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.
Motomatters.org
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.”
Rider Organisations
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!
Insurance
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.
UK Consultation
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.
SORN
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.
General Options
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’
Information
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
MCIA – As you mention, the Commission is in the middle of an impact assessment and as those who know, know, that requires the intertervention of all committees with an interest, in this case, with the scope of working together in an inter-service steering group. As we are aware from our contacts in Brussels and your comment above, your people were involved. Perhaps it might be useful to return to discuss with the EU components.
Just a small mention about Finland – it’s easy to get things wrong. It might be useful returning to the original concept of 3rd party and the Road Traffic Act 1988?
In the event, reading the DfT’s document – specifically option 3 (starts page 22 – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/579383/motor-insurance-vnuk-judgement-impact-assessment.pdf
What is apparent is the issue of insurance premiums and effectively the government’s laissez faire attitude towards the insurance industry. Simply, the government seems to believe that motor insurance in this country is competitive – I would suggest it is an oligopoly, thus even with option 3, the motoring public of the UK, will pay higher premiums.
As mentioned, by somebody who knows, the Vnuk issue within the EU Commission is seen as a “UK” problem – though I would extend this to Ireland as well. Why? Because in these countries, simple RTA insurance (or in the case of Northern Ireland) NI order – has been over-ridden by the insurance industry to include both vehicle (which is generally the case in most EU countries) and the person).
Let me explain… RTA 1988 insurance aims to ensure that personal injury is covered by insurance through 3rd party insurance. What the UK/Irish insurance industry does however is to consider the driver/rider and the vehicle when calculating premiums.
The fact that there are differences between the UK and the rest of the EU is largely due to the historical evolution of the industry in the UK. Specifically, it has been less heavily regulated, direct government provision has been absent and it has generally been a more “competitive” market. The core argument for insuring the driver is that it is the driver, not the vehicle, that is responsible for the risk and it is possible to relate price much more closely to risk than would be the case in a vehicle based system.
Safer drivers with a good driving record then pay a lower premium than those with a history of being involved in road traffic accidents. Given the very strong correlation between age and risk, this means among other things that younger drivers pay higher premia.
In principle, with vehicle-based insurance, once a policy has been issued, anyone can drive the vehicle as long as he or she has the registered keeper’s permission. In practice it is not quite that straightforward as, increasingly, insurers writing business in continental Europe are requesting driver details and using this information to inform their pricing.
If the UK were to move to a regime grounded on insuring the vehicle, several consequences are probable. First, it is likely that there would be a narrowing of the range of premiums charged, because underwriters would not be able to discriminate individual risk as finely as at present. This would almost certainly mean that (current) high-risk drivers would pay less and low risk drivers more.
Second, with fewer risk factors on which to price, it is probable that average premia could increase as insurers attempt to cover for greater uncertainty, although overall, they would have to charge less in order to remain “competitive”.
Thus, the offence of driving without insurance would effectively be de-criminalised. This follows because driving without insurance would only be deemed to have occurred if an individual were driving without the permission of the registered keeper. This would be a civil matter between the registered keeper, his/her insurance company and the driver, there would not be any need for police enforcement.
The reason for writing all this, is because effectively the Vnuk judgement has blown UK motor insurance out of the water and it is understandable why the insurance industry is upset, because it brings into question its definition of RTA insurance and how that extends from simple personal injury to the UK insurance industry’s definition of 3rd party which means insuring both the driver and the vehicle. They must be peeing themselves.
You might say “So what? what’s that got to do with motorcycle sport?” The answer is the MIB – which means that whether the vehicle is on private or public land – the insurance policies would have to revert back to the MIB for claims against whatever vehicle is involved in the case where the claimant is unable to identify the vehicle/driver. In that respect, the MIB gets its money to pay out – from the motorist – the issue now is what will we class as a vehicle and third party insurance.
