It is a legal requirement that you must have the right level of insurance if you are licensed to drive a licensed taxi or private hire vehicle. Most insurance policies for licensed vehicles will generally include a policy limitation of:
- Use for business purposes and social and domestic and pleasure purposes by any person who is entitled to drive the vehicle.
- Use for business purposes including the carriage of passengers for hire or reward under a public hire licence.
Up until recently, it was common practice for licensing authorities, when prosecuting a licensed driver for offences related to unlawful plying for hire, to also seek a conviction for driving a vehicle without the proper level of insurance. The basis for this is that the driver of the offending vehicle was not insured to undertake public hire work by virtue of the limitations placed on their vehicle insurance.
The common practice of seeking to also prosecute for insurance related offences was turned on its head in a High Court judgement. The case, Oldham Borough Council v. Mohammed Sajjad, involved a licensed driver, Mr Sajjad, who held a Hackney Carriage driver’s licence issued by Rossendale Borough Council, entitling the vehicle to ply for hire within that borough’s local authority area but not anywhere else.
Mr Sajjad was charged by Oldham Council with two offences alleged to have been committed on 23rd January 2015. They were first, plying for hire in the Oldham area and driving without insurance.
On 10th January 2016 Mr Sajjad pleaded guilty to the offence of unlawfully plying for hire but maintained a plea of not guilty to an offence of using the vehicle without insurance.
On 26th February 2016 Oldham Magistrate’s Court found Mr Sajjad guilty of the offence for unlawfully plying for hire but not guilty of the offence of driving without insurance.
Oldham Borough Council appealed against the decision of the Magistrates’ Court not to find Mr Sajjad guilty of an offence of using a motor vehicle on a road without there being in force a valid policy of insurance, contrary to section 143 of the Road Traffic Act 1988.
Oldham argued before the High Court that the terms of the insurance policy were clear; Mr Sajjad was permitted to ply for hire under a public hire licence. The respondent did not hold a Hackney Carriage driver’s licence with Oldham and the vehicle was not licensed to apply for hire in Oldham. He therefore could only lawfully ply for hire in Rossendale and not in Oldham. His plea to the offence of plying for hire was inevitable.
Oldham contended therefore he was acting outside the terms of the insurance policy as the policy would not cover the activity of plying for hire outside the area of the local authority which issued the Hackney Carriage licence.
Mr Sajjad’s counsel, for his part, submitted there were no exclusions or conditions contained in the certificate of insurance that required the insurer to have a current vehicle licence or a private hire driver’s licence for a specific borough or district.
Moreover, the certificate of insurance did not contain conditions requiring the insurer to comply with any rules and regulations of any particular licensing authority. Mr Sajjad’s counsel argued that on the facts and details of the insurance certificate therefore he was insured. The activity covered by the insurance certificate was, quoting again the terms of the policy (b) “use for business purposes including the carriage of passengers for hire or reward under a public hire licence.” That was the exact same activity in which the respondent was engaged.
Lord Justice Mccombe hearing the case said: “Whether a policy covers a particular risk and therefore whether there is in force a valid insurance covering that risk will usually be a matter of construction of the insurance policy in question, rather than a matter of evidence.
“In the present case, the question is whether the insurance on its true construction, and with reference to the Act and on the facts as found, covered the activity being conducted by this respondent.” [Emphasis Added]
Mccombe LJ said in his ruling that notwithstanding the offence for unlawful plying for hire, on the strict interpretation of the of construction of the insurance policy, Mr Sajjad was engaging in the activities covered by the insurance policy albeit it was an unlawful activity. He agreed that the certificate of insurance did not contain conditions requiring the insurer to comply with any rules and regulations of any particular licensing authority and was not specific to any borough or district.
The appeal was rejected.
This case has raised important questions about the previously common held practice of, almost automatically, including the offence of being uninsured when being reported for an offence of unlawful plying for hire.
Whilst each case will come down to individual circumstances, the common law direction that has come out of this case suggests that Hackney Carriage drivers remain insured notwithstanding the fact that they may unlawfully be plying for hire. The opposite is not true for private hire drivers however. On the true construction of the insurance policy, private hire drivers can still be prosecuted for both offences since they are not licensed to undertake the type of activity, whether lawful or otherwise, permitted by the policy.
As a side note however, in my experience I have found in many of my cases that private hire vehicle insurance convictions have not been upheld in many cases because in actual fact the underwriters, regardless of the position of the insurance company, have stated that they would insure third parties although they would seek to claim the costs incurred from the policy holder or driver.
The question that has arisen as a result of this case is, perhaps unintentionally, is whether it will remove some of the disincentives for particularly licensed Hackney Carriage drivers to try their luck.
Getting an insurance conviction and with that points on your licence and ultimately the risk of a disqualification is significantly worse in comparison with a conviction and fine for unlawfully plying for hire.
This case has sent minor shock waves through the world of taxi licensing. I can foresee that licensing authorities, as a result of the outcome of this case, may now opt for more reliance on primary legislation to deter any unlawful activity in their districts.
Under section 61(1)(b) of the Local Government (Miscellaneous Provisions) Act 1976, licensing authorities have the power to suspend or revoke the licence of a Hackney Carriage or Private Hire driver if they consider that driver to no longer be a fit and proper person.
In addition, section 61(a)(ii) of the same Act specifically empowers licensing authorities to revoke a licence where, since the grant of that licence, they have been convicted of unlawfully plying for hire.
Clearly criminal matters and punishment are rightly matters for the Courts, but in the absence of criminal sanction that does not deter unlawful activity by licence holders, councils are likely to take matters in their own hands to revoke licences themselves to remove any incentives that may be out there for licensed drivers to break the law.
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Taken from the November 2017 PHTM edition. This article was written by Stephen Mccaffrey, Head of Kings View Chambers & Taxi Defence Barristers.
