The issue that I have to decide (as set out in the Part 8 claim form) is this: “which [of the claimant and the defendant] is liable to indemnify Floodlighting & Electrical Services Limited (hereinafter “Floodlighting”) in respect of Floodlighting’s liability to Aaron Keeble arising from an accident”. The claimant, Axa Insurance UK plc (“Axa”), argues that the defendant, Norwich Union Insurance Ltd (“NU”), is liable under a motor liability policy. NU argues that Axa is liable under an employer’s liability policy.

The crucial question is whether it was compulsory under the Road Traffic Act 1988 (“RTA 1988”) that Floodlighting be insured against their liability to Mr Keeble. If it was so compulsory, then NU is liable. If it was not, Axa is liable. This depends upon the proper interpretation and application of section 145(4A) of the RTA 1988. There is no question that it was compulsory that Floodlighting be insured in respect of its liability, if not under the RTA Act 1988, then under the Employers’ Liability (Compulsory Insurance) Act 1969 (“ELA 1969”).

The background against which this question arises is explained in a Statement of Facts and Matters which has been agreed between the parties. I can do no better than set out (as far as relevant) paragraphs 1 to 20 of it:

Part VI of the RTA 1988 provides that people must not use, or cause or permit any other person to use, a motor vehicle on a road unless there is in force in relation to such use a policy of insurance or other proper security. Section 145 of the Act specifies the requirements of a policy of insurance that complies with the statute, and section 145(3) provides, “Subject to subsection (4) below, the policy (a) must insure such person, persons or class of persons as may be specified in the policy in respect of any liability which may be incurred by him or them in respect of the death of or bodily injury to any person or damage to property caused by, or arising out of, the use of the vehicle on a road in Great Britain…”. Subsection (4) provides for an exception to subsection (3), that, “the policy shall not, by virtue of subsection (3)(a) above, be required – (a) to cover liability in respect of death, arising out of or in the course of his employment, of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment”. Subsection 145(4A) provides for a limited exception to that exception in subsection 145(4), and so brings a limited category of cases back within subsection 145(3): “In the case of a person (a) carried in or upon a vehicle, or (b) entering or getting on to, or alighting from a vehicle, the provisions of paragraph (a) of subsection (4) do not apply unless cover in respect of the liability referred to in that paragraph is in fact provided pursuant to a requirement of the Employers’ Liability (Compulsory Insurance) Act 1969”.

I have referred to subsection 145(4A) providing for a “limited” exception because of the words introduced by “unless”, which (by an exception to the exception to the exception) keep outside subsection 145(3) the case where “cover in respect of liability referred to in [paragraph 4 of subsection 145(4)] is in fact provided pursuant to a requirement of the Employers’ Liability (Compulsory Insurance) Act 1969”. However, the Employers’ Liability (Compulsory Insurance) Exemption (Amendment) Regulations 1992 were made in December 1992 and came into force on 1 July 1994, and made an exception to the circumstances in which the Employers’ Liability (Compulsory Insurance) Act 1969 require cover. The explanatory note to this Statutory Instrument explains, “The amendments made by these Regulations are consequent upon the changes made by Part VI of the Road Traffic Act 1988 by Regulation 2(3) of the Motor Vehicles Compulsory Insurance Regulations 1992”, which introduced subsection 145(4A) into the RTA 1988. The Regulations exempt an employer from any obligation imposed by section 1(1) of the ELA 1969 to insure against liability for bodily injury sustained by an employee when the employee is “(i) carried on or upon a vehicle, or (ii) entering or getting on to, or alighting from a vehicle, in the circumstances specified in that subsection and where that bodily injury is caused by, or arises out of, the use by the employer of a vehicle on the road; and the expressions “road”, “use” and “vehicle” have the same meanings as in Part VI of the Road Traffic Act 1988”.

The question whether subsection 145(4A) applies to Floodlighting’s liability to Mr Keeble depends upon whether he was at the relevant time a person “carried on or upon a vehicle”. The background of this provision is that on 14 May 1990 the Council of the European Economic Communities adopted the Third Directive on Motor Insurance (90/232/EEC) (the “Third Directive”). This required Member States to implement its requirements in national law by 31 December 1992, and the subsection 145(4A) was introduced into the RTA 1988 pursuant to that obligation. Article 1 of the Third Directive referred to a previous directive (72/116/EEC, the “First Directive”) that had obliged Member States to require compulsory motor insurance, and provided: “…the insurance referred to in [the First Directive] shall cover liability for personal injuries to all passengers, other than the driver, arising out of use of a vehicle…”.

