Written evidence submitted by the Motor Insurers’ Bureau
Response submitted on behalf of the Motor Insurers’ Bureau by:
The Motor Insurers’ Bureau (MIB)
The MIB, established as a not-for-profit organisation in 1946, compensates victims of uninsured and ‘hit and run drivers’ under agreements with the Department for Transport and aims to reduce the level and impact of uninsured driving in the UK. We are funded by all premium paying motorists via a levy paid by every company providing motor insurance in the UK. The annual levy for 2020 is £394m. Our claims handling experts manage more than 25,000 claims every year for accidents involving uninsured and ‘hit and run’ drivers and seek to settle the claims for innocent victims, fairly and promptly.
We manage the Motor Insurance Database which is the only central record of more than 40 million vehicles in the UK and is used by the police to identify and seize vehicles being driven without insurance. We play an instrumental role in the operation of the Continuous Insurance Enforcement (CIE) scheme, working alongside key insurance industry bodies, the government, police and the DVLA. CIE makes it an offence to keep a vehicle without insurance: the process links vehicle registration data with records of motor insurance to establish whether a vehicle is insured.
The MIB also acts as the UK Green Card Bureau, Information Centre and Compensation Body for cross-border motor insurance.
Accordingly, the MIB has both a material interest in, and substantial expertise concerning, the matters raised by the any policy and legislative changes that are to be pursued in respect of e-scooters. In particular, it is critical that any legalisation of e-scooters is underpinned by an adequate, effective and proportionate insurance regime that protects all road users and ensures a fair distribution of the costs and benefits associated with the increased use of e-scooters in public places and on public roads.
Is the legislation for e-scooters up to date and appropriate?
No. There are five main areas to consider regarding the Road Traffic Act (1988) (RTA):
(i) An e-scooter is a motor vehicle under the RTA definition but cannot meet the Type Approval requirements
On one level, an e-scooter meets the definition of a motor vehicle under the RTA – but it cannot be used legally on roads or in other public places. Section 151(c) of the RTA states: ““motor vehicle” means, subject to S20 of the Chronically Sick and Disabled Persons Act, a mechanically propelled vehicle intended or adapted for use on roads”.
An e-scooter may be intended (by its manufacturer) for use on roads but its construction, size and nature mean that it cannot meet the exacting Type Approval requirements for use on a road or in another public place.
(ii) Driving a motor vehicle requires a driving licence
Under Section 87(1) of the RTA it is an offence to drive a motor vehicle without a driving licence. There is no appropriate driving licence class for an e-scooter.
Section 143 of the RTA requires users of motor vehicles to insure against third-party liabilities in respect of personal injury and damage to property. Section 145 sets out that motor insurance meeting specific conditions – known as Motor Third Party Liability (MTPL) insurance - must be issued by an authorised insurer, conditional (among other things) on their being a member of the MIB. As e-scooters cannot obtain Type Approval, their use on roads and in other public places is inherently illegal. It follows that MTPL cover cannot be issued.
The MIB provides a safety net to compensate victims of uninsured and hit-and-run drivers, funded by a levy on all insurers selling motor insurance policies in the UK. So, in effect, all premium paying motorists pay for uninsured and hit and run claims through their premiums.
(iv) The direct effect of EU law
At present, EU law has a clearer approach on the use of vehicles such as e-scooters. For example, the definition of a vehicle under the EU Motor Insurance Directive states: “vehicle means any motor vehicle intended for travel on land and propelled by mechanical power, but not running on rails, and any trailer, whether or not coupled”. The 2014 European Court of Justice (“ECJ”) judgment of Damijan Vnuk v Zavarovalnica Trigalev (C-162/13) (“Vnuk”) clarified the insurance position further. In that case the Court decided that the test for whether any vehicle under the above wide definition requires motor insurance is whether it is being used for the purpose for which it was designed. In addition, unlike UK law, there is no geographical restriction for compulsory insurance limited to use on roads or public places.
The Government has not implemented this aspect of the Motor Insurance Directive, as authoritatively interpreted by the ECJ in Vnuk, into UK law. Neither has it amended the definition of a vehicle, despite being clearly out of step with EU law. In the intervening period covering this lacuna between UK and EU law there have been legal cases where victims injured by vehicles that are out of scope of the RTA, or accidents on private land (also out of scope of the RTA) have been unable to pursue a claim. The judiciary has found the MIB to be liable for a wider definition of vehicles than stated in the RTA, in line with the EU definition. Furthermore, it has found that the MIB is an emanation of the state and that, as such, the requirements of EU law can be directly effective against the MIB: accordingly, the MIB is now responsible for accidents on private land too, despite this not being a requirement of the domestic RTA.
The result therefore is that presently the MIB is responsible for claims involving the illegal use of e-scooters on roads and public places and their uninsured use on private land. These claims are effectively funded by premium paying motorists, which as things stand cannot include the users of e-scooters. This is inequitable and disproportionate – and fundamentally distorts the policy-oriented balance that has hitherto existed between the MIB and its insurer members and the motoring public - by pushing up the cost of motor insurance, to effectively cross-subsidise the use of e-scooters. An additional consideration is that the MIB will pursue the users of e-scooters for recovery of claims paid: this could significantly affect e-scooter users financially. They may be unaware of the risk they are exposing themselves to by using their e-scooter without third party liability insurance. Therefore, the situation is arguably unfair on e-scooter users too.
