Seeds Sown on Compulsory Insurance Cover for Farm Vehicle Accidents in Ireland
A 2018 national survey of farm accidents conducted by the Teagasc National Farm Survey (NFS) found that 2,814 farm accidents occurred between 2012 and 2017, with farm vehicles or machinery accounting for 25% of those accidents.
During the same period, significant European Court of Justice (ECJ) case law developed, shaping individual member states’ interpretation of the EU Codified Motor Insurance Directive (“MID”) [Directive 2009/103/EC]. The MID requires compulsory insurance coverage for victims of accidents caused by vehicles and to guarantee such victims receive comparable treatment, irrespective of where in the European Union the accident occurred.
Prior to the 2013 ECJ decision in the case of Damijan Vnuk v Zavarovalnica Triglav, Irish law required that motor insurance policies cover the use of motor vehicles (defined as mechanically propelled vehicles intended or adapted for use on roads) on “a road or other public place.” This meant coverage for “on-farm accidents” would be unlikely under any given motor insurance policy.
The ECJ Position
The Vnuk case involved a farm worker in Slovenia who was injured in a private farmyard when a ladder he was standing on was hit by a tractor reversing with an attached trailer carrying bales. The case proceeded from the national courts to the ECJ, which examined what the scope of compulsory insurance cover should be in European states, as required by the MID, in particular the interpretation of the term “use of vehicles,” which had been unclear up to that point.
In the Vnuk judgment, the ECJ broadened the interpretation of “vehicle” to include all vehicles that perform engine movements on both private and public roads/areas. In respect of the concept of “use of a vehicle,” the ECJ concluded that the scope of third-party insurance cover should extend to cover any accident caused by “any use” of a vehicle that is “consistent with the normal function of that vehicle,” and that no limitation should apply in geographical terms as to whether it was private or public land or as to what terrain the vehicle was on.
The judgment in Case C-648/17, BTA Baltic Insurance Company, affirmed the ECJ stance on the concept of “use of vehicles” and further held that the fact that a vehicle involved in an accident was stationary when the accident occurred does not, in itself, preclude the use of that vehicle at that time from falling within the scope of compulsory insurance under the MID.
Application in Ireland
ECJ case law has direct effect in Ireland, so Irish Courts had to interpret the domestic law in line with the broad ECJ interpretations of when compulsory motor insurance cover was required to cover an accident. Equally, it meant motor insurance policies that differentiate between private property and land to which the public has access are out of date.
This line of ECJ case law was considered in a recent High Court application in John Haughton v Quinns of Baltinglass Ltd (Record No: 2017 7450P) to set aside a decision to join a motor insurer as a third party to personal injuries proceedings arising from an accident involving a vehicle at an agribusiness premises. The defendant business used the above ECJ case law to support an argument that the motor fleet insurance extended to cover the circumstances of the accident and so the decision to join them as a third party was correct.
The case arose from an accident involving a farmer who attended the defendant’s agribusiness premises on 21 July 2015, for the purposes of purchasing and collecting cattle feed. The cattle feed was dispensed at the premises using a loader vehicle with a hydraulically controlled front bucket that loaded the feed into large canvas bags for customers. Due to the alleged negligence of an employee operating the vehicle, the bucket was caused to close, resulting in injuries to the farmer’s left arm.
The defendant initially sought indemnity for the accident from their public liability insurers. Court proceedings issued, and pleadings closed in November 2017. Some three months passed before the defendant company sent an initial letter to the motor insurance company requesting indemnity for the accident. This request for indemnity was refused on several grounds, and a motion issued before the High Court to add the motor insurers to the proceedings. This motion was granted by the High Court on 1st October 2018.
An application to set aside that decision came before Simons J, who, by judgement delivered on the 19th December 2019, dismissed the application and determined that the third-party procedure had been properly invoked in the case. The judge held that, although the legal issues arising in the main proceedings and the third-party proceedings may not be the same, there was significant overlap in terms of the factual matters. Of note, he said the motor insurers had purported to decline cover because the vehicle was not being used as a means of transport at the time of the accident and was being used to load cattle feed instead, and that the vehicle was on private property. Accordingly, the judge held the use of the vehicle was relevant to determining the distinct legal issues of (i) whether there had been negligence, and (ii) whether the use of the vehicle was of a type covered by the motor insurance policy.
Interestingly, at the time of this decision the main proceedings had been settled between the claimant and the defendant’s public liability insurers. The third-party proceedings related to the question of indemnity between the two sets of insurers. The judgement raises a question in the context of litigation arising from accidents involving farm vehicles and machinery, as to whether compensation falls to be paid by any given public liability insurer, motor policy insurer or employer’s liability insurer (where the injured party was a farm employee).
In such circumstances, where there are separate insurance policies, each insurer should be notified by an injured party’s legal representatives as soon as possible following the incident and, ideally, at the same time. This will save both time and cost and avoid any protracted disputes at a later stage in the case. It may also be useful because the insurers can investigate the accident circumstances and narrow issues at an early stage.
These developments in European law in respect of compulsory motor insurance cover represent a very important change for motor insurance providers in Ireland. Equally, they represent an important procedural consideration that legal representatives of injured parties need to be aware of. The full extent of these changes remains to be examined, but they arrive at a time when vehicle and machinery accidents on Irish farms are on the rise, so legal practitioners would be well advised to familiarise themselves with their far-reaching implications.
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