This is the headline from yesterday’s press release from the European Parliament which provides the outline of an agreement in principle between the Parliament and the Council on the key measures to take forward in the reform of the Motor Insurance Directive. The stand-out feature is the scope of compulsory insurance – a controversial area as a result of the Vnuk case – on which there is apparent consensus on excluding motorsports and ebikes as well as the prospect of allowing for non-standard non-road vehicles to be excluded.
The agreement between the institutions can be regarded as the start of the end game in the debate over scope which began with the European Court’s decision in Vnuk v Zararovalnica back in 2014.
The proposed changes to the MID outlined in the press release would take effect 24 months after final agreement on the detail, suggesting it may be as long as a decade after Vnuk was decided before the adverse effects of the case can be limited in practice by Member States’ national motor insurance legislation. I read the phrase in the press release “to avoid overregulation” and the lead MEP’s reference to “the absurd overregulation of motorsports” as a strong reminder of the Parliament’s dislike for the expanded scope of cover which the Vnuk decision brought about.
The shape of the Directive when amended will not apply in the UK but, perhaps ironically, the recent agreement in Europe to roll back from the full effects of Vnuk reflects exactly the same view within UK government. Back in February, the DfT stated that the government “plans to bin the EU’s ‘Vnuk’ motor insurance law“. Some four months on and no proposals for the necessary legislation have emerged and nor was there any reference to it in the Queen’s Speech.
It will be interesting to see which sets of legislative proposals emerge first in the coming months, but I very much doubt we’ll see Ministers here welcoming this agreement in Europe despite it being (in broad terms) well-aligned with their thinking on the issue.
[Footnote. There are two technical ways in which motor vehicles as such those involved in motorsports or non-road vehicles such as ride-on mowers might be excluded from the MID. Either (i) the definition of vehicle in the Directive could be amended so that some types are completely outside its scope or (ii) states could be allowed the option to derogate some types. In this latter case, risks associated with the use of the derogated vehicles would nevertheless be picked up by national guarantee funds. It is not clear from the press release which option is being developed for which type of vehicle.]