The Department for Transport (DfT) has confirmed that the government plans to scrap the controversial ‘Vnuk’ motor insurance law that could have seen premiums sharply increase.

As the BMF reported at the time, a decision by the European Court of Justice after a Slovenian tractor accident prompted a review of the Motor Insurance Directive that led to it being interpreted more widely to include, among other things, private land, more vehicles and significant ramifications for motorsport.

A statement by the DfT argued that: “Had the EU law been implemented in Great Britain, it would have meant the insurance industry would have been liable for almost £2 billion in extra overall costs. These costs would likely have been passed onto their customers – British road-users.”

Welcoming the news, a statement by the Motorcycle Industry Association (MCIA) said: “Had the Vnuk law been enforced, this would have meant compulsory insurance policies on a wide range of vehicles outside of traditional transport solutions. Golf buggies, mobility scooters, quad bikes and even ride on lawnmowers would have fallen victim to the proposed legislation, affecting many insurance policies for GB residents. Bypassing Vnuk will also protect the existence of the UK’s world-leading motorsports industry, which could have been decimated due to the additional insurance costs. Scrapping the rules will save the industry from potential collapse and secure hundreds of thousands of jobs in the sector in the process.”

The BMF’s Anna Zee examined the Vnuk case and its ramifications here.