The Vnuk court case came to our attention about 6 months ago and we commenced collecting information on the 2014 decision of the Court of Justice of the European Union in relation to the “Vnuk judgment” and its possible effects on proposed changes to motor vehicle use and motor insurance within the European Union.
Recently the topic has been stirred up by movement within the UK Government through its public consultation, along with a joint statement by the Motorcycle Industry Association (MCIA), the Amateur Motor Cycle Association (AMCA) and the Auto-Cycle Union (ACU).
All this provided the impetus to produce an article with more detail and substance.
What is this “Vnuk judgement”?
A statement made by Robert Goodwill (then the Secretary of State for Transport) in the UK Parliament in March 2015 in reply to a question from the Northern Ireland MP Jim Shannon explains the basis for the interest in the UK for this case.
Jim Shannon: “To ask the Secretary of State for Transport, what recent discussions he has had with his counterparts from other EU member states on insurance cover for (a) ride-on lawn mowers, (b) mobility scooters and (c) golf buggies”
Robert Goodwill : “The Vnuk judgement concerned a case before the European Court of Justice about a man (Mr Vnuk) who was injured when he was knocked off a ladder by a trailer that was attached to a tractor in a barn in Slovenia. The effect of the judgment is that any vehicle that falls within the Motor Insurance Directives’ definition of a vehicle should have a compulsory motor insurance policy. The definition of vehicle in the Directives is very wide. We are working closely with insurers, and others to identify how the ruling in the Vnuk case should be applied to a range of vehicles, including mobility scooters, golf buggies and ride-on lawn mowers. We will shortly be meeting with relevant stakeholders to discuss the particular issues that apply to those using mobility scooters. We will, of course, consult before making any changes and we are determined to get a sensible outcome.”
The beginning of the saga was thus a man knocked off a ladder in Slovenia in 2007 on private land, whose claim for compensation was refused by the Slovenian Courts. The case was then referred to the European Court of Justice, which of course meant ratcheting up the involvement of lawyers. The European Court of Justice ruled that Mr Vnuk was due compensation and that the European Motor Insurance Directive 2009/103/EC was required to be changed.
The directive is interpreted differently in the various EU member states – one interpretation (UK) is that third party motor insurance cover is required for vehicles “in traffic” – another interpretation is that third party motor insurance is required for all vehicles “in use” – with some derogation exemptions for certain types of vehicles from insurance requirement.
The Vnuk judgement requires all vehicles to have compulsory insurance when in use.
Vehicles “in use” brought within the scope of the Motor Insurance Directive by virtue of the Vnuk judgment are electrically assisted pedal cycles, construction vehicles, agricultural vehicles, Segways, ride -on lawnmowers, motorsports vehicles, mobility scooters, golf buggies, motorised ride-on children’s toys, fairground rides (e.g. dodgems), fork lift trucks, dumper trucks, engineering plant and quad bikes (off-road construction).
This basically means whether these are parked up, from farms, motor (racing) tracks, on private land (no public access), or having a vehicle on a private dwelling.
The current Motor Insurance Directive (MID) states that “vehicle” means 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 Motor Insurance Directive as it stands, aims at ensuring a high level of protection for victims of motor accidents throughout the EU and is aimed at facilitating the free movement of motor vehicles throughout the EEC. A good thing for those riders who tour, holiday and travel though the EU.
Thus we appear have a “perfect storm” for continued anti-EU rhetoric, fear and misreporting. Thankfully sane and reasonable reporting along with the UK Government consultation are on hand. In the meantime, it would appear that the European Commission is being “forced” to make changes by the ruling from the European Court of Justice.
ACU – AMCA – MCIA
Speaking for the ACU, AMCA and MCIA, in a December 2015 press release, entitled – “British motorsport could end due to EU ruling” – Steve Kenward, CEO of MCIA states, “At a stroke, this (Vnuk judgement) would wipe out a successful industry and all the jobs that go with it, as well as eliminating a popular leisure pursuit for 1.9 million people, along with the boost that this gives to both local and national economies. “If the government implements the Vnuk judgment un-amended, British motorcycle sport would end in the UK. Given that we are coming out of the EU, we are astonished that the government is even considering an option to implement Vnuk. We call on ministers to end uncertainty and put a stop to Vnuk in the UK.”
