Advocate General Bot of the European Court of Justice recently concluded that a property fire caused by an electrical fault in a stationary vehicle parked in a private garage fell within the definition of vehicle 'use' for the purposes of the Motor Insurance Directive.
Therefore, the motor insurer of the vehicle would be required to indemnify the owner for a subrogated action brought against him by the property insurer.
The opinion is consistent with the recent line of ECJ judicial authority which held that "use of vehicles" covers any use of a vehicle that is consistent with the normal function of that vehicle, i.e. as a means of transport and not, for example, as a machine for carrying out work.
Mr Rodes had parked his vehicle in the garage of a property. The vehicle caught fire the next night as a result of an electrical fault, causing property damage.
The property insurer, Segurcaixa pursued a recovery against Mr Rodes' motor insurance company, Linea Directa.
The Supreme Court in Spain held that 'use' would cover those vehicles which were parked in garages or parking areas (both public and private), and if a vehicle caught fire whilst travelling. However, the Court found that 'use' excluded circumstances where a vehicle caught fire when stationary.
Referral to the ECJ
The referral to the ECJ by the Supreme Court in Spain raised the following issue:
"Should [Article 3 of the Motor Insurance Directive] be interpreted as meaning that the concept of ‘use of vehicles’ covers a situation in which a fire originating in the electrical circuit of a vehicle parked in a private garage for over twenty-four hours caused damage to the house adjoining the garage."
Opinion of the Advocate General
The Advocate General provided the following key commentary:
- "… situations in which a vehicle is stationary in a parking space, regardless of whether the engine is running at the time of the accident, can be regarded as being covered by the compulsory insurance."
- "…the use of a vehicle consistent with its function as a means of transport is not limited to driving, but extends to related acts, such as passengers using the doors to get out of a parked vehicle."
- "…only circumstances in which an accident occurs when the vehicle is or has been used for a purpose other than transport, for example as a machine for carrying out work or as a weapon, or even as living accommodation, do not fall within the meaning of ‘use of vehicles’."
The Advocate General concluded that because the fire had originated in the vehicle's electrical system and the vehicle was used consistently as a means of transport, it "could be said to be involved in an accident merely upon a finding that it contributed in some way to its occurrence".
Summarising the opinion, as the electrical system was used consistently as part of the vehicle as a means of transport, then its' failure, being causative of the damage, would be interpreted as 'use'. Accordingly, Linea Directa would be required to indemnify Mr Salazar Rodes for the subrogated claim.
It should be noted that whilst the case awaits a full judgment from the ECJ, opinions of the Advocate General are usually followed by the ECJ.
What can we learn?
- Recent decisions – Vnuk, Rodridgues, Juliana – have all held that "use of vehicles" covers any use of a vehicle that is consistent with the normal function of that vehicle, i.e. as a means of transport and not, for example, as a machine for carrying out work. The opinion of the Advocate General is therefore not unexpected.
- Advocate General Bot stated that his opinion was in line with previous decisions which are not intended to introduce limits on the risks covered by motor insurance policies, especially where the vehicle behaves in a manner which is unsafe.
- The opinion is firmly in line with the proposed changes advanced by the European Parliament to amend the Motor Insurance Directive to provide clearer guidance on when vehicles require compulsory motor insurance.
- The decision of the ECJ will be relevant when considering the Supreme Court decision awaited in the matter of R&S Pilling t/a Phoenix Engineering (Respondent) v UK Insurance Ltd.
- In Pilling, an engineer welding plates onto his own vehicle within his employer's garage had caused a fire, again, causing damage to the property. The Court of Appeal ruled in favour of AXA, as the property insurer. Advocate General Bot applied very similar rationale with the focus being 'use' arising out of the normal function of the vehicle.
- However, the circumstances of the fires are different, with one being caused by an internal electric fault, and the fire in Pilling, being caused by external welding to the vehicle. Whether the Supreme Court considers welding – in repairing the vehicle – to be 'use' or not remains to be seen. The hearing for Pilling was heard on 13 December, and the judgment is expected shortly.