Can MVIL Recover What It Paid From the Driver or Owner?

The compulsory cover protects the driver and owner as well as the victim, but not unconditionally. Section 57 tells an owner or driver when the insurer can come back to them for what it has paid out, and Part X adds the offences that surround the scheme.

Recovery on uninsured and unidentified vehicle claims

Section 57(1) allows MVIL to recover “any amount properly paid” in satisfaction of a claim under the former section 54(1)(b) or (c) — uninsured or unidentified vehicles on a public street — together with its costs and expenses, “as a debt” from the person who was the owner at the time, or, where someone else was driving, from the owner and driver jointly or either severally. The rationale is simple: no premium was paid for that vehicle, so the person who should have paid it bears the loss. Although the 2021 amendment repealed the paragraphs that created those claims, section 57(1) still governs recovery on pre-2021 claims.

An employee driving the company truck who assumed, reasonably, that the company had kept the registration current is therefore protected; the company is not.

Recovery from convicted drivers of insured vehicles

Section 57(3) is the provision that matters for the ordinary insured driver. Where MVIL has paid a claim or judgment on an insured vehicle’s cover, and the driver “has been convicted of an offence under Section 40 of the Motor Traffic Act relating to the incident from which the claim arose”, MVIL may recover the amount paid, with costs, “as a debt from the driver of the vehicle”. The reference is to the offences of driving under the influence of alcohol or drugs and driving recklessly, dangerously or carelessly, which now appear in sections 39 to 42 of the Road Traffic Act 2014. A drunk driver who injures a passenger is thus insured for the victim’s sake but not for his own: the victim recovers from MVIL, and MVIL recovers from him. No reported judgment on PacLII records MVIL exercising this right, but the provision remains in force.

What MVIL cannot recover

Outside section 57 there is no right of recovery. An owner whose registered, insured vehicle causes an injury through ordinary negligence, and a driver who was merely careless without being convicted, are fully indemnified up to the cap. Section 58(1)(b) goes further and requires MVIL to indemnify the insured person against the costs and expenses of the proceedings, up to the same limit. Above the cap, of course, the owner and driver are exposed directly to the claimant under section 54(5), not to MVIL.

The offences in Part X

• Using an uninsured vehicle (section 59): a fine of up to K500 or 12 months’ imprisonment, or both, for using or permitting the use of an uninsured motor vehicle, with a defence of reasonable and honest belief that it was insured. Section 61 preserves the victim’s civil remedies regardless of any prosecution.
• Soliciting claims for gain (section 60): a fine of up to K200 for anyone who, for personal gain, solicits authority to act for another in making or settling a motor accident claim, or who makes or settles such a claim on another’s behalf. Section 60(2) exempts “a lawyer properly acting in the course of his profession”. Section 60(3) makes any agreement to pay such a person void, and the money recoverable. The section is aimed at the claims tout who takes a cut of a villager’s compensation.
• False statements about insurance (section 63): a fine of up to K500 for an owner who refuses to say, or lies about, whether his vehicle was insured when a claimant demands to know.
• Obstructing an ICCC-appointed operator (section 27C): a fine of up to K100,000.

Void PMV contract terms

Section 62 provides that a contract for the carriage of a passenger in a public motor vehicle is void “so far as it purports to negative or to restrict” the liability of MVIL or any person for the death or injury of the passenger “while being carried in, entering or alighting from the vehicle”, or to impose conditions on enforcing it. A ticket or notice saying passengers travel at their own risk, or must claim within 24 hours, has no effect.

The employer’s indemnity: recovery from MVIL

The traffic of recovery also runs the other way. An employer or its compensation insurer that has paid workers’ compensation to an employee injured or killed by a negligently driven insured vehicle may recover that payment from MVIL, because section 54(7) treats the compensation as damages. MVIT v Job Builders Pty Ltd [1992] PGLawRp 642; [1993] PNGLR 272 upheld such a claim by an employer whose worker was killed in Lae, holding that the right arose at the accident and matured when the compensation was paid to the dependants; Post & Telecommunication v MVIT [2003] PGNC 30; N2479 required the amounts to be strictly proved. See what the cover does not cover.