I should refer briefly to the legislative history of section 145 of the RTA 1988. It elucidates why employers’ in this country generally have separate motor insurance policies and employers’ liability policies, why both cover liability to employees arising from the use of vehicles in different circumstances and the terms of such policies that are commonly used and that are exemplified in this case.

Between 1897 and 1948 the Workman’s Compensation Act 1897 and its successors provided for a statutory scheme of compensation payable by employers’ to employees where “injury by accident arising out of and in the course of the employment is caused to a workman”. It was decided by the House of Lords in St Helen’s Colliery Co v Hewetson, [1924] AC 59 that, upon the true interpretation of the expression “arising out of and in the course of the employment”, the scheme did not apply to an employee who was injured when travelling to work in a vehicle provided by his employer if he was not obliged to use the transport.

When compulsory motor insurance was introduced by the Road Traffic Act 1930, it was provided in section 36 that insurance was not required to cover (a) liability in respect of death or injury of a person “arising out of and in the course of his employment” by the insured or (b) “except in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, liability in respect of death of or bodily injury to persons carried in or upon or entering or getting on to or alighting from the vehicle at the time of the occurrence of the event out of which the claims arise”. (The effect of the second exception in (b) was to require cover for liability in respect of the death of or injury to workmen who were not protected under the Workman’s Compensation Act schemes.) These provisions were re-enacted in the Road Traffic Act 1960.

By this time, the Workman’s Compensation Act had been repealed with effect from 5 July 1948 by the National Insurance (Industrial Injuries) Act 1946. The 1946 Act replaced compensation paid by employers’ with various industrial benefits paid by the state and extended protection to persons carried in their employers’ vehicles, who would not have enjoyed protection under the Workman’s Compensation Act. However, the terms of policies for both motor insurance and employers’ liability insurance and the demarcation between them continued to reflect the old law: see Vandyke v Fender, [1970] 2 QB 292. (Insurance for employers’ liability was not compulsory until the ELA 1969 came into force with effect from 1 January 1972, but many employers’ had taken out insurance against their potential liabilities long before that.)

By the Motor Vehicles (Passenger Insurance) Act 1971 the second exception to compulsory liability insurance introduced by the 1930 Act was abolished. However, there remained the exception for liability in respect of death or injury of a person “arising out of and in the course of his employment” by the insured, and this was re-enacted in section 45 of the Road Traffic Act 1972 and then in subsection 145(4)(a) of the RTA 1988. Thus the position came about that if an employer was liable to an employee who was injured when being carried in the employer’s vehicle, that liability was covered by compulsory employers’ liability insurance if the employee’s travel arose out of and was in the course of his employment, but otherwise it was covered by the employer’s compulsory motor insurance. The question that arises in this case is how far the position is altered by the amendment to section 145 of the Road Traffic Act 1988 by the introduction of subsection 145(4A).

The key question is whether at the time of the accident Mr Keeble was being “carried in or upon a vehicle” within the meaning of the subsection. The word “carried” is not defined. Subject to other considerations to which I shall come shortly, the word is to be given its ordinary and natural meaning in the context in the subsection. To my mind, its ordinary and natural meaning connotes that the person is being transported or moved from one place to another. That is not to say that a person necessarily and immediately ceases to be “carried” once his vehicle ceases (temporary or permanently) to be in motion or that he cannot be said to be being “carried” when he has entered a vehicle and is waiting for it to start. That is because the question whether a person is being carried is not determined by looking at the position at a single point of time but taking a broader view of why he is “in or upon a vehicle”.

I am comforted in this view by this observation of Popplewell J (who had considerable experience in this area of the law) in R v Secretary of State for Transport ex p. National Insurance Guarantee Corp plc, (8 May 1996). Referring to section 203(4) of the Road Traffic Act 1960 (the successor to section 36 of the 1930 Act and a predecessor to section 145 of the 1988 Act), he said, “It was always accepted by the insurance industry and by the Bar who specialised in insurance work that “persons being carried in or upon or entering or getting on to or alighting from the vehicle” were synonymous in paragraph (a) with the words “passengers” in the proviso under (c)”.

