horwich farrelly

S152 RTA Declarations: Important Decisions

June, 27, 2019

The MIB has now advised its members that in the light of the European Court of Justice decision in Fidelidade-Companhia deSeguros SA v Caisse Suisse de Compensation and Others and the Road Peace Judicial Review, there will be amendments to section 152 of the Road Traffic Act 1988 (the Act) which will come into effect on 1 November 2019 (and irrespective of what may or may not happen as regards Brexit).

Although the wording for the amendment is not yet available, it is clear that its effect will be that from 1 November, insurers will no longer be able to rely on having obtained a declaration confirming their entitlement to void a policy after an accident and thus avoid being liable to third party victims under the Act. The changes do not affect reliance on any declarations obtained before the accident date (albeit these are exceedingly rare) and further do not affect any court declaration validly obtained before the implementation date.

It is therefore critical that insurers identify existing claims  where there are valid grounds for avoiding the policy on the grounds of misrepresentation  and thereafter take steps to obtain the declaration by no later than 31 October (merely issuing the proceedings for declaratory relief before that date will not suffice).

In anticipation of these changes, Horwich Farrelly has put in place provisions to maximise the prospects of processing such cases from instruction through to a declaration being granted (including the likely spike in  instructions being received). Inevitably, however, a date will come when there will not be sufficient time both to issue and process any application for a declaration. Time is therefore clearly of the essence.

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