The EU law relating to vehicle insurance is found in 6 Directives issued by the European Council between 1972 and 2009.
The aims of these were to provide a consistent approach by Member States to the question of insurance provision with regard to civil liability for the use of motor vehicles.
Recent decisions in the European Court of Justice and Court of Appeal have shown that some aspects UK law does not comply with EU law and the Government needs to review its current legislation.
DAMIJAN VNUK V ZAVAROVALNICA TRIGLAV (2014)
In this case Mr Vnuk was injured when a tractor with a trailer attached, reversed into a farmyard, knocking him off his ladder while he worked. Mr Vnuk claimed 15944.10 Euros as compensation. The case went from a lower Slovenian court to the Slovenian Supreme Court and was finally referred to the European Court of Justice(ECJ). Slovenian law stated that ‘the owner of a vehicle must take out insurance covering liability for damage caused by the use of the vehicle, to third parties resulting in death, physical injury, invalidity, loss of or damage to property….’. The legal point of contention was surrounding the phrase ‘the use of the vehicle’ and whether the insurance policy should cover a vehicle being used as a machine or propulsion device or whether it only covered use of a vehicle as a means of transport.
The ECJ held ‘..the Commission is of the opinion that this provision applies to the use of vehicles, whether as a means of transport or as machines, in any area, both public and private, in which risks inherent in the use of vehicles may arise, whether those vehicles are moving or not. The original definition of a ‘vehicle’ in the First Motor Insurance Directive was ‘any motor vehicle intended for travel on land and propelled by mechanical power, but not running on rails, and any trailer, whether or not coupled’. The Court found that ‘a tractor to which a trailer is attached satisfies that definition…that definition is unconnected with the use which is made or may be made of the vehicle in question…the fact that a tractor, possibly with a trailer attached, may be used as an agricultural machine has no effect on the finding that such a vehicle corresponds to the concept of ‘vehicle’ in the First Directive. However types of vehicle or certain vehicles having a special plate can be given an exemption. A list of such types vehicles must be drawn up by the State concerned and communicated to other Member States and to the Commission. The Court found that Slovenia had not chosen to exclude the type of vehicle in question from the scope of the Directive.
The implication of the Vnuk case is that it appears that the provisions of the Road Traffic Act (RTA) 1988 are in breach of the First Motor Insurance Directive. This is because the Act states that third party cover is only required for the ‘use of a motor vehicle on a road or other public place’ and it defines a motor vehicle as ‘a mechanically propelled vehicle intended or adapted for use on roads’. Both of these definitions are narrower than the ECJ interpretation as the latter would cover instances where injuries were caused by motor vehicles on private land, for instance car parks as well as by vehicles falling outside the definition of ‘a mechanically propelled vehicle intended or adapted for use on roads’.
This is also relevant to cases under the Uninsured Drivers Agreement 1999 and Untraced Drivers Agreement 2003(the MIB Agreements) made between the Motor Insurers’ Bureau(MIB) and the Government which provide compensation for the victims of uninsured and untraced drivers.
DELANEY V SECRETARY OF STATE FOR TRANSPORT 2015
In this case Delaney, the claimant sustained serious injuries in a car accident caused by the negligence of the driver. Both claimant and driver were in possession of a commercial quantity of cannabis with intent to supply. The insurer argued that their liability was excluded on the basis that the claimant knew that the vehicle was being used for the purposes of a crime. The claimant brought proceedings against the Secretary of State for Transport. He claimed that Article 1.4 established the obligations of the insurer of last resort, in this case the MIB, to pay compensation to third party victims, and only permitted certain limited exceptions. The facts of the case did not fall within these exceptions. It was found that if the insurer avoided its obligations, then the MIB needed to step in and pay compensation. The MIB would only have no responsibility if the case fell under a number of very limited exceptions involving the victim’s own blameworthy conduct. These exceptions are expressly stipulated in Article 1(4) and Article 2(1). No other exclusions were permitted. The claimant was therefore awarded damages against the Secretary of State.
The result of both these cases is that the UK Government will need to consider legislative changes in order to comply with European Motor Directives.