UK: Supreme Court: Motor Insurer Not Liable For Fire Damage Caused By Policyholder Repairing Vehicle

Last Updated: 8 April 2019
Article by Mark Hemsted

The Supreme Court has held that vehicle repairs on private property are not considered 'use' of the vehicle for the purposes of the Road Traffic Act. Therefore, any third party property damage caused by negligent repairs in these circumstances will not be covered by the motor insurance policy.


Mr Holden owned a vehicle insured by UK Insurance Limited ("UKI").

Clause 1a of the UKI policy stated that "We will cover you for your legal responsibility if you have an accident in your vehicle and you kill or injure someone [or] you damage their property".

The policy was required to satisfy the relevant legislation, including S145(3) of the Road Traffic Act ("RTA"). The RTA states that policies must provide cover "in respect of any liability incurred... in respect of... damage to property caused by, or arising out of, the use of the vehicle on the road or other public place."

Mr Holden was employed as a mechanical fitter employed by the appellants trading as Phoenix Engineering ("Phoenix"). He asked Phoenix if he could carry out repair work on his vehicle needed to pass its MOT. As part of the repair works, he had to move the vehicle inside Phoenix's premises and then start to use welding tools.

Whilst welding, Mr Holden answered a phone call, then saw flames inside the car. It was found that sparks from the welding had ignited flammable material inside the car. The fire spread to other flammable materials outside of the vehicle, taking hold and causing substantial damage to Phoenix's and adjoining premises.

Phoenix was insured by AXA against property damage and public liability. AXA paid in excess of £2 million to repair and reinstate the damage caused. They pursued a subrogated action in Phoenix's name against Mr Holden.

UKI sought a declaration that they were not liable to indemnify Mr Holden for the claim. AXA / Phoenix counterclaimed for such an indemnity.

Court of Appeal

The High Court granted the declaration sought by UKI. Phoenix appealed.

The Court of Appeal held that Clause 1a of the policy was inadequate and did not satisfy the requirements of the RTA. They construed Clause 1a to mean "We will cover you for your legal responsibility if there is an accident involving your vehicle," thus covering repairs which were commonplace for drivers.

The Master of the Rolls also held that the repairs amounted to 'use' under s145(3), as this was consistent with the recent ECJ jurisprudence and the objective of the Motor Insurance Directive.

The Court of Appeal overturned the decision of the High Court and granted AXA the indemnity sought. UKI appealed to the Supreme Court.


The Supreme Court unanimously granted the appeal, Lord Hodge giving the only judgment:

  • The policy should be construed to satisfy the requirements of the RTA, however, the analysis undertaken by the Court of Appeal was excessive. The necessary interpretation was to extend the cover to that required by the RTA, and no more
  • Taking this into account, Lord Hodge stated the corrective interpretation of Clause 1a was "we will cover you for your legal responsibility if you have an accident in your vehicle or if there is an accident caused by or arising out of your use of your vehicle on a road or other public place."
  • Whilst recent ECJ jurisprudence has expanded the concept of 'use' of vehicles to include accidents on private property, national legislation still applies. The Court could not disapply the requirement under the RTA that the repair of the vehicle must have been on a road or other public place
  • Furthermore, in considering the phrase 'arising out of the use of the vehicle', it was apparent that the fire was not caused by the use of the vehicle. Whilst previous use may have prompted the repairs, the operating cause of the fire was "Mr Holden's alleged negligence in carrying out the repair."
  • It was Lord Hodge's judgment that the accident did not fall within the corrective interpretation of Clause 1a, and therefore, UKI were entitled to the declaration that they were not liable to indemnity Mr Holden for the claim

What can we learn?

  • This decision will be welcomed by motor insurers as it offers clear guidance "that the carrying out of significant repairs to a vehicle on private property" is not 'use' within the context of the RTA
  • The judgment makes clear the limitation to roads or other public places still apply when UK Courts are required to consider the concept of 'use'. However, Lord Hodge did make clear that the recent ECJ decisions such as Vnuk do "demonstrate a need for Parliament to reconsider the wording of section 145(3)(a) of the RTA to comply with the Directive."
  • When addressing recent ECJ jurisprudence on 'use', Lord Hodge made clear that he was not "persuaded that a vehicle which is on its side being repaired on private property, such as a garage, is being used as a means of transport"
  • This interpretation appears consistent with the recent Advocate General opinion on the matter of Linea Directa. In this AG opinion, it was summarised that the failure of an electrical system used consistently as part of the vehicle's transport functions was causative of third party property damage, and was deemed to be 'use'. The motor insurer in Linea Directa would therefore be expected to indemnify the driver for the third party subrogated action – the very indemnity sought by AXA in Phoenix
  • However, there is a clear distinction in the circumstances of the fires, Linea Directa caused by an internal electric fault, and Phoenix caused by the negligent welding. Therefore, it could be argued that even if the RTA was correctly transposed and fully compliant with the Directive, that UKI's appeal would have been successful in any event.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions