Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2009] CSOH 82
PD2265/08	OPINION OF LORD MALCOLM in the cause MARTIN CAMERON Pursuer; against MELISSA BETH GELLATLY Defender: AXA CORPORATE SOLUTIONS ASSURANCE SA Minuters: ­­­­­­­­­­­­­­­­­________________

Pursuer: J. McConnell; Gildeas

Minuters: P. Stuart, HBM Sayers

No appearance for the defender

11 June 2009

[1] The pursuer avers that on 12 May 2007, while he was leaning into the rear nearside door of a stationary taxi in South Street, Perth, a car being driven by the defender collided with the taxi. The pursuer's resulting injuries included a brain injury. He has raised an action against the defender in which he seeks damages of £500,000. The minuters are defending the action on the basis that they insured the vehicle driven by the defender; that the defender was not insured under the relevant policy at the time of the accident because she was driving the vehicle without the policy holder's permission; and that the minuters will be obliged to satisfy any judgement obtained by the pursuer against the defender under and in terms of section 151 of the Road Traffic Act 1988.

[2] I am told that the pursuer is in a "desperate" financial situation. In these circumstances he has enrolled a motion for interim damages. The application is opposed by the minuters solely on the ground that it is incompetent because it does not fall within the terms of Rule of Court 43.11(5). If an award is competent, it is agreed that an interim payment of £27,500 (net of CRU) should be ordered.

[3] So far as relevant Rule of Court 43.11(5) is in the following terms:

"(5) No order shall be made against a defender under this Rule unless it appears to the court that the defender is -

(a) A person who is insured in respect of the claim of the pursuer;

(aa) A person who is not insured but in respect of whose liability the Motor Insurers' Bureau will be liable to make payment; ..."

[4] For the minuters, Mr Stuart submitted that clearly head (aa) did not apply, and nor did head (a) since the defender was not insured. For the pursuer Mr McConnell observed that the opposition to the motion might appear to be technically correct, however a purposive interpretation should be adopted in respect of head (a), thereby allowing a wider construction of the phrase "who is insured". He referred me to Ferguson v McGrandles 1993 SLT 822, the equivalent English Civil Procedure Rule (Rule 25.7(c)), and Evans v The Secretary of State for the Environment, Transport and the Regions and Motor Insurers Bureau ECR 2003 page I - 14447, though in the course of the discussion it became clear that the European case is of little assistance. Mr McConnell explained that section 151 of the 1988 Act applied when the driver of the vehicle at fault is uninsured but the vehicle itself is the subject of a contract of insurance, whereas the Motor Insurers' Bureau (the MIB) will step in where there is no contract of insurance relating to the vehicle. Section 151 will apply if an insured vehicle is stolen or, as here, driven without permission.

[5] Head (aa) was introduced by an amendment to the Rule in 2004. Mr McConnell indicated that he had not found any discussion of the decision to introduce a specific mention of the MIB, but not of section 151; nor as to why a reference to section 151 can be found in the English Rule concerning interim damages, yet it was not transposed to the Scottish Rule. He submitted that there is no good reason why an application for an interim payment of damages should be excluded in the present circumstances. He invited the court to take the view that the phrase "who is insured" in head (a) means a person whose liability in respect of litigation will be met by an insurer. This would reflect the clear intention and purpose of the provision, and fill what would otherwise be an illogical gap.

Discussion and decision
[6] The court's power to award an interim payment of damages is derived from an exercise of its jurisdiction to regulate matters of practice, c.f. the Act of Sederunt (Rules of Court Amendment) 1974, SI 1974/845. This, when taken along with the terms of Rule 43.12 (adjustment on final decree), suggests that the power is primarily procedural rather than one of substantive remedy. This may afford the court greater flexibility in interpreting and applying the Rule than would apply, for example, to construction of a contract or an Act of Parliament.

[7] The reference to the MIB in head (aa) was introduced by an amendment to the Rule in 2004 (SSI 2004/331). I have no reason to suppose that the drafters of that amendment were unaware of the terms of section 151 of the 1988 Act, nor as to the terms of the equivalent English provisions. Nonetheless no specific reference was made to section 151. This may well have been because there is a significant difference between a case where the MIB is involved and one where section 151 applies. The agreements involving the MIB are designed to provide compensation for the victim of a road traffic accident when there is no other remedy. However, in the present case the defender was driving a car which was insured by the minuters, although without permission. The effect of section 151 is to make the minuters liable to the pursuer as if the defender was covered, albeit, as Mr Stuart pointed out, they would have a right of recovery against the defender. The relevant parts of Rule 43.11(5) can be understood as requiring, on the one hand, an identifiable insurer who is able to and is obliged to satisfy a judgment against the defender because they have entered into a policy of insurance in respect of the relevant vehicle, or on the other hand, where this is not the case, a liability resting on the MIB. This structure would explain the absence of any reference to section 151 when head (aa) was introduced. It was not necessary because it was assumed that where a specific insurer is liable to satisfy the judgement in favour of a pursuer, and can do so, head (a) will apply. The fact that the insurer's liability flows not only from the terms of the contract of insurance, but also from the overlaying provisions of section 151, is of no real significance. Were it otherwise it made no sense to alter the Rule to deal specifically with the MIB, but ignore section 151 cases.

[8] In Ferguson Lord Penrose understood the then Rule, which so far as relevant mirrored the current head (a), as relating to

"a person who has the benefit of a contract of insurance in his favour, or in favour of some other party in terms which cover the risks of the defender."

The essence of this is that head (a) will apply when an identifiable insurer has entered into a relevant contract of insurance; he is obliged to satisfy any judgment in favour of the pursuer; and he can and will do so. On the other hand, one or more of these criteria will not apply if and when the MIB are involved, hence the need for the new head (aa).

[9] The above analysis is consistent with the basic purpose of Rule 43.11(5), namely that an award of an interim payment will only be made when the person liable is able to make the payment. Although the case was not cited to me, I should mention that I have not overlooked Lord Ross' decision in Martin v McKinsley 1980 SLT (N) 15 (OH). The new factor is the inference which can now be drawn from the decision in 2004 to introduce a specific and separate provision concerning the MIB. The absence of an equivalent mention of section 151 of the 1988 Act can be explained on the basis of a wider approach to the rest of the Rule than that adopted in Martin. (There was an unsuccessful reclaiming motion in Martin, but the Opinion of the Court, delivered by the Lord President (26 June 1980, unreported), dealt with a different issue from that under consideration in this judgement).

[10] While it would do no harm for consideration to be given to a further clarifying revisal to Rule 43.11(5), in the meantime I am satisfied that the pursuer's application is competent. I shall therefore make an order for interim payment of damages in the terms set out above.