CJEU takes hard line on motor insurance

The EU Court of Justice has taken a strong line on the requirement for motor insurance in a case referred from the Portuguese courts.

A vehicle which is not formally withdrawn from use and which is capable of being driven must be covered by motor vehicle insurance against civil liability even if its owner, who no longer intends to drive it, has chosen to park it on private land
Member States may provide that, when the person who was subject to the obligation to take out insurance against civil liability for the vehicle involved in an accident has failed to comply with that obligation, the national compensation body can bring an action against that person even though the latter has no civil liability for the accident
Mrs Alina Antónia Juliana was the owner of a motor vehicle registered in Portugal. Due to health problems, she stopped driving it and parked it in the yard of her house, but did not take steps formally to withdraw it from use. In November 2006, Mrs Juliana’s son took possession of the vehicle without his mother’s permission or knowledge. The vehicle went off the road, causing the death of Mrs Juliana’s son and two others, who were in that vehicle as passengers. On the date of the accident, Mrs Juliana had not taken out insurance against civil liability in respect of the use of that vehicle (motor vehicle civil liability insurance). The Fundo de Garantia Automóvel (Motor Vehicle Guarantee Fund, Portugal) paid compensation to the persons entitled to such, through the passengers, for the damage and injuries resulting from the accident. Taking the view that Mrs Juliana was subject to the obligation to take out insurance against civil liability for her vehicle and that she had failed to comply with that obligation, the Fund then, in accordance with the possibility provided for by Portuguese law, sued in particular Mrs Juliana, claiming reimbursement from her of the sum of €437,345.85 which it had paid to the persons entitled to compensation through the passengers. Mrs Juliana submitted that she was not liable for the accident and that, since she had parked her vehicle in the yard of her house and since she did not intend to use it, she was under no obligation to take out a motor vehicle civil liability insurance contract.