On 12 May 1969, BBC screened the first of a two-part episode of Z-Cars titled ‘Hit and Run’. The timing of that was very apt as the Motor Insurers’ Bureau (MIB) had just a few weeks earlier signed the very first Untraced Drivers Agreement which came into effect on the first of May that year.

Since its conception in 1946 MIB, a private not-for-profit organisation, funded by motor insurers, had been compensating victims of uninsured drivers under the terms of an agreement with the Minister. It had in fact, on a voluntary basis, also been making payments to victims of ‘hit and run’ (or untraced) drivers for some years prior to the signing of the 1969 Agreement.

Almost half a century later, in January 2017 the latest in a series of Untraced Agreements was signed. The new arrangements come into force for accidents occurring on or after 1 March 2017 and several important changes have been made from the previous 2003 Agreement.

Principles of the Untraced Drivers Agreement

Before delving into the detail of the new Agreement it is worth looking at exactly what the Untraced Agreement is and how the scheme operates.

A victim who has suffered injury or damage and cannot trace a person responsible has, in law, no route to compensation in the sense of an ordinary tort claim; there is no person against whom a claim can be brought and judgment obtained. The only route available is to make an application to the MIB under the terms of the Untraced Drivers Agreement.

This is not a ‘claim against the MIB’ in the sense that that a claim is made ‘against’ a tortfeasor; rather, it is an application to be considered under the terms of the Agreement which itself is a private contract between MIB and the Secretary of State.

The distinction is important because it leads to a fundamental feature of the Untraced Agreement, where MIB is obliged to investigate applications and present the evidence back to the claimant together with a reasoned decision. MIB is obliged to act like a court in its consideration of the facts and evidence; it is not ‘defending’ a claim against it and must act in an inquisitorial fashion in gathering and considering the evidence. The claimant is obliged to co-operate with MIB’s investigation and the Agreement contains various measures aimed at guarding against fraud.

In essence, the Agreement provides for MIB to compensate victims who would have succeeded in a claim had the responsible motorist been identified. It follows the Uninsured Drivers Agreement in that claims are payable only where the loss is one which would be required to be covered by the compulsory insurance requirements of the Road Traffic Act 1988.

This inquisitorial process has operated since the original 1969 Agreement and today is effectively the method by which the UK State fulfils its European law obligations which, in this regard, first appeared in the Second Motor Insurance Directive (84/5/EEC) which came into effect in 1988.

Key changes

So what’s new for 2017 and why has it been necessary and desirable to make some changes? The reasons for the changes are varied but a large proportion of them have been made to improve the system for claimants and to make the Agreement easier to follow for claimant solicitors and MIB. Other changes come about from legal developments over the 14 years since the last Agreement was made or from a need to modernise the wording and recognise current practice. These are the same reasons that led to the introduction of a new Uninsured Drivers Agreement in 2015 which was well received.

Those familiar with the 2003 Untraced Drivers Agreement will notice firstly a new look and feel to the new Agreement document. Wording has been simplified and the layout has changed. The Agreement is now organised into five parts to make reading and understanding the Agreement easier. After a series of definitions and setting the effective date of 1 March 2017, the following sections appear:

• General terms and conditions
• Procedure
• Appeals and dispute resolution
• Costs
• Miscellaneous

The following key changes are worthy of note.

• Approval of award (clause 14) — the new Agreement now includes a comprehensive process for claims by minors and protected parties using arbitrators to ‘approve’ awards. The process is mandatory and provides for the arbitrator to determine whether the agreed award represents a fair settlement.

• Reporting to police (clause 10) — this replaces the previous provisions which had differing time limits depending on the type of claim. The new Agreement requires a claimant, where requested by MIB, to report matters to the police unless they have already done so. Failing to stop and report an accident is a serious criminal offence and as such it is important to maintain this requirement which is also there to discourage false or fraudulent claims.

• Terrorism exclusion — this is now removed. However, because of the remit of the Agreement, compensation will only be payable where the loss arises in circumstances required to be covered by the Road Traffic Act. In this respect the Agreement is now similar to the wording of many motor insurance policies.

• Significant Personal Injury(SPI) (clause 7) — this is only relevant in cases where a claim for damage to property is made and the vehicle causing that damage is unidentified. MIB is only obliged to pay property damage claims in these circumstances if it has compensated any claimant in respect of an SPI arising out of the accident. The definition has now changed meaning less severe injuries will be classed as a SPI.

• Damage to uninsured vehicles — this exclusion, which was in the previous Agreement and allowed MIB to avoid paying a claimant for damage to a vehicle when the claimant was uninsured, has now been removed. Whilst MIB remains of the view that it is wholly inappropriate to expect premium paying motorists to fund these claims (via the MIB), the Government felt this change was necessary as its hands were tied by the terms of the Directive.

• Contribution to costs (clause 21) — an entirely new scale of costs contributions has been introduced. The amount payable continues to reflect the fact the Untraced Agreement is an inquisitorial scheme with MIB being responsible for investigating and gathering the evidence.

The 2003 Agreement was overly generous in relation to small claims, in particular those that would otherwise be brought under the Small Claims Track (against an identified defendant) which would not normally attract costs. The 2017 Agreement remedies that situation and at the same time provides a much higher contribution for claims of utmost severity.

In addition, there is now a provision for a further contribution to be paid in exceptional circumstances.

• Excess (clause 1) — the excess has increased from £300 to £400 which remains within the €500 limit set by the Directive. The excess still only applies in certain cases i.e. where damage to property is payable in cases where the offending vehicle is unidentified and there has been payment in respect of an SPI.

Other changes will be welcome by claimants such as; clearer rules on the payment of interest; an ability to arbitrate a liability only decision; some flexibility over appeal time limits; formal recognition of settlement by way of periodic payments. MIB has published a Correlation table on its website along with the Agreement to allow users to easily see what is new compared to the 2003 Agreement.

Preventing ‘hit and run’ driving

Sadly it is not possible to view all 803 episodes of Z-Cars and it appears that the 1969 ‘hit and run’ episode has been lost, but I would like to think that it was aimed at highlighting the issue which is certainly a serious problem in today’s society. According to Department for Transport data over 12% of all reported personal injury accidents are caused by ‘hit and run’ drivers. 

The University of Leicester has recently published its final report in a study, commissioned by MIB, looking at the reasons why drivers leave the scene of an accident and what might be done to improve the situation. MIB is now looking further at this research in terms of preventative measures but in the meantime will continue its mission to compensate victims fairly and promptly under the terms of its Agreements.

Modern Claims Mag - A version of this article appeared in Modern Claims Magazine, 3 April 2017.