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PI and Civil Litigation

Law - practice - procedure

30 SEP 2014

Scope of duty to insure against civil liability in respect of the use of vehicles under First Motor Insurance Directive – Damijan Vnuk v Zavarovalnica Triglav (C-162/13)

Daniel  Clarke


In Vnuk v Zavarovalnica Triglav (C-162/13) the CJEU has given an important decision on the scope of the duty to insure against civil liability in respect of the use of vehicles under Article 3(1) of the First Directive on Motor Insurance (72/166/EEC).

 Mr Vnuk, a farmworker, was on a ladder stacking bales of hay in a barn in Slovenia. He was then knocked off his ladder by a reversing tractor and trailer and injured. He brought a modest personal injury claim in a local court against the driver's motor insurers.

 Mr Vnuk's claim initially proceeded in the local courts, where it failed. The relevant Slovenian law (the equivalent of section 143 of the Road Traffic Act 1988) provided that the owner of a vehicle “must take out insurance covering liability for damage caused by the use of the vehicle to third parties resulting in death, physical injury [etc.]”. It was held that a compulsory insurance policy in respect of the “use of the vehicle” covered damage caused by the tractor as a means of transport, but not damage caused when a tractor is used as a machine or propulsion device.

 Mr Vnuk appealed to the Supreme Court, which made a reference to the CJEU for a preliminary ruling. The reference was for it to consider whether the duty to insure “the use of vehicles” within the meaning of the Directive covered the circumstances of the case.

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The CJEU ruled that it did (although, formally, it left the factual findings to the local court). On the specific question as to whether the reversing trailer propelled by a tractor was covered by the duty to insure in the Directive, it held that it was. The key ruling was this: motor vehicle “use” covers “any use of a vehicle that is consistent with the normal function of that vehicle”.

 The CJEU did not expressly rule that the geographic scope of the duty to insure extended to private property, such as the farm where Mr Vnuk was injured. However, this appears plain from the breadth of its definition of “use”. It is also clear from its conclusion where it stated that its definition may cover “the manoeuvre of a tractor in the courtyard of a farm”.

Where does this leave the law in this jurisdiction? On its face in breach of the Directive. Sections 143, 145 and 185 of the Road Traffic Act 1988 restrict the duty to take out third party motor insurance and the scope of cover to be provided by authorised motor insurers in the UK to the “use of a motor vehicle on a road or other public place” and define “motor vehicle” as “a mechanically propelled vehicle intended or adapted for use on roads”.

 Hence it has hitherto been considered that those injured by motor vehicles on private land (eg car parks or caravan sites) are excluded from the compensatory guarantee. Similarly, a claimant injured on a public road by a motor vehicle not intended or adapted for road use. Similar definitions are used in Uninsured Drivers Agreement 1999 and the Untraced Drivers Agreement 2003.

 It now appears this is too narrow. The obvious course for the UK (which it likely to find itself in a similar position to a number of other EU Member States) would be, having conducted a review, to legislate so as to ensure the UK has correctly implemented the Directive.

 Where does this leave litigants in this jurisdiction who find themselves in an equivalent position to Mr Vnuk in the meantime? The answer, it appears, is in the unenviable position of having to bring a claim for Francovich damages. The alternative is to seek to persuade the domestic court that the relevant UK legislation must be construed so as to be compliant with the Directive. However, it does not appear likely that the plain wording of the domestic legislation will be susceptible to this.