Claimant Receives Settlement After 24 Years

In Katie Johnson (A Protected Party) v Secretary of State for Transport & Anor [2021] EWHC 745 (QB), Fordham J approved a confidential settlement between Ms Johnson and the Motor Insurers’ Bureau, who had been joined to the claim as an Interested Party for the purposes of settlement. The Claimant had been waiting almost 24 years for the full resolution of her claim.

That claim arose out of an accident which occurred on 16 July 1997, when the Claimant was only seven years old. She was knocked down by a ‘scrambler’ motorbike which was being driven across a paved area outside her home within a council estate. Unfortunately, she suffered a severe brain injury and serious orthopaedic injuries, which have had lasting effects on her capacity.

The driver of the motorbike was not insured, and so the Claimant sued the Motor Insurers’ Bureau in 2000. The MIB is the ‘insurer of last resort’ for anyone suffering injury as the result of negligence of an uninsured driver but will only provide compensation in certain circumstances. In 2000, the MIB defended the claim on two separate bases, namely that the accident had not happened on a ‘road’ as defined in the Road Traffic Act 1988 and that, in any event, the scrambler bike was not a ‘motor vehicle’ as defined in the Act.

Counsel’s advice was obtained as to the prospects of success of such defences based on the legal position at the time, and ultimately in 2001 the court approved a liability apportionment of 50/50. In 2009, there was further approval of a financial settlement amounting to £1.1 million, based on a ‘full liability’ valuation of £2.2 million.

There matters rested until, in 2014, the Court of Justice of the European Union reached its judgment in Vnuk v Zavarovalnica Trigalev (C-162/13). In that decision, the court clarified the scope of compulsory insurance cover under the Motor Insurance Directives such that, had the Directives been properly implemented via the Road Traffic Act 1988, the Claimant would have been fully compensated by the MIB. There would have been no tenable defence as to either the geographical or vehicular scope of the Act.

The current proceedings were therefore brought in 2019, seeking £1.5 million (the balance of the full settlement sum and interest) from the Secretary of State as Francovich damages due to the government’s failure properly to implement the Directives. This was possible because the Claimant’s lack of capacity meant that no limitation period had begun to run in respect of her case.

The Defendant denied any liability and raised a number of defences, including whether any breach of EU law had been sufficiently serious for Francovich damages to be recoverable, whether the Claimant did in fact lack capacity, whether the original settlement had been an unreasonable one because the MIB’s defence had always been hopeless, and whether in any event the Claimant had suffered no loss because compulsory insurance cover was only required up to 350,000 euros and she had already received more than that amount.

The last matter was due to be heard as a preliminary issue on 25 March 2021, but before that could occur the MIB applied to be added as an Interested Party to the claim and paid a confidential amount in damages and costs to the Claimant, bringing the claim to a successful conclusion following the approval of the High Court. As a result, the Claimant has finally been fully compensated for injuries suffered 24 years ago, in an accident which was not her fault.

To read a full copy of the judgment, please click here.

Matthew Sellwood was instructed by Potter Rees Dolan to act for the Claimant, led by Winston Hunter QC.

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