4 September 2015 marks the first anniversary of the Court of Justice of the European Union’s Vnuk judgment and whilst there remains much discussion there is little certainty as to how the RTA can best be brought into line with European law. At best it can be said that options are starting to emerge but there is at present little consensus around the likely legislative outcome that will be preferred.
A complete compliance regime would mean that every vehicle, where use was “consistent with its normal function” would be subject to compulsory motor insurance. There is illogicality in lumping together vehicles built for use in a public environment and designed to comply with the long established rules and regulations associated with road use with those not designed for the highway, esoteric vehicles (such as the Segway that knocked over Usain Bolt) and specialist trade vehicles such as forklift trucks. There is the further problem that many of the vehicles that would then require RTA cover already have public liability insurance, which for many businesses offers a simpler and preferable solution.
A lesser compliance regime allowing an opt out or ‘derogation’ of certain types or classes of vehicle would solve the commercial problem but shifts the risk and costs to the Motor Insurers’ Bureau in the case of the UK or to the relevant compensatory guarantee scheme of other EU countries. The cost of the wider compliance is imposed on every insured motorist through the mechanism of the MIB levy and motor premiums.
A third alternative, to return to the present status quo (or some middle ground that does not broaden the liabilities), would necessitate lobbying for change at a European level. Inevitably this will take a considerable period of time when the UK Government and therefore the taxpayer would be left open to meeting the cost of Vnuk claims pending a resolution. It seems very unlikely that the Chancellor will entertain this as a possibility.
None of the above alternatives offer a solution to the risk of claims fraud which result from situations more than likely to arise on private land involving non-standard vehicles.
The certainty, one year after the ECJ decision, is that the amendment to the RTA is inescapable. Consultation is expected before the end of the year and change to the law and the obligations to insure vehicles will arise in 2016.
Written by Terry Renouf, partner, BLM