The recent Court of Justice of the European Union (ECJ) decision in the case of Fundo de Garantia Automovel v Juliana indicates that a vehicle which has not formally been taken out of use and can still be driven should be covered by insurance even if the owner does not drive it or has parked it on private land.
does your vehicle require insurance if its off the road?

Whilst some public sector organisations are exempt from the need to insure their vehicles, it does not exempt them from liability attaching to their ownership1.

The case

Defendant Ms Juliana owned a vehicle which she no longer drove for medical reasons2. Roadworthy, but unused, she left the vehicle in her yard. Her son stole the vehicle and as a result was involved in a collision which killed him and his two passengers. The Portuguese compensation body (MIB) paid out compensation before starting legal proceedings to recover the money from Ms Juliana with the claim that the vehicle should have been insured. The Supreme Court of Portugal referred the case to the ECJ asking whether Ms Juliana was required to have insurance and if she was not directly responsible for the deaths, was she indirectly responsible?3

The MIB's argument was that all vehicles impose an inherent risk and therefore need to be insured until they are formally de-registered and withdrawn from use. The UK equivalent of this would be Statutory Off Road Notification (SORN) or declaring the vehicle as off road to the DVLA. Unless this has been done then the vehicle is subject to Continuous Insurance Enforcement Legislation (CIE).

What does this mean for off-road vehicles?

The Court of Justice of the European Union held article 3(1) of Council Directive 72/166/EEC, as amended by Directive (EC) 2005/14, interpreting it as the need for insurance to be in place for motor vehicles which have been withdrawn from use if they are capable of being driven. This extends to off-road and onto private property. The ruling indicates that if an off-road vehicle is involved in an accident on private land then the national compensation body can bring action against the person who was responsible for securing insurance - even if they are not personally liable for the incident.4

This does differ slightly from the scope of SORN, meaning that the UK may now need to create an amendment to the scheme to comply with this Directive.

A recent ruling from the UK Court of Appeal in the case of UK Insurance v Holden reaffirms this5, as it was ruled that a vehicle under repair or restoration is still in operation as it is capable of being driven and therefore requires insurance.

Another case which reaffirms this is Damijan Vnuk v Zavarovalnica Trigalev (C-162/13)6 which ruled that vehicles on private land require liability insurance after Mr Vnuk was knocked off a ladder by a tractor trailer on the farmland where he worked.

These rulings and the ECJ’s recent interpretation of the directives have a considerable unexpected effect on a number of industries, including the public sector where vehicular equipment, such as tractors and other off road vehicles may now be treated by the courts in the same way as vehicles using the highway, even if they never stray from private land. privately owned land.

Find out more

At Gallagher we can develop appropriate solutions for our clients and are well versed in the peculiarities and specialist needs of the public sector risk. To find out more, please get in touch with your usual Gallagher representative.