Position Paper and Support of the Motorsport Industry Association (MIA)

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1 Position Paper and Support of the Motorsport Industry Association (MIA) MIA, The Apex on 10 th Street, Stoneleigh Park, Kenilworth, Warwickshire, CV8 2LG, UK 17/01/19 on the proposal for a Directive of the European Parliament and of the Council amending Directive 2009/103/EC of the European Parliament and the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to ensure against such liability (COM (2018)0336 C8-0211/ /0168(COD)) 1. Introduction On 22 nd January, members of the EU Parliament IMCO Committee will vote on proposed amendments to the EC s MID proposal. This Position Paper provides background information relating to the potential impact of this proposal, if unamended, on the European motorsport industry and the support of the MIA in regard to certain amendments being voted upon. We are pleased to support the proposed amendments shown in our attached Appendix. Speaking for the European motorsport industry as a whole, we are grateful for the detailed work undertaken by IMCO and the efforts made to avoid damaging EU motorsport and our industry. We recognise that these dire economic consequences were not fully realised when the MID was proposed by EU legislators following the Vnuk judgment. The Motorsport Industry Association (MIA) is the only industry body representing motorsport businesses in Europe. Its corporate membership embraces 300 employers who jointly employ some 10,000 people across the EU in the business of motorsport. The MIA and its members respect the overall aim of the Motor Insurance Directive (MID) to harmonise the requirement for compulsory motor insurance across the EU, in accord with the Union s free movement objectives which allow vehicles to be driven, freely, across internal borders without facing border checks on insurance papers. 2. Threat to employment from the current EC proposal for a new Motor Insurance Directive The wording of the European Commission s (EC) proposed SCOPE in the new MID dated May 2017, clearly threatens the future employment over 100,000 people in the EU motorsport industry. The proposed scope is too wide, which if implemented will have a disastrous effect on our industry, in that it requires third-party liability (TPL) insurance to cover any use of a vehicle, consistent with its normal function as a means of transport, irrespective of the terrain on which the motor vehicle is used and whether it is stationary or in motion. The concern, of the substantial European businesses and their many employees which we represent, is that this proposal requires compulsory third-party liability motor insurance (covering both property damage and personal injury) for all motorsport vehicles in use. To include, for example, a racing car or motorcycle whilst on a circuit, a rally car on a rally and all other forms of motorsport including track days, historic time trials, hill climbs etc. Insurance Market specialists who underwrite and provide the majority of insurance for motorsport across the EU have confirmed to the EC and the MIA that no effective market can, or will, write insurance to meet the Directivespecified levels of liability (i.e. covering both property damage and personal injury to motorsport participants). As no insurance cover, as proposed by the new Directive, will be available for motorsport activities, then if implemented without change this will directly be responsible for the loss of hundreds of thousands of motorsport-related jobs, over 25 billion in motorsport sales and investment - and a sport enjoyed by millions of Europeans for generations will cease.

2 We have, since 2016, brought these likely consequences to the attention of the EC as best we could. Together with over 770 organisations and more than 2,000 individuals we replied to the EC s Consultation (July-October 2017) in response to the REFIT review of the 2009 MID. All expressed their collective concern about the scope of the proposed text and the insurance industry made it clear that no insurance complying with the requirements would ever be available. The EC in ignoring these 3,000 responses said certain Member States already impose a motor third party liability insurance requirement in line with the case law, without excessively high insurance premiums, including for motor sports events (extract from the EC proposal). We believe this statement to be untrue, misleading and potentially damaging as the French Fédération Francaise de l Assurance (FFA) stated that, currently, the Civil Liability law in France excludes vehicle-to-vehicle damage caused during sporting events due to their Acceptance of Risks rule. This demonstrates that, contrary to the statement of the EC, current French legislation does NOT comply with the Directive given following the VNUK judgment of In fact, currently, NO EU Member State complies with the VNUK judgment. As no compliant insurance cover will be made available then, by implementing the current MID proposal across all EU Member States, no motorsport activities, at any level of any nature, will continue. 3. Feedback on the IMCO Committee s Draft Report of October 26 th, 2018 Madam Charanzova s initial Draft Report proposed amendments to the EC s proposal clearly recognised the potential for significant damage to the motorsport industry and its employment. The Rapporteur s recommendation that motorsport vehicles should be exempt from the scope of the Directive is very welcome. However, we must explain that, by far the majority of vehicles used for motorsport in the EU are road legal and not used exclusively for motorsport. They are used for both motorsport and road travel and have normal road insurance which does not cover them taking part in motorsport activities, as the risks are seen as uninsurable. Amendments to that Report, which we are pleased to support, are shown in the Appendix attached. 4. Conclusion The Draft Proposal, if it were adopted in its current form without these amendments, will directly bring about the immediate end to a sport enjoyed by millions since the first car was built, the loss of hundreds of thousands of motorsport-related jobs and billions of Euros in motorsport sales and investment across the whole of the EU. The MIA and its members request IMCO Committee members and the European Parliament to make the amendments which we support to allow the EU motorsport industry, employment and sport to continue in future. Thank you Chris Aylett CEO - Motorsport Industry Association Th Apex on 10 th Street, Stoneleigh Park, Kenilworth Warwickshire CV8 2LG UK Tel: +44 (0) chris.aylett@the-mia.com Web: Appendix attached showing amendments supported by the MIA