The joint press release primarily concentrates on the effect for motorsport in the UK and in a debate on the MCIA’s Facebook page. Motorcycle Minds’ Elaine Hardy, as herself, commented, “However the discussion effectively relates to all road going vehicles……” the MCIA commented back, “We are highlighting the motorsport sector yes and other affected parties may also run their own campaigns” adding, “Our immediate concern is the issue we have highlighted (Motorsport Sector). But thanks for taking the time to make your comments.”
While we understand this stance on Motorsports, coming from Northern Ireland and recognising that in Ireland, road racing is difficult enough financially to maintain without this extra burden. What about the effect for road going motorcyclists, if as it appears, the motorcycle industry is only highlighting the motorsport sector and leaving “other affected parties” to run their own campaigns? You could ponder as to why the MCIA and their associates are bringing attention to something that might best be sorted out diplomatically. In other words, perhaps a softly, softly approach might have a far better effect than scaremongering.
The website Motomatters.org www.motomatters.org follows up on the ACU, AMCA and MCIA press release and asks, “Is the end nigh for motorsport in Britain?” giving the short answer , “No, but it’s complicated” and questioning, “So where did these warnings that the sky is falling come from?”
Motomatters David Emmett, the author of the Motomatters article explains in-depth the Vnuk judgment in an easy to read/understand manner.
Concentrating on the Motorsport aspect of the issue David explains the, “Doomsday scenario which the MCIA press release was warning of.”
“In the Vnuk judgment, the ECJ interpreted the directive to mean that any motor vehicle, whether on private or public land, must be covered by third party insurance. That would also extend to racing vehicles, be they racing motorcycles or cars, racing on circuits on private land. It would mean, for example, that at every European round of MotoGP, every Grand Prix rider, from Marc Márquez and Valentino Rossi down to Romano Fenati and Patrik Pulkkinen would have to be insured against any damage they would cause to other riders in a crash.”
“Arguably, Valentino Rossi and Movistar Yamaha could easily afford that insurance, though the smaller teams in Moto3 might struggle. But the real issue is with the bottom level of racing, at club, regional, and even national level. Insurance for a club racer, or even a national racer, could end up being so prohibitively expensive that it becomes basically uninsurable. Without club racing and track days, operating a race track is not economically viable. Silverstone struggles to stay afloat financially as it is; if it was forced to rely solely on the income from MotoGP and F1, it would be bankrupt within days.”
The article continues that it is a shame the MCIA press release generated such a batch of alarmist headlines, which in our (Motorcycle Minds) opinion this seems to be the way to report in the small world of the UK motorcycle lobby, explaining that, “The reality of the situation is that while there is genuine cause for concern, the chances of motorcycle racing ending in the UK – or anywhere in Europe – are close to zero. Not because motorsports are such an important part of the economy (even though they are) but because the implications of the Vnuk judgment are so far reaching and touch on so many different industries that the EU is already working on fixing it.
“Though the UK may be the worst affected by the Vnuk judgment because of the peculiarities of British law, the case also has implications throughout Europe. The other 27 member states of the EU will also have to implement legislation to deal with the insurance liability imposed. This could have a devastating effect not just in the UK, but especially in racing-mad countries such as Spain, Italy, Germany, and even Slovenia.”
Instead of writing our own article we could have simply posted up the Motomaters.org article as it covers all aspects without the alarmist views, in a sane and rational manner. The article concludes, “The difficulties posed by the Vnuk judgment would be dissolved, while ensuring that all vehicles in the EU have to be insured when used in traffic. Innocent victims of road traffic accidents involving vehicles from other EU member states would receive compensation in full, and riders taking part in a motorcycle race would do so at their own risk, exactly as is the case now.”
With a final comment, that the EU Commission proposal was to have action taken in the third quarter of 2016, which has now passed, urging that although the work is ongoing, “They need to hurry up. If they don’t, it won’t quite kill motorsports in the EU, but it will create a rather major inconvenience.”
Have rider organisations been aware of the Vnuk “issue”? The answer is yes but are they being active?
At the Fédération Internationale de Motocyclisme (FIM) Europe Congress in Malta which hosted the 9th edition of Road Safety Conference in 2015, John Chatterton-Ross, FIM Europe Director of Public Affairs, stated that regarding, “Current issues facing motorcycling from Brussels” , one issue was, “The European Court of Justice and the case of Mr Vnuk (insurance problems in sporting events)…………….. a problem that may (or not) eventually effect road going insurance.”
