she then moved to apply it to the facts of the case, reminding herself of a number of points:
70. First, the insured in this case was the taxi driver. It was not the Claimant. It was the taxi driver, and not the Claimant, who was in the equivalent position of Mrs Bentley in Dunthorne v Bentley. This is not a case where the taxi driver, as a pedestrian, was in the road seeking to continue his journey. The facts of this case are very far removed from those in Dunthorne v Bentley.
71. Second, the Claimant was the passenger in the taxi. There is no dispute that his journey in the taxi started in Hardman Street, when he got in the taxi. However, it is crucial to consider whether the journey was continuing at the time the Claimant was injured or whether the journey in the taxi had in fact come to an end: see Worboys at paragraph (d).
72. Third, it is necessary to analyse the activities of the taxi driver to see what he was doing at the time when the injuries were suffered in order to ascertain if they were “arising out of the use of the car”: see Worboys at paragraph .
73. Fourth, once the journey in the vehicle is at an end, what may or may not happen to a passenger after the journey has been completed is not a relevant consideration in determining whether a person’s injuries arise out of the use of a vehicle on a road under section 145(3)(a) of the RTA. There is therefore no legal basis for Mr Melton QC’s argument based on foreseeability under section 145(3)(a) of the RTA, namely that it is entirely foreseeable that, if a taxi driver abandons a drunk passenger short of his destination, then accidents will happen, such as the accident to the Claimant.
In a sense, although the law was complex and the authorities considered substantial, the case was very simple to resolve. In effect the taxi driver’s actions were not causa causans of the claimant’s accident and terrible injuries. The concept of “use” provided a limiting case, which precluded the driver and thus the insurer from being fixed with liability.
74. I now turn to my conclusion on the facts. There is no dispute that, by the time the Claimant hailed the taxi on Hardman Street, he was affected by drink. However, the fact he had been drinking was not apparent from the manner in which he was walking and he was still able to talk to Ms Dyer by telephone and hail a cab.
75. Once the Claimant had hailed the taxi the fact he had been drinking must have become obvious to the taxi driver when he spoke to the Claimant. This, as I have explained above, was either immediately before the Claimant got in the taxi, or immediately after the Claimant got into the taxi on Hardman Street. Once the taxi driver knew the Claimant was affected by drink, and therefore vulnerable, he decided to rob him in the very same way that he had robbed two others on earlier occasions. He tricked the Claimant into parting with his debit card, and exchanged it for another stolen card which the taxi driver knew would not work for the Claimant.
76. The taxi driver then used his taxi to drive the Claimant to the Santander cash point on Prescot Road so that the Claimant would then try and get cash out of the cash point with
the stolen card and, in doing so, that would give the taxi driver the opportunity to steal his PIN. The Lloyds cash point was also very nearby and that provided the taxi driver with a further opportunity to steal the Claimant’s PIN by watching him unsuccessfully putting it into the machine. Then, having stolen both the debit card and the PIN from the Claimant, the taxi driver abandoned him and used his taxi to drive to another cash point nearby in order to steal money from the Claimant’s bank account as quickly as possible. Less than 10 minutes later, the taxi driver had withdrawn £220 in cash from the Claimant’s bank account.
77. The Claimant’s journey in the taxi driver’s taxi was from Hardman Street to the Santander cash point on Prescot Road. Once the Claimant got out of the taxi to go to that first cash point the journey in the taxi came to an end. It was impossible for the Claimant to withdraw any cash from the cash point, or indeed the second cash point at the Lloyds TSB nearby, as the taxi driver had already stolen his debit card, and the Claimant was using someone else’s bank card with his own PIN. Further, the taxi driver knew that the Claimant would be unable to withdraw cash and the purpose of taking the Claimant to the two cash points close together was to steal his PIN. The taxi driver had no intention of allowing the Claimant to get back into his cab in order to continue the journey home to Huyton. Rather, once the taxi driver knew the PIN, he intended to drive off without the Claimant and take money out of his bank account from another cash point as soon as possible, and that is precisely what then happened.
78. The Claimant was not put out on the street in the Old Swan area by the taxi driver so that the journey was temporarily interrupted, and so that the Claimant could resume his
journey in the taxi once he had withdrawn cash from the cash machine to pay for the journey. Rather, he was put out on the street, so that the taxi driver could observe him at the cash point and steal his PIN. The Claimant’s journey in the taxi was then at an end.
