ECJ says FBD should not pay out on van injury claim

An Irish insurance company should not be required to pay out for a claim arising from legislation wrongly transposed by the State from an EU directive, an opinion from the Luxembourg-based European Court of Justice’s advocate general has found.

The opinion, usually followed by the full EU court when it rules, finds that an EU directive cannot have direct retrospective effect on a an insurer’s legal obligations. The case, , David Smith v Patrick Meade, Phillip Meade, FBD Insurance plc,Ireland, Attorney General, concerned liability by FBD for injuries sustained in an uninsured context.

The ECJ had previously found that the State had failed to correctly transpose a directive that provides that compulsory insurance is to cover liability for personal injuries to “all passengers, other than the driver”. However, Irish legislation did not implement this requirement correctly and excluded compulsory insurance in respect of passengers for whom no fixed seats had been provided.

In 1999, Mr Smith, travelling in the back of a van, was very seriously injured when it was involved in an accident. Mr Smith brought proceedings against the driver and owner of the vehicle.

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In its defence FBD pleaded that the policy of insurance taken out by the second named defendant did not cover the plaintiff’s loss because the vehicle in question was a van and that the plaintiff was travelling as a passenger in the rear of the van where there were no seats for passengers

The insurance policy written by FBD insurance for the van specified that “passenger cover only operates for the one passenger seated on the fixed seat in front of the vehicle.” This conformed to the requirements of national legislation in force at the time that the policy was concluded. FBD insurance therefore refused to pay out.