Mr Dermod O’Brien QC, who represents Axa, submits that the verb “carry” does not necessarily connote transportation or movement. He exemplifies this by observing that the words, “the handbag was being carried by a lady” might in some circumstances connote that the lady was going somewhere or might in others connote that the lady was simply holding the bag. I agree that in some contexts “carry” can mean simply hold or bear without connoting movement. Nevertheless, I think that the primary and more usual usage of the word connotes movement. Indeed, on Mr O’Brien’s interpretation, the word “carried” has no real meaning or significance in the subsection. More importantly, here the context is carriage in or upon a vehicle, and this reinforces that “carried” as used in subsection 145(4A) bears (or “carries”) the implication of movement.

It cannot be disputed that when he was being driven by Mr Ward to the scene of the accident, Mr Keeble was being “carried in or upon the vehicle”. Although it is not expressly stated in the agreed Statement of Facts and Matters, the implication of the reference to the “first job” might well be that but for the accident he would again have been “carried in or upon the vehicle” after completing the job. But that is beside the point. I cannot accept that it makes a difference whether Mr Keeble was driven to the job or whether he made his own way there. After all, if Mr Ward had been the worker who went in the bucket to remove the decoration and Mr Keeble had acted as look out and suffered an accident when he was doing that, it could not have been suggested that Mr Keeble was being carried in or upon the vehicle.

I should add that although at or about the time of the accident Mr Keeble was raising himself in the bucket, it is not suggested by Mr O’Brien, and in my judgment rightly not suggested, that this in itself could properly be said to mean that he was being “carried” in or upon a vehicle.

However, Mr O’Brien has other arguments. He submits that if the word “carried” imports the notion of being carried from place to place, there is a mismatch between clause (a) and clause (b) of subsection 145(4A). A person might get into a vehicle to talk with another person without going anywhere. It is said that it would be odd if he falls within the subsection when he is getting into the vehicle and leaving it but not while he is sitting in the parked car having a conversation. I agree that it would be, and this lends some support for Axa’s interpretation of clause (a). However, in the end, I am not persuaded that clause (b), the most usual application of which would be to extend the period for which a transported passenger is covered by subsection 145(4A) (or at least to avoid any argument that he is not covered before the starts his journey or ceases to be covered before leaving the vehicle), should govern the interpretation of clause (a). It is not necessary for me to consider whether there might be an argument that the apparently unrestricted words of clause (b) should be interpreted as applying only to persons who had been or were to be “carried”, so as to restrict its application so to supplementing clause (a) (whatever the meaning of “carried”). The experienced counsel who appeared before me knew of no authority on that point.

Mr O’Brien also argues that the history of the legislation regarding compulsory motor cover shows that the intention of subsection 145(4A) was to bring it about that any employee in or on his employer’s vehicle who suffers injury arising out of or in the course of his employment caused by or arising out of the use of the vehicle on the road should fall within the same insurance regime, and to avoid the anomaly that such people might, depending upon the precise circumstances of the accident, be protected by a different regime of compulsory insurance, what I shall call the “motor insurance regime” and what I shall call the “employers’ liability regime”. I am not persuaded of the force of this point. Mr O’Brien acknowledges that it is impossible to interpret section 145(4A) as covering liability for all injuries to employees suffered in the course of employment and arising from use of the employer’s vehicle on the road. Although Mr O’Brien did not accept that Jack J was right about the interpretation and application of section 145(4A), I consider that Miller v Hales, [2006] EHWC 1529 (QB) illustrates this. So too in this case, if, when he was acting as look out or checking the plug, Mr Ward had suffered injuries from something falling from the bucket when the boom was struck, he would not have been within the regime of subsection 145(4A). It would be an anomaly if Mr Keeble and Mr Ward were to be covered by different regimes when working together on the same job. If the lorry had broken down and Floodlighting had sent out an employed mechanic to repair it, would the regime governing liability to him depend upon whether he was able to do the repair by standing in the road and working under the bonnet or whether he was inside the vehicle? These illustrations justify the submission of Mr Roger ter Haar QC, who represents NU, that the subsection does not adopt a “cover-all” approach.

