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VNUK: Scope of UK motor insurance re-set to "road or other public place"

  • Legal Development 29 April 2022 29 April 2022
  • UK & Europe

  • Insurance & Reinsurance

The Motor Vehicles (Compulsory Insuance) Act 2022 was passed yesterday when it received Royal Assent.

An identically named Act applying to Northern Ireland also secured Royal Assent this week. The effect of both Acts is to remove, from the motor insurance law of all three UK jurisdictions, the interpretation of compulsory insurance set down by the European Court in 2014 in the seminal case Vnuk v Zararovalnica.

The Vnuk interpretation would have added liability for non-road motor vehicles and for any use away from roads or other public places to the scope of UK compulsory insurance. Case law since 2014 had established that the Motor Insurer's Bureau could be held liable in these circumstances and the Government Actuary's Department estimated the potential cost to be around £50 per UK motor policy per year. Commenting this week, MIB CEO Dominic Clayden said:

"The MIB welcomes the passing of the Motor Vehicles (Compulsory Insurance) Bill. We have campaigned on this issue for a number of years and we're delighted that the necessary legislation to remove the effects of Vnuk has now passed."

"Motorists wil no longer be faced with the additional costs relating to future accidents on private land and accidents involving a range of extra vehicles - including lawnmowers and golf carts. This will save all motorists money and take us back to the common-sense approach we had before the Vnuk ruling in 2014"

Clyde & Co has been actively involved from the outset in the campaign to reform Vnuk, leading cross-stakeholder workshops in the early phases and continuously advocating for reform. We've been blogging extensively about the progress of both pieces of legislation in our Policy Blog as well as closely monitoring the progress of similar reforms at European level, where changes to the relevant Directive will take effect from December 2023.

Please contact us or any of your usual Clyde & Co Motor contacts if you would like any further information about these important changes.

*This content was written by BLM prior to its merger with Clyde & Co*

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