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Insurers call for action against private land motor insurance ruling

28 August 2017

Owners of vehicles like golf buggies and motorised lawnmowers could be forced to take out third party insurance, unless the European Commission takes urgent action, according to the Association of British Insurers.

The ABI, together with a number of other UK insurance industry bodies, is urging the Commission to act on a proposal to clarify that compulsory motor insurance only applies to vehicles when in traffic and not those used on private land.  

The issue arose following a ruling by the European Court of Justice in 2014 that compensation for injuries suffered by a Slovenian farm worker, Damijan Vnuk, by a tractor while on private land should have been covered by compulsory motor insurance. In the UK this only applies to vehicles used on public roads.

If the Commission fails to act, the ABI states that the UK Government will need to change domestic law and extend the scope of compulsory motor insurance for the time the UK remains in the EU and during any exit transition period. This "would lead to significant disruption and additional costs", it claims. No other EU country has such a wide ranging compulsory motor insurance regime as would result from implementing this ruling.

The ruling, it maintains, is:

  • unnecessary, as in the UK the accident would have been covered through employers’ liability insurance or public liability insurance;
  • unworkable, as implementation would involve a costly taxpayer-funded enforcement and compliance regime, involving vehicles that are not on any public database and do not need to be licensed;
  • and unfair, as regular recreational motorsport participants would be forced to pay for cover they have never needed before.

"As insurers will have no reliable past data to assess the risk and calculate premiums, the cost of insurance could make it difficult for some events to continue", the ABI commented. "Responsibility for the safety of participants and the public at such events should remain the responsibility of the event organisers."

Ben Howarth, the ABI's senior policy adviser for motor and liability, added: “We recognise that victims of accidents on private land should be entitled to compensation, but making insurance compulsory for off-road vehicle users is unnecessary, unworkable and unfair. There is no evidence that this extension is needed in the UK. And it could prove the next lucrative hunting ground for claims management companies, encouraging claims that end up being paid for by all motorists through higher premiums.

“The European Commission can easily resolve this, by implementing its own proposal to simply specify that the Motor Insurance Directive only applies to vehicles in traffic. It needs to end the uncertainty by doing this now.”


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