I come to the consideration that subsection 145(4A) was introduced in order to implement article 1 of the Third Directive. I readily accept the importance of this when construing the subsection. National courts should construe national legislation in conformity with European directives if this is possible, particularly in the case of national legislation that is designed to implement a directive. The European Court said this in Joined Cases C-397/01 to C-403/01 Pfeiffer [2005] ECR 1307 at para 119: “... it must be concluded that, when hearing a case between individuals, a national court is required, when applying the provisions of domestic law adopted for the purpose of transposing obligations laid down by a directive, to consider the whole body of rules of national law and to interpret them, so far as possible, in the light of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued by the directive.” See too Case C-212/04 Adeneler Judgment of 4 July 2006 at para 124, and the domestic cases of Litster v Forth Dry Dock, [1990] 1 AC 546 esp. at p.559E per Lord Oliver and Webb v EMO, [1993] 1 WLR 49 esp. at p.59F per Lord Keith.

However, I do not consider that article 1 of the Third Directive provides support for Axa’s interpretation of subsection 145(4A) because I am unable to accept that the article is directed to circumstances such as those of this case. The Directive is concerned with “the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles”, and the recitals include this: “Whereas there are, in particular, gaps in the compulsory insurance cover of motor vehicle passengers in certain Member States; whereas, to protect this particularly vulnerable category of potential victims, such gaps should be filled”. In case C-537/03 Candolin [2005] ECR I-5745, the European Court stated that article 1 of the Third Directive is intended to distinguish between only two categories of people, the driver and the passengers: “By providing that insurance for civil liability in respect of the use of motor vehicles covers liability for personal injuries to all passengers other than the driver, Article 1 of the Third Directive lays down only one distinction between the driver and the other passengers…”.

Mr O’Brien argued that, since the Directive recognises only these two categories of people, the inference is that all persons in or on a vehicle other than the driver are referred to as “passengers”, passengers being an expression that is not defined in the Directive. I am unable to accept this argument. Rather it seems to me the inference is that the Directive is concerned with use of vehicles by drivers and passengers, that is to say when vehicles are being used to transport (or carry) people. The implication of the expression “the driver” is that the vehicle is being driven.

I should refer to two points made by Mr O’Brien in support of this part of his argument. First, he cites the opinion of Advocate General Stix-Hackl in Case C-356/05 Farrell (opinion dated 5 October 2006). The central issue in that case turned on the meaning of the word “passenger” in article 1 of the Third Directive. The injured party, Ms Farrell, had been travelling in the rear of a van which was neither designed nor constructed to carry passengers in the rear and was not fitted with rear seats. At the time of the accident Ms Farrell was sitting on the floor of the rear of the van. Advocate General Stix-Hackl considered that a broad interpretation of the word “passenger” was appropriate given the wording and purpose of the Directive. Her starting point appears to have been that it was not disputed by the Republic of Ireland in their argument that “the concept of passenger includes any person ‘in or on’ a vehicle”. She was of the view that no restrictions should be added to the concept of “passenger”, in particular in view of the need to preserve uniformity of European law. This case was not concerned with whether “passenger” included persons in or on the vehicle when it was not being used. When using the phrase “any person ‘in or on’ a vehicle”, Advocate General Stix-Hackle was simply citing a concession made on the facts of the case. It rips the observation out of context to apply it to the facts of this case.

Secondly, Mr O’Brien rightly observes that the different language versions of a Community provision are all equally authoritative and may have to be compared in interpreting the provision: see Case 283/81, CILFIT, [1982] ECR 3415. He goes on to observe that, while the English version of the Directive uses the term “passenger”, the equally authoritative Spanish language version uses the term “ocupantes” rather than “pasajeros”. It is suggested that “ocupantes” is a wider term that could cover occupiers or occupants as well as passengers. I am not equipped to evaluate the nuances of the choice of words in the Spanish text, but in any case I am not persuaded that the comparison with only one of the other versions of the Directive provides any real support for Axa’s contentions. (While the word “ocupantes” might not connote motion, I observe in passing that the Spanish equivalent of the term “the use of a vehicle” is “la circulacion de un vehiculo”: it is tempting to suppose that this might connote movement of the vehicle.)

However, Mr O’Brien’s argument that the European Directives require that liability to persons such as Mr Keeble be covered by insurance does not depend entirely upon an argument that he was a passenger within the meaning of article 1 of the Third Directive. He advances a more general argument, and I hope that I do justice to it by setting out the essential reasoning as follows:

The cumulative effect of the relevant European Directives in force at the time of the accident to Mr Keeble is such that Member States were required to have in place national legislation to ensure that civil liability in respect of the use of motor vehicles is covered by insurance.

The insurance that is compulsory by the law of a Member State (including but not limited to the insurance required of the Member State in order to comply with the Directives) must attract a single premium and comply with other requirements of the Directives.

