The Court of Justice of the European Union (CJEU) has produced a ruling that could have wide-reaching effects on the scope of compulsory motor insurance. In the case of Vnuk v Triglav the claimant, who lived in Slovenia, had been climbing a ladder in a farmyard when a tractor was reversed into the ladder causing him to fall and sustain injuries. Mr Vnuk sought to claim against the insurers of the tractor.
The current legislation for European Member States requires that all vehicles used are insured for any civil liability (ie to include liability for injury caused by their use). Thus each member state has compulsory motor insurance.
Slovenia’s legislation requires that the owner of a vehicle must take out insurance covering liability for damage caused by the ‘use of the vehicle’. Initially the Slovenian courts dismissed Mr Vnuk’s claim on the basis that compulsory insurance was designed to cover a vehicle when it was being used for transport. In this instance, as the tractor was being used at the time to manouevre a trailer on the farmyard, they held that this was not being used for transport. The line taken by the insurers through the various hearings in the Slovenian courts was that the nature of the compulsory insurance covered road use only and not the use of the tractor on private land.
The Slovenian court was unable to determine what the scope of ‘use of a vehicle’ was in insurance terms and asked the European Court for guidance. The CJEU provided a preliminary ruling in Mr Vnuk’s favour on the basis that the tractor was being used for its normal function and therefore should be covered by its insurance policy. However, within the judgment, the CJEU did appear to propose two definitions. The first is that “provision applies to the use of vehicles, whether as a means of transport or as machines, in any area, both public and private, in which risks inherent in the use of vehicles may arise, whether those vehicles are moving or not” which appears to cover all uses of a vehicle. The second is that “…the First Directive must be interpreted as meaning that the concept of ‘use of vehicles’ in that article covers any use of a vehicle that is consistent with the normal function of that vehicle” which appears to be a more narrow coverage confined to the ‘normal use’ of a vehicle. The judgment very much focused on what the vehicle was being used for at the time of the accident rather than whether it was on public or private land.
Philippa Luscombe, partner in the personal injury team at Penningtons Manches, comments: “This is a very interesting case with potentially significant implications for personal injury claims in the UK. It could mean that a number of injured parties who currently are excluded from bringing a claim, simply because an accident involving a vehicle happened on private land, may now be able to claim. It would appear that our motor insurance legislation, as it currently stands, is not consistent with how the European Court thinks the Directive should be interpreted (looking at either of their definitions).
“UK legislation currently requires motor insurance to be in place for a vehicle being used on a road or in a public place. This provision is used by insurers to say that the scope of motor insurance does not cover liability for injury caused on private land by an insured vehicle. This has meant that claimants injured by a vehicle on private land - such as at an event with parking provided on private land, at a racetrack etc - have often been told that there is no insurance indemnity for their case, even though the vehicle was insured, and they have not been able to recover damages.
“It will be very interesting to see what happens now. Will cases be brought to the UK courts to see whether they follow the guidance from Europe on interpretation of the Directives – and, if so, which part of the guidance - or will steps be taken to make the government amend the existing legislation? Either way, it seems highly likely that cases which may not have been pursued before because of injury suffered on private land may now be pursued and soon there will be UK case law on this issue. It may well be that the scope of insurance cover required will extend not just on the issue of where a vehicle is covered by insurance but also the range of vehicles that will now require compulsory insurance, even if they are never driven on a road.”