MIB welcomes the announcement by the Department for Transport (DfT) that it is consulting on options to amend motor insurance law in light of the European Court ruling in the case of Damijan Vnuk.

Ashton West OBE, Chief Executive of MIB, said: “MIB welcomes this consultation and the opportunity it will provide for a wide range of stakeholders to share their views on the options presented by the Government.

“As soon as the decision was released by the European Court of Justice, we immediately recognised the serious ramifications of the Vnuk case and we have been working extensively with the insurance industry, Government, the European Commission and MIB-equivalent bodies across Europe to ensure that the impact to UK motorists is mitigated.

“The full implementation of the judgment could lead to a series of unintended consequences, such as hindering the effective enforcement of compulsory motor insurance and increasing opportunities for fraud.

“Following lobbying by MIB and its industry partners, the proposed amendment to the Directive which the European Commission is now considering does go some way to address our concerns. The UK Government’s preferred approach to amend the law in line with the Commission’s proposed changes is entirely sensible and we support this option.”

Background

This European Court of Justice judgment has wide-ranging effects on compulsory motor insurance requirements. Most EU Member States, including the UK, link the compulsory third party motor insurance requirement to whether a vehicle is used on a road, in traffic, or where the public has access. This judgment introduced the concept that a vehicle requires insurance wherever it is used as long as its use is consistent with the purpose for which it was designed. This, coupled with the very wide definition of vehicle in the EU Directive, created a compulsory insurance requirement for many more types of vehicle and situations, including off-road. MIB is extremely concerned about the practicalities of enforcing compulsory insurance in these circumstances and undermining existing enforcement.

The DfT outlines in its introduction to the consultation that while it “understands the principle of ensuring that victims of motor vehicle accidents have protection” it has “serious misgivings about the extent to which the Vnuk judgment has broadened the scope of the Directive”.

The European Commission itself has recognised that this judgment has generated some unintended consequences. It is now considering amending the Directive and has set out four options for consideration by interested parties. The UK Government’s consultation sets out the option to implement the judgment fully (which it refers to as the “Comprehensive Option”), or bring UK law into line with the Directive as if it had been amended as proposed by the Commission (the “amended Directive option”).

Read more about the DfT’s Motor insurance: consideration of the 'Vnuk judgment' open consultation.

Previous MIB comment

Read MIB's statement from June 2016 welcoming the European Commission's review on the Vnuk judgment here

Read Ashton West’s blog for more detail about Vnuk: The unintended consequences of a farmyard misfortune here