The United Kingdom has not fulfilled the requirements of the Directives. For example, it has not ensured that insureds are charged a single premium in respect of compulsory insurance for liability in respect of the use of motor vehicles.

Nevertheless, the National Court must interpret the national law that the United Kingdom has introduced so as to minimise the extent to which the United Kingdom has failed to comply with the requirements of the Directives.

In order to do so, the court should interpret national legislation so as to maximise the extent to which liability to victims of accidents arising from the use of vehicles is governed by the motor insurance regime.

To this end, the court should interpret the provisions of subsection 145(4A) so as to cover liability to persons such as Mr Keeble.

The reasoning supposes, I think, that the Third Directive assumed and built upon a structure for compulsory and essentially comprehensive insurance for liability arising from the use of vehicles, or at least from accidents arising from their use. (The recitals to the first Directive refer to the objective of the Treaty creating the European Economic Community to create a common market and the essential condition of freedom of movement of goods and persons to achieve this, and go on to say that “the only purpose of frontier controls of compulsory insurance cover against civil liability in respect of the use of motor vehicles is to safeguard the interests of persons who may be the victims of accidents caused by such vehicles; whereas the existence of such frontier controls results from disparities between national requirements in this field.” From the start, the focus of these Directives was upon liability to the victims of accidents, and not, say, upon any liability for deterioration of goods in transit.)

I accept the starting point of Axa’s argument if stated in those terms, although there is more room for debate about what the Directives required and require. Article 3.1 of the First Directive provides: “Each Member State shall, subject to Article 4, take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance. The extent of the liability covered and the terms and conditions of the cover shall be determined on the basis of these measures”. (There is no suggestion that article 4 bears upon the questions that I have to consider.) Thus, it was left it to Member States “to determine the damage covered and the terms and conditions of compulsory insurance against civil liability”: see Case C-348/98 Mendes Ferreira, [2000] ECR I-6711 at para 26. Nothing was specified about what civil liabilities were to be insured except that they were liabilities “in respect of the use of vehicles”.

The Second Directive on Motor Insurance (84/5/EEC) (the “Second Directive”) contains provisions about what the insurance referred to in the First Directive should cover. It has a recital that reads, “Whereas, in particular, the extension of the obligation of insurance cover to include liability incurred in respect of damage to property is justified”. Article 1 provides that, “The insurance referred to in Article 3(1) of Directive 72/166/EEC shall cover compulsorily both damage to property and personal injuries”, and goes on to specify minimum amounts for the amount of cover in respect of both personal injury and damage to property.

Article 2 of the Second Directive requires Member States to take the necessary measures to prevent exclusions from cover of use of vehicles of unauthorised drivers and other such exclusions in so far as they related to “claims by third parties who have been the victims of accidents”. It goes on to permit exclusions in two cases: where the person voluntarily entered a vehicle that he knew was stolen and that vehicle caused the damage or injury; and where the victim may obtain compensation from a social security body. Article 3 prevents members of the family of the insured person, the driver or other people civilly liable from being excluded from insurance by their relationship.

The European Court decided in Case C-129/94 Bernaldez [1996] I-1829 that the only circumstances in which a compulsory insurance contract may exclude a victim from its protection are those identified in article 2 of the Second Directive: “… Article 2(1) of the First Directive is to be interpreted as meaning that, without prejudice to the provisions of Article 2(1) of the Second Directive, a compulsory insurance contract may not provide in certain cases … the insurer is not obliged to pay compensation for the damage to property and personal injuries caused to third parties by the insured vehicle” (at para 24).

However, this does not decide what insurance is required by the Directives, as can be seen from Case C-158/01 Withers v Delaney [2002] I-8301. The victim was travelling in the back of a vehicle where there was no seating and which was not designed to carry passengers. The question was whether Irish law, which did not make compulsory insurance for liability to such victims, complied with European law. The Court rejected the complaint of non-compliance, saying (at para 18) that it followed from the grounds of the judgment in Mendes Ferreira (cit sup) that “in the sphere defined by the First and Second Directive, Member States remain competent to determine the extent of passenger cover, on condition that passengers who are members of the family of the insured, the driver or any other person liable should be afforded protection equivalent to that of other third party passengers”.