3 MIA Appendix IMCO Vote on new Motor Insurance Directive (22 ) The Motorsport Industry Association (MIA), on behalf of our EU business membership is pleased to support the following amendments (marked in yellow) and respectfully request members of the IMCO to approve these: CA 1 1a. use of a vehicle means any use of such vehicle in traffic that is consistent with the vehicle's function as a means of transport at the time of the accident, irrespective of the vehicle's characteristics and irrespective of the terrain on which the motor vehicle is used and of whether it is stationary or in motion. 14 (Dita Charanzova) (1 a) In Article 2, the following paragraphs are added: "This Directive shall only apply to vehicles covered by Regulation (EU) 2018/858*, Regulation (EU) No 167/2013** or Regulation (EU) No 168/2013***. This Directive shall not apply to vehicles that are intended exclusively for use in the context of participation in a competitive sport activity, or in related sport activities, within a closed area. Block vote with: CA 3a (3 b) It is also appropriate to exclude from the scope of Directive 2009/103/EC vehicles intended exclusively for motorsports, as these vehicles are generally covered by other forms of liability insurance and not subject to compulsory motor insurance when they are solely used for a competition. Being limited to a controlled track or space, the chance of an accident with unrelated vehicles or persons is also limited. However, it is important that Member State maintain or introduce new mandatory provisions to cover vehicles that participate in a motorsport event. CA 2 (1 b) In Article 3, the following paragraph is added: Member States shall ensure, when a vehicle is required to hold insurance pursuant to the first paragraph the insurance is also valid and covers injured parties in the case of accidents: - occurring when that vehicle is in traffic and not being used in line with its primary function and - beyond a vehicle's normal use in traffic. Member States may adopt limitations on this latter coverage in respect of use beyond a vehicle's normal use in traffic. This provision shall be used as an exception and only when necessary, where Member States consider that such coverage would go beyond what can be reasonably expected from a motor insurance. This provision may never be used to circumvent the principles and rules set out in this Directive. CA 4 (3 c) Use of a vehicle in traffic includes the use of a vehicle in circulation on public and private roadways. This may include all driveways, parking lots or any other equivalent areas on private terrain which are accessible by the general public. The use of a vehicle in a closed area, where no access is possible by the general public, should not be seen as the use of a vehicle in traffic. Nonetheless, when a vehicle is used in traffic at any point and therefore subject to compulsory insurance, Member States should ensure that the vehicle is covered by an insurance policy that covers potential injured parties, during the contracted period, regardless of whether the vehicle is in traffic or not at the time of the accident, except where the vehicle is used in a motorsports event. Member States should be able to limit this non-traffic related insurance cover where there can be no reasonable expectation of cover, such as in a situation in which a tractor is involved in an accident when its primary function, at the time of that accident, was not to serve as a means of transport, but to generate, as a machine for carrying out work, the motive power necessary to function. Use of a vehicle exclusively in non-traffic situation should therefore be excluded from the scope of Directive 2009/103/EC. Moreover, Member States should avoid a situation where insurance is required for vehicles which are permanently or temporarily de-registered due to their incapability of being used as a means of transport, because they are in a museum, they are undergoing restoration or they are not being used for a certain period of time for another reason, such as seasonal use. OR.

4 58 (Daniel Dalton) falls if CA4 is adopted (3b) It is further appropriate to exclude from the scope of Directive 2009/103/EC all vehicles intended exclusively for use in non-traffic situations. These vehicles are generally used in controlled environments and are subject to other forms of liability insurance, such as employers or public liability insurance, which ensures that injured parties received adequate compensation. However, it should continue to be possible for individual Member States to decide whether compulsory motor insurance is the appropriate form of cover for these vehicles and under what conditions. 4 (Dita Charanzova) falls if CA3a is adopted (3 b) It is also appropriate to exclude from the scope of Directive 2009/103/EC vehicles intended exclusively for motorsports, as these vehicles are generally covered by other forms of liability insurance and not subject to compulsory motor insurance when they are solely used for a competition. Being limited to a controlled track or space, the chance of an accident with unrelated vehicles or persons is also limited. However, it should continue to be possible for individual Member States to decide whether motor insurance coverage should be compulsory in order for a vehicle to participate in a motorsport event and under what conditions. 5 (Dita Charanzova) - Falls if CA 4 is adopted (3 c) Use of a vehicle in traffic includes the use of a vehicle in circulation on public and private roadways. This includes all driveways, parking lots or garages, docking and unloading stations or any other equivalent areas on private terrain which are accessible by the general public. The use of a vehicle in a closed area, where no access is possible by the general public, should not be seen as the use of a vehicle in traffic and therefore should not lead to an obligation to hold compulsory insurance. Nonetheless, when a vehicle is used in traffic at any point and therefore subject to compulsory insurance, Member States should ensure that the vehicle is covered by an insurance policy that covers potential injured parties, during the contracted period, regardless of whether the vehicle is in traffic or not at the time of the accident, except where the vehicle is used in a motorsports event. Member States should be able to limit this non-traffic related insurance cover where there can be no reasonable expectation of cover, such as in a situation in which a tractor is involved in an accident when its principal function, at the time of that accident, was not to serve as a means of transport but to generate, as a machine for carrying out work, the motive power necessary to function. 60 (Daniel Dalton) - Falls if CA 4 is adopted (3c) Use of vehicles in traffic includes the use of a vehicle on a road or other public place. Traffic implies a certain degree of volume and regularity. The isolated use of a vehicle for other purposes in areas without public access should not be seen as the use of a vehicle in traffic and should not lead to an obligation to hold compulsory insurance. Where a vehicle is used in non-traffic-related situations, Member States should be able to limit the scope of compulsory insurance. This is particularly relevant in situations where the principal function of the vehicle, at the time of the accident, was related to secondary functions of that vehicle. Nothing in this Directive prevents Member States from maintaining or introducing new provisions that extend the scope of compulsory motor insurance to these situations.

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