The Court of Appeal of Northern Ireland has upheld the legality of the compensation scheme for victims of untraced drivers under the Untraced Drivers' Agreement 2004, while cautioning that future cases may not satisfy EU law requirements unless comparable safeguards are provided for vulnerable claimants.
The appeal arose from a claim brought on behalf of a child who was injured as a two-month-old when his pram was struck by an unidentified vehicle in 2011. After initially awarding £500 in compensation, the Motor Insurers' Bureau (MIB) increased its offer to £1,500 following representations from the child's solicitors.
The appellant accepted the revised offer but sought court approval through a minor's petition, requesting that the compensation be invested in the Courts Funds Office until he reached adulthood. The MIB refused, insisting that the compensation be paid directly to the child's mother despite concerns about her ability to safeguard the funds. Judicial review proceedings followed, alleging that the 2004 Agreement breached the EU law principles of equivalence and effectiveness by failing to provide protections equivalent to those available where the responsible driver is identified. The appellant also argued that the scheme unlawfully restricted access to the courts and discriminated against victims of untraced drivers.
During the proceedings, the MIB increased its offer to £2,901.28, including interest, and undertook that, where no suitable adult could hold compensation on behalf of a minor, it would support an application for the Official Solicitor to be appointed guardian of the child's estate and would meet the associated costs.
Delivering judgment, Mr Justice Gerry McAlinden held that the scheme complied with the principles of equivalence and effectiveness. The Court found that the right to appeal compensation awards to an independent arbitrator provided safeguards comparable to judicial approval of settlements involving minors, noting the arbitrator's independence, expertise, ability to conduct oral hearings, and power to increase awards.
The Court also held that the mechanism for protecting compensation through the appointment of the Official Solicitor, together with the MIB's undertaking to bear the associated costs, provided an equivalent and effective means of safeguarding awards made to minors.
However, the Court stressed that future applications under the 2004 Agreement may not satisfy the principles of equivalence and effectiveness unless similar assurances and practical arrangements are made available. It further recommended that the MIB consider adopting a formal system similar to that operated by the Compensation Agency for criminal injuries claims, whereby compensation awarded to minors and persons under a disability is invested in dedicated accounts.
The Court also rejected the appellant's claims under Article 6 of the European Convention on Human Rights, finding that the Agreement's investigative and arbitration procedures provided sufficient procedural safeguards, and dismissed the discrimination claim.
The appeal was accordingly dismissed.