Motor Vehicles (Compulsory Insurance) Act 2022 passed

The Motor Vehicles (Compulsory Insurance) Act 2022 became law on 28 April 2022, when it received its date of passage¹. The Act is chapter 25 of the 2022 session and is described as "An Act to amend retained EU law relating to compulsory insurance for the use of motor vehicles; and for connected purposes"¹.

The Act inserts a new section 156A into the Road Traffic Act 1988¹. Under that section, where Article 3 of the 2009 Motor Insurance Directive is relevant to the interpretation or effect of that Part of the 1988 Act, references to liability in respect of the use of vehicles are to be read as not including liability for the use in Great Britain of vehicles "other than motor vehicles", or use "otherwise than on a road or other public place"¹. The same limits apply to what the Act calls "relevant section 4 rights", which cease to be recognised and available so far as they relate to compensation in connection with the use in Great Britain of vehicles falling into those two categories¹. To the extent that retained case law is inconsistent with those provisions, it ceases to have effect¹.

The Act defines the 2009 Motor Insurance Directive as Directive 2009/103/EC of the European Parliament and of the Council of 16 September 2009, relating to insurance against civil liability in respect of the use of motor vehicles and the enforcement of the obligation to insure against such liability¹. "Relevant section 4 rights" are defined as section 4 rights recognised and available in the law of England and Wales or the law of Scotland which derive from the obligation imposed on the United Kingdom by Article 10 of that Directive as it had effect immediately before IP completion day, which relates to compensation where drivers are uninsured or untraced¹.

The Act extends to England and Wales and Scotland¹. Its commencement information records both sections 1 and 2 as in force at 28 June 2022¹. Section 156A(6) states that nothing in the section applies in relation to the use of a vehicle before the day on which section 1 of the Act comes into force¹.

Why it matters for households

The change concerns which uses of a vehicle fall within compulsory motor insurance requirements in Great Britain, and the compensation rights that follow from them. From 28 June 2022, liability arising from the use of vehicles that are not motor vehicles, and from the use of vehicles otherwise than on a road or other public place, is excluded from the reading of Article 3 of the 2009 Motor Insurance Directive for the purposes of Part VI of the Road Traffic Act 1988¹. Rights derived from Article 10 of that Directive, covering compensation where drivers are uninsured or untraced, cease to be recognised and available so far as they relate to those same two categories of use¹.

The Act does not apply to the use of a vehicle before section 1 came into force, so incidents predating 28 June 2022 are unaffected by the new section¹. The Act does not extend to Northern Ireland, and section 156A(2) preserves the position on questions about the compulsory insurance law of a member State or Northern Ireland for the purposes of section 145(3)(aa) or (b) of the Road Traffic Act 1988¹. The legislation page records no known outstanding effects for the Act¹. No estimate of the number of claims or households affected, and no figure for any change in premiums, appears in the Act¹.

What happens next

The Act's provisions took effect on 28 June 2022, two months after passage¹. The legislation.gov.uk record shows an amendment version dated 28 June 2022 and states that there are currently no known outstanding effects for the Act¹. No further commencement dates or secondary legislation are set out in the text¹.

Households wanting background on how motor cover is priced, including Insurance Premium Tax, can read how insurance premiums are worked out, and those looking at the structure of a policy can read insurance excess: compulsory and voluntary excess explained. The wider subject is covered in the insurance hub, and cover for legal costs in disputes is explained in legal expenses insurance and motor legal protection.