One of the recitals to the Third Directive recites that the Second Directive “reduced considerably the disparities between the level and content of compulsory civil liability insurance in the Member States”, but that significant disparities still existed. It went on to recite that “motor vehicle accident victims should be guaranteed comparable treatment irrespective of where in the Community accidents occur”, that “there are, in particular, gaps in the compulsory insurance cover of motor vehicle passengers in certain Member States” and that “to protect this particularly vulnerable category of potential victims, such gaps should be filled”. Hence article 1 of the Directive dealt with insurance of liability to passengers. The implication is that in other cases the Member States continue to have competence to decide upon the extent of compulsory cover, subject to the restriction recognised in Bernaldez (cit sup). To suggest that article 1 of the Third Directive affords additional protection to persons other than passengers leaves unexplained why passengers are specifically referred to in article 1 and why the need to protect them as a particularly vulnerable group is identified in the recitals. This is confirmed by the decision of the European court in Case C-356/05 Farrell (Judgment dated 19 April 2007), another case that concerned the Irish law about persons carried on a vehicle but not in a proper seat. The court rejected the argument of the Irish government that it was for the Member States to define which persons travelling in vehicles are to be considered as passengers for the purposes of the Third Directive and that the Directive does not require Member States to ensure that compulsory insurance is in place in respect of personal injuries suffered by persons travelling in any part of a vehicle which has not been designed with seating accommodation. It decided that the Third Directive meant that the Irish law was no longer in accordance with the requirements of European law, because (at para 23), since article 1 of the Third Directive “extends insurance cover to all passengers, Ireland’s argument can be accepted only in so far as persons carried in a vehicle that was not designed for their transport could not be classified as “passengers”.

Thus, it seems to me that the approach of European Directives – except in cases specifically covered, including that of passengers with which article 1 of the Third Directive is concerned – has been to leave it to Member States to determine the extent of compulsory insurance cover in respect of civil liabilities arising from motor accidents. While it must be recognised in light of Bernaldez (cit sup) that this is subject to limitations upon exclusions from policies and while it could properly be said that this creates some uncertainty about how far this impinges upon that freedom of Member States to determine the extent of compulsory cover, I cannot accept that this affects the fundamental approach of European law that Member States determine the extent of compulsory insurance.

However this might be, NU have two answers to this part of Axa’s submission. First, Mr ter Haar submits that these Directives are primarily concerned with making compulsory insurance cover for civil liability for damage and injury resulting from accidents. Whatever the answer to the issue that I have to decide, the United Kingdom legislation does require such insurance, whether it be compulsory under the motor insurance regime or under the employers’ liability regime. The two regimes together provide a comprehensive scheme for compulsory insurance of the relevant liabilities, whatever the precise line of demarcation between them.

Mr O’Brien does not accept that is a sufficient answer. He says that it matters which regime applies in any particular case, and that in order to maximise the extent to which the United Kingdom complies with the requirements of the Directives and to minimise the extent to which the United Kingdom is in breach of them, the court should interpret domestic legislation so as to bring liabilities as far as properly possible under the motor insurance regime.

First, he relies upon article 2 of Third Directive. This provides as follows: “Member States shall take the necessary steps to ensure that all compulsory insurance policies against civil liability arising out of the use of vehicles:

Mr O’Brien argues that if liability to persons in Mr Keeble’s position is governed by the employers’ liability regime, this means that the cover is not paid for by the insured’s premium for the insurance required by the motor insurance regime, and so there is non-compliance with article 2.

I am unable to accept this argument for two reasons. First, the simple fact is that under United Kingdom legislation employers’ are obliged to insure in respect of the use of motor vehicles under two regimes. If the implication of having two regimes is that insureds will pay two premiums, that might (subject to what I say below) be said to be contrary to what is contemplated by article 2. However, the fact remains that United Kingdom legislation does not require that there be a single regime, and this position is neither mitigated nor aggravated by having the insurance required to cover liability in any particular circumstances fall into one regime rather than the other.

Secondly, as Mr ter Haar points out, the number of premiums that an insured pays is not governed by whether there is a single or a dual regime of compulsory cover. Insurers could offer cover under both regimes for a single premium and, per contra, they could charge separate premiums for insurance relating to different parts of a single regime (for example, for liability in respect of personal injuries and liability in respect of damage to goods).