Again in 2016 at the FIM 10th edition of the Road Safety Conference at Kavala (Greece) Mr Chatterton-Ross’ report focussed on the most important issues for FIM Europe which included European Court of Justice and the case of Mr Vnuk (insurance problems in our sporting events).
Therefore FIM is aware of this important situation as an international sporting body and organisation that represent the interests of motorcyclists to the European authorities.
Also in 2015 Anna Zee the President of the Federation Of European Motorcyclists (FEMA) responding as the BMF (British Motorcyclists Federation) made a statement on the Vnuk judgement – reported in the Motorcycle Action Groups (MAG) activists Newsletter:
“So, what next? I think there are two areas the BMF needs to look at, legislation and insurance products. Proposals will be made to amend the regulations applying to compulsory motor insurance; we may be able to participate in the drafting of these proposals.
These will then be subject to a consultation over the summer which we will naturally respond to. With respect to insurance this should be an opportunity to work with insurance providers to design products which will provide necessary cover without unnecessary cost. I’m not sure yet where we stand with respect to bikes which are SORNed, show bikes, farmers’ trail bikes, the unregistered bike at the back of your garage etc.
Note that something that will probably finally be decided by test litigation is the definition of the normal function of a vehicle. I would welcome any input from you about activity involving a bike which does not currently fall under the remit of the Road Traffic Act – this would help us in discussions with the insurance providers.”
Perhaps some updated information in the public domain would be pertinent for road going riders to help steer the lobby for the motorcycling community. At this point in time, the silence from FEMA on this issue is deafening!
There is the elephant in the room that perhaps people need to think more about – and that is the insurance industry. The fact that insurance was even an issue for the ECJ is in itself of concern – this should have been a national issue regarding a claim, instead it escalated to become an EU problem.
Why should that be?
Consider that the Motor Insurance Directive is exactly that – a Directive. The way that works within the European Union is that a “Directive” is open to interpretation and derogation by the member states. In that respect one could query why the European Court of Justice should interfere into Slovenia’s interpretation of the Directive.
What is confusing is not that the ECJ ruled that Mr Vnuk was due compensation – based on the Slovenian interpretation of the Directive – BUT that the ECJ effectively interfered with a Directive – in this case the European Motor Insurance Directive 2009/103/EC ruling that it was required to be changed.
In that respect, the insurance industry is a powerful and influential lobbyist – not only in Brussels, but also in the UK. So perhaps more attention needs to be given to this industry and how it is looking at this ruling. As most of us who have worked within the European Institutions as lobbyists, we know that typically the UK government tends to “gold plate” everything that comes out of Brussels.
In this case however, in the UK consultation, the government has made clear that the preferred option will not amount to gold-plating and in fact is in full agreement with the EU Commission that does not agree with the ruling from the ECJ.
The UK consultation which closes on 31st March 2017 states that the European Commission has recognised the significant nature of this judgment and has proposed an amendment to the Directive to limit the effect of the Vnuk judgment.
For UK road going riders the main issue is Statutory Off-Road Notification (SORN).
“If a vehicle is not being used on a road or other public place, the owner can make a declaration to that effect; this is a Statutory Off-Road Notification (SORN).
The consequence of making a SORN declaration is twofold: (i) the owner does not have to pay Vehicle Excise Duty (VED or “road tax”); and (ii) the owner does not need to insure the vehicle”.
The requirements of the Vnuk requirement means any SORN vehicle which is used on private land must have insurance in place. The UK consultation says this means that there is a question over whether government can maintain the blanket exemption from insurance for SORN vehicles.
Would this mean that your box of bits or bike sitting laid up require road going insurance, when not in use on private land and declared as SORN, as there are questions whether the “blanket exemption” could be maintained?
The consultation asks two questions regarding SORN.
Should all SORN vehicles be required to have third party insurance under the comprehensive option? – With a yes and no option and the reasons for your answer.
The second question asks.
Would there be problems with SORN under the amended Directive option?
Although the consultation says that, “Dealing with SORN under the amended Directive option should not generate a problem. The obligation for compulsory insurance would be triggered when a vehicle was used on land over which the public has access. If a vehicle subject to VED was being used on land over which the public has access, and had a SORN in place, it would be committing an offence as it would be contravening the terms of the SORN.”
