ECJ Offers Further Guidance On Compulsory Insurance Regime

There has been a seemingly endless procession of decisions from the European Court of Justice (ECJ), most notably Vnuk, compelling risk managers to consider whether a range of vehicles ranging from forklifts to golf buggies required compulsory motor insurance, even when used on private land.

However, it remained unclear whether a vehicle capable of dual functions, such as a tractor, was required to be covered by a motor insurance policy in the event that it was being used for a mechanical function rather than transport.

It will therefore come as relief to risk managers that the ECJ decision in Rodrigues confirms that dual function vehicles are only subject to compulsory motor insurance provisions when the vehicle is being used for transport purposes.

Vnuk had suggested that the Motor Insurance Directive was to be interpreted in an expansive manner, imposing a requirement for compulsory insurance on any vehicle used on private property, whether that use was for a transport or mechanical function. This was viewed as increasing both costs and administrative burdens on businesses and would include many vehicles usually insured through employers liability or public liability policies.

Rodrigues, a Portuguese case, now limits that scope at least in respect of dual function vehicles. The case involved an employee of a vineyard spraying herbicide. A tractor was stationary nearby and left with the engine running, powering the spray device used to administer the herbicide. A landslip occurred, carrying the tractor away into the vineyard, causing the death of the employee.

The employers liability insurer of the vineyard had paid some of the damages claimed by the employee's widower. The ECJ was asked to consider whether the motor insurer of the tractor was also liable for the incident.

The ECJ made clear that the tractor itself fell within the wide definition of a vehicle under the Motor Insurance Directive. Furthermore, although the tractor was stationary, this did not preclude it from "falling within the scope of its function as a means of transport and, therefore, within the scope of the concept of 'use of vehicles' within the meaning of Article 3(1)".

However, the ECJ held that in matters involving dual function vehicles, the issue to be determined was what the tractor's 'principal function' was at the time of the incident.

At the time of the incident, it was found that the function was to power the spray device being used and not as transport...

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