Vnuk throws Road Traffic Act into doubt

My attention was drawn this week to an interesting case which has far-reaching ramifications for the UK insurance industry and many businesses operating motor vehicles. It is also highly topical given that it emanates from the European Court of Justice having ruled on a case which occurred in Slovenia involving a farm worker called Damijan Vnuk.

Details of the case can be found here but suffice to say that the UK law under question as a result of this ruling is the Road Traffic Act 1988 (RTA). This basically places a duty to insure any vehicle on a public road. The Vnuk case calls this duty into question and brings in many non-roadgoing vehicles to the scope of compulsory motor insurance. For instance, forklift trucks or other items of mechanically propelled plant, ride on lawnmowers and segways . These may be used only on private ground at present and not therefore required to be insured under a motor insurance policy.  Liability for their use would typically be covered under a public liability policy. 

However, insurers could now use the argument that, under European law, these should be insured correctly under a motor policy and if this motor policy does not exist their activities would be uninsured.

This would then place a further burden upon the MIB (Motor Insurance Bureau) which deals with claims against uninsured drivers. They would be unlikely to deal with these claims as they are bound by the RTA as to the types of claims they can handle.

This may then trigger so-called "Francovich" damage claims from those left uninsured who will argue that the UK Government has been negligent in not ensuring compliance with full EU law under the RTA.  This would potentially involve major costs for the UK Government and they are currently investigating the best approach to this. It is likely that a change to the RTA will follow.

How this might differ given the recent Brexit vote, is anyones guess.

For now, it is a story to watch and certainly I will be monitoring insurers decisions in circumstances such as this.