No escape from need for motor insurance cover



Supreme Court

Neutral citation (2012) IESC 44

Judgment was delivered by Mr Justice Nial Fennelly on July 23rd, the Chief Justice Mrs Susan Justice Denham, Mr Justice Adrian Hardiman, Mr Justice Donal O’Donnell and Mr Justice Liam McKechnie concurring.


In response to a question sent by the Circuit Court on a case stated, the court answered No to the question as to whether, under the Road Traffic Act 1961, the reference to a vehicle insurer being liable for injury caused by the negligent use of a vehicle includes liability for the insurance company to pay damages to a third party under section 76 of that Act.


Keith Donnelly was convicted in the District Court, following a plea of guilty, of driving without insurance. He was driving his father’s car with the latter’s permission. His father was insured with AXA Insurance and his mother was a named driver on the policy, but he was not.

He appealed the conviction to the Circuit Court, arguing that the charge should be dismissed on the grounds that an approved policy of insurance was in force, and thus the insurer was liable for any injury or damage caused to a third party.

His counsel also argued that under European Commission directives, an insurer was precluded from relying on statutory provisions or contractual causes, such as restricting the use of a vehicle to named persons, to refuse to compensate third-party victims of an accident. The insurer was liable for any third-party injury, notwithstanding any breach of contract that may have occurred.

The prosecution argued that an insurer was entitled to restrict cover to named users of the vehicle insured and the legislation requiring insurance cover did not envisage that the insured should be able to rewrite the insurance contract after the event.

Judge Thomas Teehan reserved his decision and referred two questions to the Supreme Court. These were whether the reference to a

vehicle insurer being liable for injury caused by the negligent use of a vehicle included liability to pay damages to a third party who claimed against the owner under section 76 of the Act; if the answer to this question was Yes, can liability be avoided on the basis of a provision in the contract limiting cover to named persons, in the light of the EC directives on insurance.


Mr Justice Fennelly said that the legislation as amended, including by statutory instrument to give effect to European directives, was “a somewhat unsatisfactory patchwork of provisions, some of them clearly outdated”.

The essential question was whether the reference to “vehicle insurer” included a case such as this, where an approved policy of insurance exists but it did not cover the driving of the person who was asked to produce his insurance.

Section 56 of the Act was a penal provision, prohibiting the driving of a vehicle in a public place unless one of a number of conditions are met. These included where “a vehicle insurer . . . or an exempted person” would be liable for injury, or where there is in force an approved policy of insurance.

The appellant was arguing that here the term “vehicle insurer” included AXA Insurance and was not limited to the person who took out the insurance policy. Counsel argued that the provision was ambiguous on this point and, given that section 56 was a penal provision, it should be construed strictly.

Counsel for the DPP argued that the section clearly referred to a situation where the “vehicle insurer” would be liable in tort for injuries sustained by a third party.

Mr Justice Fennelly said he did not think that AXA Insurance would have been liable for any such injury.

“The injury envisaged here is the injury suffered by a third party as a result of negligent driving. The hypothetical negligent driving is that of the appellant or, as I have noted, even the named driver.”

A motor insurance policy was a policy of indemnity, he said. The liability of an insurer was to indemnify a driver who caused injury by negligent driving. The duty was owed to the insured, not to the injured party.

Section 68 of the Act put the matter beyond doubt, by providing for a certificate to be issued by a vehicle “certifying that the vehicle is owned by him”.

The language was clear and without ambiguity and lead inevitably to a negative answer to the first question. The second therefore did not arise.

* The full judgment is on