This appears near to the present condition as regards SORN in the UK.
The consultation lays out three options, with the preferred option the same as the suggested EU commission option as they have “elucidated” in most detail in their own Inception Impact Assessment
“The scope of the Directive would relate only to accidents caused by motor vehicles in the context of traffic. This would be done by defining locations and types of activities that are to be understood to fall within that definition. The use in traffic could mean where the use of a vehicle is for the transport of persons or goods, whether stationary or in motion, in areas where the public has access in accordance with national law. Activities that would fall outside of this definition would be regulated at Member State level and it would be for them to decide whether they wish to pool them with other activities by regulatory means. The guarantee funds would not be obliged, under EU law, to compensate consequences of traffic accidents unrelated to use in traffic. No changes in premiums or guarantee funds would be needed to absorb the potential need to compensate victims of accidents occurring in the context of purely agricultural, construction, industrial, motor sports or fairground activities involving vehicles where these occur outside of the sphere of use in traffic.”
The Commission’s suggestions are, at present, according to the UK consultation at very a high–level of discussion with the UK Government awaiting further details about the Commission’s plans. “Nonetheless, for the purposes of this consultation we are seeking views on the theoretical option of changing domestic legislation to comply with the potential amendment to the Directive detailed in the Commission’s suggestion.”
The detail of this option sets out how it is perceived the amendments will work in relation to insurance for motorsports on “types” of private land/areas with public access as the directive was intended to cover vehicles being used for transport purposes on public roads or on areas accessible to the public.
This would be a good result for motorsports, “in most cases motor sports event would take place on private land with no public access to the actual areas where the competition takes place”, therefore basically exempting motorsports within the scope of the Motor Insurance Directive, that its intention “should be limited to the use of vehicles in the context of traffic.”, leaving certain decisions to Member States and National laws.
Rest Of Europe
Ireland though the Modello Park race circuit have set out that, “This ruling unless amended, will have detrimental effects across all EU motorsport businesses as the insurance industry have stated that “participant” to “participant” unlimited liability cover is uninsurable and won’t be available.”
“The European Commission recognises the need for the amendment to the Insurance Directive to address this issue, and is shortly to produce a road-map which clearly outlines their plan to approve and implement this amendment which will exempt all motorsport in the EU. For this to take place the European Commission must have majority support from all 28 EU national governments, and then obtain majority support from 751 MEPs in the EU Parliament to confirm the resulting legislation.”
An interesting read is from Motorsports.ie – DON’T PANIC. The Real facts about Vnuk The article includes an interview with Irish MEP Brian Hayes who states that “they” are working in collaboration with British MEPs and others from Ireland and Belgium and within the European institutions.
Asked if, “Are the governing body, the FIA – Fédération Internationale de l’Automobile involved in this at all?” Brian Hayes says that, “I’m aware they are aware of it. I think they are working with the representative bodies across the European Union to see if they can lobby.”
Bearing in mind these articles from Ireland are from the early part of this year (2016) up to date information and discovering what the rest of Europe is doing is hard to find.
What To Do?
Further reading on the topic is recommended, this would include reading where we sourced our material and replying to the UK Government consultation:
MCIA press release – British motorsport could end due to EU ruling
Motomatters.com – No, The End Is Not Nigh For Motorsport In Britain, Or The EU – Our thanks to Motomatters.com for the use of the information in their article.
Motorsport IE – DON’T PANIC. The Real facts about Vnuk
Save UK Motorsport – Fight ‘Vnuk’ judgement – includes petition – suggested letter to your MP – www.fightvnuk.co.uk
European Commission- Adaptation of the scope of Directive 2009/103/EC on motor insurance
UK Government Consultation – Motor insurance: consideration of the ‘Vnuk judgment’
Motorcycle Industry Association – MCIA – The trade body for the wholesale side of the UK motorcycle industry – www.mcia.co.uk
The Amateur Motor Cycle Association – AMCA – Independent organisation dedicated to providing efficient management and control of off-road motorcycle sports – www.amca.uk.com
The Auto-Cycle Union – ACU – National Governing Body for motorcycle sport in the British Isles – www.acu.org.uk
Fédération Internationale de l’Automobile – FIA – governing body of motor sport and aims to safeguard the rights and promote the interests of motorists and motor sport – www.fia.com