None of this discussion should be taken to indicate that I consider that the United Kingdom is falling short of its obligations under article 2 of the Third Directive because there is no legislation that requires a single premium be paid to insurers in respect of full compulsory insurance for civil liability in respect the use of motor vehicles. I do not have to decide that question and decline to do so. I note, however, that the purpose, or a purpose, of article 2 is expressed in the recitals to the Third Directive in these terms: “Whereas, in the interests of the party insured, every insurance policy should … guarantee for a single premium, in each Member State, the cover required by its law or the cover required by the law of the member State where the vehicle is normally based, when that cover is higher”. The article, I think, is directed primarily at protecting insureds being charged high premiums to obtain cover for liability incurred in particular Member States (which might inhibit freedom of movement of goods and persons) and it might well not bear the wider implications implicit in Mr O’Brien’s submission.

In support of his submission that it matters which regime applies in any particular case Mr O’Brien also relies upon article 5 of the Third Directive and article 3 of the Fourth Directive (Directive 2000/26/EC). These require that when there is civil liability to the victim of an accident arising from the use of a vehicle, the victim should enjoy other benefits ancillary to the compulsory insurance of the liability to him. Mr O’Brien’s point is that if the liability to a victim is governed by the employers’ liability regime rather than the motor insurance regime, the victim does not, under United Kingdom legislation, enjoy those ancillary benefits, and that thus the extent to which the United Kingdom has failed to ensure that victims enjoy these ancillary benefits required by the Directives is minimised by interpreting United Kingdom legislation so that, as for as is properly possible, liabilities are regarded as governed by the motor insurance regime.

Article 5 of the Third Directive reads as follows: “Member States shall adopt the necessary measures to ensure that the parties involved in a road traffic accident are able to ascertain promptly the identity of the insurance undertaking covering the liability arising out of the use of any motor vehicle involved in the accident.” This requirement is satisfied under the motor insurance regime by the provisions in section 154 of the RTA 1988 requiring insurance details to be provided on demand. Regulations 5, 6 and 7 of the Employers’ Liability (Compulsory Insurance) Regulations, 1998 require that the certificates of employers’ liability insurance be displayed at the employer’s premises and such certificates or the policies be produced as required by an authorised inspector. I am not persuaded that these provisions fall short of satisfying the requirements of article 5, and I reject the submission that this informs the interpretation of subsection 145(4A).

I come to article 3 of the Fourth Directive. As the recitals make clear, one of the purposes of the Directive was to bring it about that in some circumstances “the injured party” has “a direct right of action against the insurance undertaking of the responsible party”. Article 3 provides, “Each Member State shall ensure that injured parties referred to in Article 1 in accidents within the meaning of that provision enjoy a direct right of action against the insurance undertaking covering the responsible person against civil liability”. The persons referred to in article 1 were persons injured in accidents that occurred in a Member State other than that of residence of the insured party and that were caused by the use of vehicles insured and normally based in a Member State.

In the United Kingdom, the European Communities (Rights against Insurers) Regulations 2002 were introduced in order to give effect to article 3 of the Fourth Directive. They provide that “an entitled party” might “without prejudice to his right to issue proceedings against the insured person, issue proceedings against the insured which issued the policy of insurance relating to the insured vehicle, and that the insurer shall be directly liable to the entitled person to the extent that he is liable to the insured person”. The Regulations went further than required by the Directive in that it included residents of the Member State where the accident occurred. However, what matters for the purpose of Mr O’Brien’s argument is that “insured person” was defined in the Regulations as meaning a person insured under a policy of insurance fulfilling the requirements of section 145 of the RTA 1988. No direct right to proceed against the insurer is given to a victim if the insurance of civil liability to him is governed by the employers’ liability regime. Thus, Mr O’Brien is able to argue that if the motor insurance regime does not cover liability to a victim of an accident in the circumstances of Mr Keeble, then the United Kingdom would not have fulfilled its obligation to ensure that such a victim has a direct right of action against the employers’ insurers to the prejudice of a victim who is resident in a Member State other than the United Kingdom.

Thus far I accept Mr O’Brien’s argument. The next question is whether the provisions of the Fourth Directive of 16 May 2000 and the United Kingdom legislation implementing it, which was contained in a statutory instrument that was made on 10 December 2002 and came into force on 19 January 2003, can affect the interpretation of subsection 145(4A), which was introduced by a statutory instrument made on 2 December 1992 and coming into force on 31 December 1992. As was made clear by the European Court in Case C-106/89 Marleasing SA v La Comercial Internacional de Alimentacion SA [1990] ECR 4135 at para. 8, “…in applying national law, whether the provisions in question were adopted before or after the directive, the National Court called upon to interpret it is required to do so, as far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter…”. The implication of this is that when the National Court is hearing a case between individuals which involves applying a directive and, adopting the approach explained, for example, in Pfeiffer (cit sup) at para. 119, is considering “the whole body of rules of national law and [interpreting] them, so far as possible, in light of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued by the directive”, it does not matter that the provisions of national law antedate the directive.

