Untraced Drivers’ Compensation for Minors: Arbitration and Fund-Protection Measures Can Satisfy EU Equivalence/Effectiveness (Fact-Sensitive)

1. Introduction

This appeal concerned a judicial review challenge brought on behalf of a minor claimant injured in 2011 when an unidentified (untraced) vehicle collided with his pram. The claim proceeded under the Northern Ireland Untraced Drivers’ Agreement dated 1 June 2004 (the “2004 Agreement”) between the Motor Insurers’ Bureau (“MIB”) and the Department for Infrastructure (“DfI”).

The core dispute was not primarily about liability (which is handled administratively under the Agreement), but about procedural protections for minors: (i) whether EU motor insurance law required access to a court to approve a minor’s settlement (or an equivalent safeguard), and (ii) whether there had to be a mechanism to protect/invest the award until majority.

The appellant alleged that the 2004 Agreement, as operated, breached: (a) EU principles of equivalence and effectiveness in light of Directive 2009/103/EC (the “2009 Directive”); (b) the right of access to a court under Article 6 ECHR; and (c) Article 14 discrimination (with Article 6 and/or A1P1). Rooney J dismissed the claim; the appellant appealed.

2. Summary of the Judgment

• The Court of Appeal dismissed the appeal and affirmed Rooney J’s decision; the application for judicial review was refused.
• The court held that, on the facts of this case, the 2004 Agreement’s mechanisms—particularly the availability of an independent arbitrator and the MIB’s proposals to secure the award (including using the Official Solicitor and the Court Funds Office)—were sufficiently equivalent and effective to satisfy EU law for a minor’s claim.
• The court rejected the argument that EU law (or common law) conferred a general direct cause of action to sue MIB as surrogate tortfeasor in this context.
• Article 6 and Article 14/A1P1 grounds were not made out, particularly given multiple available routes to court oversight (judicial review; Arbitration Act challenges; contractual enforcement routes under the Agreement).
• Important guidance (obiter) was given: future cases under the 2004 Agreement (and potentially the 2024 Agreement) may fail the EU tests unless MIB offers protections akin to those provided here, especially regarding representation and safeguarding/investment of awards.

3. Analysis

3.1 Precedents Cited and Their Influence

(a) Evans v the Secretary of State for the Environment, Transport and the Regions (Case C-63/01)

Evans is the central EU authority. The court treated it as determinative on several themes:

• Minimum procedural requirements: EU motor insurance directives require that victims must be able to apply directly to the compensation body and receive a reasoned response, but EU law does not prescribe a single uniform national procedure.
• Equivalence/effectiveness test: domestic procedural autonomy is bounded by the principles that EU-rights procedures must be no less favourable than comparable domestic actions (equivalence) and must not make EU rights virtually impossible or excessively difficult to enforce (effectiveness).
• No need to place compensation body “on the same footing” as an insured driver defendant: at para [28] of Evans, the CJEC made clear that meeting Directive requirements does not require the compensation body to be treated as a civil defendant equivalent to an identified insured tortfeasor. The Court of Appeal used this to resist attempts to import a full “ordinary litigation” model into untraced-driver compensation.
• Direct application ≠ right to sue: the court relied on Evans to distinguish a right to make a claim to MIB from a right to sue MIB in ordinary civil proceedings as if it were the tortfeasor.

(b) Morrison v MIB [1987] NI 204

This first-instance Northern Ireland decision (Carswell J) held there was no “cause or matter” permitting an originating summons against MIB to obtain court approval of a compromise under the untraced scheme. The appellant argued EU developments undermined Morrison, but the Court of Appeal held the premise failed: Evans did not support a direct cause of action to sue MIB, so Morrison was not displaced.

(c) Farrell v Whitty (No.2), C-413/15 and Lewis v Tindale [2019] EWCA Civ 909

These authorities supported the proposition that Directive obligations may be enforced against certain private-law bodies tasked with public functions (an “emanation of the state” concept). However, the court used them carefully: they informed the scope of enforceability of Directive rights against bodies like MIB, but they did not convert the untraced-driver scheme into a full surrogate-defendant litigation model, nor did they create a freestanding EU right to court approval of minor settlements.

