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Use of Vehicles on Private Land - UK in Breach of EU Insurance Obligation

The UK is in long-standing breach of its obligation under European law to require compulsory insurance in respect of the use of motor vehicles on private land. So ruled the Court of Appeal in a case of crucial importance to the motor insurance industry.

The case concerned a pedestrian who was run down in a private field by a farmer at the wheel of an uninsured 4x4 vehicle. The farmer had erroneously assumed that the pedestrian was up to no good and drove off a public road, onto a footpath and through a barbed wire fence before colliding with him. The farmer denied that he had driven into the pedestrian deliberately and was later acquitted of a charge of causing grievous bodily harm with intent.

Lawyers representing the pedestrian, who suffered a broken neck and was left quadriplegic, launched proceedings against the Motor Insurers' Bureau (MIB) – the industry body which, under an agreement with the Government, compensates victims of untraced or uninsured drivers.

The MIB did not dispute that the farmer was liable for the accident, but denied that it was under a duty to compensate the pedestrian on the basis that the accident, and his injuries, had not arisen from the use of a vehicle on a road or other public place, within the meaning of the Road Traffic Act 1988. That argument, however, fell on fallow ground and the pedestrian's claim was upheld by a judge.

In dismissing the MIB's appeal against that ruling, the Court found that EU Directive 2009/103/EC, which pertains to compulsory motor insurance, has direct effect in the UK. The Directive imposes an unconditional and precise duty on member states to take measures to ensure that civil liability in respect of the use of vehicles normally based in their territory is covered by compulsory insurance.

The Directive makes no distinction between the use of vehicles on public and private land. In those circumstances, the UK had failed in its obligation to ensure that civil liability in respect of the use of motor vehicles on private land is the subject of a scheme of compulsory insurance. As an emanation of the state, the MIB was also directly bound by the Directive. The Court's ruling entitles the pedestrian to very substantial compensation from the MIB.

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