The new European Motor Insurance Directive
(the Vnuk issue)
How does the new European Motor Insurance Directive threaten motorsport?
The 2009 European Motor Insurance Directive (MID) is the current legislative act setting out goals that all EU countries must achieve concerning motor insurance across the EU member states. Following the 2014 “Vnuk” ruling, the Court of Justice of the European Union (CJEU) clarified that compulsory unlimited third-party liability insurance was required for anyone using any form of motorised transport – including motorsport - in any location across all EU Member States.
This MID must be incorporated by EU countries into their national legislation. Once implemented, it would mean that any motorsport vehicle (Formula One, Moto GP, race or rally car, motorcycle, go-kart, speedway, drag, etc) must carry insurance covering personal injury to other competitors AND car to car /bike to bike damage to competitor’s vehicles during any event, anywhere in the EU.
However, there is no such motorsport insurance available in the EU meeting the compulsory requirements of the Motor Insurance Directive (MID). Insurance Market specialists, who underwrite the majority of insurance for motorsport across the EU, made it clear that no effective market can, or will in the future, write insurance to meet the specified levels of liability.
To be clear – if the 2009 MID was actively enforced by the laws of each EU State, it would be illegal to race or compete as the compulsory motor insurance required would not be available for vehicles taking part.
In 2017, the European Commission (EC) started a review of the Motor Insurance Directive in order to evaluate its effectiveness. In May 2018, it published a proposal clarifying that the new MID should apply to “any use of a vehicle, consistent with its normal function as a means of transport, irrespective of the terrain on which the motor vehicle is used and whether it is stationary or in motion”. The EC, therefore, proposed that the scope of the Directive should be unchanged, covering all motor vehicles used on any land (public or private), including motorsport vehicles.
How can this serious Threat be overcome?
Following the May 2018 European Commission’s proposal for a new Motor Insurance Directive, the European Parliament, and the Council of the European Union are due to vote on the text of the proposal by the end of 2019.
On 13th February 2019, the MEPs voted to adopt amendments, supported by the Motorsport Industry Association (MIA), excluding motorsport from compulsory motor insurance as proposed in the new EU Motor Insurance Directive (MID).
The revised text, as adopted by the EU Parliament, means that:
- only vehicles used in traffic as a means of transport would need to be covered by Third Party Liability (TPL) insurance;
- ‘dual-use’ vehicles used both in-traffic and out-of-traffic (i.e. 90% of ‘motorsport’ vehicles) only need insurance cover for use ‘in traffic’, but not for motorsport activities;
- vehicles intended exclusively for motorsport, and vehicles used exclusively in a non-traffic situation, would be excluded from the scope of the MID.
This decision is just a first, but important, step in making sure motorsport can continue across the EU.
These amendments will now need to be approved by the EU’s Council of EU Ministers at a future date, yet to be set.
All involved in motorsport can demand their national government to support the revised MID to exclude motorsport, as per the proposal made by the EU Parliament.
These amendments would allow motorsport to continue in all EU Member States.
What can I do to keep European motorsport alive?
Until finally amended by the European Parliament and the Council of EU Ministers, the new European Motor Insurance Directive is an immediate threat to hundreds of thousands of motorsport jobs and businesses across Europe.
This immediate threat to jobs and businesses can be overcome if motorsport organisations and motorsport employers, across all EU States, individually, and collectively, send a strong, clear message demanding all Ministers to support amendments excluding motorsport from the EU Motor Insurance Directive before the text is voted upon by all Members of the Council of the European Union.
If you are a major motorsport employer in the EU, please write to your Minister and ask your government to ‘exclude motorsport from the Motor Insurance Directive text, by supporting the EU Parliament's revised MID proposal voted on 13th February 2019, which would save hundreds of thousands of motorsport jobs and businesses across Europe, the motorsport industry and sport.’
You can find the name and contact details of your Minister here.
MAKE YOUR VOICE HEARD - so motorsport has a future in Europe.