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VNUK: Is the end in sight?


The VNUK ruling and the decision in Motor Insurers’ Bureau v Lewis [2019] EWCA Civ 909 which followed it, created a previously unfunded pool of cases which insurers have to meet indirectly via the MIB levy – causing a knock-on financial impact to premium-paying consumers.  This financial impact was previously estimated by Government to be around £50 per motor insurance policy - should the impact of VNUK be fully implemented to UK law. 

On 21 February 2021, the Government announced its intention to remove the effects of VNUK from British law. The Road Traffic Act 1988, as it currently stands, only requires the use of motor vehicles (defined as being ‘intended or adapted for use on a road’ – s.185) on a ‘road or other public place’ (s.143), however the European Union (Withdrawal) Act 2018 takes the position of EU law at the point of Brexit, and retains that position in UK law until such time as new law is passed after 31 December 2020. 

As a result, the impact of VNUK will continue to be felt in the UK until such time as legislation sets out the intended future position for motor insurance.  A positive step is necessary to introduce legislation in this case to distance the UK from the effect of VNUK.

Grant Shapps, Secretary of State for Transport, made a statement on 29 June 2021 that Government would ‘continue to explore bringing forward the necessary legislation as soon as parliamentary time allows[1]’, but the experience of whiplash reform has undoubtedly made the insurance industry nervous about how soon this might be!   

One MP who clearly has an eye on the lack of parliamentary time caused firstly by Brexit and then by Covid-19 is the Hon. Member for Wellington, Peter Bone, who has introduced a Private Members Bill (PMB) entitled ‘Motor Vehicles (Compulsory Insurance)’ which aims to deliver the necessary legislative change to eliminate the impact of VNUK. 

Private Members Bill Parliamentary framework

Private Members’ Bills follow a similar path through the Houses of Parliament as government Bills. Each must pass First, Second and Third Reading in both the House of Commons and the House of Lords.  A Bill Committee in each House is required to go through the Bill line by line before consensus between both Houses is reached and Royal Assent is granted, officially allowing the Bill to become law.

However, government naturally prioritises its own Bills, and therefore the majority of the PMBs’ stages take place on a set of allocated Fridays, and there are only 13 of these in each Parliamentary session. This means that most Private Members Bills either take a long time to pass (sometimes well over a year) or lack the support to make it through all the necessary stages.

Even on the occasions that the Government supports the Bill in question, there is no guarantee of success: the Bill might be talked out (meaning Parliament runs out of time to debate it and it is dropped) or the Government may choose to bring forward their own Bill – either to ensure that the legislation drafted achieves its aims or simply to make sure that they get the credit!

A difficult path

A major issue for Peter Bone’s PMB is that priority for debate is given to the PMBs of the 20 MPs that were drawn from the ballot.  The top seven are guaranteed a full day of debate on their Bill and the remaining 13 get debates if there is enough time.  With Peter Bone’s PMB not being a balloted one that makes its chance of seeing debate or moving through the parliamentary stages quite remote.  In the period of 2017-2019 only 3.8% of PMBs which started the parliamentary process achieved royal assent[1].

Private Members Bills face a slow and difficult path through Parliament, even if the Government supports them.  The Secretary of State for Transport has said ‘Government will follow passage of this bill with interest’, but that doesn’t necessarily mean that Government will support the Bill.  Whether this happens is likely to depend on if the wording is tight enough, and we will know more about that at the second reading, which will take place on 10 September 2021. 

We’ll be keeping a keen eye on progress of this PMB at Keoghs and will provide further updates as, and indeed if, it progresses.

For more information please contact Natalie Larnder.


[1] Written statements - Written questions, answers and statements - UK Parliament

[2] Guide to Private Members' Bills | Hansard Society


Natalie Larnder

Natalie Larnder
Head of Market Affairs


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