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Motor Vehicles (Compulsory Insurance) Bill - Sitting 1

05 January 2022

Proposing MP
Rushanara Ali Lab
Bethnal Green and Stepney
Type
Public Bill Committee

At a Glance

Issue Summary

The statement discusses the Motor Vehicles (Compulsory Insurance) Bill which aims to remove the requirement for compulsory motor insurance for vehicles used exclusively on private land. The statement discusses a Bill aimed at limiting the insurance obligation for motor vehicles used on public places as defined by the Road Traffic Act 1988, in response to the Vnuk judgment. The statement discusses the Motor Vehicles (Compulsory Insurance) Bill and its aim to repeal the effects of the Vnuk case in relation to motor insurance liability. The statement discusses the progress and support for the Motor Vehicles (Compulsory Insurance) Bill in Parliament.

Action Requested

The Bill seeks to end the Court of Justice of the European Union's Vnuk decision in retained EU law and related case law, thereby restoring the original interpretation of the law. It also addresses potential increases in insurance premiums and the liability for insurance claims against the Motor Insurers’ Bureau.

Key Facts

  • The Bill had its First Reading on 21 June 2021.
  • Second Reading was moved on 22 October, but faced objections initially.
  • The Vnuk interpretation extends compulsory third-party motor insurance to vehicles used exclusively on private land and for ride-on lawnmowers.
  • The Bill aims to be the first Act of Parliament to remove EU retained law.
  • The Bill aims to save the average policyholder about £50 in unnecessary increased insurance premiums.
  • The Government Actuary’s estimate shows an increase in premiums due to extending coverage following the Vnuk judgment.
  • Clause 1 would insert new section 156A into the Road Traffic Act 1988, limiting the insurance obligation under article 3 of the 2009 motor insurance directive.
  • Subsection (2) clarifies that the Bill does not affect provisions requiring higher cover in EU member states or Northern Ireland.
  • Subsection (3) ends the section 4 right to compensation from the Motor Insurers’ Bureau for vehicles on private land and those not constructed for road use, except on roads or public places as defined by the Road Traffic Act.
  • Clause 2 provides for the Act to come into force two months after Royal Assent.
  • The Bill applies to England, Wales, and Scotland only; Northern Ireland is excluded initially but may legislate separately.
  • The UK scheme for compensation has been in place since the 1930s.
  • Costs for the MIB fund could potentially be significant due to new liabilities arising from Vnuk and Lewis v. Tindle cases.
  • The Government Actuary’s Department produced an analysis of the costs.
  • Prime Minister described Vnuk as a 'pointless and expensive burden on millions of people'.
  • This Bill is the first piece of primary legislation to repeal retained EU law.
  • The provisions will comprehensively remove the effect of Vnuk and Lewis from GB law.
  • The MP thanks stakeholders such as Izzy Jackson, Paul Ryman-Tubb of Weightmans, and Nick Robbins of the Motor Insurer’s Bureau.
  • The Department for Transport staff, including James Langston, are acknowledged for their work on the Bill.
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