Compulsory Motor Insurance Is Vnuk'd

In a long awaited judgment, the High Court has called for the UK to extend compulsory motor insurance to vehicles used on private land.

The decision could have widespread implications for corporates, who may have to insure a whole host of different vehicles, such as forklift trucks and golf buggies, for the first time. This is not specifically a UK issue, as this decision is based on a European decision and potentially the compulsory motor cover requirements will be EU (and UK) wide.

In RoadPeace v Secretary of State for Transport and MIB, the claimant road safety charity alleged various provisions of UK law governing compulsory motor insurance contravened EU law following the European Court of Justice's (ECJ) interpretation of the Motor Insurance Directive (MID) in the 2014 Vnuk case.

Vnuk was a Slovenian case that involved a tractor being manoeuvred in a farm courtyard when it hit the ladder the Claimant was stood on, causing him injury. The matter was referred to the ECJ which extended the definition of 'use of a motor vehicle' to include any use that is consistent with the vehicle's 'normal function'; which is not limited to use of the vehicle as transport on a public road. The ruling has been interpreted as requiring compulsory insurance for any vehicle used on private property, which is currently inconsistent with UK law.

Perhaps unsurprisingly in light of the ECJ's interpretation, the High Court held that compulsory motor insurance in the UK applied to any vehicle being used anywhere, for any purpose for which it was intended. Current compulsory insurance restrictions requiring a vehicle to be "intended for use on roads" or to its use "on a road or public place" are not permitted under MID. The judge concluded that an appropriate declaration to this effect should be granted, although no timetable has yet been set for amending domestic legislation.

Whilst there is no impact on UK motor insurance arrangements at present, recent UK decisions have already begun to widen the scope for motor insurance as a result of Vnuk. In UK Insurance Ltd v R&S Pilling, it was found that damage to premises caused by fire resulting from repairs being carried out to a vehicle was covered by that vehicle's motor insurance. In Wastell v Woodward it was held that a hamburger van parked in a layby, with the purpose of conducting a business, constituted use of a vehicle on the road.

In light of this developing body of domestic and European law, the increased...