(d) R (Roadpeace Ltd) v Secretary of State for Transport [2017] EWHC 2725

The Roadpeace challenge (England & Wales) argued that untraced agreements failed to protect minors/protected parties equivalently to CPR Part 21 court-approval protections. Ouseley J held the pre-2017 agreement “just about” satisfied the EU principles, focusing on MIB’s investigative duties, independent arbitration, and Arbitration Act review. The Court of Appeal treated Roadpeace as relevant but cautioned against over-reliance, given Evans’s guidance on comparators and the distinctive structure of untraced claims (not adversarial litigation against an identified defendant).

(e) Dunhill v Burgin [2014] UKSC 18

The appellant relied on Dunhill to argue that minors and protected parties require court approval of settlements as a matter of policy, reflected in Northern Ireland’s Order 80 rule 8 RCJ (NI) 1980. The Court of Appeal accepted the policy importance of protection, but held that EU equivalence/effectiveness can be met by mechanisms other than court approval—here, arbitration plus protective steps for investment/administration. The court also noted that the Civil Justice Report recommendation to legislate for mandatory court approval in all minor/disability settlements tended to undermine the claim that such a right already existed at common law for this scheme.

(f) Supreme Court guidance on equivalence/effectiveness: Totel Ltd v Revenue and Customs Commissioners [2018] UKSC 44 and PSNI v Agnew and others [2023] UKSC 33

The Court of Appeal endorsed Rooney J’s use of these cases for structuring the analysis: the national court must consider the role of the procedure “as a whole” (drawing on Levez v TH Jennings (Harlow Pools) Ltd (C-326/96) as cited in PSNI v Agnew), avoid superficial comparators, and recognise that equivalence does not demand uniformity.

(g) Article 6 access to court: Carswell v Secretary of State for Transport and the Motor Insurers' Bureau [2010] EWHC 3230

The Court of Appeal agreed with the lower court’s reliance on Carswell in rejecting a broad Article 6 challenge. Key was the availability of multiple routes to court involvement or supervision (judicial review; Arbitration Act challenges; contractual enforcement mechanisms).

3.2 Legal Reasoning

(i) What EU law (the 2009 Directive) does and does not require

The court emphasised that Article 10 of the 2009 Directive obliges Member States to set up/authorise a compensation body and to apply national laws/regulations to compensation payment “without prejudice to more favourable practices”. The Directive contains no express requirement for special minor/disability protections, no express right to court approval, and no express investment regime for awards.

Accordingly, the key legal question became whether Northern Ireland’s chosen procedures, in the round, were equivalent and effective safeguards for EU rights.

(ii) Comparator and “equivalence”

The appellant compared the untraced-driver scheme to procedures for insured/uninsured identified drivers, where minors’ compromises require court approval under Order 80 rule 8 RCJ (NI) 1980 (and similar County Court provisions). The court accepted that Evans points to comparison with the position of victims of identified insured vehicles, but stressed (again via Evans) that the compensation body need not be placed on the same footing as a civil defendant.

On the facts, the court held the arbitrator route (with the detailed features highlighted by MIB) could deliver protection sufficiently comparable in function to court approval, particularly given the independent expertise of arbitrators and the scope of the procedure.

(iii) “Effectiveness” and the structure of the MIB process

The court placed weight on the nature of the untraced-driver process as a largely inquisitorial investigative scheme: MIB investigates, gathers witness evidence, obtains medical evidence, and assesses compensation on court-like principles. These features were treated as materially supporting “effectiveness” because they reduce barriers (cost/speed/information asymmetry) that would otherwise impede victims, including minors.

(iv) The two specific minor-protection complaints: (A) adequacy scrutiny; (B) safeguarding/investment

(A) Adequacy scrutiny: The court held equivalence/effectiveness was satisfied here because the minor was legally represented and MIB’s correspondence set out a workable path to independent scrutiny by arbitration, including cost/time-limit accommodations and an available oral hearing process. The court also noted a practical point: an arbitrator can increase an award, whereas a judge approving a compromise cannot do so without the defendant’s consent.

