Introduction
Background

Decision
Comment


Introduction

On 12 October 2020 the controversy over whether electric bicycles are motor vehicles and are hence subject to the Law of Compensation to Victims of Road Accidents 1975 (the Road Accidents Law) came to an end with the Supreme Court ruling in a majority opinion of two judges (Yitzhak Amit and David Minz) against the dissenting judgment of Justice Daphne Barak-Erez.(1)

According to this judgment, the Road Accidents Law sets a social arrangement which aims to compensate anyone who suffers bodily injury in a road accident. Compensation is granted by commercial insurers that cover motor vehicles and where the insurer is unknown or there is no insurance policy, compensation is provided by the Karnit Road Accident Victims Compensation Fund (Karnit Fund).

Background

In recent years, there has been an increase in the use of electric bicycles, which are considered to be a cheap and 'green' transport method.

In 2010 a regulation defined 'electric bicycles' as "bicycles with an ancillary engine" and regulations set the technical requirements concerning engine power (not more than 250 watts) and the cessation of the engine at 25km per hour. Standard electric bicycles are considered to have these qualities. However, in many cases changes are made to bicycle engines. The judgment also refers to these non-standard electric bicycles.

Since electric bicycles are involved in many accidents, the question of whether the Road Accident Law applies has become important. If electric bicycles were to be considered motor vehicles, there would be a duty of insurance. Moreover, the law limits the amount of compensation based on a no-fault system.

At present, it is impossible to purchase a mandatory insurance policy for standard electric bicycles and sell such insurance for non-standard bicycles which are illegal, which will make the policy an illegal contract.

The court decided that the legal definition of 'motor vehicles' is not suitable to encompass electric bicycles, because this would mean that a person who rides an electric bicycle will be considered as a pedestrian and in case of an accident with a car, they will be entitled to compensation from the driver's insurer. On the other hand, when such a rider injures a pedestrian, the latter will not enjoy compensation under the law and hence may sometimes remain without any compensation if the wrongdoer disappears or it is impossible to recover the damage from them.

As mentioned earlier, where a car involved in a road accident lacks insurance, the compensation will be made by Karnit Fund; however, this arrangement does not apply to an uninsured rider who causes bodily injury to a pedestrian.

Decision

The Supreme Court reviewed the contradictory judgments of the lower instances of the magistrate and district courts and reached its decision based on the definition of 'motor vehicles' and public policy considerations.

The Supreme Court joined three appeals in which the same issue arose.

Electric-bicycles-are-motor-vehicles case law
One of the cases concerned the Asulin estate. Mr Asulin rode an electric bicycle and was hit by a car driven by the respondent and insured by Hachshara. The accident led to Asulin's death.

The insurer argued that:

  • electric bicycles are motor vehicles;
  • the deceased should be considered as a person riding a motor vehicle without insurance; and
  • there was no cause of action against the insurer under the Road Accident Law.

Accordingly, Asulin's estate amended the claim and added the Karnit Fund and the state. The cause of action against the state was that it had failed to establish law or regulations which apply to electric bicycles.

The district court (Judge Saab) determined that:

  • electric bicycles are motor vehicles;
  • there was no case against the insurer; and
  • the claim should be dealt with between Asulin's estate, the Karnit Fund and the state.

Electric-bicycles-are-not-motor-vehicles case law
The other claim which was adjoined to the appeal concerned a pedestrian who crossed a road at a green light and a biker on an electric bicycle who crossed the junction at a red light and hit the pedestrian, causing her bodily injuries.

In this claim, the magistrate and district courts determined that:

  • electric bicycles are not motor vehicles;
  • there was no case against the Karnit Fund; and
  • the claim should be dealt as a tort claim and not under the Road Accidents Law.

Supreme Court decision
The Supreme Court reviewed the arguments of the parties and the issue of the proper legal policy in view of the impact of the decision on persons riding electric bicycles.

The state argued that electric bicycles which are non-standard may be considered as motor vehicles if the change carried out leads to the rider not having to pedal – thus, the use is based only on the bicycle's mechanical power.

The Karnit Fund argued that electric bicycles are activated by both mechanical power and the rider's physical power. Further, the Road Accident Law, which is aimed at clear social objects, should not be turned into an enforcement tool in order to stop riders changing the characteristics of their bicycle which should be left to penal law.

The court referred to the definitions of 'vehicles', 'motor vehicles' and 'road accidents', whereby a road accident is caused by the use of a motor vehicle for transport purposes. In addition, the majority judges highlighted the standard definition of bicycles with an ancillary engine and concluded that the proper legal policy means that electric bicycles of both kinds are not motor vehicles and, therefore, are not subject to the Road Accident Law.

Comment

Although the intuitive feeling of anyone who is injured by an electric bicycle is that it is a motor vehicle, this intuition can only be a starting point for the interpretation of the law, which should be based on the plain language of the definition and the object of the law and considerations of public policy.

There are various bills to amend the Road Accident Law which may solve the problem; however, they have not yet been passed into law. The Supreme Court has called for a clear definition by the legislature concerning these vehicles.

In respect of the risks involved, electric bicycles are different from regular bicycles; however, the risks that they pose are less than that of cars. Velocity is not the yardstick and the legal definition places emphasis on the main reason that a vehicle is used for transport.

Since electric bicycles are unregistered and have no licence plate, when imposing a duty of insurance, parties are faced with practical difficulties. This is an anonymous vehicle which insurers will avoid from covering; however, on the other hand, the premium would be high. This would lead to a market failure. The majority judges determined that electric bicycles should not be considered as motor vehicles, a conclusion which stands in line with similar arrangements concerning these vehicles in other countries (eg, in Europe and Australia).

The Supreme Court called for the legislature to intervene and regulate this issue.

Barak-Erez's decision in her minority judgment found that electric bicycles are popular and where the legislation left this issue without a clear answer, the court should solve this problem. Further, the relevant public policy considerations should lead to regarding this vehicle as being subject to the Road Accident Law in order to afford remedy to those who are injured thereby.

For further information on this topic please contact Oded Cederboim at Levitan, Sharon & Co by telephone (+972 3 688 6768) or email ([email protected]). The Levitan, Sharon & Co website can be accessed at www.israelinsurancelaw.com.

Endnotes

(1) CA 7023/19 Gabriel Asulin Estate v Walid Darwish, 12 October 2020.