FIM Brussels - The Motor Insurance Directive: What impact for the motorcycle and motor sports industries?
On 24th May, the European Commission (EC) published its proposal for a revision of the Motor Insurance Directive (MID), which sets out legislation regarding insurance for motor vehicles across the EU and includes protection for EU citizens involved in incidents in other EU countries. The proposal for a revision is the first time the EC has set out to revise the directive since five separate Directives were consolidated into the MID in 2009, the oldest of which dates back to 1972.
The proposal for a revision follows internal evaluation work which began in June 2016 and a subsequent public consultation (July-October 2017). The basic intent of the revision is two-fold. It aims to strengthen EU rules on motor insurance with the ambition of providing better protection for accident victims and improving the rights of policy holders. Overall, the principal proposed changes to the current MID are concerning insolvency of the insurer, claims history statements, uninsured driving, minimum amounts of cover and its scope.
Significantly, the EC’s proposal sets out that the scope of the MID should be expanded to include accidents which are caused during the normal use of a motor vehicle for the purpose on transportation, including use on private properties. This aspect of the proposal represents the EC’s interpretation of how some recent decisions of the European Court of Justice (ECJ) should be implemented in practice in EU legislation.
In particular, the decision to propose an extension of the scope in the aforementioned manner aims to address the decision of the ECJ in 2014 regarding the case of Damijan Vnuk v Zavarovalnica Trigalev (C-162/13), commonly referred to as the ‘Vnuk Case’. The Slovenian Supreme Court ruled against Mr. Vnuk’s attempt to seek damages from the insurer of a tractor, the trailer of which knocked him off a ladder while it was being reversed on a farm. It was subsequently referred to the ECJ which decided that the duty to insure did extend to the specific circumstances of the accident. Significantly, the ECJ made no reference to the duty to insure including use on private property in its judgement.
The decision to include use of motor vehicles on private properties represents the EC’s decision to base the scope of the MID on the use of vehicles per se rather than the situations in which they are used. It follows the 2017 public consultation, which presented a number of options, including a possibility to require insurance at European level for vehicles being used in traffic only, which therefore left accidents arising outside this scope to be addressed by Member States.
The proposed clarification of the scope of the MID, if agreed to by the co-legislators, may therefore cover accidents from agricultural, construction, industrial and motor sports activities. From a motor sports perspective, this would have serious implications for the practice of such activities in Europe in the future as it could lead to motor sport events being dependent on the willingness of insurance companies to provide the requisite cover at an affordable cost.