Vehicles can remain uninsured on private land

A decision by the UK government not to implement the controversial ‘Vnuk law’ requiring the compulsory insurance of a wide range of vehicles used on private land has been welcomed by logistics and motor sport organisations.

The change was estimated to likely cost over £2bn to implement and was expected to increase motor premiums (opens a new window) to reflect these new liabilities. If the Vnuk law had been implemented it would have meant that insureds and insurers would have needed to obtain and provide insurance for a wide range of vehicles that currently do not legally require insurance to operate on private land e.g. fork lift trucks, hoists, golf carts, ride on mowers. 

The ‘Vnuk law’ arose from the case of  Damijan Vnuk v Zavarovalnica Triglav (C-162/13) (opens a new window) which was decided by the Court of Justice of the European Union in 2014 in respect of the meaning of Article 3(1) of the First Directive on Motor Insurance (72/166/EEC). The Court determined that the directive essentially placed a requirement on insurers to provide cover for the use of vehicles whilst on private land. This decision was contrary to the UK rules under the Road Traffic Act 1988 which requires an insurer to only cover losses resulting from collisions on a road or other public place. 

The issue was recently put before the Court of Appeal in the matter of Lewis v Tindale, MI & Another (case B3/20182411) where it was ruled that the MIB were obliged to indemnify a Claimant for his injuries sustained as a result of a collision that occurred on private land. Permission to appeal to the Supreme Court was sought by the MIB but refused. The Court held that the UK was in long standing breach of its obligations to implement the Vnuk ruling (opens a new window) in UK law. 

However, following Brexit, the UK Government has now decided that it does not intend to implement the ruling in the UK with Grant Shapps, Secretary of State for Transport confirming: ‘We have always disagreed with this over-the-top law that would only do one thing – hit the pockets of hard-working people up and down the country with an unnecessary hike in their car insurance. I am delighted to announce that we no longer need to implement it.’

It should be noted that until the Government’s decision is formally implemented Road Traffic Act (RTA) insurers will still be expected to meet the costs of claims arising from the use of insured motor vehicles whilst on private land. Furthermore, whilst public and employers’ liability policies often will include cover for the use of vehicles not subject to the compulsory provisions of the RTA (i.e. generally vehicles not used on roads) it would be advisable for commercial policyholders to ensure that those who operate upon their premises are insured should they cause any damage whilst on site. Conversely, checks should also be made that their own insurers will respond should their employees cause damage to third party property whilst operating on private land. 

For further information, please contact: 

Samuel Ellerton – Regional Claims Leader

T: +44 (0)121 232 4563  | E: (opens a new window)