(B) Safeguarding/investment: The court accepted, in principle, that clause 25 of the 2004 Agreement (trust/Office of Care and Protection mechanisms) and the proposed use of the Official Solicitor as guardian of the fortune/estate with payment into the Court Funds Office could meet equivalence/effectiveness—particularly because MIB offered to fund associated costs/fees.

(v) Forward-looking warnings and recommendations (obiter)

Although dismissing the appeal, the court signalled that future cases may be decided differently if similar protections are not provided. It expressly stated that a future reviewing court may be “hard to persuade” that equivalence/effectiveness are met without similar assurances and facilities—both for adequacy assessment and for protection of funds.

The court also recommended that MIB consider replicating the approach under the Northern Ireland criminal injuries compensation scheme, which holds minors’ awards in trust until 18 and transfers management to the Office of Care and Protection where disability persists—suggesting a more formalised, consistent investment/safeguarding model to reduce litigation risk.

(vi) Article 6 and Article 14/A1P1

The court treated the Convention arguments as essentially falling away once the EU equivalence/effectiveness analysis was satisfied on the facts. It also rejected any “generic” Article 6 claim: to succeed, the appellant would need to show systemic denial of access in all or nearly all cases, which was unsustainable given the available routes to court: judicial review; Arbitration Act 1996 challenges (sections 67 and 68); and contractual routes contemplated by clauses 31–32 (including the Contracts (Rights of Third Parties) Act 1999 reference and enforcement if MIB fails to pay).

The discrimination claim likewise failed: even assuming Article 6 and/or A1P1 engagement, the court held the equivalence/effectiveness conclusion and justification considerations defeated it.

3.3 Impact

• Fact-sensitive validation of the 2004 Agreement (as operated): The judgment supports the proposition that, for pre-2024 accidents governed by the 2004 Agreement, the scheme can be compatible with EU equivalence/effectiveness for minors where robust independent scrutiny and fund-protection measures are practically available.
• Operational pressure on MIB (2004 and 2024 Agreements): The court’s warnings create strong incentives for MIB to standardise safeguards (legal representation for minors/protected parties; accessible arbitration; and reliable mechanisms to protect awards until capacity/majority).
• No new right to sue MIB for untraced claims: The judgment reaffirms the distinction between a direct application right and a direct civil cause of action against MIB as defendant (reinforcing Morrison v MIB [1987] NI 204 in this context).
• Guidance for future challenges: Claimants may use this judgment as a benchmark: if MIB does not offer comparable assurances/facilities in similar cases, equivalence/effectiveness challenges may have greater traction.

4. Complex Concepts Simplified

• Untraced driver scheme: A compensation process for victims where the at-fault driver cannot be identified, administered by MIB under an agreement with a government department.
• Directive 2009/103/EC: EU law requiring compulsory motor insurance and a compensation body for uninsured/untraced cases, leaving many procedural details to national systems.
• Equivalence: The national procedure for enforcing an EU-based right must not be less favourable than the procedure for a comparable domestic right.
• Effectiveness: The national procedure must not make the EU right practically impossible or excessively difficult to use in practice.
• Minor’s settlement approval (Order 80): In ordinary civil litigation, a minor’s settlement is not valid unless a court approves it, reflecting protective policy for those lacking full legal capacity.
• Arbitration Act challenges (ss.67–68): Court challenges to an arbitrator’s award are limited (jurisdiction or serious irregularity), not a full merits appeal—relevant to “access to court” arguments.

5. Conclusion

Morgan, Application for Judicial Review [2026] NICA 33 confirms that the 2004 Untraced Drivers’ Agreement is not inherently incompatible with EU law merely because it does not replicate court-based compromise approval for minors. The Court of Appeal held that, in a legally represented minor’s case, independent arbitration combined with workable fund-protection arrangements can satisfy the EU principles of equivalence and effectiveness.

The judgment’s enduring significance lies in its practical guidance: compatibility may depend on the real-world availability of safeguards (representation, meaningful independent scrutiny, and secure administration of funds). The court effectively signalled that if those safeguards are not provided in future cases—under either the 2004 Agreement or the 2024 Agreement—fresh challenges may succeed.