Rodrigues de Andrade v Salvador & Ors
Has the CJEU engaged reverse on Vnuk?
If living in interesting times is a curse then lawyers who practise in the more technical areas of motor insurance must have been very poorly behaved to attract the karmic payback they have received this year.
In the last 6 months the CJEU has provided 3 judgments of importance: Fidelidade-Companhia de Seguros v Caisse Suisse de Compensation [C-287/16]; Farrell v Whitty & Ors [C-413/15]; and now Rodrigues de Andrade [C-514/16]). This is on top of the Court of Appeal decisions in the last 12 months in Sahin v Havard  EWCA Civ 1202 (permission to appeal to the Supreme Court has been refused), UK Insurance Ltd v R & S Pilling  EWCA Civ 259 (permission to appeal to the Supreme Court has been granted), and Cameron v Hussain (an application for permission to appeal to the Supreme Court is yet to be determined).
Rodrigues de Andrade is the first occasion on which the CJEU has revisited its decision in Vnuk – a decision which came out of left-field for many member states. Readers will know that the Motor Directives require member states to implement a system for the compulsory insurance of the use of motor vehicles (‘the compulsory insurance obligation’). In UK domestic law, compulsory insurance is confined to the use of vehicles on roads or in other public places under the RTA 1988. Similar restrictions apply in other member states. The CJEU in Vnuk concluded that the compulsory insurance obligation applied to any use of a vehicle that is consistent with the normal function of that vehicle, wherever that use took place. That means that UK domestic legislation does not comply with the Motor Directives and brings with it a concomitant obligation to have in place a compensation body to provide compensation where someone is injured by the uninsured use of a vehicle not only on a road but also on private land. The UK has not yet rectified this defective implementation of the Directive and that itself has been a matter of legal challenge in RoadPeace v Secretary of State for Transport. On the face of it post-Vnuk the compulsory insurance obligation extended to the normal function of any mechanically propelled vehicle (not running on rails). That decision was met with a degree of consternation, see e.g. Vnuk – the unintended consequences of a farmyard misfortune, and it has been estimated that it would cost £1.83bn in premia in the first year to extend the UK compulsory insurance requirements in line with Vnuk.
In Rodrigues de Andrade a vineyard employee had been tragically killed when a tractor which had been stationary powering a spraying device caused a landslip which led to the tractor falling down the terraces and crushing the employee. A dispute arose as to whether the motor insurer was obliged to meet any claim. It appears that under Portuguese law compulsory motor insurance is only required to cover accidents caused by the movement of the vehicle [see §§15-17]. The question referred to the CJEU asked, inter alia, whether the compulsory motor insurance obligation only applied to the use of vehicles when they were moving or also applied when they were stationary with the engine running.
The CJEU reiterated that the concept of the ‘use of vehicles’ “cannot be left to the assessment of each Member State but is an autonomous concept of EU law” [§31]. It then went on to consider what was meant by the ‘use of vehicles’ stating:
- the concept does not depend on the characteristics of the terrain on which the motor vehicle is used [§35];
- that motor vehicles are ‘intended normally to serve as a means of transport’ [§37];
- it covers any use of a vehicle as a means of transport [§38];
- thus, whether a vehicle is stationary or moving or whether its engine is running or off is not determinative [§39];
- where a vehicle is intended to be used not only as means of transport but also as a machine for carrying out work it is necessary to determine whether, at the time of the accident, the vehicle was being used principally as a means of transport [§40].
The CJEU concluded from the information provided to it that it was apparent that at the time of the accident the tractor was being used as a machine for carrying out work and, subject to verification by the referring court, was therefore not subject to the compulsory insurance requirements under the Motor Directives.
It can be noted that the Motor Directives make no reference to the compulsory insurance obligation being confined to the use of vehicles for transport. The use of a tractor as a means of powering agricultural equipment is clearly part of the normal function of such a vehicle. The CJEU has rowed back from the wide scope of Vnuk and confined the compulsory insurance obligation in respect of vehicles which are also used as a machine for carrying out work to times when those vehicles are being used principally as a means of transport.
That raises yet more questions about the scope of the compulsory insurance obligation. When a tractor is ploughing a field is its principal use as a machine or a means of transport? If movement is not determinative then it would seem to be used as a machine in those circumstances. If that tractor were being used on a road to trim a roadside hedge does the position alter? It would be a surprising outcome of Vnuk if it leads to insurance not being compulsory for a vehicle being used on a road. Does a similar distinction apply where a vehicle is being used for a purpose other than as machinery, e.g. motorsport vehicles where the principal use is arguably for sport and entertainment with transport being incidental to that purpose? The distinction between use as a means of transport and other uses will need to be grappled with if and when amendments are made to the RTA 1988 to comply with Vnuk and also by Claimants considering Francovich-type claims in respect of accidents suffered on private land.
The decision may also have ramifications for the current domestic position as well. The appeal to the Supreme Court in UK Insurance Ltd v R & S Pilling is likely to involve a challenge to Dunthorne v Bentley and the scope of insurance required to satisfy the RTA 1988. The decision in Rodrigues de Andrade has made that argument easier on the facts of that case where the vehicle was not being used as a means of transport at the time of the ‘accident’.
In the meantime, the European Commission’s deliberations on what action to take in the light of Vnuk continue. It is not clear whether or not any action will be taken to amend the Motor Directive and proposals (if any) in that respect are not expected until next year. Further cases remain in the CJEU (including a reference in respect of a vehicle kept on private land which was not intended to be used by the owner – C80/17) and the European Commission has indicated that it does not intend to start infraction proceedings for the time being against Member States whose domestic law does not comply with Vnuk.
Who knows where we will be in 12 months time?
29 November 2017