In a recent case Damijan Vnuk v Zavarovalnica Triglav C-162/13, in the European Court of Justice, the courts ruled in favour of a plaintive claiming compensation after being involved in an accident. Mr Vnuk had fallen off a ladder hit by a tractor and trailer during the stacking of hay bales in a barn. After initially being dismissed by Slovenian courts it was later decided in the European courts that the concept of “vehicle” within the meaning of the European Directive on motor insurance (72/166/EEC) bore no relation to its use.

The implication now is that because of the Vnuk case, RTA (Road Traffic Act) compulsory motor insurance may now extend to “any use of a motor vehicle consistent with the normal function of the vehicle and anywhere”, it will no longer be limited to being in use on a road or public place.

If this is the case then it could take up to 12 months to change the RTA and it will have to be approved by Parliament so nothing will happen immediately.

So how will this affect the Motorsport industry?

Following the conclusions of the case, the definition of a vehicle could change to “any motor vehicle intended for travel on land and propelled by mechanical power, but not running on rails and any trailer whether coupled or not”.

This new definition takes into consideration vehicles not designed for road use – such as specialist motorsport vehicles.

The 1st implication will be insuring the vehicles, not an issue for rally cars as all have to be road registered and MOT’d so this is already catered for by insurance. The difficulty will be insuring vehicles that are not registered for road use so they comply with any new RTA law, as currently the MID (Motor Insurance Database) does not recognise chassis numbers. This will have to be addressed if the RTA is changed.

It appears that the construction of motor vehicles will not be impacted by the case. This does raise the question however; does this mean that if a race car that is not adapted for road use, will it be exempt from the implications of Vnuk? Thereby meaning the RTA will not apply to vehicles that are not intended for road use but solely for track use?

Is the impact clear?

The Motor Sports Authority (MSA) issues permits for all licenced events that cover the Public Liability aspect, but any events that are not held under permit will need its own insurance. This would include events such as drag racing, drifting and track days, which, if these activities are now subject to Vnuk, ie vehicles being used anywhere; will now require RTA motor policies. This has MID issues as already highlighted above.

Another possible outcome as well is the need to address passenger liability as a result of RTA and vehicles being subject to RTA law. Are participants in competitive vehicles able to be covered under the passenger cover that the RTA gives? Meaning that if there is an incident where two cars meet on a race track or a rally car crashes, will the participants be able to claim under passenger liability? Currently claims are not pursued as participants all sign disclaimers to prevent this from happening.

This case has clearly set a precedent, but as yet it remains unclear as to its full impact until the law changes, so we will report on any impact when it has been determined.

If you would like to read about the impact the case has had from a general standpoint then please click here to read our related blog.

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