Vnuk : A brief history and

Transcription

1 Vnuk : A brief history and ongoing developments A presentation to the Manchester Claims Association 18 May 2017 David Spencer - Partner BLM - Manchester

2 - Overview of the Vnuk decision - Where we ve been - Where we are - Where we re going

3 Vnuk : where did it all start? - Vnuk v Zavarovalnica Triglav d.d. [2014] CJEU C-162/13 - Accident 13 August C working as farmhand knocked from ladders by trailer hitched to a tractor - Compensation claim of 15, Zavarovalnica Triglav insurers of the tractor (compulsory motor insurance)

4 - At first instance the claim failed and the appeal was also dismissed compulsory insurance in respect of use of a tractor was as a means of transport, not as a propulsion device - Slovenian appeal court referred the case to the Court of Justice of the European Union (CJEU) - They were asked to determine whether the duty to insure the use of vehicles within the meaning of Article 3(1) covered the circumstances of the accident

5 Article 3(1) of the First Directive Each Member State shall.. 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

6 CJEU Judgment - broad interpretation of movement and use implies no requirement for the vehicle to be on a road - The definition of vehicle is unconnected with the use - Concept of use referred to in 3(1) cannot be left to the assessment of each Member State

7 Definition of use - Article 3(1) must be interpreted as meaning that use covers: any use of a vehicle that is consistent with the normal function of that vehicle But: - Gardner v Moore [1984] AC Dunthorne v Bentley [1996] RTR428 - AXN & Ors v (1) John Worboys (2) Inceptum Insurance (previously HSBC) [2012] EWHC 1730 (QB) - UK Insurance Ltd v (1) Thomas Holden (2) R & S Pilling (T/A Phoenix Engineering) [2017] EWCA Civ 259

8 Definition of vehicle - Art. 1 of the 1st MID : vehicle means any motor vehicle intended for travel on land and propelled by mechanical power, but not running on rails, and any trailer, whether or not coupled - s.185 of the Road Traffic Act motor vehicle is: a mechanically propelled vehicle intended or adapted for use on roads - From Vnuk the RTA definition is too narrow in scope and cannot be interpreted in accordance with EU law

9 CJEU judgment implies compulsory insurance extends to: - any motorised vehicle (on land, not on rails) - any use consistent with normal function of vehicle (whether moving or not) - anywhere

10 Implications for UK: Commercial Impact - Insurance companies - Brokers - Insured policyholders - Motorsports UK - Claims

11 Implications for UK: Government - Amendment to the RTA: - ss.143 and 145 restrict duty to take out third party motor insurance to the use of a (motor) vehicle on a road or other public place - Amendment to MIB Agreements: - Uninsured Drivers Agreement Untraced Drivers Agreement Wider MIB impact: Derogation of vehicles? - Potential exposure of UK Government to Francovich claims - Francovich v Italy (1991) C-6/90 - Sean Delaney v SoS for Transport [2015] EWCA Civ 172

12 TIMELINE - 13 August 2007: Date of Accident - 4 September 2014: Decision of the CJEU - 8 June 2016: EC Roadmap: Adaptation of the scope of Directive 2009/103/EC on motor insurance - 20 September 2016: DfT Impact Assessment for Extending the scope of compulsory motor insurance - 20 December 2016: DfT Technical Consultation on Motor insurance: consideration of the 'Vnuk judgment - 13 April 2017: DfT Consultation Closed

13 EU Roadmap 8 June 2016: Adaptation of the scope of Directive 2009/103/EC on motor insurance - Fundamental point remains to protect and compensate victims of motor vehicle accidents - Considers opportunity of member states to set up at national level protection for victims of accidents from agricultural, construction, industrial, motor sports or fairground activities

14 EU Road Map OPTION MAPPING: 4 options: 1. Do Nothing 2. EU Level Legislation that requires Member States to set up Guarantee Fund to cover purely agricultural, construction, industrial, motor sports or fairground activities if uninsured 3. Amend the Directive - The Scope of the directive relates only to accidents caused by motor vehicles in the context of traffic 4. Exclude some types of vehicles from the scope of The Directive

15 DfT Consultation From the 4 options in the EC Roadmap, DfT narrowed to: 1. The Comprehensive Option: Adopting the Vnuk decision, amending UK Legislation to broaden the scope of vehicle and broadening the requirement for compulsory motor insurance beyond roads and other public places 2. The Amended Directive Option: The definition of a motor vehicle broadened in much the same way as for the comprehensive option with key distinction that it would only require third party insurance cover on land over which the public has access

16 DfT Consultation - Closing date extended from 28 March to 13 April - Ordinarily a 3 month response period to collate stakeholder input and respond - BUT - Intervening issues: - 29 March 2017 Article 50 Triggered - 18 April 2017 General Election announced

17 BREXIT - Until we formally exit we are: - Still a Member State - Subject to EU legislation, directives and the implications that follow - Not compliant with the MID - At risk of Francovich claims - Uncertain of the impact against standard policies

18 Present position - Impact on current claims process the involuntary transfer of risk? - Development of Common Law - UK Insurance Ltd v (1) Thomas Holden (2) R & S Pilling (T/A Phoenix Engineering) [2017] EWCA Civ Axa v NU (2007) decided differently? - Development of EC / CJEU Law - Isabel Maria Pinheiro Vieira Rodrigues v José Manuel Proença Salvador (CJEU appeal C-514/16)

19 What next? - Government: - Road Traffic Act is not compliant with the MID so: - Amendment to RTA re vehicle and use. - Consequent amendment to the MIB agreements. - And until then - potential risk of Francovich claims - Industry: - Ability to write motor risk? - Gap in cover / Absence of cover / Professional Indemnity? - Indemnity limit? RTA v EL v PL - MIB Levy - Fraud risk

20 blmlaw.com