Finally,while we understand why MCIA should be concerned with motorcycle sport, I find it somewhat difficult to understand why the MCIA is not more involved in the issues that may affect road going motorcycles – which, based on what I have written above would definitely be in the firing line for increased premiums whatever the outcome of the DfT’s consultation and choice of options. In that respect and paraphrasing your comment “They believe that someone, somewhere will stop it from happening”. Yeah sure….this stuff is for clever people. 😉
Thanks MCIA for the additional information, which as you say at the end of your additional article, “Underplaying the risks is not a sensible course of action, given the timescale.” – Vnuk is too far reaching to simply ignore, or take a relaxed view about.” is something we have not done. We have reported and looked at the options as laid out, however we have had an issue with the “scaremongering” headlines and as we know from half a year of BREXIT lobbying in 2016, people are turned off or “radically” turned on by claims that come from this angle of engagement, when you are looking for support.
However one other comment – You state that, “We want the unintended consequences of Vnuk to be made clear and resolved in a manner that protects UK motor and motorcycle sport.” continuing that, “However, the Isle of Man TT will be unaffected, as the Isle of Man is neither in the EU, or the EEA.”
Surely there would be an unintended consequence of Vnuk for racing on the Isle Of Man, bearing in mind that racing on the Isle of Man does not just consist of the TT it also includes – MANX Grand Prix – Southern 100 – Classic Car Racing – Motocross – Trials – Motorsport Rallying – Jurby Drag Racing – Jurby Track Days – last but not least, the Ramsey Sprint – “The only place a normal biker can race legally during the TT and Manx Grand Prix with classes for all bikes just turn up and enter on the day.” ?
That unintended consequence, if Vnuk is implemented without change, is that riders/driver/competitors do not only race or reside on the Isle of Man, therefore the unintended consequences would be that those riders/driver/competitors both professional and as you say, “58,000 riders who take part in grassroots events across the UK will find that legal avenues to the sport will be shut down.” if riders/driver/competitors cannot afford to race or motorsport in general is not protected in the UK, then what hope is there for racing on the Isle Of Man. So the Isle Of Man should not be ignored and it would be interesting to know how aware and what or anything they are doing.
Unless, mirroring what happened over a hundred years ago when the UK Government made it impossible to close public roads for racing and the Isle of Man/Manx Government initiated legislation to enable the closing of public roads for racing – that the Isle Of Man remains the only possible place to race in the UK.
We wonder how long that hypothetical “loophole” would take to close or even open?
We will also be along in a moment on the issue of insurance.
You can get further background on what lobbying has taken place to limit the Vnuk judgment here: MCIA involvement with highlighting Vnuk and its affect on motorsport
We have reproduced the further background information below.
MCIA involvement with highlighting Vnuk and its affect on motorsport
31st December 2016
See below for additional information on the background to lobbying by the MCIA and UK motorsport bodies.
Note from MCIA on Vnuk
The MCIA’s role is to deal with a wide range of legislation that affects all aspects of motorcycling and the sport. MCIA works on many technical and legislative issues, many of which can be resolved through our regular dialogue with government. From time to time, publicity is needed to highlight an issue, state a public position and call for support for this position, both from politicians and the public. The Vnuk ruling is one such case.
MCIA has been working on Vnuk since the European Court of Justice (ECJ) judgement was handed down in September 2014. We have done this in partnership with motorcycle sport, the wider four wheeled motorsport sector, the insurance industry and the Department for Transport. We have also liaised closely with European colleagues and the European Commission. This is a rare example of government, the industry, sporting bodies and insurers all uniting with a single voice.
It is important to realise that Vnuk is not an item of forthcoming legislation which can be lobbied against or amended, but an actual ruling of Europe’s highest court, with no further avenues for appeal possible. Vnuk is set in stone and cannot be changed. It requires third party damage and injury insurance to be in place for all mechanically propelled vehicles when used at any time, for any purpose and in any place. This includes motorsport vehicles.
