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DON’T PANIC. The Real facts about Vnuk #msirl

The Vnuk Ruling and its implications for Motorsport in Ireland. It’s easy to dismiss it as sensationalist nonsense but, given the gravity of the situation if it wasn’t that, we decided to dig a bit deeper on the subject. What is it? What are the ramifications? Why is amendment needed?

The Case:
Mr Vnuk was involved in an accident where he was knocked off of a ladder, while working as a farmhand, by a trailer attached to a tractor. The incident took place on private property, a farm courtyard, and initially the Slovenian Courts dismissed the claim on the basis that the Vehicle, while insured, was being used as a propulsion device rather than a means of transport.

The case was referred to the Court of Justice of the European Union to determine extent of cover given via a duty to insure “the use of vehicles” in the context of Article 3(1):
“Each Member State shall, subject to Article 4, take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered by insurance. The extent of the liability covered and the terms and conditions of the cover shall be determined on the basis of these measures”

Reversing a tractor on a farmyard then would be regarded as use of a vehicle. Except in many states, including Ireland, the insurance obligation only extended to road use. The shift in legislation would see vehicles insured not just as means of transport but also as machines. It would extend Insurance policy to “Any Use” “Anywhere”.

Derogation or Exceptions could still be left out of this scope by means of Article 4:
“A Member State may act in derogation of Article 3 in respect of :
(b) Certain types of vehicle or certain vehicles having a special plate; the list of such types or of such vehicles shall be drawn up by the State and communicated to the other Member States and to the [European] Commission”

Derogation from the MID (Motor Insurance Directive) would not be decided by types of place or types of use, but only for certain persons and/or certain types of vehicles. The issue arises when these exceptions then fall into the jurisdiction of the MIB (Motor Insurance Bureau)

When we read through Mondello Park’s Statement this was the area where the cause for concern centred. It was impossible to exempt Motorsport using this method because “Unlimited liability cover is uninsurable and won’t be available”

Not so much the sensational nonsense and more a real problem that urgently needed to be dealt with. We were put in contact with MEP Brian Hayes and asked him how real this threat was and what was underway to halt what is a European wide issue.

Brian Hayes MEP

Brian Hayes MEP:
This goes back to 2014 and normally when a judgment comes out you have two years to implement it and effectively this goes back to a case that was taken where in Slovenia a guy called Mr Vnuk was hurt while working on a ladder on a farm and the Slovenian Motor Insurance (Courts) denied liability on the case and it was referred to the European Court of Justice which ruled that Mr Vnuk was in right, was in favour, and they granted compensation.

They then said, effectively, when it came to insurance cover that we had to drop this distinction between private and public.

Up to now it’s only when you are driving on a public road that you require insurance, not so much on a private dwelling or a private race track or whatever.

You’ve two years on the moment of the judgement. The judgement will effectively come into operation in October 2016, which is after the 2014 ruling.

I was approached by Mondello and other people that are interested in Motorsport in Ireland to find out what we can do because there is no way that you can effectively insure against an unknown risk.

The dilemma for Mondello and hundreds of other tracks around Western Europe is how can they possibly get insurance in a circumstance where there is no possible solution to that insurance because there’s no way of quantifying the total risk?

This is a real problem. It’s not contrived. This is a real issue that has to be resolved and I’m working with lots of other MEPs here from Britain, Ireland and Belgium and other places where Motorsport is an important leisure pursuit to see if we can find a way to solve this problem.

Leo Nulty:
“Was the intention, Brian, for this to include Motorsport or was it just not properly put together?”

Brian Hayes MEP:
They didn’t realise the impact of this. The judgment effectively means, Leo, that from October of this year all EU member states are required to make unlimited 3rd party motor insurance compulsory for all vehicles wherever they are used. That could be on farms, in motor (racing) tracks, on private lands, a guy in a vehicle in his private dwelling. Because it’s so all-encompassing it has such an immediate effect.

Insurance is an area that I have an interest in because I’m the only Irish member of ECON, which is the Economics Affairs Committee of Parliament. It also requires some change to the EU Motor Insurance Directive (MID) so that these rules can be applicable.

I’ve spoken to Jonathan Hill, who is the commissioner and his team and I’ve outlined my view that an amendment to the directive before October will resolve this problem for motor (racing) tracks especially and for Motorsports. He has given a commitment that he wants to solve this problem.

Whether it can be done by October is another matter but ultimately it requires some amendment to the existing EU Motor Insurance Directive to effectively give a carve-out for people who are doing Motorsport and Motor Leisure.

Leo Nulty:
“One question, you’ve probably covered it a little bit so far. Everybody thought initially this was a sensationalist headline when it went on to social media. We ran it on and got a reach of 25,000 and 100 shares inside three hours. When you dig into it it’s quite worrying if it’s not changed.”

Brian Hayes MEP:
Oh no. This is a real problem. It’s not some contrived situation. The good news is for those who are interested in Motorsport as a leisure pursuit or professionally even it has to be done in a regulated environment, it has to be done with well-designed tracks, where there is insurance and there is also a facility there for people. In recent years thankfully the safety standards have improved dramatically, which is really good as well.

