By Donal Creaton, Partner, Insurance Unit.

 

In a recent High Court case, Smith v Meade and others, a passenger who had been injured in a road traffic accident has taken an action for damages for personal injury and loss.

 

The defendant insurer, FBD Insurance PLC, sought to exclude their liability to the passenger by relying on a clause in the defendant vehicle owner's insurance policy with them. The clause excluded liability for passengers traveling in an area of a vehicle which is not a designated seating area. In this case the passenger was traveling in the rear of a van with no provision for seats.

 

In the relevant Irish legislation this type of clause is expressly permitted and the insurance company had complied with the relevant Irish legislation in force at the time. However in EU Directives governing this area of insurance law EU member states are expressly directed to enact legislation to make such clauses void so that all passengers are covered by insurance (save in certain circumstances in relation to vehicles driven without the owner's consent). Ireland has not implemented the directives correctly and the deadline provided by the EU for Ireland to enact such legislation has passed.

 

The court concluded that one of the objectives of the directives was to ensure that passengers would be protected and that insurer's could not use such exclusion clauses. Courts are required to give supremacy to EU law over Irish law and utilise harmonious interpretation of national laws and give primacy to EU law. The court applied the national Irish law to achieve the objectives of the directives and stated they should overlook and ignore the section of Irish legislation which permitted the exclusion clause the insurer sought to rely on.