The European Commission outlined in the EU Motor Insurance Directive and a 2014 ruling – relating to a Slovenian farm worker who was knocked off a ladder when a tractor backed into him – that all vehicles must have compulsory unlimited third-party liability insurance if used in their “normal function”.
The Motor Insurance Directive was reviewed by the European Commission in May, and ruled insurance would be required for “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”.
Diane James, an independent MEP for south-east England, warned that unless the directive is rewritten before it goes back to the floor of the European Parliament and Council for a final binding vote, it would risk “slamming on the brakes for one of England’s truly world-beating industries”.
She said: “My inbox is full with bamboozled constituents – business leaders, passionate professionals, fans glued to the tracks, in the stands, on their screens.
“Whether they live right around the corner or in major motorsport markets like Brazil, they are all backing my call right now for the lawmakers in this building to rewrite this daft legal draft.”
In a sharp warning to the EU, she added: “Trust me, I will make sure the EU Parliament tears this up – like Lewis Hamilton on the track – to get the Motor Insurance Directive re-written at top speed before it goes to the floor for the final vote in Strasbourg. And before the marshall waves his ‘Chequers’ flag for the last time.”
The EU politician stressed the Motorsport Industry Association (MIA) – the world’s leading trade association for motorsports – were “up in arms” over the directive, as it could leave the likes of Mercedes, Ferrari, Red Bull and McLaren unable to find any insurers willing to “underwrite policies worth the premiums they would need to slap on”.
MIA chief executive Chris Aylett echoed this sentiment, telling Auto Express: “Unless the EU amends the wording or the insurers change their minds entirely, motor sports will become illegal.
“For golf buggies and ride-on lawnmowers, for example, you could probably get cover for not too much money.
“But no insurer will pick up the risk of motorsport accidents. They can’t give unlimited liability to personal injuries or vehicle accidents on the racetrack.”
Ms James noted that ‘Motorsport Valley’ – the UK’s motorsport hub in and around Silverstone, Brand’s Hatch and Goodwood – is a “supercharged, cutting-edge, state-of-the-art, £10billion-a-year, manufacturing-driven industry”.
She warned around 4,500 companies – from revolutionary design to specialised legal services – and at least 45,000 jobs would be directly impacted by the directive.
Mr Ayett also stressed Brexit will have little impact on the rulings, as the laws will still impact the rest of the continent – where numerous Formula 1 races are held – and the UK will still remain bound to EU law throughout the transition period.
However, the UK’s High Court ruled last November the directive should be written into law.
Mr Ayett added the Government has been “fantastic,” noting the “Department for Transport is categorically saying the rules should include the words ‘in traffic only’.”
Ms James nevertheless warned there would be “hell to pay” if the directive is not amended in the coming weeks.
She said: “If you find it had to believe planes will be grounded at the post-Brexit border – believe you me, if we don’t get this embarrassing mess fixed right here in the European Parliament, there will be hell to pay.”
Valois Dombrovskis, Vice President responsible for financial stability, financial services and capital markets union, nevertheless defended the proposals in May, stating: “With today’s proposals, we are ensuring that victims of motor vehicle accidents will be better protected in the future.
“In addition, when people move across borders and purchase a motor insurance policy in another EU member state, their claim history will be treated in the same way as those of domestic consumers.
“This is good news for those who move across the EU and for all of us as EU citizens.”