Motor Vehicles (Compulsory Insurance) Bill

Lord Rosser Excerpts

2nd reading
Friday 18th March 2022 Lords Chamber

[Lord Rosser (Lab)]

As the noble Lord, Lord Robathan, said, the aim of this Private Member’s Bill—introduced in the Commons by the Conservative MP Peter Bone—is to reverse a 2014 decision of the Court of Justice of the European Union that expanded the types of vehicles required to have compulsory third-party motor insurance. It received government support and, indeed, the Minister has written to me—for which I thank her—confirming the Government’s support for this Bill in the Lords and encouraging me to support it likewise.

Judging by the length of the list of speakers, I think that it could hardly be described as a Bill which has got the pulses racing in your Lordships’ House. Three speakers are listed and all three of us are here because we have to be here. This Bill appears, so far, to have been met with one long yawn in your Lordships’ House.

The Road Traffic Act 1988 limits compulsory insurance to drivers of vehicles on roads and in other public places. This legal position, as has been said, was altered by a decision in 2014 by the Court of Justice of the European Union which extended the requirement for compulsory motor insurance to include vehicles used on private land and to vehicles not constructed for road use. The ruling continued to have effect after the UK left the EU as part of retained EU case law.

According to the Government, the ruling would have led to a rise in motor insurance premiums because claims resulting from the expanded range of vehicles specified in the ruling are admissible by the Motor Insurers’ Bureau, the MIB being a statutory body that operates a compensation scheme for victims who have suffered injury or loss as a result of uninsured or untraced drivers. The scheme is funded by a levy on motor insurance companies, with the costs of the levy ultimately capable of being passed on to motorists through increases in insurance premiums. The MIB is also responsible for meeting claims made by victims of accidents arising from the use of vehicles on private land, hence the significance of the ruling by the Court of Justice of the European Union as far as the MIB is concerned. As a result, an increase in the scope of claims payable by the MIB, such as that brought about by the ruling we are discussing, could increase insurance costs for motorists.

In her response, can the Minister clarify whether—and, if so, from when—the 2014 CJEU ruling has been applied in the UK? If it has—I am not sure it has—what has its impact been on insurance costs? If it has not, from when would it have become applicable had we not left the EU? The Government say that the ruling could lead to an average increase in premiums of £50 for each motorist.

In the Commons, the mover of the Bill stated that the CJEU ruling had led the EU to revise its European directive but that:

“The revisions it has made will fail to protect motorists in the EU from the associated costs of the compulsory insurance requirement on private land.”—[Official Report, Commons, 28/1/22; col. 1209.]


As the Government are supporting the Bill, can the Minister confirm that the EU’s recent revisions to its European directive do not affect the Government’s assessment that the ruling could lead to an average increase in premiums of £50 for each motorist—in other words, that the £50 figure relates to the EU directive as now revised and not as it was at the time of the CJEU ruling?

The Association of British Insurers has stated that the additional insurance cover brought about by the CJEU ruling was not necessary in the UK because the claim would already have been covered by other insurance policies, such as compulsory employers’ liability and public liability. The Minister’s letter to me states that the Bill

“provides only positives: savings for motorists without any real reduction in consumer protection due to existing protections such as employers’ and public liability”.

What is the significance of saying “any real reduction”, as opposed to the completely unambiguous “any reduction”?

Would the CJEU ruling have led to greater protection for vehicles covered by the ruling—that is, vehicles used on private land; and a potentially greater range of vehicles, including non-roadgoing vehicles—than is provided at present by compulsory employers’ liability and public liability? In the context of that question, I refer to paragraph 19 of the impact assessment, which states:

“Bespoke insurance arrangements exist in the GB (and predate the Vnuk decision), such as employers’ liability and public liability insurance policies that cover some of the risks on private land. However, these do not provide as much cover as the Vnuk decision, but we consider that these are more appropriate forms of insurance to cover these risks, rather than motor insurance.”


Maybe I am misinterpreting it, but to me that paragraph suggests that the CJEU decision would provide greater cover than the existing arrangements under employers’ liability and public liability insurance. I would be obliged for a government response on that point.

This Bill will not reduce insurance premiums for motorists. The argument is that premiums will not go up as much as would otherwise have been the case if the CJEU ruling was implemented and that the additional cover provided by the CJEU ruling is already covered in this country by other insurance policies. If that is the case—and I have asked questions on that and on other points—we are not opposed to the Bill, and that stance is in line with the position we took when the Bill went through its Commons stages.