Reckless motorist with no cover crashes in ruin (9, 6)

Occasionally it feels like I am looking at a cryptic crossword clue when deciphering an opinion. Such was my apprehension when I first sat down in a cosy armchair to read Lady Haldane’s recent opinion in Whyte v Arthur [2025] CSOH 47, available here. This was the latest outstanding procedural chapter arising from a road traffic accident in June 2017.

The original litigated case involved a claim from a passenger (Whyte) against the driver (Arthur) of a vehicle involved in an accident. Other parties involved in the case were a second defender (UK Insurance) and a third party (Methven) in whose name a policy of insurance had been taken out for the vehicle involved in the incident. This most recent decision was due to a legal dispute between those parties – i.e. UK Insurance and Methven – as to the insurer’s right to seek recovery of sums that they had paid out to Mr Whyte.

The trouble was that Methven had, when taking out the policy of insurance, made false representation to UK Insurance as to a number of matters, including that she owned the car when she did not. When this was discovered by UK Insurance they sought to avoid the policy and, indeed, obtained a declarator from the Court of Session to confirm that the policy was void and of no effect from inception. This declarator was obtained after the accident, but before the action Whyte v Arthur was raised.

UK Insurance settled Whyte’s claim in their role as a Motor Insurer’s Bureau (MIB) Article 75 insurer. They then attempted to recoup the sum that they had paid to Whyte from Methven, relying on section 151(8) of the Road Traffic Act 1988 (the 1988 Act). The problem was, according to Methven, that UK Insurance had entirely avoided the policy of insurance when they obtained the declarator from the Court of Session. Accordingly, when they paid out to Whyte, they did not do so in terms of s151 of the 1988 Act, as there was deemed to be no policy of insurance. Rather, they had paid out in their capacity as Article 75 Insurers on behalf of the MIB.

Lady Haldane decided in favour of Methven, that UK Insurance did not have grounds to recover sums paid to Whyte under s151 of the 1988 Act. This was in line with the Court of Appeal in England & Wales in Colley v Shuker & Ors [2021] 1 WLR 1889 where Stuart-Smith LJ summarised the issue in similar circumstances. As the matter revolves around interpretation of a UK statute, the decisions of the  appellate courts in England & Wales are helpful.  To paraphrase the decision in that case and apply it to the present one, pursuant to the provisions of sections 151 and 152 of the 1988 Act the declarator obtained released UK Insurance from any obligation arising under section 151 of the 1988 Act to make payment to Mr Whyte in respect of any award of damages he may subsequently obtain against Ms Methven.

One point worth noting is that the current legislation in s152(2) of the 1988 Act requires the declarator to be obtained before any accident occurs, so these precise circumstances may not perhaps be repeated. What is also unanswered is whether there may have been a recovery avenue open to UK Insurance through their role as Article 75 insurers, rather than trying to mix and match by settling the claim under Article 75 and thereafter seeking recovery under s151 of the 1988 Act.

The answer to the crossword clue is, of course, “uninsured driver”.