Britain has the worst record for uninsured drivers in Europe apart from Greece, according to a report this week from Direct Line, which claims that the cost could soon add £60 to the average car insurance premium.
Direct Line says the number of claims arising from accidents involving uninsured drivers has jumped from just £39m in 1991 to £265m this year. It estimates that around one in 20 of the cars on Britain's roads today are not insured, compared to just one in 500 drivers on the autobahns of Germany. Only in Greece is the problem worse, where it is estimated that one in 10 drivers do not have insurance.
Direct Line also challenged the government to raise fines on uninsured drivers. The maximum fine at present is £5,000, but insurance companies say that magistrates courts typically fine drivers just £150, reduced to as little as £35 for an early guilty plea. "With average annual insurance premiums costing around £350, compared to typical fines for driving without insurance of £150, many drivers may think it is worth the gamble. Clearly fines are out of line with the cost of insurance," it says.
In a survey carried out for Direct Line this week, one in 10 drivers said they know someone who is driving without insurance. Most want a crackdown on uninsured driving, with more police spot checks to catch culprits. A quarter said they want bigger fines and imprisonment for drivers who persistently flout the law.
The cost of claims against uninsured drivers is borne by the Motor Insurers' Bureau. But the true cost is counted in lives wrecked by dangerous drivers, which studies show are more likely to be uninsured.
Mary Williams, executive director of road safety organisation Brake, says: "There is growing evidence that where a driver is stopped in a 30mph zone doing above 55mph, the majority are also uninsured. Bad drivers are often guilty of multiple offences; if they don't give a monkey's about insurance they usually don't give a monkey's about anything else."
Brake says there should be a crackdown on uninsured drivers by a greater investment in traffic policing, which it says has fallen markedly in the past 10 years.
Another solution, and one already popular on the continent, is for all cars to be legally obliged to carry an insurance disc on their car windscreens just above the car tax disc. But Direct Line, the biggest car insurer in the UK, is opposed to such a move. "It doesn't stop uninsured drivers and is susceptible to fraud."
Instead, Direct Line is part of an industry-wide new database, the Motor Insurance Database, which has cost £12m to set up and which goes "live" on July 1 this year.
Eventually the database should do away with the tedious practice - for both police and drivers - of having to present insurance documents at police stations for minor motoring offences.
The database will hold insurance details on all 28m cars on Britain's roads, containing the policyholder's name and address, the vehicle make and model, dates of cover and a list of named drivers. All the police officer has to do is to check a car's licence plate against the database to reveal - in a matter of seconds - whether it is insured or not.
Direct Line says the database will cut both uninsured driving and a paperchase at police stations, which it estimates costs the police £20m-£25m a year. "About 75% of "HORTI" forms are issued to drivers whose documents are in order; that's a great deal of police time and effort wasted."
Around 50,000 drivers in 1999 were involved in accidents with uninsured vehi cles. So what happens if you have a crash with a driver who does not carry insurance?
Direct Line says the driver of the insured vehicle must first appoint a solicitor, which will be free if the driver has legal protection insurance. Secondly, once it is formally established that the third party has no insurance, the solicitor applies for a claim form from the Motor Insurers' Bureau. The bureau then investigates the claim and once it has decided that the uninsured party is liable, will go about assessing a payout in the usual way. The MIB will also seek to recover its costs from the uninsured driver, but admits that it rarely recovers much.
But although the MIB acts as a protection against uninsured drivers, it doesn't mean that a crash with an uninsured driver is cost-free.
A Direct Line spokesman says: "No one is pretending that making a claim through the MIB is anything other than a long drawn-out process."
Buying a car is act of faith
Buying a secondhand car privately can be hazardous. One of the many worries buyers have is that the car could be stolen. If this is the case, the buyer has no rights to the car. However, if the car was bought from someone who had themselves bought it through a hire purchase agreement, the new buyer does have full legal rights to the car.
The Hire Purchase Act 1964 says that a person in possession of a car subject to such an agreement does pass title when selling it. So long as the sale is in good faith the finance company loses the car. This also applies where there is a conditional sale agreement, though not to leasing contracts. This protects innocent buyers who have no way of knowing whether the car is on an HP agreement
Needless to say, the finance industry does not like that law and there are certain grey areas where it has tried to argue that the provision does not apply.
The most recent legal battle in this area has just resulted in a triumph for London man Anthony Hitchens over the General Guarantee Corporation.
Mr Hitchens bought a £37,000 Toyota Supra from a woman, referred to in court appositely as "the rogue". She had, unbeknown to Mr Hitchens, acquired the car from a dealer only five days before. On the day she acquired it, she agreed the terms of an HP agreement with General Guarantee over the phone, having paid a £15,000 cash deposit directly to the dealer.
After selling it to Mr Hitchens, she made no payments on the HP agreement, and effectively disappeared, leaving General Guarantee with no remedy unless they could get the car back.
Rather than use the courts as it should have done, the company simply helped itself to the car from a car park without even giving Mr Hitchens any warning. He quickly obtained a court injunction ordering its return. However, the company decided that it wanted a full hearing in which it would be determined whether it did have a legal claim to the car.
General Guarantee argued, both in the high court and the court of appeal, that in the absence of a signature on the HP agreement, the rogue had not taken the car under that agreement. Instead, it said, all that the dealer had done was lend her the car and by selling it she was stealing it.
Both courts roundly rejected this argument. The judges decided that commercial reality was such that the dealer would only have handed an expensive car over after having been told by General Guarantee that it had entered into the HP agreement.
There is no reason why an HP agreement has to be made in writing, although in practice most of them are. English law allows most contracts, except for the sale of land, to be made orally. The court not only declared that Mr Hitchens was the legal owner of the car, but awarded him £350 damages for General Guarantee's wrongful seizing of the vehicle.
The decision does reduce one of the risks of car buying. Dealers often hand over cars before all the formalities are completed. General Guarantee's persistence in taking the case to the court of appeal reflected the belief in the finance industry that the Hire Purchase Act normally only applies after a written agreement is signed. Now that that has been effectively scotched, many innocent purchasers will be saved from losing their vehicles.
• Richard Colbey is a barrister.
