FBD decision on cover referred to European court

The Court of Justice of the European Union (CJEU) is to be asked to decide whether insurer FBD was entitled to impose an exclusion in a motor insurance policy on which it ultimately had to pay out €3m because of a High Court decision.

FBD had claimed it was entitled to impose a condition in a policy that a person insured on a van was not covered if they carried anyone in the back of the vehicle which was not designed or constructed with passenger seating.

A 19-year-old man, who was later made a ward of court and is now 35 years old, was one such passenger in a van which crashed into another vehicle in Co Louth in 1999.

He cannot be named now as he is a ward of court.

He suffered serious life- changing injuries and in 2009 the High Court approved a settlement for €3m for him against the owner of the van who was insured by FBD.

This had followed an earlier ruling that FBD was not entitled to claim the insurance policy was void over the no-rear passengers clause.

The High Court found a previous EU Court of Justice ruling in relation to EU motor insurance directives requiring equal treatment of all passengers in a vehicle meant FBD could not refuse indemnity to the insured.

FBD, which paid out the €3m settlement, appealed that ruling saying it was entitled to recoup that money from the State if its appeal succeeded.

Yesterday the Court of Appeal said the matter should be referred to the CJEU for a decision.

Mr Justice Gerard Hogan, on behalf of the three-judge court, said it was clear this case raised difficult and unresolved issues concerning the extent to which EU motor insurance directives can be held to have a direct effect against a private party.


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