Tracing improvements to driver's agreement

Mark Kiteley looks at the latest revision of the Motor Insurers' Bureau untraced driver's agreement and finds that it offers additional protection to the public and an increase in the costs that may be claimed by solicitors

Solicitors may not have noticed the introduction of the latest revision of the Motor Insurers' Bureau (MIB) untraced driver's agreement, in force since 14 February 2003.

Certainly it has arrived with not so much a bang as a whimper, and no doubt while eyes were grimly turned to issues such as 5% success fees, referral fees and predictable costs.

In fact, the agreement does rather go against the grain in that it may even be considered good news.

It offers not only an additional level of protection to the public, but also a notable increase in the level of costs that may be claimed by solicitors.

The MIB was established in 1946 and administers the guarantee fund, through two agreements between the bureau and the secretary of state for transport.

The first, the uninsured driver's agreement, will compensate those involved in accidents involving an uninsured motorist.

The second, the untraced driver's agreement, as its name suggests, will compensate those involved in hit-and-run type cases.

Perhaps the most significant change with this revision is that the untraced driver's agreement has now been brought into line with the uninsured agreement, in that a claim may be made for damage to property.

Not limited to the cost of the repairs or write-off value of the vehicle, the bureau has confirmed that it will also entertain claims for hire car charges.

A 300 excess applies.

One can imagine the scheme being abused - who is to say that an anonymous lorry driver, and not a moment of carelessness on your part, caused the damage to your brand new Mercedes? Before reaching for an application form, note clause 5.

To protect the bureau's position, clauses 5(1)(a) and 5(3) combine to exclude payments in respect of property damage where there is not an 'identified vehicle' (as opposed to an identified driver).

In other words, there must be proof that a qualifying incident has taken place.

An example of the provision in practice would be an accident involving a stolen vehicle - the thief may well attempt to abandon the vehicle following the accident, but the vehicle itself will be identified, even if the thief is not.

The scheme has a number of other qualifying provisions.

Under clause 3(c)(ii), the police must be notified within five days in respect of property claims, and under (i) within 14 days in the case of injury claims.

Here looms a threat to practitioners taking instructions at an early stage.

Beware seeing the client within five days of the accident, and failing to advise that the client reports the accident to the police.

Not only will the MIB avoid liability, but also the door may be opened to a negligence action.

The applicant must produce satisfactory evidence of having reported to the police in the form of an acknowledgement showing the crime or incident number, and be able to demonstrate that he has co-operated with the police in respect of any investigations.

An application under the untraced drivers agreement must be made in respect of an injury claim within the familiar three-year period (clause 3(a)(i)), but note that a property claim must be brought within nine months (clause 3(b)(ii)) whether or not it forms part of a more substantial injury claim.

Furthermore, there can be no claim after two years for property damage, or 15 years for injury, irrespective of whether the applicant may be reasonably expected to have been aware of the loss within that time.

There is only limited scope for date of knowledge arguments.

To the usual exclusions of the applicant being carried in a vehicle which he knew to be stolen, uninsured and so on, is added injury caused by or in the course of, an act of terrorism.

A sign of the times, perhaps.

Predictable costs or fixed fees are nothing new to practitioners dealing with the untraced driver's scheme.

Under the 1996 agreement, a fixed payment of 150 plus VAT was made in respect of profit costs.

The nominal nature of the sum was justified on the basis that the MIB itself would deal with most of the work.

Under clause 7(1), the 'MIB shall, at its own cost, take all reasonable steps to investigate the claim made in the application'.

However, under the most recent agreement the payment increases from 150 plus VAT to a minimum of 500 plus VAT.

That figure rises on a sliding scale of 15% of the amount awarded, to the dizzy heights of 3,000 for an award of 20,000 or more.

Disbursements will be paid if they are incurred with the agreement of the MIB, although counsels' fees are payable only where the applicant is a minor or under a disability.

An additional 500 will be paid per half day in the event of an oral hearing.

It would appear on reading the agreement that the minimum payment is payable even in cases relating to property damage alone, and irrespective of the value of the claim.

Thus, there does not appear to be any reason why 500 plus VAT costs could not be claimed in circumstances where no costs would have been paid following an accident involving an identified driver in the small claims track.

That is unlikely to be the intention and it will be interesting to see how that particular aspect of the scheme works in practice.

Mark Kiteley is an assistant solicitor at Birmingham-based Blakemores Solicitors and is a member of the Law Society's personal injury panel