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Published 25 April 2022

50 predictions: Construction & Engineering

The House of Lords has today passed the Motor Vehicles (Compulsory Insurance) Bill into law. Royal Assent is expected this week and the new Act will come into force two months after Royal Assent. By the end of June, the UK’s compulsory motor insurance requirements will diverge significantly from EU legislation and case law.

The House of Lords has today passed the Motor Vehicles (Compulsory Insurance) Bill into law. Royal Assent is expected this week and the new Act will come into force two months after Royal Assent. By the end of June, the UK’s compulsory motor insurance requirements will diverge significantly from EU legislation and case law.The background to the BillOn 21 February 2021, the UK government announced its intention to remove from our law the effects of the decision of the Court of Justice of the European Communities in the Vnuk1 case, which extended the requirement for compulsory third party motor insurance to include incidents on private land. This decision had been problematic ever since it came into effect, with the government accepting (see RoadPeace v Secretary of State for Transport [2017] EWHC 2725 (Admin)) that UK law failed to satisfy the EU requirements as interpreted by Vnuk.In spite of this announcement and the obvious need to address the wide reaching effects of the Vnuk decision, no active steps were taken by the Department for Transport. In England, Scotland and Wales, it was left to Peter Bone MP to introduce and push through this Private Member’s Bill to achieve this.Few Private Members’ Bills ever make it to the statute books, but the Bone Bill will do so. Peter Bone has steered the Bill through all stages in the House of Commons and Lord Robathan has now done the same in the Lords. In Northern Ireland a like named Private Member’s Bill was passed by the Assembly on 7th March 2022; once both Bills receive Royal Assent, the UK picture will be complete.What will change?It’s very much a case of “back to the future”. In essence, we will see a return to the requirements for compulsory motor insurance as set out in Part VI of the Road Traffic Act 1988. These had not been amended on the face of the statute: section 145 still refers to liability in respect of death/injury or property damage “caused by, or arising out of, the use of a vehicle on a road or other public place”. The new Act simply ensures that for any accident after it comes into force at the end of June, the wording of section 145 represents the settled law – and so-called retained case law (i.e. Vnuk and other EU cases) ceases to have any effect.By removing the effect of Vnuk and of the line of EU cases that followed it, the new Act creates a real divergence for the UK from the position of EU member states. In November 2021 the European Parliament and Council moved to amend Directive 2009/103/EC, upon which the Vnuk decision was based, in a number of areas. Of particular importance is a revised definition of a “vehicle” and the introduction of a new definition for “use of a vehicle”, which is now by reference to any use consistent with its function as a means of transport and irrespective of its characteristics, the terrain and whether it is stationary or in motion. Crucially, though, the EU has opted to retain the extension to accidents taking place on private land and so stops well short of reverting to the pre-Vnuk position.The changes in the UK mean that insuring against liability for off-road incidents will no longer be a compulsory requirement. Where they consider it appropriate to the risks they are willing to write, insurers can go back to policy wordings which limit cover, in the UK at least, to “on a road or other public place”.1Damijan Vnuk v Zavarovalnica Triglav (C-162/13)

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