What’s the scope of the “criminal conduct” exception in the Uninsured Drivers Agreement and how does it relate to the principle formally known as ex turpi causa? This was the issue before the Court of Appeal in Delaney v (1) Pickett (2) Tradewise Insurance Services Ltd  EWCA Civ 1532.
C was a passenger in D’s vehicle and was badly injured because of D’s negligent driving. Substantial quantities of cannabis were found on the parties after the accident, and the judge found that C and D had travelled together to buy and then transport cannabis for subsequent resale.
D defended the claim, relying on ex turpi causa.
In the mean time, D had confessed habitual drug use to the police. His insurers discovered this and successfully took proceedings to avoid his insurance policy for material non-disclosure.
Under the Uninsured Drivers Agreement the insurer was potentially liable to satisfy the judgment as road traffic accident insurers. But the general duty to indemnify is subject to a number of exceptions, notably Paragraph 6(e)(ii), where “a claim which is made… by a claimant who… was voluntarily allowing himself to be carried in the vehicle and… knew or ought to know that… the vehicle was being used in the course of or furtherance of a crime”. Insurers argued that this clause should be given a literal construction: the vehicle was being used in the process of committing the crime and as part of the carrying out of criminal activity.
Both defences succeeded at first instance, and C appealed.
The Court of Appeal disagreed with the judge’s conclusion on ex turpi causa. Following Gray v Thames Trains  1 AC 1339 and Pitts v Hunt  2 QB 24:
- This was not a case where the Court could not determine a standard of care for D’s driving, unlike (say) a getaway car.
- This was not a case where liability would be an affront to the public conscience.
- The crime provided the occasion for the accident rather than actually being the cause of it. The immediate cause was D’s negligent driving, and not the crime. The illegal acts were incidental.
Given the size of this claim, success against D would be cold comfort unless the insurers were also liable. So where did this leave the insurer’s argument? Was the exclusion under Paragraph 6(e)(ii) wider than the ex turpi causa defence?
Their Lordships were all agreed that, taking a literal reading of the clause, (on the judge’s findings) to C’s knowledge, the vehicle was indeed being used “in the furtherance of crime”. But this would mean a very wide exception, and potentially prevent recovery even where the crime in question was very minor – for example speeding, or possession of a small amount of a controlled drug.
Ward LJ’s answer was that the exception should be “proportionate” and was limited to “serious” crime of the sort that would give the driver a defence of illegality: this crime was not “serious” enough and the exception should not apply.
The majority (Richards and Tomlinson LJJ) did not agree. Their reasoning is not consistent, however:-
Richards LJ considered there was a de minimis exception, but that possession with intent to supply was certainly serious enough. The use of the vehicle did not have to constitute an ingredient of the offence for the exception to apply.
Tomlinson LJ took a firmer line. Use of the vehicle was not incidental to the crime, it was an integral part of it. Whilst the literal reading of the clause could lead to recovery being denied where the crime was minor, it was not appropriate for the court to make a value judgment about the seriousness of the offence, which was irrelevant to the criteria for liability under the agreement. Tomlinson LJ did not endorse the de minimis exception.
This case underlines that the ex turpi causa defence will rarely succeed. But exceptions to liability under the Uninsured Drivers Agreement will succeed far more often. When these succeed, the cause of the accident may well be nothing to do with the circumstance prohibiting recovery – for example that C knew (or ought to know) the vehicle was stolen, or that D was not insured. In those cases, blameworthiness on C’s part is not “the touchstone of recovery”. However, if insurers use this decision to argue more frequently that there should be no recovery by reason of very minor crimes, it is likely that pressure will mount for a change to the 1999 Agreement.