The High Court has ruled that FBD Insurance plc cannot rely on an insurance policy exclusion to avoid covering a claim by a passenger injured while travelling in the rear of a van without passenger seating.
David Smith was injured on June 19, 1999 when a vehicle owned by Philip Meade and driven by Patrick Meade collided with another vehicle. Smith had been travelling in a part of the vehicle which had not been designed or constructed to carry seated passengers.
FBD had issued the compulsory motor insurance policy covering the vehicle. It declined to indemnify the owner in respect of Smith’s injuries, relying on a policy term providing passenger cover only for one passenger seated on a fixed seat at the front.
Irish road traffic legislation then permitted such an exclusion. However, Smith argued that the position was incompatible with European motor insurance directives requiring compulsory cover for personal injuries suffered by all passengers other than the driver.
Mr Justice Michael Peart noted that the relevant Third Motor Insurance Directive had not been properly transposed into Irish law by the date of the accident, despite the deadline for doing so having passed.
The court accepted that the directive could not itself impose obligations directly on a private insurer such as FBD. It nevertheless held that Irish legislation had, so far as possible, to be interpreted consistently with the wording and purpose of EU law.
The judge concluded that the statutory exclusion for passengers travelling in parts of vehicles without passenger seating had to be disregarded. It followed that the corresponding exclusion in FBD’s policy was void and could not be used to deny indemnity.
The ruling determined only that preliminary insurance issue. It did not decide whether Patrick Meade was negligent, the amount of Smith’s damages, or whether Ireland might separately face liability for failing to transpose the directive on time. Those matters remained outside the determination.