January 9, 2017

Government Consultation - Consultation to extend compulsory motor insurance

As the Law Society and others bemoan the potential implications of the Government's whiplash consultation, it is the Government itself that has been grumbling about an entirely different motor consultation. The Foreign Secretary, in particular, has complained that European judges have forced a “pointless and expensive burden on millions of people”.  

Mr Johnson was referring to the Consultation considering implementing the effects of the European Court of Justice ruling in the case of Damijan Vnuk v Zavarovalnica Triglv d.d. (c-162/13). 

This was a Slovenian case that involved a tractor and trailer that was being manoeuvred in the courtyard of a farm, when it hit the ladder the Claimant was stood on, causing him injury. The Slovenian courts dismissed the claim on the basis that compulsory insurance was limited to circumstances where the tractor was being used as a means of transport, not just where its function was as a machine.

However on appeal, the ECJ extended the definition of 'use of a motor vehicle' to include any use that is consistent with the vehicle's 'normal function', which is not limited to merely use of the vehicle as transport on a public road. The ruling has been interpreted as requiring compulsory insurance for any vehicle used on private property, which is currently inconsistent with UK law.

The Government's consultation will therefore consider how to amend the UK's legal position to accord with the judgment. It will question what type of vehicle is compulsory to insure and could potentially result in compulsory insurance for previously uninsured vehicles such as lawnmowers and mobility scooters, or as the Foreign Secretary put it; "anything from dodgems, to segways, to scooters to your granny’s motorised bath-chair".

The European Commission has indicated it may review the Motor Insurance Directive in light of its interpretation in Vnuk. This could mean that the scope of the Directive would be limited to 'use in traffic', which would most closely mirror the current UK position. Unsurprising the Government has advised this is their preferred option. However as the European Commission has published four alternative proposals, it remains to be seen whether this will be taken forward. 

The matter has been complicated by Brexit and it is understood some ministers have been outraged at having to amend UK law whilst simultaneously negotiating an EU departure. However, until the exit negotiations are completed, the UK must comply with EU law as determined in the Vnuk judgment, irrespective of how time limited these changes may be.