Vnuk – impact on motor insurance discussed in European Parliament

The way forward in compulsory motor insurance following the decision of the European Court of Justice in Vnuk (please refer to our briefing note here) was raised in the European Parliament this week.

Commissioner Hill addressed the Internal Market Committee on 25 May and said he believes that “a practical solution” can be found, but did not indicate precisely what that might be or when it might emerge.

Both his response and the question put to him by Vicky Ford MEP refer to the wider impacts of the Vnuk decision as well as making specific reference to motor sports. The exchange of views can be viewed here and is transcribed below.

As noted on this blog post on 25 May, BLM is keeping this under close scrutiny and we will pass on details of whatever emerges from the Commission and/or Parliament as soon as we are able.

QUESTION from Vicky Ford MEP, Chair of the European Parliament’s Internal Market and Consumer Protection Committee

First is about the Motor Insurance Directive and the Vnuk judgment. So we have obviously had motor insurance legalisation in some way or another since 1972, I understand, and it has always has been understood that that applied to vehicles used in traffic and the Vnuk judgment, which extended that potentially to other areas. as you mentioned, that is causing great uncertainty; not just because of the premiums of ordinary car drivers but really if it is extended to motorsports those risks could be uninsurable, and just not possible to comply with the legalisation.

So I know that this is technical and you are working on it, but I need you to be more specific. Could you please help us to know:

  • what sort of change you want (are you just clarifying the language that it will just be vehicles in traffic),
  • how does that intend to be legally brought through (do we need to put through an amendment in this Committee or is it just a technical amendment),
  • who’s working on it (who do we need to speak to to help move this along), and
  • when is it going to happen?

So what, how, who, and when please?

REPLY by Jonathan Hill, EU Commissioner for Financial Stability, Financial Services and Capital Markets Union

On Vnuk there isn’t at the moment a huge amount more I can say, I know you are impatient. You have been obviously been very active in this area. I think that we can find a solution.

I take your distinction that you make; it is not just the costs for all insured people, but for specific sectors and the motorsport industry would be a good example. One wouldn’t want to have as an unintended consequence a damaging effect on that important industry.

I believe that we can come up with a practical solution that will work. I’m impatient, there are some processes that we are going through. As soon as I am able to give you a date, you’ll be the first person that I will come and give it to.

About the Author

akAlistair Kinley is BLM’s Director of Policy & Government Affairs.

Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.

He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).

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