The Government has announced plans “to bin the EU’s ‘Vnuk’ motor insurance law – which requires insurance even on private land for a wider range of ‘vehicles’, including ride-on lawnmowers and mobility scooters” a move which it states “will ensure every British driver is spared an estimated £50 annual increase in insurance premiums.”
Mark Shepherd, Assistant Director, Head of General Insurance, at the Association of British Insurers, said:
“We welcome the Government’s plan to scrap this unnecessary requirement. This should happen as quickly as possible.
“There would have been no easy way to monitor compliance and enforcement for those using their vehicles on private land. It would also have been difficult to establish the circumstances of any claim, so increasing the scope for fraud, that ultimately ends up being paid for by motorists through their insurance premiums.”
In the Vnuk case itself (Vnuk v Zavarovalnica Triglav d.d), decided in 2014, the Court of Justice of the European Union came to the conclusion that Article 3(1) of Council Directive (EEC) 72/166 had to be interpreted as meaning that the concept of 'use of vehicles' covered any use of a vehicle that was consistent with the normal function of that vehicle. This interpretation resulted in a position that the Road Traffic Act 1988 (“RTA”), which sets out the UK law in relation to compulsory insurance of motor vehicles, including the European requirements pursuant to the Directives, was actually inconsistent with European law, having been construed much more narrowly.
In December 2019, the European Council agreed the text of the proposal to amend the Motor Insurance Directive 2009/103/ECUK (MID), which had been put forward by the European Commission in May 2018, ahead of final negotiations, in order to provide clarity on the potentially far-reaching consequences of Vnuk.
This shortcoming in UK Legislation has been recognised by the courts on a number of occasions, for instance in Roadpeace v Secretary of State for Transport v Motor Insurer's Bureau [2017] EWHC 2725 (Admin). The courts have, by subsequently classifying the Motor Insurer’s Bureau (“MIB”) as an “emanation of the state”, arrived at a position where claims that would be
possible under the Vnuk approach can still be pursued in the UK, notwithstanding that the RTA does not require compulsory insurance in such situations. These cases include Colley v Shuker [2020] EWHC 3433 (QB) (claimant a passenger in a vehicle he knew to be uninsured) and Motor Insurers' Bureau v Lewis [2019] EWCA Civ 909 (claimant injured by an uninsured car on private land).
The Government announcement signals another post-Brexit step away from the policies of the European Union which, in relation to motor insurance, were more reflective of the wider indemnity provisions and stricter liability regimes of some European countries.
What currently remains unclear is whether the Government announcement will translate merely into a line in the sand, with the statutory changes that would have been necessary to bring UK law into line with European law not being brought into force. The more palatable alternative from a legal point of view, although it would broaden the divide with Europe, would be to introduce a rolling back of legal developments: with legislation confirming that, if circumstances akin to those arising in cases such as Colley v Shuker and MIB v Lewis were to occur again, the compulsory requirements are such that the MIB would no longer be held liable.
Further developments will be monitored with interest.
