Yesterday the ECJ published its judgment in this case, a reference from Spain. Sr Núñez Torreiro was injured when the all-terrain military vehicle in which he was a passenger overturned during an exercise inside a restricted military area. The key question was whether Spanish legislation could exclude these circumstances from the scope of compulsory cover as required by the Motor Insurance Directive? The advice of the Advocate General, given in June this year, was that it could not.
The Vnuk problem
The original case arose from an injury claim in which a Slovenian worker was knocked off a ladder by the trailer attached to a reversing tractor on a farm. The ECJ ruled that as this vehicle was intended to be used on a road, it should be covered by the compulsory motor insurance regime under the 6th Motor Insurance Directive (MID).
More specifically, the decision was that compulsory motor insurance applied to any vehicle being used anywhere, for any purpose, for which it was intended. Such a wide ambit encompasses all sorts of vehicles traditionally covered under EL and PL policies, for example agricultural vehicles, construction vehicles, forklift trucks, EBTs and driveable aircraft steps.
How this ruling is interpreted among European courts is up for debate and is currently being considered by the EC. The outcome will have significant ramifications for the general insurance arrangements of corporates.
A much-awaited action plan from the European Commission (EC) on how to deal with the ramifications from the European Court of Justice (ECJ) decision in Damijan Vnuk v Zavarovalnica Triglav remains elusive, much to the frustration of governments, insurers and businesses across Europe.
As we mentioned in two recent Vnuk blogs the European Commission has picked up the pace in considering the issues that arise both in respect of that judgment but also in respect of the Motor Insurance Directive. Whilst a broader consultation closes in October a narrower Inception Impact Assessment consultation closed this week with 20 substantive responses. There are two Government responses (UK and Ireland) with British, French, German, Irish, Spanish and Maltese insurers responding through member organisations such as the ABI. Additionally the Council of Bureaux, the Secretariat for 47 National Guarantee Funds (the European MIBs) has also responded on behalf of its members. Motorsport responses are also strong with two from the UK and one from Ireland, again responding collectively on behalf of members. All of the above favour the “in traffic” amendment to the Motor Insurance Directive to reflect a narrower compulsory insurance obligation than is implied by the Vnuk judgment itself (save for the French Insurance Federation which takes the view that its compulsory cover already includes Vnuk).
The contrary case in respect of Vnuk is presented by three lawyer lobbying groups: APIL, FOCIS and PEOPIL. The first two are broadly representational of UK legal firms but the latter has a much broader Pan-European (an indeed wider global) membership.
A narrow reading of “for” and “against” is dangerous on a technical issue and responses, even of those arguing for the ‘full Vnuk’ accept that there should be exceptions. The weight of insurer responses and particularly that of the Council or Bureaux should, one would hope, carry significant weight with the Commission. The very clear concerns of motorsport about the existential threat posed by the ‘full Vnuk’ are articulately expressed and broaden to include reference to other European treaties and societal considerations.
There is an ongoing debate about the issue and further work to be done. The wider consultation on MID does not close until 20 October and there will be further opportunity to reinforce the arguments about the scope of MID and Vnuk in those submissions. BLM is hosting a workshop on the subject on 25 September and is happy to welcome interested parties.
Written by Terry Renouf, consultant at BLM
Having been largely silent for a year about how to tackle the Vnuk problem (i.e. the extended scope of compulsory motor insurance to any normal use, anywhere, of any motor vehicle) the European Commission appears to have picked up the pace significantly in just announcing a new four-week consultation period running from 24 July to 21 August.
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.