chapter 1 Flashcards
Particular Risks:
These are localized risks affecting a specific area or individual cases.
Losses can range from minor to major, such as damage from a small car accident or theft.
These risks are typically insurable.
Fundamental Risks:
These are widespread and catastrophic, affecting a large scale, e.g., war or nuclear disasters.
They are generally uninsurable because the insurance market cannot cover such extensive losses.
Exceptions: Some large-scale risks, like floods or storms, can be insured under the comprehensive section of motor insurance policies.
Peril:
Refers to the cause of the loss.
In motor insurance, examples of perils include:
-Death or injury to vehicle occupants.
Injury to other road users (e.g., pedestrians or cyclists).
-Damage to property (cars, buildings, or animals).
-Damage to the insured vehicle (accidents, storms, vandalism).
-Fire and theft (including attempted theft or fraud).
Nervous Shock case law
(caused by witnessing an accident due to someone’s negligence.)
Boardman v. Sanderson (1964): A father who saw his injured son was successful because he was close to the scene.
King v. Phillips (1953): A mother who was 70 yards away and did not see the actual collision failed in her claim.
Onus of Proof
claimant must prove that negligence occurred.
defendant must disprove negligence
Res Ipsa Loquitur
The accident speaks for itself (eg drunk driving=negligence)
Strict Liability:
In some cases, liability is automatic if something dangerous escapes and causes damage.
Liability can occur even if the vehicle is stationary, especially if used for non-driving purposes (e.g., a digger damaging cables).
strict liability case law
Rylands v. Fletcher (1868): Damage caused by the escape of water.
Musgrove v. Pandelis (1919): A fire caused by a car in a garage was considered the owner’s responsibility.
What is Vicarious Liability?
When one person (e.g., an employer) is held responsible for the actions of another (e.g., an employee).
Employer Responsibility:
Employers must ensure the health and safety of employees at work, as required by the Health and Safety at Work Act 1974.
This includes:
- Preventing injuries while employees are passengers or drivers in work-related vehicles.
- Managing risks, such as loads falling from vehicles or fatigue caused by long driving hours.
Corporate Manslaughter and Corporate Homicide Act 2007:
Companies, not just individuals, can be prosecuted for manslaughter if negligence leads to an employee’s death.
Senior management in larger firms is now held accountable for health and safety failures.
Contributory Negligence
If a claimant is partly at fault for their own injury, the compensation they receive can be reduced to reflect their share of responsibility.
O’Connell v. Jackson (1972):
(Contributory Negligence)
A motorcyclist not wearing a helmet suffered worse injuries.
Damages were reduced by 15% because the failure to wear a helmet contributed to the severity of the injuries.
Smith v. Finch (2009):
(Contributory Negligence)
A cyclist not wearing a helmet could be held partly responsible for their injuries, though this hasn’t been tested in court.
Phethean-Hubble v. Coles (2011):
(Contributory Negligence)
A cyclist was deemed negligent due to reckless riding, not for failing to wear a helmet.
Limitation Act 1980
Claims must generally be brought within:
6 years for property damage.
3 years for personal injury claims.
Exceptions:
- For minors: Time begins when they turn 18.
- For those with disabilities (e.g., in a coma): Time starts once the disability ends.
Latent Damage Act 1986:
Extends the period for property damage claims by 3 more years from when the damage is discovered, but no more than 15 years from the cause of the damage.
Theft Act 1968:
Defines theft as dishonestly taking property with the intent to permanently deprive the owner.
Riot Damages Act 1886
provided recovery rights for damage to buildings but excluded vehicles unless they were inside a building.
Riot Compensation Act 2016:
Allows claims for motor vehicles on public roads only if not insured for riot damage.
Imposes a £1 million cap per claim.
Excludes compensation for consequential losses.
Road Traffic Acts (RTA):
The Road Traffic Act 1930 introduced compulsory motor insurance.
The Road Traffic Act 1988, with subsequent amendments, is the current version.
RTA’s Seven Parts:
Part I: Road safety provisions.
Part II: Vehicle construction and use.
