UK Government plan to axe EU ‘VNUK’ Insurance Law

In these strange times, we have some good news for once!

The Department of Transport have confirmed in a press release issued on Sunday 21^st February that they are taking the necessary steps to exempt the UK from the implications of the EU Motor Insurance Directive.

Had the EU law been implemented in Great Britain, it would have meant the insurance industry would have been liable for almost £2 billion in extra overall costs. These costs would more than likely have been passed onto the vehicle owner.

Now we have left the EU, the measures no longer need to be implemented, helping road-users across the country steer clear of increased premiums, a clear win for motorists in Britain and subsequently a massive boost for motorcycle sport.

The news will be met with great relief in the motorcycle sport community.  The EU ruling would have meant any incident in motorcycle sport would have been treated as regular road traffic accidents requiring insurance.  The financial implications would have placed a huge threat on the sport and thousands of jobs within the industry could have been at risk.

Roy Humphrey, Chairman ACU Ltd commented, ‘The announcement made by Grant Shapps, the Secretary of State for Transport has been welcomed wholeheartedly throughout the ACU community.  I know a lot of work has taken place in the background working with the Department of Transport, Insurers, Motorsport UK and other facilitators of motorsport, and I would like to thank everyone involved for their considerable efforts over the years which has obviously gone some way to today’s decision being made.

Today’s announcement signifies a huge victory for motorsport overall and hopefully it won’t be too long before we can get the sport underway.  Some good news at last………’

The VNUK ruling will continue to apply in the EU member states and the FIM are making significant representations to get motorsport exempt.  The ACU will continue to liaise with the FIM because although the UK itself is not affected, UK participants in events taking place in the EU will be affected unless the ruling becomes exempt for motorsport in the EU.

Ends

Taken from the minuets of Meeting of the Centre Chairmen/Secretaries 9th February 2019:
 

VNUK Update
Mr Thompson gave an update on VNUK. A resolution to the Vnuk motorsport
insurance issue took a step in the right direction last November, after an EU
government committee recommended motorsport be exempt from new insurance
law wording.
The 2014 Vnuk court case set a precedent that all vehicles should have insurance,
even if they are being used on private land. That would mean that all motorcycles
competing in motorsport events in Europe would need to be insured.
For example, any crash between motorcycles competing in motorsport would be
treated as a road traffic collision, consequently involving the police. Most insurance
firms have confirmed this would make motorsport uninsurable.
In a draft report from the European Parliament's Internal Market and Consumer
Protection Committee (IMCO) issued in November, it recommended that the phrase
'in traffic' to be inserted with the intention of making the sport exempt from the Vnuk
precedent.
This was voted on at a meeting on 29th January and the vote went completely in
motorsports favour and the relevant committee in the European Parliament, IMCO,
voted by an overwhelming majority (32 for, 2 against) to exempt various vehicles from
the scope of the Motor Insurance Directive.
The next stage is almost certain to be a three-way discussion between the
representatives of the Parliament (MEPs), Council (national governments) and the
Commission. This is not anticipated until later this year due to EU elections and a
change of Commissioners
 

Issued by the Motorcycle Industry Association Ltd 24 January 2019:

Issued by the ACU 24 July 2018:

The Vnuk issue. An update…….
 

In recent years, we have reported on the threat posed by the so-called ‘Vnuk’ judgement by the
European Court of Justice (CJEU). We had hoped that moves in Brussels to amend the Motor Insurance
Directive (MID) would see exemptions granted to motor and motorcycle sport. But recent proposals to
amend the MID have seen the European Commission do a 180 degree U-turn and Vnuk is now in danger
of become a serious reality.
The background to all this is that in 2007, a Mr Vnuk in Slovenia was knocked off a ladder at work by a
reversing tractor and trailer. He was injured and claimed compensation from the tractor’s motor
insurance. As the incident happened away from the public road, the claim was outside the policy and
the insurer refused to pay. The CJEU became involved and ruled that the Slovenian government had
failed to transpose the Directive into national law correctly and the Motor Insurance Directive required
that all vehicles must have insurance cover for all uses everywhere covering all risks and liabilities. This
ruling was challenged by the British, Irish and German governments, but in 2014 the CJEU rejected the
appeal.
The UK government, along with sports bodies and industry, lobbied the European Commission to change
the legislation so that motorsport would be exempt. We were helped by insurance bodies such as British
Insurance Brokers Association (BIBA) and the Association of British Insurers (ABI), who stated that
insuring motorsport in the same way as normal road use would be extremely expensive (particularly for
vehicle to vehicle collisions on the track), that such a policy would not be commercially viable, and no
underwriter would want to enter this market. The UK Government also supports our position on the
matter.
In April 2016, the argument that motorsport was a case apart was accepted by the then Commissioner
in charge of this portfolio, Lord Hill, who directed that an amendment be tabled shortly to be completed
by the end of the year. However, rather than publish immediately, he held a consultation and then, after
the Brexit vote, Lord Hill resigned. The new Commissioner in charge decided to roll the amendment into
a longer process known as “Refit” which included the issue with several other changes to the Motor
Insurance Directive.
The European Commission held two more consultations on the issue during 2017. The responses to both
were overwhelmingly in favour of the EU exempting motorsport from mandatory insurance
requirements.
However in May 2018, two years after the Commission promised to exempt motorsport, they published
a formal proposal for an amendment and an impact assessment that explicitly included motorsport in
the scope for compulsory motor insurance.
The detail of this proposal was to include a definition of the ‘use of a vehicle’ which included all use of a
vehicle on all terrains, whether moving or stationary.
If adopted, this proposal will mean that all vehicles, whether family cars, museum pieces, off road
competition machines or MotoGP bikes, will need a minimum 3rd party motor insurance covering all
damages and liabilities at all times and for all uses - including use on a closed circuit or a closed public
road.
We now have a short window of opportunity to stop the threat of Vnuk becoming reality. We have been
working with the AMCA and the MCIA to ensure that our European counterparts lobby their
governments and members of the European Parliament (EP). The objective is to get the European
Parliament to amend the European Commission proposals, so that motor and motorcycle sports are
removed from the scope of the Directive. But it’s vital that other EU governments are also brought on
side, given that the EP vote will only be advisory and not binding on the Commission.
Votes in Europe will take place later this year. If we are unsuccessful in getting the proposed Directive
amended, the theatre of action then moves to the UK, where we will be calling on the UK Government
to not implement under any circumstances. At that point we may request the direct help of clubs in
contacting MPs – though there is nothing wrong with writing to your MP about the matter now.
Given the current state of the Brexit negotiations, we cannot look to Brexit to solve this problem for us,
as European directives may still apply to motor insurance after the UK leaves the EU. In any case, this is
a European problem, not just a UK matter.
Irrespective of the UK’s place in the future, we will do what we can to support our European colleagues
and friends in their endeavours to save motor and motorcycle sport.
Kind regards
Gary Thompson MBE BEM
General Secretary