Vnuk – Scrapping of proposed changes to compulsory motor insurance legislation

On the face of it not at all, however, the legal rulings which followed the incident raised the real possibility of compulsory motor insurance being required for the use of any motor vehicle which was consistent with its normal use, rather than just for vehicles intended for use on a public highway.

In 2014 the Vnuk case was referred to the European Court of Justices (ECJ)¹ following a local ruling which dismissed the claim for damages following the insurers refusal to pay the claim. The insurer successfully argued locally that the Motor Insurance Directive (2009/103/EC) did not require compulsory motor insurance to be in place at the time of the incident.

The ECJ had a different view and in allowing the claim effectively opened the possibility of compulsory motor insurance being required for any motor vehicle whether being used on a highway or, importantly, on private land.

The UK did not change their legislations to recognise the ruling, but some high profile cases have used the principles established (eg RoadPeace v Secretary of State for Transport and MIB²) and there was a real concern that the UK, despite now being outside the Europe Union (EU), would feel obliged to follow EU’s lead and implement new legislation.

If this were to happen, organisations and individuals may find themselves having to purchase motor insurance for their golf buggies, sit-on mowers, mobility scooters, the list goes on. The administrative burden could be significant and has not been lost on the UK government.

In February this year, the government announced that they would be scrapping plans to implement the proposed legislation³, which would likely come as a welcome bit of news to most in the sector.

Sources:

1. Damijan Vnuk v Zavarovalnica Triglav d.d (case C-162/13)
2. RoadPeace v Secretary of State for Transport and MIB,: https://www.lexology.com/library/detail.aspx?g=ca8c49fa-d77d-497b-b113-063024e0c61d
3. https://www.gov.uk/government/news/government-announces-plan-to-scrap-eu-law-ensuring-british-drivers-avoid-50-a-year-insurance-hike

The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.