Law in breach of EU directive

COMPENSATION will have to be paid to people travelling in uninsured cars involved in accidents they did not cause, the European Court of Justice has said.

The court has ruled that Irish legislation is in breach of the EU’s motor insurance directive by refusing compensation in such cases.

But compensation can be refused to people travelling in an uninsured vehicle that causes an accident, according to the directive.

However, the version of the legislation enacted in Ireland states those injured in both the car that caused the accident, and the victim of such an accident, are not entitled to compensation when neither are insured.

John Casey, chief executive of the Motor Insurers’ Bureau of Ireland, which is responsible for compensating the victims of uninsured vehicles, said they are studying the ruling.

“We have had very few cases like this in the last few years but we will have to review our agreement in light of this judgment,” he said.

He added that at first glance it should not have a significant impact on the payouts by the bureau.

The Department of Transport is reviewing the legislation and is expected to have discussions with the insurers’ bureau shortly.

The bureau settled 2,200 cases in 2005, costing more than €60 million.

The bureau’s fund is created by every insured driver paying an extra €45 a year on their premium. Six percent of all drivers here are believed to be uninsured.

Last year the European Court ruled that all passengers should be eligible for compensation when involved in an accident with an insured driver.