What have construction vehicles, agricultural vehicles, golf buggies and mobility scooters all got in common?

27 Feb 2017

Those of you who are familiar with insurance law matters will no doubt already be aware of the European Court of Justice (ECJ) ruling in the case of Damijan Vnuk v Zavarovalnica Triglav (Vnuk). However the implications of the case may be very wide for all of us and will therefore be of interest not only to those involved directly in insurance.

Vnuk concerned a claim for personal injuries which were sustained in a farmyard accident in Slovenia. The court found that the tractor involved in the accident should have been insured, even though the vehicle was being used on private land and only for agricultural purposes. The court said that it needed insurance as it was a vehicle being used for a purpose "consistent with its normal function".

This was a much wider interpretation of the obligation for compulsory motor insurance than the UK had thought to be the case and means UK law no longer reflects the requirements of the Motor Insurance Directive as interpreted by the ECJ. If UK law is amended to reflect this it could mean that a whole range of vehicles including construction vehicles, mobility scooters, quad bikes, fork lift trucks, ride on lawnmowers, dodgem cars and many more would all require compulsory insurance, wherever they are being used. There is also a concern that at a time when much work has been done to address fraud this could open the door to new opportunities for fraudsters.

More accidents could occur away from CCTV and involving vehicles which do not have advanced systems of traceability unlike the registration system we have for vehicles on the highway.

Various solutions to the problems posed by Vnuk have been mooted. One such proposal is to amend the Motor Insurance Directive to include provision that cover is required only when a "motor vehicle" is "used in traffic".

The Department for Transport has launched a consultation to look at the issues arising from the case. The consultation is open until 31 March. Boris Johnson was quoted as saying "what has it got to do with the so called single market whether I tootle around my garden on an undersized quad bike?" This suggests at least that the government does want to take action! Watch this space for updates!

It is ironic that at a time when the news is full of potential problems arising from our exit from the EU, this case gives rise to problems due to the fact that we are still within the EU and therefore need to comply with its laws.