13/10/2017
The motorcycle and motorcycle sport industry is being urged to respond to a consultation which could end the threat of the sport’s complete collapse due to an insurance ruling which currently hangs over it.
The Vnuk Issue
In August 2007, a Mr Vnuk in Slovenia fell from a ladder which had been struck by a farm vehicle. The European Court of Justice (ECJ) was asked to confirm whether Mr Vnuk’s accident fell within the duty to insure a vehicle, as required under the existing EU Motor Insurance Directive (MID) – rather like any other road vehicle even though it was on private land. In 2014, the ECJ decided It did. EU Member States are now legally obliged to change their national law to ensure that all vehicles everywhere have road traffic insurance.This means that all motor and motorcycle sport vehicles and drivers/riders in the UK are now required to be covered by unlimited third-party motor insurance during competition. The only way out of this is through the EU amending the Directive. If this does not happen, the Vnuk ruling could end motor and motorcycle sport in the EU and UK overnight.
Threat to Motorcycle Sport
This ECJ ruling makes unlimited third-party insurance compulsory for anyone using any form of motorised transport in any location in the EU. This includes all participants in all forms of motorsport – cars, motorcycles, karts, drag, rally etc. at all levels from grassroots to Formula One. This compulsory, unlimited insurance must cover all third-party damage, including personal injury to other competitors and any damage to their vehicles, damage to property and injury to marshals etc.
The insurance industry has already confirmed that it will not be able to offer such insurance given the claims liability that will need to be absorbed – mainly from vehicle damage. It was tried in Finland, but premiums per rider rose very fast and are now as high as €29,000 per annum for some younger individuals. Sporting bodies such as the FIA and FIM, as well as insurance bodies such as the ABI, are protesting the change.
The UK Government opposes the Vnuk judgment and has so far not implemented it. But this leaves the taxpayer liable to claims from individuals which may arise as a result of non-implementation. The UK Government is therefore under great pressure to find a solution – or implement Vnuk with the subsequent closure of UK motorised sport.
Brexit may not be the ‘escape’ from Vnuk that it may first seem. This is because any transitional deal seems set to include Single Market membership, or continuing to abide by Market rules. These cover most areas of EU law, meaning that the UK may now not effectively leave the EU until at least 2021. Even after then, if the UK continues to abide by EU insurance law as part of any ‘mutual recognition’ arrangements, we may still be stuck with Vnuk. So just waiting for Brexit is not a solution.
NEW HOPE?
The European Commission realises that Vnuk has unintended consequences such as the effect on motorised sport. But instead of amending the Motor Insurance Directive, it wants to undertake a wider review of the directive. This is called REFIT. They have issued a consultation on this, which closes on October 20th
It is NOW essential that ALL who have an interest in motorcycle sport make their views known to the European Commission by OCTOBER 20th to the REFIT consultation and support the simple amendment offered.
Please Make Your Views Known Online!
You don't need to respond to every question and some draft answers for you to cut-and-paste are below (although it’s better to write your own if you have time):
SECTION B
Q27: Should the protection provided under MID include liability for accidents irrespective where they occur, thus both on public roads and private property?
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Liabilities occurring from accidents where the general public have no access should not require compulsory motor insurance. Once you enter an area where the general public do not have access, e.g. a racetrack, you are aware of the risks and consequences.
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Q28: In light of the Vnuk ruling, should it be left to the discretion of individual Member States to exempt certain natural or legal persons, certain public or private vehicles, certain types of vehicles or vehicles bearing special number plates that normally fall under MID, provided that the victims are otherwise compensated? If not, why not and what action should be taken?
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Exempting any type of vehicle would a) mean that that vehicle would not need insurance when used on a road or public place and b) would mean the general motoring public would become liable via the national guarantee fund (i.e. MIB in the UK). This would add a massive unfair cost onto motorists. Member states should be free to choose which vehicles should be covered or not, but generally, the activity of motorsport should be exempt, not the types of vehicles which may be used on roads in other circumstances.
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Q29: What types of vehicles, if any, should be excluded from the scope of MID at EU level?
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All vehicles when used in motorsport should be exempt from the requirement for compulsory insurance.
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Q30: Should compulsory MTPL insurance cover accidents resulting from agricultural, construction, industrial, motor sports or fairground activities?
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Motorsport activities should not be covered by Motor Third Party Liability insurance. Responsible motorsports organisers already have Third Party Liability insurance for non-competitors.
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Q31: Should compulsory MTPL insurance cover accidents that occur on areas that the public are not allowed (legally) to access?
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The public are prohibited from the competition area during motorsport events and therefore there should be no requirement for Motor Third Party Liability insurance.
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Q32: Do you have other comments related to the scope of MID?
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Unless motorsport is taken out of the scope of the Motor Insurance Directive, European motorsport will be placed at a significant disadvantage to motorsport around the world and the employment, business and social benefit that arises from motorsport will cease in Europe. Restricting motor insurance to the scope of traffic (as defined in national law) is an ideal solution.
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Q38: Are there any other issues not falling within the remit of the above questions that might require action at EU level you wish to raise? What would be your preferred solution to the identified issue?
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No insurance is available to insure competitor-to-competitor liabilities in motorsport as required by the Motor Insurance Directive as understood by Vnuk.
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