Can motor insurers be liable for the deliberate criminal acts of drivers?

Police Car with lights on

Many practioners may be surprised to hear that insurers cannot, as a matter of course, refuse to indemnify third party victims of the deliberate criminal acts of their insured. The issue has recently been considered by the Queen’s Bench Division in two equally shocking but very different factual scenarios. Both cases turned on whether the damage arose from ‘use of the vehicle’:- 

In Bristol Alliance Ltd Partnership v Williams [2011] EWHC 1657 (QB), Mr Williams drove his vehicle into the window display of a House of Fraser store. He caused the damage deliberately with the intention to commit suicide. The property insurer Bristol Alliance paid the cost of the damage and then went after Williams in an attempt to recover their outlay from his Road Traffic Insurers.

The RTA insurer argued that they did not require to indemnify Williams as deliberate damage was not a liability covered by the insurance policy. It was held that in order to comply with s. 145 of the Road Traffic Act, which required a policy to cover any liability which might be incurred as a result of ‘use of the vehicle’, the policy had to be read to include liability against an innocent third party arising out of a deliberate act. Bristol Alliance succeeded in their subrogated claim against the Road Traffic insurers. 

However, a different result was reached in the case of Axn and others v Warboys and another [2012] EWHC 1730 (QB). The Claimants in this case were victims of sexual offences committed by the First Defendant, who was a taxi driver. The Second Defendant was his insurer. The claimant argued that the insurer was liable for injuries they sustained at the hands of the taxi driver. The Court held that since the injuries resulted not from the taxi driver’s use of the cab but rather as part of a deliberate criminal enterprise, they did not 'arise out of the use of the vehicle on a road or public place' in terms of RTA 1988 s.145(3)(a)). There was not a sufficient causal link between the claimant’s injuries and the use of the vehicle. This case can be distinguished from Bristol  on the basis that the injuries were caused by conduct extraneous to criminal driving such as poisoing and carrying out sexual assaults.