The Court of Appeal has adjourned an insurer’s appeal while seeking guidance from the Court of Justice of the European Union on whether a policy exclusion for an unseated van passenger can be set aside under EU law.
The appeal concerns a €3 million settlement paid to David Smith, who was seriously injured in 1999 while travelling in the rear of a van near Tullyallen, Co Louth. The van had no fixed seating for rear passengers. FBD Insurance had declined to indemnify the vehicle’s owner, relying on a policy clause limiting passenger cover to one person seated on the fixed front seat.
In 2009, the High Court ruled that the exclusion should be treated as void under an interpretation of Irish law consistent with an EU motor insurance directive. Smith and FBD then settled the claim, and the High Court approved the settlement. The proceedings against the van’s driver and owner, Ireland and the Attorney General were adjourned generally with liberty to re-enter.
FBD appealed the High Court ruling. It argued that the national legislation could not be interpreted to remove the exclusion and that applying the directive directly against a private insurer would be impermissible. Ireland and the Attorney General argued that the provisions should be interpreted consistently with EU law or, if that was impossible, disapplied.
In a judgment delivered on 16 December 2016, Mr Justice Gerard Hogan said the relevant provisions could not be interpreted consistently with the directive without contradicting their clear wording. He considered that the provisions excluding passengers without fixed seats had to be disapplied, but said it remained unresolved whether that would also require the court to disapply the exclusion in FBD’s policy. That question could determine whether FBD was obliged to indemnify the defendants or could seek to recover the settlement from the State.
The Court of Appeal proposed referring that issue to the CJEU and invited counsel to make submissions on the wording of the reference. It ordered that the appeal stand adjourned pending the CJEU’s determination. The court did not decide whether the policy exclusion was unenforceable or resolve FBD’s appeal.