INSURANCEMotor car - third party cover while driving another person's car - cover remaining valid after insured car soldDodson v Peter H Dodson Insurance Services (a firm): CA (Schiemann and Mance LJJ and Smith J): 12 December 2000The claimant's car was insured in his name under a policy, effected by his parents who were insurance brokers, which included cover for third party liability while he was driving another person's car with the owner's consent.The policy required notification of particulars of any 'replacement' vehicle within seven days, but did not specify any time limit for acquiring such replacement.

The claimant sold the car, but his parents advised him that the third party cover would continue to be valid.

While driving his mother's car with her consent he was involved in an accident.

His insurers asserted that the policy had lapsed after he had sold his own car without obtaining an immediate replacement.

The mother's insurance did not cover the claimant driving her car, but her insurers accepted liability under the Road Traffic Act 1988 in respect of the third party claims.The mother's insurers sought to recover from the claimant personally.

The claimant brought an action seeking an indemnity from his parents' firm in respect of his mother's insurers' claim against him, on the basis that his liabilities had been caused by their wrong and negligent advice.The judge held that the claimant's policy remained valid throughout the insurance period whether or not the claimant retained the insured car.

The claimant appealed.Benet Hytner QC, who did not appear below, and David Zucker (instructed by Mills Kemp & Brown with Hinchliffe Baker, Barnsley) for the claimant.

Brian Doctor QC (instructed by Squire & Co) for the defendant firm.Held, dismissing the appeal, that, although authorities on differently worded policies had held that third party cover did not survive the disposal of an insured vehicle, the point was ultimately one of construction of the policy; that the policy was ambiguous and should not be forced into an artificial mould dictated by legal authority; and that, since the policy specified no period within which a replacement vehicle had to be acquired, the claimant's insurers had to be taken to have accepted that cover continued after disposal of the insured car.