Coward v Motor Insurers’ Bureau (MIB) [1963] 1 QB 359 Court of Appeal
Coward v Motor Insurers’ Bureau [1963] 1 QB 359 is a significant case in English contract law that addresses the concept of “intention to create legal relations” and the liability of the Motor Insurers’ Bureau (MIB) in instances where a passenger is injured due to a driver’s negligence.
Facts of the Case (Coward v Motor Insurers’ Bureau)
The case involved a pillion passenger named Coward who was killed in a motorcycle accident caused by the negligent rider, a friend and colleague. At the time of the accident, the rider’s insurance policy did not include coverage for pillion passengers. Therefore, damages were claimed from the MIB. It was claimed that the rider’s policy should have had coverage for the passenger as required under the Road Traffic Act 1930. Under the Road Traffic Act 1930, passengers carried for hire or reward in an insured vehicle must be covered by the driver’s insurance policy.
Coward’s widow sought damages from the MIB, claiming that Coward had made a small weekly contribution towards the motorcycle rides, which constituted a contract of “hire or reward.”
The MIB argued that for such a contract to exist, there must be an intention to create legal relations, which they contended was absent in this social arrangement between friends.
Issue that arose
The crux of the case centered on whether Coward was a passenger entitled to coverage under the insurance policy as required by the Road Traffic Act 1930, which stipulates that – passengers carried “for hire or reward” must be insured.
Decision in Coward v Motor Insurers’ Bureau
The Court of Appeal ruled that there was no contract of hire or reward since the agreement between Coward and the rider was deemed a social and domestic one lacking the necessary intention to create legal relations. As a result, Coward’s widow was not entitled to compensation from the MIB.
Subsequent Impact
This decision faced criticism in later cases. In Connell v MIB (1969), Lord Denning expressed his dissatisfaction with the Coward decision, suggesting that a contract could arise when a driver gives a lift in exchange for money, thus establishing a legal relationship. The House of Lords later endorsed this view in Albert v MIB (1971), which prioritized the Connell ruling over Coward.
References:
YOU MIGHT ALSO LIKE:
MORE FROM CONTRACT LAW: