By : Henry Slack
Henry Slack provides an update on the new MIB agreement.
The latest Untraced Drivers' Agreement came into effect on 14th February 2003, covering claims involving accidents caused by an untraced driver from this date onwards. There are a number of new features in the agreement that are highlighted in this article.
Limitation/Scope of the Agreement
This area of the Agreement is covered at Clause 4. Personal injury claims must be submitted within three years unless the injury is not immediately apparent, when limitation will extend to fifteen years. Any applicant must submit a claim as soon as is practicable after they become aware or ought to have become aware of injury.
Compensation for property damage is a new feature of the Agreement granting compensation for damages with an excess over £300 (Clause 1). For damage claims limitation is nine months, regardless of whether there is a personal injury claim. Where damage is not immediately apparent there is again an extension of time limits but only for two years. The same condition of submitting a claim as soon as practicable applies (Clause 4).
In the case of a personal injury claim
The claimant must report the accident to the police within 14 days or as soon as reasonably possible after the index accident.
For property damage the reporting period is reduced to five days or as soon as reasonably possible, regardless of the possible existence of a personal injury claim.
Proof of report to the police is required and clause 4 sets out the form: an acknowledgement from the relevant Police Force showing the crime or incident number.
Limit on Liability/Compensation
Essentially, the MIBs requirement to provide compensation will only arise if there is no other body making payment. Other than in limited circumstances (see Clause 6) if compensation has been received that exceeds payment the MIB would make, it has no further liability. MIB is also entitled to take account of, and reduce its payment accordingly, where compensation of payment has been received that is less than the MIB's overall liability.
When assessing loss, the MIB will use the broad tortious principles. Any loss of earnings claim can be reduced by earnings received whether or such payments are required to be repaid (Clause 8).
Interest on any award will be paid at the prevailing court rate and will become payable one month after the MIB receives the police report. However if the MIB has failed to seek and obtain that report promptly interest shall run from one month after the date it would have received it had it acted promptly (Clause 9). How such a "promptness" is determined is clearly open to interpretation.
Exclusions from the Agreement
There are a number of ways in which a claim may be excluded from the agreement. These are set out in detail at Clause 5. In brief they are:
- Where there is only damaged property and no associated personal injury;
- When the applicant knew or ought to have known that the vehicle was stolen or uninsured or was being used in the course of or for the furtherance of a crime or for escaping lawful apprehension.
- Claims arising from acts of terrorism, subrogated claims, claims already met by an insurer or property damage where the vehicle was not insured under the Road Traffic Act 1988.
MIB's liability where a wrongdoer is identified
On occasion, an accident can be caused by more than one defendant. In such a case, if the claimant has identified one, upon obtaining judgment that named defendant becomes liable for the whole of defendant liability - the named defendant picks up the untraced driver's liability as well as his own. This alleviates the MIB of liability.
However, if judgment is not met in 3 months the MIB will grant an award but only equal to the untraced driver's liability, it will not pick up the named defendant's liability.
Prospective applicants should be aware that if they have not obtained judgment against an identified person, but simply agreed settlement, the MIB will treat this as full and final settlement of all liability and refuse all liability in the claim (Clause 13).
Notification of decision and payment of an award
The MIB will investigate a claim and provide the applicant with a written statement setting out all the evidence obtained during the investigation and its finding of fact relevant to its decision. Any interim or final award will be accompanied with a similar statement and will contain reasons for reaching the decision plus a statement of the amount of the award (Clause 16).
Structured and provisional awards can be made either with the MIB's agreement or following an order of an arbitrator (Clause 17). Further details as to what procedure should be followed in both the case of "structured settlements" and provisional awards are set out in full detail in Clause 17.
Appeal Procedure and Oral Hearings
The applicant, having received a decision, a proposed structured settlement or provisional award, has up to six weeks to appeal against the MIB's decision. Within seven days the MIB can either apply for an arbitrator, or, by giving notice to the applicant investigate the claim further. If the appeal relates to the level of the award or contributory negligence then the MIB can, on notice to the applicant, ask the arbitrator to consider whether or not there should be any award made at all. Following the receipt of the MIB's notice/report, the applicant has six weeks either to comment or withdraw the appeal.
If the applicant does not withdraw the appeal then the procedure is adopted - the MIB must apply for an arbitrator within seven days of receiving notice to continue. The applicant can apply himself or herself where the MIB fails either to investigate or apply.
The arbitrator has wide powers that allow him or her to order the MIB to carry out further investigations and submit a written report both to themselves and the applicant. The applicant has four weeks after receipt of this report to submit written observations to both the MIB and arbitrator.
Having considered these submissions, the arbitrator sends the MIB and applicant the proposed decision. Following receipt the parties should respond within 28 days, unless they agree an extension. Failure to respond or failure by either party to serve a copy of his/her response on the other party is deemed acceptance of the arbitrator's proposed decision. If the proposed decision is not accepted then further comments or evidence may be submitted or either party can request an oral hearing. If the applicant submits fresh evidence with their written comments, the MIB may within 28 days, investigate the evidence, submit written observations and request an oral hearing. The arbitrator has discretion to permit the MIB more time beyond 28 days.
The parties can be represented at the hearing and witnesses may be called to give evidence. The Arbitrator has a wide range of powers available to:
- Determine questions
- Make awards
- Remit the claim back to the MIB for further investigation
- Make costs orders
The arbitrators decision will be in writing.
If the arbitrator finds that the applicant was unreasonable in making an appeal or asking for an oral hearing then he can order cost penalties. If an award higher than the original MIB offer is made, the MIB will pay costs. Costs at an oral hearing are limited to £500 per half day where the applicant is represented unless the arbitrator orders otherwise (Clauses 18 to 24).
The Schedule to the Agreement sets out guidelines regarding the MIB's contribution towards the applicant's legal costs. The contributions are:
- Where the award does not exceed £150,000 the fee will be 15% of the award subject to a minimum fee of £500 and a maximum of £3,000.
- Where the award exceeds £150,000 the fee will be 2% of the award.
Thereafter VAT, reasonable disbursements and the cost of any oral hearing are added.
"Reasonable disbursements" are defined in the Schedule as reasonable expenditure/ disbursements incurred on the applicant's behalf if they have been agreed in advance (MIB's agreement not having been unreasonably withheld). Counsel's fees are included only where the applicant is a minor or under a legal disability.
The new Agreement provides the applicant with many new benefits and is a much more generous scheme, along the lines of the Criminal Injuries Compensation Scheme. However, there are always pitfalls that exist for unwary or unorganised. This article cannot replace a careful reading of the scheme itself. The Scheme, guidance notes and assistance for those making applications are all available on the website www.mib.org.uk. For any practitioner dealing with a relevant case there is no substitute to having the Agreement to hand and following the guidance available.