However, the European Motor Insurance Directive (MID) can be changed to remove certain vehicles from the scope of the Directive, and therefore Vnuk. It is here that we have focused considerable effort.
The UK Government is not in an easy position. Currently, its only fully legal option is to implement Vnuk. It has proposed an option based on what a possible amended MID could look like and MCIA strongly supports this approach. However, we are concerned about the Government’s legal position with regard to this option, in the absence of proposals from Brussels, let alone an amended MID.
But with no sign of the European Commission legislating to remove motorsport vehicles from the MID and time running out for EU member states to implement Vnuk, the UK Government was forced to launch its recent public consultation, (December 2016), with one option being to fully implement the judgement. This would have catastrophic consequences for the sport.
The Government could choose to ‘exempt’ motorsport riders and drivers from a requirement to buy third party insurance. This is also a legal option. But the requirements of Vnuk will still remain (insurance in place to cover the use of any mechanically propelled vehicle at any time, in any place and for any purpose). This means that third party damage and injury liabilities would remain. The result of this would likely be significant hikes in the cost of all kinds of insurance to cover the costs of meeting claims from ‘exempt’ classes of vehicles. Therefore, unless the Motor Insurance Directive is amended, there is no escaping Vnuk.
Although the UK has voted to leave the EU, this may take several years and the final arrangements for our ongoing relationship with the EU is unclear. While we remain in the EU we are subject to Vnuk. The Government can’t simply ignore it. If we leave the EU and remain in the single market, or the European Economic Area (EEA), then Vnuk, along with a large percentage of other European law will still apply to the UK. Like many directives, including driving and riding licences, the MID is marked EEA ‘relevant’, so will continue to apply if we remain part of the single market. However, the Isle of Man TT will be unaffected, as the Isle of Man is neither in the EU, or the EEA.
As a result of the above and the launch of the Government’s consultation on implementing Vnuk, it became necessary to make the issue public, to alert fans and riders to their opportunity to respond to the UK government consultation and to highlight the issues behind it. We want the unintended consequences of Vnuk to be made clear and resolved in a manner that protects UK motor and motorcycle sport.
Background to lobbying
The possible ramifications for motorsport of the Vnuk ruling were first notified to the industry and sporting bodies in the two and four wheel sectors in September 2014. The UK government and insurance industry also became aware of the potential issues and began working with us.
MCIA and the Motorsport Industry Association (MIA) created a partnership to address Vnuk along with all other bodies involved with UK motorsport, from F1 to grassroots organisations. The insurance industry and the Government quickly joined the partnership. Key objectives were to ensure that the European sports bodies started lobbying the EU and member states to call on the European Commission to amend the Motor Insurance Directive. The UK Government meanwhile, partnered with the German and Irish Governments to lobby the EU, as this is not just a UK concern.
Considerable efforts have been made to lobby the EU institutions (Parliament, Commission and Council). We have also liaised closely with international sporting bodies: the Fédération Internationale de Motocyclisme (FIM) and the Fédération Internationale de L’autombile (FIA). MCIA and the Auto Cycle Union (ACU) addressed several meetings of the FIM and the UK Motor Sports Association (MSA) also raised the issue with the FIA.
As it was clear the EC is unhappy about the consequences of Vnuk, our lobbying in Brussels was successful and under the former European Commissioner Lord Hill, the EC had agreed to amend the Motor Insurance Directive. The Department for Transport had hoped the EU would resolve the situation for motorsport before Vnuk needed to be implemented. They waited two years, to see if this would happen. It did not.
The European Commission did consult governments and proposed a ‘roadmap’ of options. This roadmap became the Initial Impact Assessment, which was first published in June 2016. However, the European Commission wants a second consultation, which is yet to be conducted. With the resignation of Lord Hill in late June 2016, the matter appears to have lost all momentum at European Commission level and it is unknown when, or even if, the MID will be amended.
