He fell from the ladder, sustaining injury. He later brought proceedings before the Slovenian courts for compensation in a sum just short of €16,000 for his loss and damage.

The Slovenian courts dismissed his claim, on the basis that the requirement for compulsory insurance was limited to use of the tractor and trailer as a vehicle for road use and did not extend to cover situations where the use was as a machine or propulsion device.

The Slovenian appeal court referred the case to the Court of Justice of the European Union (CJEU), noting that the domestic legislation intended to implement Art 3(1) of Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of member states relating to insurance against civil liability in respect of the use of motor vehicles (The First Motor Insurance Directive) had been interpreted by the domestic courts in such a way as to limit its application to use of vehicles on public roads.

Affirmative

The question for the CJEU was therefore whether the requirement for compulsory insurance in Art 3(1) applied to the accident in question, which had taken place on private land and where the tractor was being used as farm machinery. It answered this question in the affirmative.

The fact that a vehicle, together with an attachment, can be used as agricultural machinery, does not affect its status as a “vehicle” for the purposes of Art 3(1). Moreover, following an analysis of the different language versions of the First Motor Directive, any use of the vehicle which is “consistent with the normal function of that vehicle” comes within Art 3(1).

This decision puts European law on a direct collision course with s 143 of the Road Traffic Act 1988, which expressly limits the requirement for third party liability insurance to “roads” or “other public places”. This wording cannot now, even in the context of generous judicial interpretation powers (see Ghaidan v Godin-Mendoza [2004] 3 All ER 411, [2004] 2 AC 557 , [33] per Lord Nicholls for an explanation of how powerful a tool this can be ) , be read consistently with the UK’s obligations under the Motor Insurance Directives. The exclusion of insurance for off-road or private land use is a breach of EU law.

Damages

So where does this leave injured parties in respect of claims for damages which are refused by insurers under s 143 RTA 1988?

It seems that a claim for Francovich damages against the Department for Transport is the only likely interim solution. Claimants can derive substantial support from the recent decision of Jay J in Delaney v MIB [2014] EWHC 1785 (QB); [2014] RTR 25, [2014] All ER (D) 31 (Jun) in which he held that implementation of the Motor Insurance Directive obligations does not give a wide margin of discretion to the UK government, meaning that failures to implement are very likely to be sufficiently serious to result in a claim for damages.

The DfT, in light of the resolution of its previous run-in with the European Commission regarding s 143 (following the decision of the House of Lords in Clarke v Kato [1998] 1 WLR 1647, [1998] 4 All ER 417), might regard itself unlucky that the decision in Vnuk has gone this way. However, it is suggested that the UK appears to have knowingly run the risk that the Commission’s interpretation of Art 3(1) might be correct, by adopting the limited amendment “or other public place” to s 143 in the Motor Vehicles (Compulsory Insurance) Regulations 2000/726. The Commission appears throughout to have taken the consistent viewpoint that the duty to insure arises in all cases of “use” of a motor vehicle, regardless of its location.

For those who might have claims, it would seem that time may be of the essence: following Spencer v DWP [2009] 2 QB 359, they have only six years from the date of injury in which to bring proceedings. This could mean that some Francovich damages claims are time-barred even before the claimant could have known he had a claim. It is a question for another article whether the Court of Appeal’s interpretation of s 2 of the Limitation Act 1980 is sustainable following the European Court of Human Rights’ decision in Howald Moor and Others v Switzerland (application nos. 52067/10 and 41072/11, March 2014), where a similar provision of Swiss domestic law was held to be breach the principle of effective remedy enshrined in Art 6.

Future

For the future, it is to be assumed that there will have to be legislative amendment to s 143 to encompass use of motor vehicles on private land, including off-road. When and how this takes place remains to be seen.

Sarah Crowther, barrister, 3 Hare Court (sarahcrowther@3harecourt.com; www.3harecourt.com; @3HareCourt).