Specialist Press Release - January 13th, 2005

SUMMARY

A vote in the European Parliament yesterday will make it easier to get adequate motor insurance for temporary stays in other EU member states or when buying a car abroad and driving it home to the UK.

The EU's 5th Motor Insurance Directive moved a step closer when MEPs adopted their 2nd reading of the proposal. If the Council of Ministers agrees to all the amendments adopted yesterday, the directive could be signed within weeks and would come into force in 2007. (If Council rejects any one of the Parliament's amendments, discussions would have to proceed to conciliation between the European Parliament and Council of Ministers).

One of the amendments adopted by the European Parliament yesterday provides for injured parties to 'bring legal proceedings against the civil liability insurance provider in the Member State in which they are domiciled'.

Another seeks to improve access to the basic data necessary for the settlement of claims, with the possibility that this could be available centrally in an electronic register.

Fundamental to the directive are the minimum amounts set down for compulsory personal injury cover. These are €1m per victim or €5m per claim, whatever the number of victims. However, Member States may have a additional five year transitional period before adopting these minimum amounts.

DEBATE

Commissioner McCreevy: The proposal before us aims to introduce legislation that will affect millions of European citizens: drivers and potential victims of accidents, as well as, of course, insurers. It will make it easier for drivers to obtain insurance and will improve the protection of accident victims.
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Before 20 July 2005, the Commission must submit to Parliament and the Council a report on the implementation of Article 6 of the fourth motor insurance directive. As part of its review, the Commission could also examine other points which cannot be resolved in the context of the fifth motor insurance directive.

It is in this spirit that I would like to respond to the amendments currently before Parliament. Further work is needed before these amendments can be accepted and the Commission stands ready to discuss these amendments with you and the Council before your vote on Wednesday.

Amendments 7 and 14, which aim to create a public Internet site in each Member State that would collect police reports of accidents, interfere with matters relating to police or judicial legislation.
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With regard to Amendments 2, 9 and 13, which aim to ensure that the cost of legal proceedings should be covered by compulsory insurance, we must bear in mind that this would overlap with the voluntary insurance regulated in the directive on legal expenses insurance (87/344/EEC)…However, the Commission recognises the need for insured persons to have access to legal redress if necessary. The costs of this could be prohibitive if not covered by an insurance policy. The Commission is therefore willing to consider the possibilities for making the offer of such insurance more widespread.

The intention behind Amendments 1, 5, 8 and 15 on trailers is unclear. Trailers, independently of their weight, are already expressly covered by the insurance directives within the definition of a vehicle and therefore are subject to compulsory insurance. Any problem relating to the identification or registration of vehicles cannot be solved within the framework of an insurance directive…

As for Amendments 3 and 10, I am afraid these will lead to a reduction in the insurance cover. Indeed, a combination of €1 million per victim and €5 million per event would be less favourable than the text in the common position, which…refers to 'claim' rather than to 'event'. I therefore believe that the text of the common position is better.

Malcolm Harbour MEP (Conservative, West Midlands): In the single market, where people are becoming more mobile and taking their motor vehicle with them, they will be able to take their car with them without insurance problems when they move for temporary stays as students or in their professional lives.

Similarly, if people want to buy cars during the course of their professional or personal life and bring those back, that will also be made easier. Their rights, when moving from one country to another, in respect of retaining their all-important no claims bonuses or their policy statements, are important details to get right. I believe we have done that.

Commissioner, we look forward to meeting with you and the Council before we vote on Wednesday because, as you said, I am sure we can reach agreement on the substantial points. I warmly welcome your suggestion that the whole issue of trailers should be looked at by you in conjunction with your mid-year communication. That is the right way to treat this subject.

I hope we will move forward on the database and Internet proposal to make information readily available, but overall I believe that the proposal we have is a good one.

Phillip Whitehead MEP (Labour, East Midlands): We hear very clearly what he (Commissioner McCreevy) says about trailers. Many Member States have different definitions, but we all know that if a declaration is forthcoming, we will be able to reach some kind of agreement, over time, on a common concept of 'trailer' among the Member States. It is rather like that nice American film 'The Straight Story', where it was established that if a lawn mower travelled on roads it became a road-using vehicle, even if it was not before. Road-using vehicles have to be covered. They have to be insured.

We have to make quite a gentle start on the issue of insurance. We must not pile draconian penalties on 25 Member States which, at the moment, have very different systems of insurance and, indeed, very different income levels. So we hear what you say there.

Diana Wallis MEP (Liberal Democrat, Yorkshire & The Humber): I want to highlight the practicality of what Parliament's amendments seek to achieve by reference to the case of one of my constituents, which is sadly by no means a unique story…This lady and her partner had a motorbike accident five years ago in another country. He was killed, she was seriously injured. The other party was the subject of criminal proceedings. After five years of lawyers' costs and problems, still there was no offer of compensation. Finally, with pressure on the insurers from myself, we got an offer. She has huge lawyers' costs in two countries. She has trailed backwards and forwards to a foreign country for medical examination.

The Legal Aid Directive that we have is so minimal that it will not help with legal costs in these sorts of cases. Most insurers offer some form of legal expense insurance for a fairly minimal premium - say, €15 per year. Why not make that compulsory? If we cannot make the insurance compulsory, can we at least make the offer of such insurance compulsory, so that there is some hope for people like my constituent?

We have to make sure that the amount of cover is sufficient. Linked to this question is that of being able to bring proceedings in your own Member State. If my constituent had been able to do that, life would have been very much easier. That right exists if you read the motor insurance directives and the Brussels Regulation together - why are we not prepared to be transparent about this and tell our citizens, in the body of this directive, that they have that right? I do not see the problem. These amendments are founded on a genuine wish to make our citizens' lives better when they find themselves in these tragic and
vulnerable circumstances.

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