Part III-IV: Driver licensing (general and heavy goods vehicles).
Part V: Driving instruction.
Part VI: Third-party liabilities.
Part VII: Miscellaneous provisions.
Claims Frequency calculation:
Frequency =
NumberofAccidents/ VehicleYears
Example:
846 accidents/500vehicleyears
=169.2%
Average Claim Cost calculation:
AverageClaimCost=
TotalCostofClaims/NumberofClaims
Example:
£1,368,964/ 275
=£4,975.32.
Part I – Principal Road Safety Provisions
Key Elements:
Driving Offences:
-Causing death by dangerous driving.
-Causing death while under the influence of drink or drugs (introduced by the 1991 RTA).
-Protective Measures: Legislation around the use of seat belts and safety helmets for protection.
-New Driver Sanctions (Road Traffic (New Drivers) Act 1995):
If a new driver accumulates 6 penalty points within 2 years of passing the driving test, their licence is revoked.
Section 143
makes it an offence to use or allow the use of a motor vehicle without insurance.
definition of road in caselaw
R v. Shaw (1974): A lane on a housing estate used by pedestrians as a shortcut was considered a road.
Suffolk CC v. Mason (1979): Footpaths and bridleways are considered roads.
Harrison v. Hill (1932): A private approach road to a farm was deemed a road.
Cutter v. Eagle Star (1998): A private car park with public access was ruled not a road as it was considered a destination.
Vnuk Case (2014):
European Court of Justice (ECJ) ruled that compulsory motor insurance should cover accidents occurring on private land, if the accident is caused by the normal use of the vehicle (e.g., moving a trailer in a farmyard).
This decision expanded the scope of compulsory insurance beyond public roads to private properties.
vnuk case post brexit
The UK government decided not to implement the EC’s proposed changes.
The UK enacted this law to remove the Vnuk ruling from UK law.
Section 156A was added to the Road Traffic Act 1988, clarifying that the scope of compulsory motor insurance does not extend to private land or certain types of vehicles, such as motorsport vehicles.
Section 144 – Exemptions from Compulsory Insurance
Before November 2019: Vehicle owners could avoid compulsory insurance by depositing £500,000 with the Senior Courts (Court of Appeal, High Court, and Crown Court). This was more common for large companies (e.g., bus companies) that managed their own third-party liabilities. However, this did not absolve them from liability for larger claims.
Section 145 – Requirements for Policies of Insurance
A policy of insurance must be issued by an authorized insurer. Insurers must be authorized by the Prudential Regulation Authority (PRA) and meet the requirements of the Financial Services Act 2012.
Motor insurers must also be members of the Motor Insurers’ Bureau (MIB), which helps ensure compensation for victims of road accidents caused by uninsured or untraceable vehicles.
case law that ‘arise out of’ the use of the vehicle
Dunthorne v. Bentley (1996): The court held that the term “arising out of” the use of the vehicle was broadly interpreted. Even though the car was parked, the accident occurred because Mrs. Bentley was seeking help for her journey, and thus the incident “arose out of” the car’s use.
AXN and Others v. Worboys (2012): The court ruled that rape and assault by a taxi driver did not “arise out of” the vehicle’s use because the actions were unrelated to the vehicle’s use for transport.
Carroll v. QBE Insurance (2020): Injuries sustained after leaving a taxi were not covered by the taxi’s insurance because the injuries did not arise from the vehicle’s use once the passenger was no longer in the car.
Deregulation Act 2015
The Deregulation Act 2015 came into force on 30 June 2015 as part of the Government’s effort to reduce unnecessary regulations.
Certificates of insurance no longer need to be delivered before the policy is effective. A policy can now be legally effective before the certificate is delivered to the policyholder.
Cancellation of Policies: If a policy is cancelled mid-term, there is no longer a requirement for the policyholder to return the certificate within seven days, and failing to do so will not be a criminal offence.
A third party was injured by an uninsured driver but they were NOT covered under the Road Traffic Act 1988 as amended. This is because the accident occurred on a:
private road where there was a gate.