In the meantime, member states have run out of time and need to implement Vnuk, or try to find a way around it, which is what the UK Government is trying to do with its public consultation. As Vnuk has now reached the point where the Government is seeking wider input from the public, MCIA decided to highlight the serious threat posed by Vnuk. We wanted to call for support for our position which is that the Government must in no way implement Vnuk in a manner which damages UK motor and motorcycle sport. All UK sports and governing bodies are behind us on this – MCIA is not acting alone.
As for other EU countries, Germany and Ireland recognise the problem and Vnuk received a large amount of coverage in Ireland back in the summer. Media in other countries failed to pick up on the Europe-wide ramifications and there remains some apathy in other EU countries and a belief that nothing needs to be done. This belief may be due to a number of factors. The people considering the legislation are not motorsport experts, some countries may be intending to follow Finland’s example (which has made insurance available, but is very expensive), and some think they are okay, as they already require riders to have third party liability. However we have discovered that this insurance only covers injury, not vehicle damage and so fails the Vnuk ‘tests’. Of course, if another member state finds a way to accommodate Vnuk in a way that works, we will encourage the UK Government to do the same. But we simply can’t hope or rely on this happening as Vnuk is incredibly specific.
Some commentators are so shocked by the possible ramifications, they believe that someone somewhere will stop it from happening; and that highlighting the worst case scenario is scaremongering.
Vnuk is too far reaching to simply ignore, or take a relaxed view about. Self-insurance options are extremely limited, even for Formula One and Moto GP. But such solutions are impossible for the wider sport and without Vnuk-compliant insurance, or insurance at a cost that few will want to bear, events will not be able to legally take place. The 58,000 riders who take part in grassroots events across the UK will find that legal avenues to the sport will be shut down.
Strong pressure via the consultation will offer the UK Government greater justification to produce a result which protects the sport. Encouraging people to reply to the consultation is one reason why MCIA and other sporting bodies chose this moment to make public its concerns.
Underplaying the risks is not a sensible course of action, given the timescale.
Original Article – Click Here
Hi Poor Old Richard
The Vnuk judgement requires all vehicles to have compulsory insurance when in use.
The European Court Of Justice interpreted the current Motor Insurance Directive to mean that any motor vehicle, whether on private or public land, must be covered by third party insurance.
Vehicles “in use” brought within the scope of the Motor Insurance Directive by virtue of the Vnuk judgment are interpreted as 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) and probably some others.
The Motor Insurance Directive – DIRECTIVE 2009/103/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 September 2009 – relates to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability.
The key words being – enforcement of the obligation to insure against such liability – so there is a compulsion for mandatory insurance for, as per the Vnuk judgement interpretation of the Directive to mean insurance for vehicles in use as opposed to the option which member States such as the UK use at present – vehicles in traffic.
That’s where the “fight” lies on this aspect.
As for getting insurance companies to pay out just because one has insurance – with options of third party only – fire and theft – fully comprehensive – use for commuting – not for hire or reward etc etc etc – all the small print – or removing the compulsory part of needing to buy insurance we would say good luck to anybody getting that into law 🙂
The way I read the ruling is that the farmer had insured his tractor with motor vehicle insurance because he had to in order to drive it on the roads. And the ruling was against the insurance company: that since they insured the tractor, they have to pay. Nothing in the ruling says a person needs to seek motor vehicle insurance for a racing vehicle or a golf buggy. If the UK adapts the law to meet the ruling, just need to make sure it simply says insurance has to pay if you have insurance, and doesn’t say you need to buy insurance.
This is a helpful article.
This is a matter of concern inside the FIM and we have again started discussing a solution following the press release issued just before Christmas.
It may be that the UK government is motivated to this by its desire to keep access to the sale of insurance products following BREXIT.
Which is an interesting subject in itself and a matter for street riders too.
Competition with insurance products keeps pricing down (for example many UK riders have insurance with companies that are not UK based).
Keep up the good work!