MIB counter-claim over payment

Horton v Sadler (House of Lords - 14 June 2006)

The claimant was injured as a result of the defendant's negligence in a road traffic accident. The Motor Insurers' Bureau's nominated insurers made an interim payment to the claimant because the defendant was uninsured.

The claimant issued proceedings two days before the expiry of the three-year limitation period but failed to comply with a notice condition under the MIB's liability precedent. As a result, the MIB counterclaimed for the return of the interim payment.

The claimant then issued duplicate proceedings against the defendant, giving correct notice to the MIB, which was joined as a party to the second action. The MIB argued that the claimant was statute barred under the Limitation Act 1980. The claimant responded by seeking an order to disapply the three-year limit under Section 33 of the Act.

The judge at first instance found against the claimant but indicated that had he been able he would have exercised his discretion in favour of the claimant. The subsequent appeal was dismissed based on the binding authority of Walkley v Precision Forgings (1979).

In Walkley, the House of Lords had ruled that if a claimant issues proceedings within the three-year limitation period but those proceedings are not pursued then the claimant cannot issue a fresh set of proceedings and seek to rely on the court to exercise its discretion to disapply the three-year limitation period under the Act. The claimant argued that Walkley was inconsistent with the wide discretion that the legislation had intended to give the court.

In this matter, the House of Lords held the true question was whether it was equitable or not to over ride the three-year time bar and that in exceptional cases, such as this, the claimant should have the time-bar dis-applied. Further that it was appropriate to depart from the decision in Walkley, which had deprived the claimant of a right that parliament had intended them to have. [BX] Comment: The House of Lords ruled in Horton that judges should exercise their discretion in personal injury claims to disapply the three-year time period under Section 33 of the Limitation Act 1980 in circumstances when it was equitable to do so. Thus, while there may be occasions where the court will exercise such a discretion, this discretion cannot be relied upon and a claimant must always seek at the first instance to pursue proceedings within the normal time limits. Nisha Patel, BLM Liverpool.

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