Moore v Secretary of State for Transport

In these proceedings Kenneth Dudley Moore sues the Secretary of State for Transport for damages on the ground that the 1972 MIB Untraced Drivers Agreement fails to implement the Second Motor Insurance Directive. The claimant was badly injured by an untraced driver in a motor accident in 1995 and complains about the inadequacy of the award made to him under the terms of the 1972 Agreement. He says he should have been awarded interest and costs and a much larger amount by way of damages for future loss of earnings. Eady J struck out the claim on the ground that it was statute barred, but went on to hold that he would have given summary judgment against the applicant on the damages part of his claim in any event.

Hughes LJ (on the papers) granted the applicant permission to appeal the judge’s decision about limitation but refused permission to challenge his conclusion about the merits of the damages claim. Mr Seabrook QC has renewed the application for permission to appeal this part of the judgment before us this morning.

The 1972 Agreement gives an injured party a right of appeal to an arbitrator against any award made by the MIB. The applicant exercised this right and the arbitrator awarded him over half a million pounds. He assessed future loss of earnings on the basis that the applicant would never work again as an actor but that he had some residual earning capacity. This conclusion followed from his view that the applicant was suffering from a degree of functional overlay which was susceptible to cure, so that when the anxiety and uncertainly of the claim were over his condition would improve and he would make himself a new life outside the acting profession.

Now it is said that the only medical evidence before the arbitrator which could have led him to this conclusion was a medical report dated 30 March and a letter dated 5 June 1998 from Professor Beaumont, a consultant neuropsychologist, which had been obtained by the MIB. In fact, the report was written after the letter and backdated in circumstances which I do not need to go into now. The report concluded by saying that there was a significant degree of exaggeration in the applicant’s presentation; the Professor’s earlier view had been that the exaggeration was slight. As he recorded in the letter, however, this view had changed after he had seen video surveillance evidence of the applicant obtained by the MIB. In the letter he said that it was now his view that with appropriate psychological support the applicant had a better prognosis of returning to near normal function and reentering gainful employment.

The 1972 agreement provides that the arbitrator should decide the appeal on the documents submitted to him. Clause 15 requires the MIB to send to the arbitrator:

“The application made by the applicant, a copy of their decision thereon as notified to the applicant and of all statements, declarations, notices, undertakings, comments, transcripts, particulars or reports furnished, given or sent under this agreement either by the applicant or any person acting for him to MIB or by MIB to the applicant or person so acting.”

The MIB submitted the report and the letter, among a large number of other documents which this claim has generated to the arbitrator. They informed the applicant’s then solicitors that this is what they had done and copied “the relevant bundle” to them. But the applicant now says he did not see the letter and therefore had no opportunity to comment upon it.

As this was an application for summary judgment, the judge rightly proceeded on the assumption that neither the applicant nor his then advisors had received a copy of the letter and that the way in which the report had been backdated was unfair to the applicant. He reminded himself of what the ECJ had said about the 1972 agreement in the case of Evans [2003] ECR I-14447 and in particular paragraph 56 where, having commentated on the scheme generally, the ECJ said:

“It is important to stress that the procedure established must guarantee that, both in dealings with the MIB and before the arbitrator, victims are made aware of any matter that might be used against them and have an opportunity to submit their comments thereon.”

The judge then asked himself what procedural safeguards could or should have been put in place which would have given the applicant the opportunity to comment on the letter and enable his advisors to discover that the report had been backdated. At paragraph 52 he said:

“It cannot be right that there will be a case for Francovich damages (based upon supposedly inadequate transposition of the terms of the Second Motor Insurance Directive) every time a claim is treated unfairly or in a way which falls short of the Directive’s aspirations (as interpreted, for example in the Evans case).”

As counsel succinctly put it, the applicant’s case:

“‘… fails to draw a distinction between a possibly erroneous failure to carry out a compliant procedure and a non-compliant procedure.’”

At paragraph 54 he said:

“On the present facts I find it difficult to envisage exactly what the Secretary of State was supposed to have put in place in order to achieve the guarantee for which Mr Seabrook contends. How could the system and structures be designed so as to avoid the unfairness here relied upon? When I asked Mr Seabrook this question in argument, the only suggestion he made is that bundles of documents supplied to applicants should be properly indexed. While it is clearly desirable as a matter of good practice, the point rather lacked conviction.”

The judge went on to say that there was also a problem about causation: how could it be shown that the applicant’s comments would have resulted in the arbitrator reaching a different conclusion, let alone the conclusion for which it is contended, namely that the applicant would have been awarded £600,000 more for future loss of earnings?

Undoubtedly, causation is a very considerable obstacle to this part of the applicant’s claim but I do not think that summary judgment can be justified on this ground alone.

It is the first of the judge’s reasons which has troubled me: what procedures should have been established to ensure that the applicant could have commented upon the letter? That is, I think the critical question. The MIB obviously intended to provide the applicant’s advisers with this document. If, as one must assume, they inadvertently failed to do so, how could this error have been prevented?

In paragraph 53 to 55 and 58 of its judgment in Evans the ECJ gave general approval to the scheme set up by the 1972 agreement as a simple mechanism for compensating victims. It cannot therefore be contended that there is any requirement for an oral hearing at which one could expect the error to have discovered. The arbitrator was to decide the appeal on the documents and the procedure followed in this case was designed to ensure that the applicant would see all that the arbitrator had in order to make his decision. The fact that it did not work in this case, as the judge said, does not mean that there was anything wrong with the procedure.

Mr Seabrook has put his submissions today rather wider than at least the judge records in his judgment. They are to the effect that one has to bear in mind that this is not an adversarial process; it is an inquisitorial process in which the MIB makes the running; and in those circumstances he contends that an applicant is entitled to see not just the reports which the MIB gather for the purpose of their investigation of a claim and any appeal to an arbitrator, but all relevant material which has led to the obtaining of such reports. Had that happened in this case it would have become apparent that the report submitted to the arbitrator had been backdated, and it would probably also have become apparent that if the papers had not contained the 5 June letter, that was a document which had been inadvertently omitted from those provided, it would have been obtained by the applicant or his advisors and they would have been able to comment on it.

These submissions have persuaded me that this is now a point which should be considered by the court when it considers the limitation issue upon which the applicant already has permission. I am not saying anything about whether they are likely to succeed and I am not saying that if this was the only point upon which one was considering granting permission that I should have granted it but, given that the matter is to be heard anyway by this court and given that this is a point of some importance upon which the views of this court may be welcomed by those who seek to suggest that these and similar agreements do not comply with the directive. I would grant permission on what is ground 2 as well as ground 1 for these matters to be considered together at a hearing which will last about a day.

I agree. Mr Seabrook has persuaded me that this is not just a question as to whether the procedure provides for the claimant to be given the same documents as are put before the arbitrator. If it were just that one would surely conclude that, even if that is not explicit, it is at any rate implicit, and a claimant has his remedies under section 68 of the Arbitration Act in a case of this kind. But in the broader way that he has sought to put it this morning -- and it may be queried whether it was put so broadly before the judge, since, as my Lord said, it is not been recorded as such -- I am persuaded that it is possible to argue that in a case where a single expert’s evidence is put before the arbitrator in what is an inquisitorial rather than an adversarial procedure, all matters which have historically gone into the making of that expert’s report should be disclosed to an applicant before the arbitrator comes to his conclusion.

I therefore agree with my Lord, Lord Justice Tuckey that we should give permission to appeal in this case.