Today’s decision of the Court of Justice of the EU holds that fire damage due caused by a car catching fire more than 24 hours after it had been parked in a garage was “use of a vehicle” and therefore within the scope of compulsory insurance set down in the relevant directive. As a result, the motor insurer would be required to meet the fire damage claim of around €45,000.
The decision in Linea Directa v Segurcaixa is the latest in a long line of case law from the CJEU which takes an expansive view of the obligation in the Motor Insurance Directive on Member States to “take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance.” The wide interpretation of this provision can be readily traced to its key decision Vnuk v Zararovalnica in 2014.
The court – as in all the recent cases on “use of vehicles” and the scope of the Directive – emphasised that “use” is an autonomous concept of EU law which is not at the discretion of Member States. In addition, it underlined the Directive’s objective of protecting the victims of accidents caused by motor vehicles.
The decision probably comes as no surprise – given the line of cases stretching back to Vnuk – and is very clear that nothing in the Directive limits the scope of compulsory insurance to “use” on certain terrain or roads. The insurance requirement in the Road Traffic Act 1998 – ie use on “a road or other public place” – falls short of this. The DfT expressly conceded this in the Roadpeace judicial review in 2017 and the Court of Appeal’s decision earlier this month in Lewis v Tindale & MIB makes this incompatibility very clear.
Linea Directa differs from the Supreme Court’s recent decision in UK Insurance v R&S Pilling even though both have the common factor of fire damage caused by the vehicle. In UKI, the fire damage was due to negligent welding on the car after it had been immobilised. Lord Hodge found that that was not “use” for compulsory insurance purposes. He explained that even where there was use, “There must be a reasonable limit to the length of the relevant causal chain” between the use and the damage. Despite the fire in the Linea Directa claim arising more than 24 hours after the car had been driven – or used, in lay terms – the CJEU was content to link the fire damage to the “use” of the vehicle. Whether this would have fallen within Lord Hodge’s “reasonable limit” is a moot point.
The Commission reviewed the scope of the Directive last year and suggested amending the text to codify the Vnuk etc interpretation. The 2014-19 European Parliament examined those amendments and in February suggested some further refinements (see our report here). We expect these discussions to resume in the second half of the year and to yield an agreed text late this year or early next. Quite how the resulting new European formulation of compulsory motor insurance will influence the UK’s post-Brexit motor insurance regime is very difficult to predict.
Written by Alistair Kinley, director of policy and government affairs