The UK cannot rely on Brexit to eliminate the potential extra premium costs associated with the Vnuk ruling – the government must legislate, says law firm partner

Biba 2021: The government needs “to do something positive to make very clear the boundaries of UK law” around the European Vnuk ruling post-Brexit, said Paul Ryman-Tubb, partner at law firm Weightmans.

Speaking during Biba’s two-day virtual conference last week, Ryman-Tubb emphasised that “the government will have to do something” to clarify the distinctions between European and UK law when it comes to the interpretation of the Vnuk ruling – this will most likely involve having “to make some legislative change”, he explained.

The case in question occurred in August 2007 and involved Damijan Vnuk, a farm worker in Slovenia.

Whilst working in a hayloft, a tractor and trailer reversed into the farmyard where Vnuk was working, causing him to fall. He subsequently made a claim against the owner of the tractor for damages amounting to around £14,000. The motor insurer, Zavarovalnica Triglav, refused to pay the claim.

In September 2014, the Court of Justice of the European Union (CJEU) ruled on the case in favour of Vnuk.

According to Ryman-Tubb, the Vnuk ruling throws up two main challenges for the UK insurance sector.

Firstly, the 1988 Road Traffic Act states that compulsory motor insurance is required for vehicles that are used on roads and public places only, however the CJEU ruled that insurance should be applicable for vehicles used in any area, including both public and private land.

Ryman-Tubb believes that compulsory insurance for vehicle use on private land would be difficult to enforce and may lead to greater fraud.

The second key issue is around the definition of ‘motor vehicle’ – again the UK and CJEU have different ideas here. The Road Traffic Acts describes a motor vehicle as a mechanically propelled vehicle intended or adapted for use on roads, explained Ryman-Tubb, however the CJEU has a broader definition.

It said motor vehicles are intended for travel on land and are propelled by mechanical power, but do not run on rails.

This instantly widens the scope of vehicles that will require compulsory motor insurance, including ride-on lawnmowers and mobility scooters, as well as vehicles used within the motor sport sector.

Ryman-Tubb said: “This has very broad impacts. If that is to be implemented within the UK, then it causes all manner of vehicles to be required to be insured. So, vehicles being used for motor sport. What about vehicles being used for banger racing?

“Every single golf cart, mobility scooter, forklift truck, ride-on lawnmower. You name it, if it’s mechanically propelled and it’s on land – it doesn’t matter if it’s on private land – it’s going to have to be insured.

“The motor sport lobby were extremely concerned about this. How could they possibly get full third-party insurance with unlimited liability for personal injuries for people using vehicles taking part in motor sport? Is that really desirable? And if it was even available, at what cost?”

Brexit solution?

Ryman-Tubb added that simply because the UK has now left the European Union, it does not mean that the government can just disregard the Vnuk ruling – this is because of the European Union (Withdrawal) Act 2018.

This Act takes a snapshot of EU law at the end of the Brexit proceedings – Ryman-Tubb explained that these EU laws are then retained until the UK legislates to the contrary.

This is why “doing nothing is not an option” and why the insurance industry is still “concerned about Vnuk until such time as the government does something about it”, Ryman-Tubb said.

He continued: “The government will have to do something. The Withdrawal Act makes it clear that the passing of new legislation after Brexit or new case law dealt with by the Supreme Court, which is contrary to European court cases, will trump the retained EU law. So, it seems that it is going to have to make some legislative change.

“It seems to me that [the government is] going to have to perhaps consider types of vehicles that are not required to be insured and specifically spell that out by changing the Road Traffic Act. It may be possible, it might be quite a long list, it may be being done by weight or maximum speed, or just descriptions of vehicles.

“It’s also going to have to reinforce the point that motor insurance is only required on roads or public places if it intends to maintain [that] position under UK law.”

Lack of detail

In February 2021, the Department for Transport confirmed that it did not plan to implement Vnuk into UK law – although Ryman-Tubb noted that this announcement was encouraging, he said the government still needs “to do something positive to make very clear the boundaries of UK law in this area. That’s the answer here”.

He explained: “They’re going to have to do something, they’re going to have to pass some legislation to clarify the boundaries because otherwise the effects of Vnuk continue to cause issues in the UK.

“What’s clear from what’s been said by [transport secretary] Grant Shapps and his team is they’re going to do something – what’s lacking at the moment is the detail.”

However, “what we can look forward to is being protected from an increase in premium by the unwanted effects of the Vnuk decision”, Ryman-Tubb noted.

The government estimated that every motor insurance premium would have to be increased by £50 to accommodate the impact of the Vnuk ruling.