The good news is that we have lots of friends in court on this issue because right the way across Western Europe and indeed in Eastern Europe there are many tracks and this judgement doesn’t just affect an Irish track it affects all of those tracks. That’s why the European parliament, which is a directly elected assembly, is really interested in this on behalf of the citizens. We need to make sure that we resolve this problem so that Mondello and other Mondellos all over Europe continue to exist.

Leo Nulty:
“The push seems to be, initially, to extend insurance to cover accidents on private land. If Motorsport, rallies or racing, gets some kind of amendment or exception put into the ruling should we still expect cars or vehicles driven on private property to need some form of insurance going forward?”

Brian Hayes MEP:
Let’s wait and see what the full amendment is. The question is “How encompassing will the amendment be”? Will it relate to tracks? Will it relate to designated events, or will it relate also to private lands? My view is that we should look for an absolute exemption when it comes to Motorsport full stop, on the basis that when people do Motorsport they know the risk they take that on, they effectively write that in terms of their own insurance.

The problem at the moment is that there is no means through which you can calculate what is the total potential liability from risk? That is the problem on what is called the Vnuk judgement. It seems to me we should be looking for a complete exemption on Motorsport full stop and in doing that that’s the clearest and cleanest way of resolving this.

It’s in the hands of the commission. They are very well aware of the problem. They know it has to be immediate. They know they’ve got to get a result before October. Before I comment on their proposal I want to see it. My understanding is that they’re working on something we should have in the summer.

Leo Nulty:
“Are the governing body, the FIA, involved in this at all?”

Brian Hayes MEP:
I’m aware they are aware of it. I think they are working with the representative bodies across the European Union to see if they can lobby. What’s happening at the moment is individual tracks, and bodies and organisations, have lobbied MEPs and there is a huge lobby in the UK at the moment.

It’s only taken off here since I’ve been asked to take some interest in this. We’re working in collaboration with British MEPs. I’ve spoken to British MEPs about this. We are working really hard to see if we can get a resolution to this.

Equally in Belgium, Netherland, France and where there are other tracks. They’re beginning to realise that the deadline is coming in October and this is a real deadline and there will be a real problem of insurance and tracks after this unless we find a solution to it.

Leo Nulty:
“What’s the procedure now? What work is underway?”

Brian Hayes MEP:
Commissioner Jonathan Hill is commissioner for Financial Affairs and Financial Regulatory Affairs. He has to bring forward, as I understand it, and amendment to the EU Motor Insurance Directive. That’s the only way now we can overcome the EU Court decision on this area.

He has given a commitment to do that. He thinks that is the best way of resolving this, presumably just providing just a carve-out for Motorsport. If there is another solution we’ll have to look at it but he has given a commitment that that solution will be looked at in the first incidence and obviously he’ll have to produce and amendment, which will have to go before my committee, which I’m a member of, which is good.

As to when it’s going to come before a committee, we cannot determine until such time as he proposes it because, as you know, over here in Europe the commission proposes legislation rather than the parliament but it’s signed off by the council and the parliament. Because we want to prioritise this we have to wait and see what his proposal is in the first place.

Leo Nulty:
“You seem very positive about the whole thing. Do you think there could be a bad ending to this? Is there a chance that there won’t be an amendment?”

Brian Hayes MEP:
In politics I’ve learned one simple thing in life. Never say never. Until I see it, until I see the actual outcome I won’t believe it. We have to be on our guard and I think also the Irish Government should help in this matter, in terms of lobbying other member states where there is a direct interest here.

Ultimately this file will have to come back onto the EU Council file and it would be a finance issue because it’s to do with Insurance. While I’m working hard with other MEPs to stop this crazy judgement for Motorsport I’d appeal to the Irish Government and other governments to work equally hard in trying to ramp up the lobbying behind this to make sure that we can get a solution, a workable solution, for everyone in the industry.

Leo Nulty:
“There was a great statement from Mondello Park yesterday, and they’ve obviously been in touch with you and they’re very well informed, and I know Alex Sinclair was involved there as well. What about the average clubman and this his hobby and he spends half his income, or he tells his wife he spends half his income on it?”

Brian Hayes MEP:
They’ve got to be protected. People involved in Motorsport they commit so much of their time, their money, their wife or their husbands time. It’s a family pursuit. I know that from my own constituency. They just want to enjoy the sport. They do it in a much regulated way. They do it in a way which respects the use of vehicles right the way across the country. I think it’s important to get the message out to them to speak to their other MEPs to try and keep the lobby strong on this and hopefully we get a good outcome, a good result.

Leo Nulty:
“That was my next question. It’s not a time for panic, it’s not petitions but lobby your local MEP”

Brian Hayes MEP:
Lobby your local MEP and I think the other point is we have another five months before this comes in so we have a bit of time yet.

Leo Nulty:
“Brian, that’s great. Thanks for your time.”

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