Note from MCIA on Vnuk
The MCIA's role is to deal with a wide range of legislation that affects all aspects of motorcycling and the sport. MCIA works on many technical and legislative issues, many of which can be resolved through our regular dialogue with government. From time to time, publicity is needed to highlight an issue, state a public position and call for support for this position, both from politicians and the public. The Vnuk ruling is one such case.
MCIA has been working on Vnuk since the European Court of Justice (ECJ) judgement was handed down in September 2014. We have done this in partnership with motorcycle sport, the wider four wheeled motorsport sector, the insurance industry and the Department for Transport. We have also liaised closely with European colleagues and the European Commission. This is a rare example of government, the industry, sporting bodies and insurers all uniting with a single voice.
It is important to realise that Vnuk is not an item of forthcoming legislation which can be lobbied against or amended, but an actual ruling of Europe’s highest court, with no further avenues for appeal possible. Vnuk is set in stone and cannot be changed. It requires third party damage and injury insurance to be in place for all mechanically propelled vehicles when used at any time, for any purpose and in any place. This includes motorsport vehicles.
However, the European Motor Insurance Directive (MID) can be changed to remove certain vehicles from the scope of the Directive, and therefore Vnuk. It is here that we have focused considerable effort.
The UK Government is not in an easy position. Currently, its only fully legal option is to implement Vnuk. It has proposed an option based on what a possible amended MID could look like and MCIA strongly supports this approach. However, we are concerned about the Government’s legal position with regard to this option, in the absence of proposals from Brussels, let alone an amended MID.
But with no sign of the European Commission legislating to remove motorsport vehicles from the MID and time running out for EU member states to implement Vnuk, the UK Government was forced to launch its recent public consultation, (December 2016), with one option being to fully implement the judgement. This would have catastrophic consequences for the sport.
The Government could choose to ‘exempt’ motorsport riders and drivers from a requirement to buy third party insurance. This is also a legal option. But the requirements of Vnuk will still remain (insurance in place to cover the use of any mechanically propelled vehicle at any time, in any place and for any purpose). This means that third party damage and injury liabilities would remain. The result of this would likely be significant hikes in the cost of all kinds of insurance to cover the costs of meeting claims from ‘exempt’ classes of vehicles. Therefore, unless the Motor Insurance Directive is amended, there is no escaping Vnuk.
Although the UK has voted to leave the EU, this may take several years and the final arrangements for our ongoing relationship with the EU is unclear. While we remain in the EU we are subject to Vnuk. The Government can’t simply ignore it. If we leave the EU and remain in the single market, or the European Economic Area (EEA), then Vnuk, along with a large percentage of other European law will still apply to the UK. Like many directives, including driving and riding licences, the MID is marked EEA ‘relevant’, so will continue to apply if we remain part of the single market. However, the Isle of Man TT will be unaffected, as the Isle of Man is neither in the EU, or the EEA.
As a result of the above and the launch of the Government’s consultation on implementing Vnuk, it became necessary to make the issue public, to alert fans and riders to their opportunity to respond to the UK government consultation and to highlight the issues behind it. We want the unintended consequences of Vnuk to be made clear and resolved in a manner that protects UK motor and motorcycle sport.
Background to lobbying
The possible ramifications for motorsport of the Vnuk ruling were first notified to the industry and sporting bodies in the two and four wheel sectors in September 2014. The UK government and insurance industry also became aware of the potential issues and began working with us.
MCIA and the Motorsport Industry Association (MIA) created a partnership to address Vnuk along with all other bodies involved with UK motorsport, from F1 to grassroots organisations. The insurance industry and the Government quickly joined the partnership. Key objectives were to ensure that the European sports bodies started lobbying the EU and member states to call on the European Commission to amend the Motor Insurance Directive. The UK Government meanwhile, partnered with the German and Irish Governments to lobby the EU, as this is not just a UK concern.
Considerable efforts have been made to lobby the EU institutions (Parliament, Commission and Council). We have also liaised closely with international sporting bodies: the Fédération Internationale de Motocyclisme (FIM) and the Fédération Internationale de L’autombile (FIA). MCIA and the Auto Cycle Union (ACU) addressed several meetings of the FIM and the UK Motor Sports Association (MSA) also raised the issue with the FIA.
As it was clear the EC is unhappy about the consequences of Vnuk, our lobbying in Brussels was successful and under the former European Commissioner Lord Hill, the EC had agreed to amend the Motor Insurance Directive. The Department for Transport had hoped the EU would resolve the situation for motorsport before Vnuk needed to be implemented. They waited two years, to see if this would happen. It did not.
The European Commission did consult governments and proposed a ‘roadmap’ of options. This roadmap became the Initial Impact Assessment, which was first published in June 2016. However, the European Commission wants a second consultation, which is yet to be conducted. With the resignation of Lord Hill in late June 2016, the matter appears to have lost all momentum at European Commission level and it is unknown when, or even if, the MID will be amended.
In the meantime, member states have run out of time and need to implement Vnuk, or try to find a way around it, which is what the UK Government is trying to do with its public consultation. As Vnuk has now reached the point where the Government is seeking wider input from the public, MCIA decided to highlight the serious threat posed by Vnuk. We wanted to call for support for our position which is that the Government must in no way implement Vnuk in a manner which damages UK motor and motorcycle sport. All UK sports and governing bodies are behind us on this – MCIA is not acting alone.
As for other EU countries, Germany and Ireland recognise the problem and Vnuk received a large amount of coverage in Ireland back in the summer. Media in other countries failed to pick up on the Europe-wide ramifications and there remains some apathy in other EU countries and a belief that nothing needs to be done. This belief may be due to a number of factors. The people considering the legislation are not motorsport experts, some countries may be intending to follow Finland’s example (which has made insurance available, but is very expensive), and some think they are okay, as they already require riders to have third party liability. However we have discovered that this insurance only covers injury, not vehicle damage and so fails the Vnuk ‘tests’. Of course, if another member state finds a way to accommodate Vnuk in a way that works, we will encourage the UK Government to do the same. But we simply can’t hope or rely on this happening as Vnuk is incredibly specific.
Some commentators are so shocked by the possible ramifications, they believe that someone somewhere will stop it from happening; and that highlighting the worst case scenario is scaremongering.
Vnuk is too far reaching to simply ignore, or take a relaxed view about. Self-insurance options are extremely limited, even for Formula One and Moto GP. But such solutions are impossible for the wider sport and without Vnuk-compliant insurance, or insurance at a cost that few will want to bear, events will not be able to legally take place. The 58,000 riders who take part in grassroots events across the UK will find that legal avenues to the sport will be shut down.
Strong pressure via the consultation will offer the UK Government greater justification to produce a result which protects the sport. Encouraging people to reply to the consultation is one reason why MCIA and other sporting bodies chose this moment to make public its concerns.
Underplaying the risks is not a sensible course of action, given the timescale.
You can see the Government consultation document here.
31st December 2016
Press Release: MCIA involvement with highlighting Vnuk and its effect on motorsport
See below for additional information on the background to lobbying by the MCIA and UK motorsport bodies.