Thus, I accept Mr O’Brien’s argument that the interpretation of section 145(4A) which AXA urge would, in this particular respect, enhance the extent of compliance by the United Kingdom legislation with European Law.

There is another aspect to this part of Mr O’Brien’s argument. Among the principles governing the questions of interpretation in relation to European Law there is a general principle of equality that requires that similar situations shall not be treated differently unless differentiation is objectively justified: see cases 17/76 and 16/77, Ruckdeschel, [1977] ECR 1753 at esp p.1769. Relying upon this principle, Mr O’Brien argues that there can be no objective justification for differentiating by reference to whether they were in a vehicle on a journey or whether they were in a parked vehicle, victims of accidents arising from the use of motor vehicles in terms of provisions taken to ensure that there was effective insurance in respect of civil liability to them. Nor can there be any objective justification for so differentiating between victims in parked vehicles depending upon whether they were an employee of the person liable to them. The effectiveness of the insurance is enhanced if it is under the motor insurance regime not only because of article 3 of the fourth directive but also because of protection provided by the Motor Insurance Bureau arrangements. Therefore victims of accidents in the circumstances of Mr Keeble should benefit from having liability to them governed by the motor insurance regime rather than by the employers’ liability regime.

I do not accept this argument. Undeniably in the United Kingdom there is the dual regime of compulsory insurance. The issue between AXA and NU is not about whether there is to be a line of demarcation between the two regimes but where it is to be drawn. Wherever it is drawn, there will be differences of treatment that cannot be objectively justified. If the line were drawn where AXA urge and Mr Keeble and Mr Ward had both been injured when working together on the same job there could, to my mind, have been no possible justification for liability to Mr Keeble being governed by the motor insurance regime and that to Mr Ward being governed by the employers’ liability regime. Indeed, I would regard that as a more striking case of persons in similar circumstances being treated differently than the differences that Mr O’Brien argues should be cured by adopting AXA’s interpretation of subsection 145(4A).

These considerations, therefore, do not entirely answer Mr O’Brien’s argument that the court should interpret national law so as to maximise the extent to which liability to victims of accidents arising from the use of vehicles is governed by the motor insurance regime so as to miximise the extent to which the United Kingdom has complied with the requirements of the Directives. However, they emasculate it and reduce it to a narrow point about the protection required by article 3 of the Fourth Directive for victims who are not resident in the Member State where the accident occurred.

Mr ter Haar, however, has another, simpler, argument. He argues that, even taking a properly generous view of the purposive (or teleological) approach to interpretation that is to be adopted on an issue such as this, nevertheless subsection 145(4A) simply is not capable of bearing the meaning that AXA would give it. I consider that Mr ter Haar is right about this. Despite Mr O’Brien’s argument, the dispute ultimately depends upon whether AXA’s interpretation of the subsection is a possible one, and I do not think that it is. Certainly I am not prepared to accept what I consider to be, at best, a distinctly strained interpretation of the subsection to the end not of ensuring that United Kingdom legislation complies with the requirements of the Directives, but in order somewhat marginally to reduce the extent of any non-compliance, the more so when, as I see it, that is at the cost of aggravating the anomalies arising from the dual regime of compulsory insurance. I add that no authority has been cited to me in which the Court adopted the approach to statutory interpretation urged upon me by Mr O’Brien in order to reduce, but not to avoid, such non-compliance.

Therefore, despite the careful and attractive arguments advanced by Mr O’Brien, I conclude that the word “carried” in subsection 145(4A) is to be understood to be referring to a person being transported, and Floodlighting’s liability to Mr Keeble is insured by Axa under the employers’ liability policy.

I add that Mr O’Brien invited me to consider whether questions of European law that bear upon the interpretation of subsection 145(4A) should be referred to the European Court for determination. In view of the reasoning that leads me to the conclusion that Axa is liable in respect of Floodlighting’s liability to Mr Keeble, it is not necessary or appropriate to do so.