The Vnuk is an important decision by the European Court widening the liability of Motor Insurers, Motor Insurers Bureau (MIB) and ultimately the Government, in respect of motor claims. The decision flags up that UK motor insurance legislation was/is inconsistent with EU law and has the potential to mean a large number of vehicle collision cases which were historically unsuccessful, now have scope to recover compensation.
Historically, UK legislation has only required compulsory motor insurance in respect of a person using a motor vehicle on a road or in a public place. Therefore there was no requirement to insure motor vehicles when they were being used in a private place or where the vehicle itself was not constructed for use on the public highway. This meant that people involved in accidents on private land, or with vehicles not intended for use on public roads may have been unable to recover damages through the insurer, or if uninsured, unable to recover via the MIB Uninsured Drivers Scheme.
The Vnuk case originated in Slovenia. The accident involved a farm vehicle knocking a worker from a ladder in a farm yard. The case proceeded to the European Court of Justice who looked at the question of what the scope of compulsory insurance cover should be in European States as required by the European Motor Directives.
The European Court concluded that the scope of third party insurance cover extends to cover any accident caused by the use of a vehicle that is consistent with the normal function of that vehicle, i.e the use of any motor vehicle; being used in almost any way; being used anywhere, whether public or private land.
Therefore any attempts to restrict insurance cover based upon geographic area, technical definitions of types of vehicle and use of the vehicle are now obsolete. The decision also has retrospective effect, as this level of cover has been required by the Directives for many years. This may enable old cases which have been unsuccessful to be reconsidered.
If too much time has passed to issue proceedings within the relevant limitation period, in such cases the remedy may be a claim against the Government under what is known as a Francovich claim. This is a claim for damages on the basis that the loss has arisen because the Government has failed to implement a scheme of insurance which provides the cover required by the Directives.