Unfortunately, this situation subsists under the EU Withdrawal Act (and will do so as things stand even after the end of the transition period) given the incorporation of directly effective EU law measures into UK law, unless and until the Government legislates to remove the direct effect consequences arising from judgment in Vnuk from UK law. At the time of writing, the Government has not made such a commitment. Therefore, as things stand, the expansive effect of EU law on motor insurance will remain in UK law even when the UK is not bound by EU law in other ways. The potential legalisation of the use of e-scooters brings this issue into focus.
(v) Driving offences
Finally, regard must be had to Part 1 of the RTA which deals with Road Safety Provisions, including the use of motor vehicles. Offences include serious road safety issues such as using a vehicle whilst under the influence of drink or drugs, speeding and dangerous driving. The enforcement issues that would arise from the introduction of e-scooters onto UK roads need to be addressed.
To what extent do e-scooters have positive benefits, for instance relating to congestion and promoting more sustainable forms of transport?
The MIB does not dispute that e-scooters could contribute towards the efficient use of road space, or that they produce no emissions or noise pollution. In many cases they might be combined with other forms of transport at the start or end of a journey (“first mile/last mile”), increasing efficiency and relieving pressure on public transport. However, the MIB is concerned that e-scooters would introduce new class of vulnerable road users, increasing the risk of personal injury, and accidents causing third party damage and/or injury would also inevitably occur (in respect of which the MIB is naturally concerned, from an insurance perspective).
Where in the urban environment could e-scooters be used (e.g. road, pavement, cycle lanes), and how could this impact on other road users and pedestrians, including people who have visual impairments or use mobility aids?
If the use of e-scooters is to be allowed in the public area, the MIB considers that they should be allowed on both roads and cycle lanes. Restricting their use to cycle lanes may be unrealistic: cycle networks are often incomplete, requiring users to go onto the main carriageway for stretches. E-scooter users will also wish to ride up to their destination on minor/residential streets which will often have no cycle lane. Usage on urban roads therefore seems inevitable, although the use of cycle lanes where possible should be encouraged to separate these vulnerable users from other road traffic. We also believe that it will be impossible in practice to exclude the use of e-scooters on higher speed roads. As they will be particularly susceptible to disturbance by road surface defects (including potholes), this militates in favour proper definition of safety features. Importantly, from the MIB’s perspective, it supports the case for compulsory third party liability insurance as the use of these vehicles will inevitably give rise to additional accidents.
Pavements should be reserved principally as a safe place for pedestrians, and the potential benefits of any expansion of the current small range of exceptions must be balanced against the need to protect the interests and security of those on foot. E-scooter users would generally move faster than pedestrians, making them potentially threatening and dangerous. Accidents causing third party damage or injury would be inevitable, including some caused by uninsured or untraced users; this would increase the MIB’s exposure to compensation claims. Many pedestrians, particularly the more vulnerable, would find it alarming to have such vehicles on the pavement, just as the (illegal) use of bicycles on pavements can cause distress and alarm now. E-scooters should therefore not be allowed on pavements.
Should there be advice or compulsory requirements to use specific safety equipment when using an e-scooter?
A compulsory requirement to use safety equipment, including a cycle helmet, should be applied in light of the inherent vulnerability of e-scooter users. It would clearly help to protect users in general; specifically, it could reduce the risk of severe injury in accidents involving other vehicles. Further, although not safety “equipment” as such, the MIB considers there is a clear need for a proportionate compulsory insurance requirement, in the interests of supporting the interests of general safety and compensation for injury. This should be lighter touch than a motor insurance policy and the amount of cover (and ultimately the cost) should reflect the lower risk presented. The insurance provider should be required to contribute towards the MIB levy.
Should there be safety and environmental regulation for the build of e-scooters, and what might this entail?
From an insurance perspective, adequate safety regulation is essential for any vehicle to be used on the road. In the case of e-scooters, it might be lighter touch than for other types of vehicle but should include:
The regulations should also include a requirement for e-scooters to be registered. Vehicle identification - which will only be possible if e-scooters are registered – is important for the following reasons:
Registration and identification are therefore essential for both insurance and enforcement purposes.
We leave it others to comment on environmental regulation as this is not within the MIB’s remit.
The experience of other countries where e-scooters are legal on the roads
The MIB has started compiling information on practice in countries where the use of e-scooters on roads and in other public places has been made legal. We have a spreadsheet with information from 12 countries on various aspects of regulation including registration, insurance, minimum age, speed/power limits and protective equipment. From this (admittedly incomplete) snapshot, the picture is one of widely varying practice. We would be pleased to provide the Committee with a copy of the spreadsheet if this would be helpful.
Media reports over the past year have provided anecdotal evidence of some of the benefits and challenges of e-scooter introduction in different countries. The challenges have included: a peak of alcohol-related arrests as well as accidents involving e-scooter users in German cities, with evidence of e-scooter users under the influence of alcohol or drugs emerging from other European cities including Copenhagen; a high incidence of e-scooter users suffering serious personal injury from accidents in US cities (said to be double the rate of such accidents involving cyclists); discarded e-scooters on the pavements of Paris causing a serious trip hazard to pedestrians, particularly the visually impaired, which led to a ban on using or parking e-scooters on pavements apart from in designated parking areas.