Vnuk - the unintended consequences of a farmyard misfortune
In August 2007 a Slovenian farmer called Damijan Vnuk had the misfortune to be knocked off a ladder by a tractor trailer that was reversing at the time, just as he was loading hay into a barn. The incident took place on private land on a farm.
At this point no-one could have anticipated how these circumstances would have escalated into a scenario that has a fundamental impact on the compulsory insurance regimes of EU countries and in some instance, including in the UK, actually threatens to create an unenforceable compulsory insurance requirement.
Vnuk sued for compensation for the injuries he received from the driver of the tractor but Slovenia’s courts ruled against his claim because in their view the tractor was not being used for its main purpose, as a means of a transport. However, in September 2014 the European Court of Justice disagreed and said the requirement in the EU Motor Insurance Directive, devised in 1972, was for vehicles to be insured for any use consistent with the normal function of that vehicle. This means the accident should have been covered by compulsory vehicle insurance.
As a result, motor insurance, in the view of the court, is now required to be in place for vehicles used in all situations – not just on roads. And ‘vehicle’ in the words of the Directive, has a very wide meaning.
The ruling has raised fundamental questions of `what is a road` and also `what constitutes a vehicle`. It’s a complex issue that has prompted the European Commission to look again at the original requirements of the Directive.
In the UK over the last ten years, a great deal of effort and resource has been spent by Government, the Police and the insurance industry on promoting a simple message to the public about the compulsory nature of motor insurance, together with the reasons for insurance protection and its compulsion in the context of the use of motor vehicles. The public message has been: if you drive uninsured you will be caught, your vehicle will be seized, you will face financial penalties and your driving licence will be endorsed.
On-road enforcement with the Police using ANPR technology and enforcement from the record using the Motor Insurance Database with the DVLA registered keeper database have all been very effective. The number of uninsured vehicles on UK roads has halved over the last decade from around 2 million vehicles to 1 million within a vehicle parc of 36 million.
All of this is underpinned by the UK requirement for compulsory insurance of vehicles (as defined by UK law – “intended or adapted for use on a road”) on roads or in public places.
The simplicity and effectiveness of this message and the practicalities of enforcement of the compulsory nature of motor insurance is now threatened by the widening of the scope of the Directive following the Vnuk decision.
The origin of the Motor Insurance Directives was to facilitate the free movement of traffic between Member States and thereby to establish the development of the single market. The subsequent Motor Insurance Directives, whilst also seeking to emphasise the need to protect third party victims, continued the same theme.
The interpretation of the Directives in the Vnuk case means that the extent of the compulsory insurance requirements are now so wide that meaningful pro-active messaging and enforcement will be almost impossible. This in turn will have a negative effect on all the work and achievements to date on tackling the problem of uninsured driving in the UK and other countries in the European Union. We do have other concerns too, not least of which is the opportunities for fraud at the expense of British motorists.
MIB is presenting its concerns to MEPs who have a particular interest in the case. We were delighted to have the opportunity to brief two of them, Vicky Ford MEP and Ashley Fox MEP, in Brussels earlier this month.
MIB is working with the ABI, the industry and Government to ensure that this ruling does not lead to a series of unintended consequences, such as hindering enforcement, the potential for fraud should accidents happen on private land away from potential witnesses, and the potential increase in costs for motorists.
So the `road ahead` looks rather unclear at the moment but rest assured we, and all concerned, will do everything in our power to ensure an acceptable outcome.
Ashton West OBE