Compulsory motor insurance and mobile machinery: yes or no?

05 Dec 2017

In Vnuk v Zararovalnica some three years ago, the European Court of Justice somewhat controversially decided that an accident caused by driving a tractor in a private farmyard fell within the scope of compulsory motor insurance required by Directive 2009/103/EC, the Codified Motor Insurance Directive (MID). Just last week, it had to consider whether serious bodily injury to agricultural workers caused by the rolling over of a stationary unoccupied tractor, the engine of which was operating only to spray herbicide, should also come within the Directive. This new case is Rodrigues de Andrade.

The tractor which caused the incident back in 2006 in the Rodrigues case was static and being used as a machine to spray herbicide in a vineyard. The vibration of the engine and it being sited on very wet terrain caused a landslip. The tractor toppled down the terraced vineyard and injured three workers and killed and a fourth, Mr Rodrigues’s wife.

The Portuguese courts referred the circumstances to the ECJ and asked if they came within the scope of the compulsory cover required by the MID as understood in the light of its decision in Vnuk?

The wide interpretation in Vnuk that compulsory motor insurance is necessary for “any use of a vehicle that is consistent with the normal function of that vehicle” might have been thought to indicate a particular outcome in this latest case. But, on 28 November 2017, the ECJ decided (in case C-514/16) that the incident in Rodrigues does not fall within compulsory motor insurance. The tractor in Rodrigues was not being used as a vehicle: it was being used as a machine.

The court drew a distinction with Vnuk on the basis that “use of a vehicle”, which the MID required to be insured, “covers any use of a vehicle as a means of transport.” The tractor in Vnuk was being driven to transport hay for storage.

The European Commission and the Governments of Six Member States, including those of the UK and Ireland, had made written representations to the court before its decision in Rodrigues. Although this may have had no obvious bearing on the ultimate outcome - and the distinction with Vnuk is justifiable given the differing facts - it is nonetheless indicative of the level of interest in this issue. Vnuk itself gave rise to concerns about the unintended consequences of the wide approach of the ECJ to interpreting the scope of the MID, and the Commission’s REFIT review of the MID over the summer offered a very recent opportunity for those concerns to be repeated and re-emphasised.

It is not clear where Rodrigues leaves the overall debate about the scope of MID and compulsory motor insurance, particularly in the UK. It is certainly to be welcomed that the court has adopted a pragmatic approach to the MID rather than further developing the expansionist view it showed in Vnuk. Rodrigues should operate to reinforce “tools of the trade” exclusions in UK motor policies, covering dual use mobile machinery such as road-legal tractors and mobile cranes - when they are being used as machines.

Rodrigues definitely does not resolve the all of the unintended consequences of Vnuk, but we can now add an important qualifier to the decision in Vnuk that motor insurance is legally required for “any use of a vehicle that is consistent with the normal function of that vehicle … as a means of transport” - with this last phrase being taken from Rodrigues.

Vnuk rendered the Road Traffic Act 1988 incompatible with the MID, a point which was conceded by the Government in the recent judicial review of the legislation. The Government noted in its submissions to the JR that the Commission was examining the whole area as part of its REFIT review of the MID.

So, with the European legislation (the MID) potentially subject to some changes in the medium term following REFIT, the UK Government might not think it appropriate to change domestic motor insurance legislation just at the moment: it may prefer to wait and see what comes of REFIT.

In the bigger picture, such a ‘wait and see’ approach in this narrow field might be politically expedient to the extent that it may tend to reinforce the perception that the UK Government is not going to bend to new European requirements as it looks to take the country out of membership of the EU.


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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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Alistair Kinley

Alistair Kinley

Director of Policy & Government Affairs,

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