The UK Government yesterday published the analysis from their Actuary’s Department, which outlined what the potential cost to UK insurance premium payers if the EU ruling on Vnuk was implemented in the UK.
Vnuk was a Slovenian case that involved a tractor being manoeuvred in a farm courtyard when it hit the ladder the Claimant was stood on, causing him injury. The matter was referred to the European Court of Justice, which extended the definition of ‘use of a motor vehicle’ to include any use that is consistent with the vehicle’s ‘normal function’; which is not limited to use of the vehicle as transport on a public road. The ruling, has been interpreted as requiring compulsory insurance for any vehicle used on private property, which is currently inconsistent with UK law.
The Government Actuary’s Department assessments concluded that enacting Vnuk “would increase premium costs for the UK by £2,060m…. The majority of the increased costs, £1,227m, would be borne by existing motorcar policy holders”. Motorsports would have been hit particularly hard due to “Increased claim frequency due to the extension of cover to private land”, with the exposure being estimated at £458m.
Has Brexit played a part in UK Gov’s decision? This ECJ ruling was originally handed down in 2014, but the UK Government has been taking its time to assess the implications of enacting this into UK law. Secretary of State for Transport Grant Shapps’s statement at the weekend, speaks volumes:
“We have always disagreed with this over-the-top law that would only do one thing – hit the pockets of hard-working people up and down the country with an unnecessary hike in their car insurance,… I am delighted to announce that we no longer need to implement it.”
The outcome is a relief for UK Motor insurers, and the MIB. For Motorsport risk, these now fortunately remain with those PL insurers who have a wealth of experience to rate such events and deal with the claims.