The Supreme Court answered “No” to a stated case concerning whether an insurer’s liability to third-party claimants meant a driver was insured when he was not covered by the vehicle’s policy. The Court did not address the separate question about European insurance directives because it arose only if the first answer was affirmative.
Keith Donnelly had pleaded guilty in the District Court to driving without insurance. The conviction was made by order on 28 February 2008. He appealed to the Circuit Court, where legal arguments about the Road Traffic Act and European Union law led Judge Teehan to refer two questions to the Supreme Court under section 16 of the Courts of Justice Act 1947.
The case arose from Donnelly driving his father’s car with consent at Fairgreen, Carlow, on 27 January 2007. The car was insured under a policy issued to his father, Eugene Donnelly, naming Eugene and his wife as drivers. Keith Donnelly was not named. After a Garda stopped him, he produced the insurance certificate at Athy Garda Station; it did not cover his driving.
Donnelly’s counsel argued in the Circuit Court that the insurer could still be liable to compensate an injured third party, despite a policy restriction to named drivers, and that the offence therefore was not made out. The prosecution submitted that the contract could restrict cover to named drivers and that the legislation did not allow the insured to change its terms after an incident.
The Supreme Court considered whether the phrase “vehicle insurer” in the opening part of section 56(1) of the Road Traffic Act 1961 covered an insurer that had issued a policy for a car but whose policy did not cover the person driving it. Justice Fennelly said an ordinary motor insurance policy indemnifies the insured for that person’s liability; it does not make the insurer directly liable to the injured third party. The section’s reference to an insurer being liable for injury instead concerned direct legal liability, such as an insurer’s liability for negligent driving of a vehicle it owned.
The Court therefore answered the first question in the negative. It did not decide whether the European directives prevented an insurer from relying on a named-driver restriction, and made no ruling on the separate operation of section 56(1)(a). The judgment states that the second question did not arise. It gives no further order on the Circuit Court appeal or the original conviction.