Joint Committee on Statutory Instruments Seventeenth Report


Memorandum by the Department of the Environment, Transport and the Regions


  1. The Committee has asked for a memorandum on the following points—

    "(1)Explain the basis on which the Department reaches the conclusion (expressed in the Explanatory Note) that the United Kingdom is under a Community obligation to extend the compulsory insurance regime to other public places when the House of Lords in its judicial capacity has clearly held that it is not.

    (2)If on the other hand the Department justifies the making of these regulations as a matter arising out of or related to (but not required by) the obligation to establish a compulsory insurance regime for use of a vehicle on a road, explain the basis for its conclusion that the extension of the regime is such a matter."

  2. Article 3(1) of Council Directive 72/166/EEC requires each Member State to take all appropriate measures to ensure that civil liability in respect of the use of vehicles normally based in their territory is covered by insurance. Member States are expressly allowed a discretion as to the extent of the liability covered and the terms and conditions of cover. Although Article 3(1) has been clarified to some extent by subsequent directives, the extent of a Member State's discretion (if any) as to the area within its territory to which it may apply the compulsory insurance regime has never been established.

  3. Given the House of Lords' interpretation of the directives the Department acknowledges that it cannot be currently argued in the English courts that there is a Community obligation to expand the obligation in Part VI of the Road Traffic Act 1988 beyond "roads" in the narrow sense of that expression. However, the European Commission in February this year issued a Reasoned Opinion to the effect that, by excluding car parks and other off-road places from the area where a motorist is required to be insured, the United Kingdom had failed to fulfil its obligations under Article 3(1). It expressed the view that a Member State's discretion did not extend to places where a vehicle must be insured, merely to the financial limits of the cover and the formalities to which a claimant may be made subject. This Opinion followed extensive correspondence with the Commission on the matter during the period 1994 to 1996 at a time when the Department believed that the expression "road" covered car parks and other off-road places to which the public had access.

  4. If the grounds on which the Reasoned Opinion was issued are wrong, it is nevertheless clear that the object of the directives is to ensure that EC nationals are covered by motor insurance when travelling in other Member States and that Member States have a discretion as to the extent of the liability covered. Therefore, irrespective of which interpretation (the Commission's or the House of Lords') is right, the Department takes the view that it is open to the Secretary of State to rely on the vires of section 2(2)(b) of the European Communities Act 1972 to extend the compulsory insurance requirement as being a matter arising out of or related to the subject matter of the directives.

  5. The foregoing forms the background to the statement in the Explanatory Note that the Regulations were made 'for the purpose of complying with' the motor insurance directives.

11th April 2000

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