chapter 1

Question 1

Particular Risks:

Answer 1

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.

Question 2

Fundamental Risks:

Answer 2

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.

Question 3

Peril:

Answer 3

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).

Question 4

Nervous Shock case law
(caused by witnessing an accident due to someone’s negligence.)

Answer 4

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.

Question 5

Onus of Proof

Answer 5

claimant must prove that negligence occurred.

defendant must disprove negligence

Question 6

Res Ipsa Loquitur

Answer 6

The accident speaks for itself (eg drunk driving=negligence)

Question 7

Strict Liability:

Answer 7

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).

Question 8

strict liability case law

Answer 8

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.

Question 9

What is Vicarious Liability?

Answer 9

When one person (e.g., an employer) is held responsible for the actions of another (e.g., an employee).

Question 10

Employer Responsibility:

Answer 10

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.

Question 11

Corporate Manslaughter and Corporate Homicide Act 2007:

Answer 11

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.

Question 12

Contributory Negligence

Answer 12

If a claimant is partly at fault for their own injury, the compensation they receive can be reduced to reflect their share of responsibility.

Question 13

O’Connell v. Jackson (1972):
(Contributory Negligence)

Answer 13

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.

Question 14

Smith v. Finch (2009):
(Contributory Negligence)

Answer 14

A cyclist not wearing a helmet could be held partly responsible for their injuries, though this hasn’t been tested in court.

Question 15

Phethean-Hubble v. Coles (2011):
(Contributory Negligence)

Answer 15

A cyclist was deemed negligent due to reckless riding, not for failing to wear a helmet.

Question 16

Limitation Act 1980

Answer 16

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.

Question 17

Latent Damage Act 1986:

Answer 17

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.

Question 18

Theft Act 1968:

Answer 18

Defines theft as dishonestly taking property with the intent to permanently deprive the owner.

Question 19

Riot Damages Act 1886

Answer 19

provided recovery rights for damage to buildings but excluded vehicles unless they were inside a building.

Question 20

Riot Compensation Act 2016:

Answer 20

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.

Question 21

Road Traffic Acts (RTA):

Answer 21

The Road Traffic Act 1930 introduced compulsory motor insurance.
The Road Traffic Act 1988, with subsequent amendments, is the current version.

Question 22

RTA’s Seven Parts:

Answer 22

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.

Question 23

Claims Frequency calculation:

Answer 23

Frequency =
NumberofAccidents/ VehicleYears

Example:
846 accidents/500vehicleyears
=169.2%

Question 24

Average Claim Cost calculation:

Answer 24

AverageClaimCost=
TotalCostofClaims/NumberofClaims

Example:
£1,368,964/ 275
=£4,975.32.

Question 25

Part I – Principal Road Safety Provisions Key Elements:

Answer 25

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.

Question 26

Section 143

Answer 26

makes it an offence to use or allow the use of a motor vehicle without insurance.

Question 27

definition of road in caselaw

Answer 27

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.

Question 28

Vnuk Case (2014):

Answer 28

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.

Question 29

vnuk case post brexit

Answer 29

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.

Question 30

Section 144 – Exemptions from Compulsory Insurance

Answer 30

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.

Question 31

Section 145 – Requirements for Policies of Insurance

Answer 31

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.

Question 32

case law that 'arise out of' the use of the vehicle

Answer 32

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.

Question 33

Deregulation Act 2015

Answer 33

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.

Question 34

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:

Answer 34

private road where there was a gate.