Sold bike, new owner crashes it, old owners responsible??

[askew]

Well this spurred me into cancelling the policy on a car I sold a week and half back: I was waiting to get the acknowledgement slip from the DVLA so that I didn't get grief about being the RK of an uninsured vehicle.

[V8 Fettler]

LoonR1 said:

The vehicle may have been sold, but the policy remains in force. That's the contractual element leading to RTA and other obligations.

I understand how the contractual element drives statutory obligations, but should that not be on the basis that the contract still exists? How can a contract still exist when key foundation stones for the contract (who owns the bike, who is the main rider etc) have been removed? Risks (and therefore liabilities) become unquantifiable.

But there we are, logic does not always apply to insurance and legislation, so it's good to know that the motor insurance sector has a representative on PH.

[LoonR1]

Most contracts will exist until such time as one party explicitly cancels it though. It's rare that a contract will lapse during it's lifetime without either party doing anything specific to prompt it.

An insurer certainly can't cancel by inference due to the strict rules of the RTA.

[bradjsmith88]

LoonR1 said:

I mean after 20 years of working at a very senior level in motor insurance claims that I know when there's a chance of recouping our outlay or not. The chances of recouping third party outlay from a policyholder are microscopic. It involves a very complex legal process that makes it twice as expensive as it needs to be and then we still need a court to rule in our favour and then we need to go about finding the assets and then we need to seize them and so on and so forth. It won't happen and it's highly unlikely that it even can happen. Of course an ambulance chaser whipping up a Daily Mailesque frenzy is far more believable.

And after 20 years you still haven't familiarised yourself with the MIB articles of assosciation?

As per Article 75 the insurer ceases to have a liability if it can show (with evidence) that the vehicle was sold prior to the loss date.

If there is no proof then the insurer remains at least A75 insurer.

[LoonR1]

bradjsmith88 said:

And after 20 years you still haven't familiarised yourself with the MIB articles of assosciation?

As per Article 75 the insurer ceases to have a liability if it can show (with evidence) that the vehicle was sold prior to the loss date.

If there is no proof then the insurer remains at least A75 insurer.

So why did they fail to do this then? More to the story.

[bradjsmith88]

Agreed...

But as the resident insurance expert, and the topic was a request to explain why this could have happened I didn't see you explaining?

Just getting on a horse...

MCE as a broker probably don't understand so failed to explain it to their customer - and likely the insurer probably messed up not obtaining proof, or the seller never documented the sale...

EDIT: Have just noticed the dates - so it probably hasn't been touched by a recent claims handler yet, and just been explained poorly by someone in a call-center.

Edited by bradjsmith88 on Wednesday 3rd September 16:19

[LoonR1]

bradjsmith88 said:

Agreed...

But as the resident insurance expert, and the topic was a request to explain why this could have happened I didn't see you explaining?

Just getting on a horse...

MCE as a broker probably don't understand so failed to explain it to their customer - and likely the insurer probably messed up not obtaining proof, or the seller never documented the sale...

I'm only an expert in that I know more than most but never profess to be a true teccy. Others can do that stuff.

Thing is that explaining The Articles of Assoc explain why it can't happen rather than why it can! My explanation should've included your point admittedly.

[V8 Fettler]

LoonR1 said:

Most contracts will exist until such time as one party explicitly cancels it though. It's rare that a contract will lapse during it's lifetime without either party doing anything specific to prompt it.

An insurer certainly can't cancel by inference due to the strict rules of the RTA.

Perhaps this is correct in the insurance world, but a serious breach of contract can lead to contract termination with immediate effect within the construction and engineering sectors. Bit of a minefield though.

[LoonR1]

V8 Fettler said:

Perhaps this is correct in the insurance world, but a serious breach of contract can lead to contract termination with immediate effect within the construction and engineering sectors. Bit of a minefield though.

I was talking generally and outside insurance. The termination in engineering will have a specific provision written in for just those circumstances rather than it just being accepted that it can happen

[CYMR0]

LoonR1 said:

V8 Fettler said:

Perhaps this is correct in the insurance world, but a serious breach of contract can lead to contract termination with immediate effect within the construction and engineering sectors. Bit of a minefield though.

I was talking generally and outside insurance. The termination in engineering will have a specific provision written in for just those circumstances rather than it just being accepted that it can happen

Even then it won't in practical terms be terminated until one party actively exercises their right to do so.

[V8 Fettler]

CYMR0 said:

LoonR1 said:

V8 Fettler said:

Perhaps this is correct in the insurance world, but a serious breach of contract can lead to contract termination with immediate effect within the construction and engineering sectors. Bit of a minefield though.

I was talking generally and outside insurance. The termination in engineering will have a specific provision written in for just those circumstances rather than it just being accepted that it can happen

Even then it won't in practical terms be terminated until one party actively exercises their right to do so.

But the point of termination would be where the serious breach occurs, anything after that is not within contract (for engineering and construction sectors). Doesn't need notice of termination of contract to be issued prior to contract termination (for serious breaches of contract), a minefield though.

[CYMR0]

V8 Fettler said:

But the point of termination would be where the serious breach occurs, anything after that is not within contract (for engineering and construction sectors). Doesn't need notice of termination of contract to be issued prior to contract termination (for serious breaches of contract), a minefield though.

You may be right that the party seeking to terminate may do so on the basis of the repudiatory breach of the other party, but for that to happen automatically would potentially prejudice the rights of the innocent party. In the event that the breach is sufficiently serious, it may be that the contract is considered terminated on the occurrence of the breach but if that were to occur decisively and irredeemably upon the breach, with the innocent party having no further rights other than those previously attributed to it on termination, I would be surprised (I don't work in that sector however and we are going way off topic).

[V8 Fettler]

LoonR1 said:

V8 Fettler said:

Perhaps this is correct in the insurance world, but a serious breach of contract can lead to contract termination with immediate effect within the construction and engineering sectors. Bit of a minefield though.

I was talking generally and outside insurance. The termination in engineering will have a specific provision written in for just those circumstances rather than it just being accepted that it can happen

The range of specific (potential) serious breaches is too great to include within contract documentation, however there will be reference to the laws of England (or Scotland, or Ireland), which is where the crucial difference probably exists. There must be historical and persuasive case law dealing with the insurer's continued statutory responsibility even where a reasonable person would consider that there is clearly no continuing contractual relationship with the (previously) insured. By no means a bad thing, but still illogical and bizarre from the insurer's viewpoint.

[V8 Fettler]

CYMR0 said:

V8 Fettler said:

But the point of termination would be where the serious breach occurs, anything after that is not within contract (for engineering and construction sectors). Doesn't need notice of termination of contract to be issued prior to contract termination (for serious breaches of contract), a minefield though.

You may be right that the party seeking to terminate may do so on the basis of the repudiatory breach of the other party, but for that to happen automatically would potentially prejudice the rights of the innocent party. In the event that the breach is sufficiently serious, it may be that the contract is considered terminated on the occurrence of the breach but if that were to occur decisively and irredeemably upon the breach, with the innocent party having no further rights other than those previously attributed to it on termination, I would be surprised (I don't work in that sector however and we are going way off topic).

As I said, a minefield. Employer denying access to the site of works being perhaps one example, contractor going AWOL another (although more likely to be yet another disappearing sub-contractor)