79. Having been left in the Old Swan area the Claimant decided to walk home. It was on that walk home that he fell off the motorway barrier and was severely injured. The Claimant could have stayed put and waited for Ms Dyer to collect him in her car. Ms Dyer thought that is what he would do, having discussed the options with him by telephone when he was abandoned. However, the Claimant decided not to wait for Ms Dyer and he decided to walk home. Further, in so far as it may be relevant (although I do not consider it is under section 145(3)(a) of the RTA, as the journey was at an end) the Claimant’s decision to walk home broke the causal chain after he had been abandoned by the taxi driver.
80. The Claimant had walked 2.1km from where he had been abandoned by the taxi driver, and the accident happened after 3.45am, or thereabouts, which was the last time he tried to call Ms Dyer. More than 45 minutes therefore had passed since his journey in the taxi had come to an end.
81. There is no evidence whatsoever about what the taxi driver was doing, or where he was, at the time the Claimant sustained his injuries. Having stolen money out of the Claimant’s bank account, the taxi driver could have been anywhere in the Liverpool area. This fact alone makes it crystal clear that the accident to the Claimant did not arise out of the use of the taxi. In these circumstances it is impossible to see how there is a relevant causal link between the use of the taxi and the injuries suffered by the Claimant under section 145(3)(a) of the RTA.
82. In my view, the Claimant’s injuries had nothing whatsoever to do with “the use of the vehicle on a road” in the context of section 145(3)(a) of the RTA. Rather, the injuries
occurred where they did, and when they did, because the Claimant had decided to make his way home on foot and these injuries were not in any sense closely linked with the
use of the taxi.
83. Finally, it is clear from Pilling that in Dunthorne v Bentley Mr Dunthorne’s claim was “close to the line”. However, it was on the right side of the line as the claim against the insured was successful. The facts of this case are very far removed from those of Dunthorne v Bentley and, in my view, are nowhere near the line for a successful claim against the taxi driver under section 145(3)(a) of the RTA.
84. I have therefore formed the very clear view that the Claimant’s injuries did not arise out of the use of the taxi and the answer to Question 1 is “No”.
Although it did not thus strictly arise, her answer to the second issue was given in brief terms. The issue however poses interesting questions as to how the normal use of a taxi for reward can be intertangled with using a taxi for a criminal purpose. Other factual scenarios which can arise in this context include a rapist using his taxi to find victims amongst his passengers and the boy racers, who deliberately set out as part of their “social” use of their vehicles, to exceed 100mph in a makeshift Mille Miglia around Nottingham city centre.
85. This issue can be dealt with more briefly. The taxi driver had no intention of using the taxi to take the Claimant home to Huyton. Rather, he was using the taxi as an integral
part of his “modus operandi” to steal from people, like the Claimant, who had been drinking and were seeking to make their way home in the early hours of the morning after a night out in the centre of Liverpool. On the facts of this case I have reached the clear view that, from the taxi driver’s perspective, the essential character of the journey in which he took the Claimant in the taxi from Hardman Street to the Santander cash point was to steal from him and that he was using the taxi for a criminal purpose.
86. Section 145(3) of the RTA only requires insurance for the use to which the person, in this case, the taxi driver, is putting the vehicle. The policy in this case limits use to “social, domestic and pleasure purposes”, “use for the Insured’s business” or “use for the carriage of passengers for hire and reward under the terms of a Hackney Carriage Licence”. The journey in this case did not therefore constitute a permitted user.
87. In these circumstances, Mr Melton QC accepted that I am bound by Keeley v Pashen  1 WLR 1226, CA and, in particular, at paragraph  where Brooke LJ held
(and Jonathan Parker LJ and Keene LJ agreed):
“… Under this statutory scheme Parliament intended innocent third parties to be able to recover direct from the driver’s insurers… Of course, if the essential character of the journey in question consists of use for a criminal purpose (as when a burglar takes his car out for a night of burgling other people’s houses) then the car will not be being used for “social, domestic and pleasure purposes”, but this is not that case.”
88. There is therefore no basis in this case for the insurance policy to respond. The answer to question 2 is also “No” and the claim against the insurer must be dismissed.
The line of authority discussed in this case and the issue of “use” arises from time to time in road traffic claims of all descriptions.
Although the Road Traffic Act 1988 imposes a very tight net of liability on a motor insurer, it having been recognised almost a century ago, in the Road Traffic Act 1930 that the law of contract and market forces were inadequate to provide insurance cover for the public at large, there are still exceptions within the Act.
Moreover, as the United Kingdom is now 8 months away from ceasing to be subject to European Union law, which has served over the years to expand the scope of indemnity from motor insurers, it remains to be seen whether in general terms United Kingdom law will remain in accordance with the position of the European Union or whether there will start to be divergences, with the consequence that further exceptions will start to emerge.